Hydroelectric Licensing Under the Federal Power Act

Note: EPA no longer updates this information, but it may be useful as a reference or resource.

[Federal Register: August 25, 2003 (Volume 68, Number 164)]
[Rules and Regulations]
[Page 51069-51143]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25au03-8]

[[Page 51069]]

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Part II

Department of Energy

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Federal Energy Regulatory Commission

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18 CFR Parts 2, et al.

Hydroelectric Licensing Under the Federal Power Act; Final Rule

[[Page 51070]]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 2, 4, 5, 9, 16, 375 and 385

[Docket No. RM02-16-000; Order No. 2002]

Hydroelectric Licensing Under the Federal Power Act

July 23, 2003.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is
revising its regulations pertaining to hydroelectric licensing under
the Federal Power Act. The revisions create a new licensing process in
which a potential license applicant's pre-filing consultation and the
Commission's scoping pursuant to the National Environmental Policy Act
(NEPA) are conducted concurrently, rather than sequentially. The
revised rules also provide for increased public participation in pre-
filing consultation; development by the potential applicant of a
Commission-approved study plan; better coordination between the
Commission's processes, including NEPA document preparation, and those
of Federal and state agencies with authority to require conditions for
Commission-issued licenses; encouragement of informal resolution of
study disagreements, followed by dispute resolution, and schedules and
deadlines.
The traditional licensing process is being retained, and modified
by increased public participation and additional time before an
application for water quality certification must be filed. No changes
are being made to the Alternative Licensing Process (ALP).
For a period of two years from the date of issuance of the new
rule, potential license applicants will be permitted to elect to use
the traditional or the integrated licensing process, or to request
authorization to use the ALP. Thereafter, the integrated process will
become the default, and Commission approval will be required to use the
traditional process or the ALP.
Under the revised rules, a new part 5 will be added to Title 18 of
the Code of Federal Regulations and 18 CFR parts 2, 4, 9, 16, 375, and
385 will be amended to implement the new procedures.

EFFECTIVE DATE: The rule will become effective October 23, 2003.

FOR FURTHER INFORMATION CONTACT: John Clements, Office of the General
Counsel, Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426, 202-502-8070.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction
II. Background
III. Discussion
A. Need for New Integrated Process Confirmed
B. Number of Processes
C. Pre-NOI Activity
1. Filing Date for NOI and PAD
2. Advance Notice
D. Process Selection
1. Default Process
2. Standard for Approval of Traditional Process
3. Timing Issues
E. Pre-Application Document
1. In General
2. PAD Contents, Format, and Distribution
a. Contents
b. Distribution
F. NEPA Scoping and Study Plan Development
1. In General
2. Study Criteria
a. General Comments
b. Criterion (2)
c. Criterion (3)
d. Criterion (5)
e. Criterion (7)
f. Proposed Additional Criteria
3. Progress and Study Reports and Additional Study Requests
a. Progress Reports and Initial and Updated Study Reports
b. Modified Study Requests
c. New Study Requests
d. Comments on Study Reports
G. Study Dispute Resolution Process
1. Informal Dispute Resolution
2. Formal Dispute Resolution--Subject Matter and Eligibility
3. Advisory Panel
a. Need for Panel
b. Panel Membership
c. Non-Member Participation
d. Technical Conference
e. Activities of the Advisory Panel
5. Timing Issues
6. Third Party Technical Expert
7. Multiple Panels and Multi-Issue Panels
8. Panel Recommendation
9. Director's Determination
10. Study Plan Implementation
H. Compliance with Study Plan
I. Other Uses for Dispute Resolution
J. Evidentiary Hearings
K. Draft License Application Replaced
1. Need for Draft Application
2. Contents of Draft Application
3. Preliminary Draft Terms and Conditions
L. License Applications
1. Contents
2. Post-Application Study Requests
M. Consultation and Coordination with States
1. General Comments
2. Timing of Water Quality Certification Application
3. Coastal Zone Management Act
N. Tribal Issues
1. Consultation Policy
2. Tribal Liaison
3. NHPA Section 106
4. Other Matters
O. Environmental Document Preparation
1. Cooperating Agencies Policy
2. NEPA Document Contents
3. Endangered Species Act Consultation
4. Fish and Wildlife Agency Recommendations
P. Time Frame for Integrated Process
Q. Settlement Agreements
1. Time Outs
2. Other Matters Pertaining to Settlements
R. Original License Applications
S. Competition for New Licenses
T. Summary of Changes to Integrated Process--Regulation Text
U. Changes to Traditional Process and ALP
1. Traditional Process--Public Participation
2. Traditional Process--Mandatory, Binding Dispute Resolution
3. Traditional Process--Other Recommendations
4. Streamlined Process for Small Projects
5. Draft Applicant-Prepared Environmental Analyses
6. ALP--Applicability of Dispute Resolution
V. Ancillary Matters
1. Intervention by Federal and State Agencies
2. Information Technology
3. Project Boundaries and Maps
4. Miscellaneous Filing Requirements
5. Technical Changes
W. Delegations of Authority
X. Critical Energy Infrastructure Information
1. Order No. 630
2. Conforming Rulemaking
3. CEII in the Integrated Process
Y. Transition Provisions
IV. Environmental Analysis
V. Regulatory Flexibility Act
VI. Information Collection Statement
VIII. Document Availability
Appendix

Before Commissioners: Pat Wood, III, Chairman; William L. Massey,
and Nora Mead Brownell.

I. Introduction

1. In this final rule, the Federal Energy Regulatory Commission
(Commission) amends its regulations for licensing of hydroelectric
power projects by establishing a new licensing process. The amendments
are the culmination of efforts by the Commission, other Federal and
state agencies, Indian tribes, licensees, and members of the public to
develop a more efficient and timely licensing process, while ensuring
that licenses provide appropriate resource protections required by the
Federal Power Act (FPA) and other applicable laws.
2. The new licensing process is designed to create efficiencies by
integrating a potential license applicant's pre-filing consultation
with

[[Page 51071]]

the Commission's scoping pursuant to the National Environmental Policy
Act (NEPA).\1\ Highlights of this ``integrated'' process include:
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\1\ 42 U.S.C. 4321, et seq.
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?
Increased assistance by Commission staff to the potential
applicant and stakeholders during the development of a license
application;
?
Increased public participation in pre-filing consultation;
?
Development by the potential applicant of a Commission-
approved study plan;
?
Opportunities for better coordination between the
Commission's processes, including NEPA document preparation, and those
of Federal and state agencies and Indian tribes with authority to
require conditions for Commission-issued licenses;
?
Encouragement of informal resolution of study
disagreements, followed by study dispute resolution; and
?
Issuance of public schedules.
3. In response to oral and written comments on the Notice of
Proposed Rulemaking (NOPR),\2\ public drafting workshops, and
additional consultations with other Federal agencies, the following
significant modifications have been made to the integrated process in
the final rule:
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\2\ 68 FR 13988 (Mar. 21, 2003); IV FERC Stats. & Regs. ]
32,568
(Feb. 20, 2003).
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?
The content and distribution requirements for the Pre-
Application Document (PAD) have been changed to make it less burdensome
on potential applicants and easier for recipients to use;
?
More time has been provided for potential applicants and
participants to develop and informally resolve differences concerning
study needs;
?
A technical conference open to all participants has been
added to the formal dispute resolution process;
?
The draft license application has been replaced by a less
burdensome ``Preliminary Licensing Proposal'';
?
The deadline for filing a water quality certification
application has been extended to 60 days after the ready for
environmental analysis notice;
?
The integrated process will become the default process in
two years; in the interim license applicants may choose the integrated
process or the traditional process as it is currently constituted; and
?
We are withdrawing our proposal to permit a cooperating
agency for NEPA document preparation to also intervene in the relevant
proceeding.

We believe that the changes we are adopting will significantly improve
the integrated licensing process.
4. We also proposed in the NOPR to modify the traditional process
by increasing public participation in pre-filing consultation, adding
mandatory, binding dispute resolution, and extending the deadline for
filing an application for water quality certification. We have decided
not to include mandatory, binding pre-filing dispute resolution, but
are adopting the other proposals.\3\
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\3\ For the convenience of commenters on the proposed rule, a
redline/strikeout version of the affected regulatory text will be
posted on the hydroelectric page of the Commission's website.
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5. To improve consultation with Indian tribes, we are establishing
the position of tribal liaison, providing in the regulations for a
meeting between the Commission and interested Indian tribes at the
beginning of the licensing process, and issuing simultaneously with
this final rule a Tribal Consultation Policy applicable to the
hydroelectric, gas, and electric programs.
6. No changes will be made to the alternative licensing procedures
(ALP).
7. The Commission appreciates the active participation and
thoughtful comments provided by the industry representatives, Federal
and state resource agencies, Indian tribes, and members of the public
in this proceeding. We believe the provisions of the final rule,
discussed below, fully take into consideration the interests of all of
the stakeholders and will establish an integrated licensing process
that serves the public interest.

II. Background

8. The background of this proceeding was set forth in detail in the
NOPR, and need not be repeated here. Since the NOPR was issued on
February 21, 2003, the Commission has held public and tribal regional
workshops to hear and consider stakeholder concerns about the proposed
rule, and to find stakeholder consensus on recommendations to resolve
those concerns.\4\ Written comments were due by April 21, 2003.\5\
Thereafter, we held a four-day stakeholder drafting session from April
29, 2003 to May 2, 2003, at Commission headquarters. At the stakeholder
drafting sessions, participants were divided into four groups: Studies,
Overall Process, Dispute Resolution, and Tribal issues, with each group
including members from all the major stakeholder groups. The goal of
the drafting sessions was to develop consensus recommendations on final
rule language.
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\4\ The regional workshops were held in Portland, Oregon;
Sacramento, California; Charlotte, North Carolina; Manchester, New
Hampshire; Milwaukee, Wisconsin; and Washington, D.C.
\5\ Entities that filed comments in response to the NOPR are
listed in the Appendix to the preamble. For administrative ease, the
commenters' names are abbreviated in the preamble, as indicated on
the Appendix. On April 21, 2003, the California Public Utilities
Commission filed a notice of intervention. However, rulemaking
proceedings do not have parties.
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9. Following the drafting sessions, the Commission staff held
additional discussion and drafting sessions with other Federal agencies
before preparing the final rule.

III. Discussion

A. Need for New Integrated Process Confirmed

10. Many commenters commended the Commission for undertaking the
rulemaking and indicated that the proposed integrated licensing process
holds strong promise of accomplishing its objectives.\6\ The commenters
also provided hundreds of general and specific recommendations
regarding how the proposed rule might be improved. After careful review
of these comments, we affirm the need for the proposed rule and
conclude that we should finalize it with certain modifications
discussed below.
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\6\ Virginia DEQ, WGA, WPPD, Interior, PCWA, EPA, Advisory
Council, VANR, WPPD, Alabama Power, AmRivers, PG&E, Long View, NHA.
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11. A few commenters \7\ question the need for an integrated
process. They are not convinced that it will simplify matters or reduce
the time needed for licensing, and think it is certain to be more
expensive for license applicants. WPSR is disappointed that the rule
does not resolve their concerns about the exercise by federal and state
agencies of mandatory conditioning authority. WPSR adds that the
integrated process will be overly burdensome for small projects and
that the dispute resolution provisions and proposed change in the
cooperating agencies policy unreasonably diminish the role of the
applicant. SCE and Georgia DNR state that the objectives of the
integrated process could be achieved by modifying the traditional
process, the consensus-based ALP,\8\ or both.\9\ These concerns are
addressed in the following pages.\10\
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\7\ SCE, NEU, Xcel, Georgia DNR
\8\ See 18 CFR 4.34(i).
\9\ SCE's detailed recommendations for improvements to the
traditional process are discussed in Section III.T.
\10\ Some commenters, such as WPSR, state that the rulemaking
should have focused on a perceived unreasonable exercise of
authority by agencies with mandatory conditioning authority. As we
explained in the NOPR, this is a matter that should be addressed
elsewhere.
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12. We are committed to making the integrated process a success.
Potential applicants who choose this process during the transition
period may rest assured that the Commission will

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dedicate the resources necessary to meet our goals for the process. To
this end, the Office of Energy Projects has established outreach and
training teams to promote the integrated process and educate
participants in its implementation.
13. It is also our intention to conduct an effectiveness study of
the integrated process in order to quantify the resulting reductions in
processing time and costs.

B. Number of Processes

14. The NOPR proposed to retain both the traditional process and
the ALP in light of comments by industry that a single process is not
suitable for all projects and that the integrated process and ALP might
be too time constrained or resource intensive for small projects. We
also proposed to retain the ALP in light of its demonstrated track
record of reducing license application processing times and fostering
settlement agreements.\11\
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\11\ 68 FR 13988 at p. 13991-992; IV FERC Stats. & Regs. ]
32,568 at pp. 34,698-699.
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15. We discussed the concerns of environmental groups, and some
agencies and Indian tribes, that multiple processes would confuse
participants with modest resources, particularly those that rely on
volunteers. We concluded that the benefits of having different
processes that can be applied to differing circumstances outweighs this
concern. We also proposed to require any potential applicant wishing to
use the traditional process to obtain Commission authorization to do
so, and to provide an opportunity for all stakeholders to comment on
the request.\12\
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\12\ The requirement for a consensus to support approval of a
request to use the ALP would be unchanged. See 18 CFR 4.34(i).
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16. Industry commenters and a few others continue to support
retaining the traditional process and ALP. They state that flexibility
is required by the diversity of project circumstances, issues, and
stakeholders; the traditional process and ALP have both been shown to
be effective under the right circumstances; the integrated process is
too costly and labor-intensive for many small projects and for small
stakeholders; and the integrated process is not suitable where
stakeholders and the potential applicant are very polarized. They add
that the integrated process is untested and that the traditional
process needs to be retained as a backstop if an ALP or the integrated
process break down.\13\
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\13\ NHA, Idaho Power, EEI, WUWC, SCE, Alabama Power, NEU, WPPD,
WPSC, Snohomish, CSWC, FWS, CHI, Maryland DNR, Minnesota DNR. NF
Rancheria states that the rules should clarify what would happen if
the ALP or integrated process break down, and that any change of
process should consider impacts to participants other than the
potential applicant.
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17. Agency and non-governmental organization (NGO) commenters
continue overwhelmingly to favor one integrated process sufficiently
flexible to accommodate the diverse circumstances of license
applications. They, along with SCE, reiterate that the existing two
processes are already confusing, making participants unclear about
their rights and duties, and making it difficult for parties with few
human and financial resources to effectively participate. A third
process, they say, will make matters worse. Some also question the
logic of retaining a traditional process which they say stakeholders
agree does not achieve the goals of the integrated process.\14\ Several
note that one process would obviate the need for time in the process to
comment on the potential applicant's process proposal.\15\
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\14\ MDEP, HRC, CRITFC, Nez Perce.
\15\ Wisconsin DNR, PFMC, CHRC, Whitewater, SC League, IRU,
Interior, CRITFC, RAW, Georgia DNR, HRC.
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18. California adds that there is no reason to retain the
traditional process because the information requirements and scope and
level of analysis are essentially the same as those of the integrated
process, so costs should be similar; that polarization is irrelevant if
both processes have mandatory, binding study dispute resolution; and
project size is no indicator that the issues will be relatively simple
or few.
19. SCE also asserts that the revised traditional process, if
supplemented by the PAD, more early identification of issues and study
design, study request criteria, and study dispute resolution, would
differ from the integrated process and the ALP only with respect to the
timing of NEPA process. This, says SCE, would make the integrated
process needless, so the Commission should just make appropriate
modifications to the traditional process.
20. Upon review of the comments, we remain convinced that having
three processes is the most effective means of ensuring that the
licensing process used is suited to the circumstances of the project,
consistent with our intention to reduce the time required for the
process without sacrificing resource protection standards. The process
selection for each licensing proceeding will be made at the outset, so
stakeholders should not be confused about which process they are in. We
designed the integrated process to show the steps clearly in sequence
from beginning to end and to be as self-contained (i.e., with a minimum
of cross-referencing to parts 4 and 16) as is practicable. To the
extent stakeholders are concerned about process ambiguities in the ALP,
they can negotiate the terms of participation. The Commission staff
also stands ready to assist in clearing up any remaining ambiguities
about what the regulations may require.
21. We also disagree with those who imply that the traditional
process never works well. About one third of traditional license
process proceedings are concluded before the existing license expires.
The most common reason for delay in the remaining cases is lack of
state water quality certification. As discussed below,\16\ the
integrated licensing process addresses this by providing opportunities
and inducements for water quality certification agencies and tribes to
participate from the beginning of pre-filing consultation.
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\16\ See Sections III.F, G, and M.2.
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22. Some commenters recommend that we consider establishing a
sunset provision to eliminate or phase out the traditional process,
ALP, or both when the integrated process has become sufficiently
established and fine-tuned in light of experience.\17\ We agree this
idea may have merit. It is our intention to conduct an ongoing review
of the progress being made in realizing the goals of the integrated
process. If it becomes clear in the future that the integrated process
is substantially meeting these goals and the traditional process is
not, then it may be appropriate to eliminate the traditional process at
that time.
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\17\ HRC, AmRivers, Washington, RAW, AMC, NPS, Georgia DNR.
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C. Pre-NOI Activity

1. Filing Date for NOI and PAD
23. In the NOPR we rejected California's recommendation that the
regulations be modified to move the deadline date for the notification
of intent to seek a license (NOI) forward to 6.5 years before license
expiration because it would be inconsistent with our goal of developing
a more timely process. We stated that in the great majority of cases, a
license applicant should be able to complete the pre-filing aspects of
the integrated process in the three and one-half year period provided
for in the regulations.\18\
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\18\ 68 FR 13988 at pp. 13992-993; IV FERC Stats. & Regs. ]
32,568 at p. 34,701.
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24. Several commenters request that we reconsider our position, and
specifically authorize licensees to voluntarily issue the NOI and
circulate

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the PAD prior to 5.5 years before license expiration.\19\ They
reiterate that the FPA requires only that the NOI be filed no later
than five years before the license expires and that some cases simply
take longer. They cite the diversity of stakeholder interests,
development of complex study plans, and unpreventable gaps between
approval of a study plan and commencement of studies owing to seasonal
considerations and the time needed to negotiate contracts with
consultants. They state that adding three to six months at the front
end will, in many cases, permit an additional field season of studies
before the application deadline, thus increasing the likelihood that
the application will be complete when filed. They stress that the goal
should be to conclude the licensing proceeding and put into place
improved terms and conditions before an existing license expires, and
that maintaining an unrealistic time frame for commencing the process
will result in the continued issuance of unnecessary annual
licenses.\20\
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\19\ California, Long View, MWH, PG&E, VANR, MHW, NOAA
Fisheries, Process Group. VANR states that the NOI deadline date
should be moved to six years before the license expires.
\20\ PG&E adds that in Order No. 513, Hydroelectric Licensing
Regulations under the Federal Power Act, 54 FR at p. 31384 (June 2,
1989), FERC Stats. & Regs., Regulations Preambles 1986-1990 ]
30,854
(May 17, 1989), which promulgated the existing time frame for filing
the NOI, the Commission specifically encouraged pre-NOI
consultation. The rule we are promulgating today does not discourage
pre-NOI activity. Indeed, the PAD cannot be prepared without it.
Rather, we are declining to require provisions that could be
construed to require or encourage consultation before the NOI is
filed.
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25. NHA and Longview suggest that an alternative would be to permit
the applicant to issue the PAD before the earliest date the NOI can be
filed if resource agencies and stakeholders approve. They state however
that this is much less desirable because stakeholders could decline to
participate before the NOI is filed, forcing the potential applicant to
repeat steps already completed with some stakeholders after the NOI is
filed.
26. These advocates of commencing the licensing process before the
NOI is issued are correct that some proceedings will exceed 5.5 years,
notwithstanding the best efforts of all participants. They base their
comments however on experience under the traditional process, which
lacks the crucial features of the integrated process designed to
minimize delays. If all stakeholders work together in good faith, the
integrated process should minimize the number of instances where a new
license application proceeding cannot be concluded before the existing
license expires by integrating pre-filing consultation and development
of the Commission's NEPA document and resolving study disputes early in
the process.
2. Advance Notice
27. In the NOPR we proposed to issue to licensees an advance notice
of license expiration. This would be done sufficiently in advance of
the NOI deadline date to ensure that the existing licensee is alerted
to the requirements for the NOI, PAD, and any potential request to use
the traditional process or ALP. We noted that because the advance
notice is an administrative action which requires no action on the part
of any other entity, and which will be undertaken regardless of the
process selected, there is no need to include this action in the
regulations. \21\
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\21\ 68 FR at pp. 13992-993; IV FERC Stats. & Regs. ]
32,568 at
pp. 34,700-701.
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28. Some commenters state that the advance notice should be
included in the regulations because it notifies stakeholders as well as
the existing licensee. Barring that, some request publication of a
written policy on when the notice will be issued and its contents.\22\
Suggestions in this regard include reminding the licensee that seasonal
study considerations may be relevant to timely application development
\23\ and giving directions to contact resource agencies and assemble a
list of entities to be consulted and potential issues to address.\24\
CHRC and Whitewater similarly recommend that the Commission issue
public notice when the advance notice is issued.
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\22\ NOAA, HRC, NHA, NEU, CRITFC, Interior, SCE.
\23\ PG&E.
\24\ Wisconsin DNR.
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29. There is no need to put the advance notice in the regulations.
The Commission has for many years published in its annual report and
annually in the Federal Register a table showing the projects for which
the license will expire during the succeeding six years and providing
essential information about each project's physical and geographical
characteristics.\25\ The Commission's annual report is posted on the
Commission's Web site.
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\25\ See 18 CFR 16.3.
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30. A written policy on the content of the notice would be
superfluous. As stated above, the purpose of the notice is to alert
licensees to the requirements for the NOI, PAD, and any potential
request to use the traditional process or ALP. These requirements are
found in the regulations.
31. Recommendations for when the advance notice should be made
range from one to three years before the NOI deadline date.\26\ We
intend to issue the notice approximately 1.5 years before the NOI
deadline date. This should provide adequate time for existing licensees
to make decisions concerning process selection and to gather existing
information for the PAD.
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\26\ Wisconsin DNR, SCE.
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D. Process Selection

1. Default Process
32. The NOPR proposed to make the integrated process the default
process. A potential applicant would have to request Commission
approval to use the traditional process or ALP when it files the NOI
and PAD.\27\
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\27\ 68 FR at pp. 13992, 14009; IV FERC Stats. & Regs. ]
32,568
at pp. 34,699, 34,730.
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33. Licensee commenters question the need for a default process and
Commission approval of the potential applicant's choice of the
integrated and traditional process.\28\ PG&E, SCE, and WUWC state that
no rationale has been offered for eliminating the applicant's existing
right to choose the traditional process and others say that applicants
should not have to show good cause to use the traditional process
because it has been tested and shown to be effective in many cases.\29\
Licensee commenters also emphasize that the integrated process is
untested, and that the ALP was formally adopted by the Commission only
after several years of case-by-case experience based on requests for
waiver of the of the traditional process requirements.
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\28\ Troutman, Snohomish, WPPD, Idaho Power, EEI, Alabama Power,
Xcel, NEU, WUWC, SCE, NHA. No commenter appears to advocate a change
in the requirements for use of the ALP, and the Process Group at the
drafting sessions agreed that the existing criteria are
satisfactory.
\29\ WUWC, Snohomish, EEI, SCE.
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34. WPPD suggests that stakeholders will threaten to withhold
support for the applicant's potential process proposal in order to
pressure potential applicants into making other procedural or
substantive concessions, and that there would be more certainty if
potential applicants had unfettered process choice.
35. Several licensees state that the potential applicant has the
most knowledge of the complexity, level of stakeholder involvement, and
the resources available to itself and others, so the Commission should
defer to its judgment.\30\ Other reasons offered in support of
applicant choice are that the applicant bears the cost of the process,
a lack of choice will inhibit

[[Page 51074]]

commitment of the potential applicant to the success of the process,
and the cooperation of stakeholders can be achieved without Commission
approval.\31\
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\30\ NHA, EEI, SCE, Long View, PG&E, B&B.
\31\ NHA, EEI, SCE, Long View, PG&E, B&B, M&H.
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36. Several of these commenters suggest that if the integrated
process is to be made the default, that it be done only after a 5-6
year test period, during which there would be a presumption that the
applicant's choice is appropriate. If the potential applicant chooses
the traditional process, proponents of the integrated process would
have the burden of showing that the integrated process would be
significantly better or significantly disadvantage non-applicant
stakeholders. If, at the end of this period, the integrated process
appeared successful, it would be made the default process, with any
modifications needed in light of experience.\32\ In this regard, AEP
and GKRSE state that the goal should be to use the process that is
likely to yield the best results, procedurally, economically and
environmentally, and that if the integrated process appears to satisfy
this goal, potential applicants and stakeholders will use it.
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\32\ NHA, Long View, PG&E, B&B.
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37. A few industry commenters assert that the traditional process,
either in its current form or with the proposed modifications, should
be the default because it has been tested by years of experience and is
satisfactory in most cases.\33\ They add that it works best for small
projects, which are a substantial portion of licensed projects.\34\
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\33\ Xcel, WPSR, Alabama Power. Other industry commenters, while
not recommending the traditional process as a default, also assert
that it generally works well. GKRSC, AEP, CHI, Long View, Consumers,
WPSC.
\34\ Approximately half of Commission-licensed projects are 5 MW
or less.
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38. Several non-industry commenters favor making the integrated
process the default with the potential applicant's choice requiring
Commission approval.\35\ The Minnesota DNR, while not apparently
objecting to the integrated process as the default, states that there
should also be a means for other entities to oppose an applicant's
election to use the default process.
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\35\ RAW, ADK, CHRC, Whitewater, SC League, IRU, California,
AmRivers. PFMC recommends that approval of the applicant's process
proposal should remain with the full Commission, rather than be
delegated to the Director of the Office of Energy Projects.
California states that an applicant may show good cause to use the
traditional process, yet other reasons may exist to deny the
request, so the regulation should read ``may'' approve, instead of
``shall.'' Any good cause determination will take account of any
objections raised by commenters.
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39. We continue to think the integrated process should be the
default because it addresses as fully as we can within the confines of
the statutory scheme the problems that participants in licensing from
every perspective have identified with the traditional process. It
merges pre-filing consultation and the NEPA process, brings finality to
pre-filing study disputes, and maximizes the opportunity for the
Federal and state agencies to coordinate their respective processes.
40. The best means of gaining acceptance for the integrated process
however is to demonstrate that it works. We agree with commenters that
some period of transition is appropriate. Accordingly, we have decided
that the integrated process should become the default process on July
23, 2005. During this two year period, potential license applicants
will be able to select the integrated process or the traditional
process as it currently exists, or request authorization to use the
ALP. At the end of the two-year period, the integrated process will
become the default process, and potential applicants will have to
obtain approval to use the traditional process.
41. We disagree with those who believe we should defer to the
potential applicant's process choice on the ground that it has the most
relevant knowledge. The comprehensive development standard of the FPA
requires us to consider all issues pertaining to the public interest
and establishes important roles and responsibilities for other federal
and state agencies. We also have a trust responsibility to Indian
tribes. The appropriate process must be selected with the interests of
these entities and other members of the public, not simply those of the
potential applicant, in mind.
2. Standard for Approval of Traditional Process
42. The NOPR proposed to grant requests to use the traditional
process upon a showing of ``good cause.'' \36\ Several commenters state
that this standard should be replaced by specified criteria, or at
least that certain factors should be considered before the Director
acts on a request to use the traditional process.\37\ Alabama Power and
WUWC, however, state that ``good cause'' is sufficient if construed
liberally and with deference to the potential applicant.
---------------------------------------------------------------------------

\36\ Proposed 18 CFR 5.2(f)(5). The criteria for approval of the
ALP would not change. Proposed 18 CFR 5.2(f)(5) states that requests
to use the traditional process or ALP will be granted ``for good
cause shown.'' NHA asserts that the good cause standard is something
new and unnecessary as applied to the ALP. While the regulatory text
of 18 CFR part 4, from which the requirements for support of a
request to use the ALP were transposed, do not explicitly state that
a good cause standard applies, it should be obvious that good cause
is the minimum standard for Commission approval of any authorization
not subject to a more specific standard. We are merely making
explicit what is plainly implicit.
\37\ Interior, PG&E, NF Rancheria, NPS, Washington, AmRivers,
Wisconsin DNR, CHRC, Whitewater, NOAA Fisheries, HRC, SC League, TU,
VANR, PFMC, AW/FLOW.
---------------------------------------------------------------------------

43. The recommended criteria predictably differ depending on
whether they come from industry commenters or others. Industry
commenters suggest that the traditional process should be readily
approved for small projects with relatively few issues. This, they
suggest, includes some or all of: a project operated in run-of-river
mode; no substantial changes are proposed in operations or structures;
there are no anadromous fish; generating capacity is modest; or the
existing project boundary includes little or no land above the high
water mark.\38\ Other recommended criteria for approving the
traditional process include where the potential applicant and
stakeholders are too polarized to work well together; \39\ if, all
things considered, it appears likely that the licensing process can be
completed before the license expires; \40\ and the potential applicant
thinks the integrated process would be too costly.\41\
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\38\ GKRSC, AEP, CHI, Long View, Consumers, WPSC.
\39\ NHA, Idaho Power, EEI, WUWC, SCE.
\40\ Consumers.
\41\ M&H.
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44. Non-licensees contend that the bar for approval of the
traditional process should be set high. Criteria for approval
recommended by these commenters include: (1) A consensus favoring the
traditional process; \42\ (2) lack of opposition from any Federal or
state agency; \43\ (3) the public or resources affected by the project
will benefit from using the traditional process compared to the
integrated process; \44\ (4) the traditional process will maximize
coordination of all pertinent regulatory processes and more timely
resolve potential disputes; \45\ (5) it will be the most efficient
process with the highest level of resource protection; \46\ (6) the
project does not have significant environmental impacts; \47\ or (7)
the

[[Page 51075]]

licensing is uncontroversial.\48\ Others factors identified by
Washington and American Rivers for consideration include the potential
for time savings, benefits to the environment, and public participation
needs.\49\
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\42\ CHRC, Interior, Whitewater, NOAA Fisheries, AmRivers.
\43\ HRC. HRC, consistent with its recommendation for one
flexible process, would also apply these criteria to requests to use
the ALP.
\44\ SC League, Wisconsin DNR.
\45\ TU, VANR.
\46\ PFMC, HRC.
\47\ NOAA Fisheries. California agrees that the bar for using
the traditional process should be very high, but makes no specific
recommendations in this regard.
\48\ AW/FLOW.
\49\ Washington, AmRivers.
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45. Regarding original license applications, Consumers contends
that the traditional process is appropriate because there is likely to
be little relevant data available, which will cause the information
gathering and study period to be extended, which is incompatible with
the compressed time frames of the integrated process. NOAA Fisheries
states that the same circumstances cited by Consumers should bar an
applicant from using the traditional process.
46. The Process Group agreed that the ``good cause'' standard is
vague, but did not identify criteria that would favor or disfavor use
of the traditional process. Instead, they identified various factors
for the Director to consider in each case in light of the goal of a
timely, well-informed decision that protects the public interest. These
factors include:
?
Project size; \50\
?
Characteristics of the river basin, including the presence
or absence of other dams; \51\
?
The likely level of controversy, including disputes over
studies;
?
The level of involvement and interest by resource agencies,
any expressed intent on their part to exercise applicable mandatory
conditioning authority, and the anticipated resource issues, including
ESA;
?
Whether there are tribal issues;
?
The physical characteristics of the project and known
biological impacts of project operations;
?
Stakeholder and tribal views on process choice; \52\
?
Resource constraints on Commission staff and participants;
?
Reasonableness of project costs; \53\
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\50\ Also suggested by NF Rancheria and NPS.
\51\ Also suggested by Wisconsin DNR.
\52\ Also suggested by Washington and AmRivers.
\53\ Also suggested by Washington, AmRivers, and PG&E.
---------------------------------------------------------------------------

?
Whether the potential applicant has a history of positive
or negative relationships with stakeholders and Indian tribes; and
?
The amount and usefulness of existing, relevant
information.
47. Although there was general agreement in the Process Group about
which factors should be considered, this does not reflect a consensus
on how the factors should be considered. For instance, industry
commenters tend to think small projects are better suited to the
traditional process because they are likely to have fewer environmental
impacts, be less controversial, and be less well able to bear the
transaction costs of relicensing. Agencies, NGOs, and Indian tribes,
tend to think project size is only coincidently related to
environmental impacts and controversy, and view transaction costs as a
cost of doing business and a much lower concern than development of a
complete record and improvements in environmental protection.
48. This fundamental difference of viewpoints leads us to conclude
that the Process Group approach, somewhat modified, is the most
sensible approach to this issue. We conclude that five factors are most
likely to bear on whether use of the traditional process is
appropriate. These are: (1) Likelihood of timely license issuance; (2)
complexity of the resource issues; (3) level of anticipated
controversy; (4) the amount of available information and potential for
significant disputes over studies, and (5) the relative cost of the
traditional process compared to the integrated process. The more likely
it appears from the participants' filings that an application will have
relatively few issues, little controversy, can be expeditiously
processed, and can be processed less expensively under the traditional
process, the more likely the Commission is to approve such a request.
In recognition of the uniqueness of licensing proceedings, participants
who comment on requests to use the traditional process may identify
other factors they think are pertinent to the proceeding in
question.\54\
---------------------------------------------------------------------------

\54\ See 18 CFR 5.3(d)(1). PFMC states that this decision should
be made by the Commission rather than delegated to the Office
Director.
---------------------------------------------------------------------------

3. Timing Issues
49. The NOPR proposed to require a potential applicant to serve a
copy of its request, if any, to use the traditional process or ALP on
all affected resource agencies, Indian tribes, and members of the
public likely to be interested in the proceeding, and to give
appropriate newspaper notice to the general public. Responses would be
due to the Commission within 15 days.\55\
---------------------------------------------------------------------------

\55\ Proposed 18 CFR 5.1(f).
---------------------------------------------------------------------------

50. Many commenters respond that this is insufficient time to
respond on a matter of such importance.\56\ We agree that additional
time may be appropriate for this step because it relies in part on
newspaper notice and occurs at the commencement of the proceeding.
Accordingly, we have increased the time allowed to respond to these
requests to 30 days.
---------------------------------------------------------------------------

\56\ NPS, NYSDEC, Interior, AmRivers, Wisconsin DNR, Consumers.
---------------------------------------------------------------------------

E. Pre-Application Document

51. The NOPR concluded that NEPA scoping will be greatly assisted
by the availability to the participants of as much relevant existing
information as possible when scoping begins. To this end, we proposed
to supplant the current requirements for existing licensees to make
project information available to the public when the NOI is filed, and
for all potential license applicants to provide an initial consultation
document (ICD) to consulted entities during first stage consultation,
with the PAD.\57\
---------------------------------------------------------------------------

\57\ 68 FR at pp. 13993-994; IV FERC Stats. & Regs. ]
32,568 at
pp. 34,699, 34,730.
---------------------------------------------------------------------------

52. The PAD should include all engineering, economic, and
environmental information relevant to licensing the project that is
reasonably available when the NOI is filed. It is a tool for
identifying issues and information needs, including NEPA scoping,
developing study requests and study plans, and providing information
for the Commission's NEPA document. The PAD would be a precursor to
Exhibit E, the environmental exhibit in the license application. In the
integrated process, the PAD would evolve directly into a new Exhibit E
that has the form and contents of an applicant-prepared draft NEPA
document.\58\
---------------------------------------------------------------------------

\58\ See proposed 18 CFR 5.16(b). Applicants using the
traditional process would continue to use the existing Exhibit E in
their license application, and applicants using the ALP could use
the existing Exhibit E or file with their application in lieu
thereof an applicant-prepared environmental analysis. As discussed
in Section III.U.5, we are changing our policy to permit applicant
using the traditional process to file an applicant-prepared
environmental assessment.
---------------------------------------------------------------------------

53. The PAD proposal was widely supported, and many comments were
received concerning the appropriate contents, format, and distribution
requirements.\59\
---------------------------------------------------------------------------

\59\ A great many specific recommendations regarding the
detailed requirements of the PAD were filed. All of these have been
considered, but it would be needless and impractical to discuss each
comment individually.
---------------------------------------------------------------------------

1. In General
54. Industry commenters generally agree that the PAD is a good idea
in principle, but that the requirements need to be significantly
reduced to ensure that the contents are relevant to the licensing
proceeding and useful to the participants. Some industry commenters
believe the PAD requires significantly more information and a

[[Page 51076]]

higher level of effort than the existing public information and ICD
requirements,\60\ and suggest that the incremental burden on applicants
is unnecessary.\61\ Several commenters also indicate that much or all
of the historical information currently required to be made available
to the public is never requested and represents a needless burden and
expense.\62\
---------------------------------------------------------------------------

\60\ The initial consultation document is required by 18 CFR
4.38(b) and 16.8(b)(1). The public information requirement for
existing licensees seeking a new license is at 18 CFR 16.7(d).
\61\ SCE, Alabama Power, NEU, Xcel, Consumers, Oroville.
\62\ PG&E, SCE, Consumers.
---------------------------------------------------------------------------

55. Consumers recommends that we allow any applicant that uses the
traditional process to meet only the existing public information and
ICD requirements instead of filing the PAD. NEU makes the same
recommendation for existing projects of 5 MW or less. Consumers also
recommends that information requirements be made flexible to
accommodate different types of projects; for instance, some data that
is useful for unconstructed projects greater than 5 MW may not be
needed to evaluate a smaller existing project. MWH and WPSR similarly
indicate the PAD requirements should be reduced for small projects
because of the asserted connection between small projects with minor
impacts.
56. Various industry commenters also seek affirmation or
clarification of our intention that only existing information relevant
to project impacts is required, and that the scope of and level of
effort to obtain existing data should be commensurate with project
impacts.\63\
---------------------------------------------------------------------------

\63\ Consumers, Long View, MWH, WPSR, EEI, NHA, Xcel, NEU, SCE,
CHI.
---------------------------------------------------------------------------

57. Resource agencies and NGOs support the PAD and state that a
high quality PAD is essential to the success of the integrated process
in light of the short time frames contemplated in the NOPR, and that an
applicant's failure in this connection would interfere with the ability
of other parties to timely and effectively participate in
licensing.\64\
---------------------------------------------------------------------------

\64\ VANR, WUWC, Interior, California, CHRC, Whitewater, SC
League, IRU, NYSDEC, CSWRCB, Long View, HRC, AmRivers, SC League,
Oregon, AMC.
---------------------------------------------------------------------------

58. California agencies and a few other commenters believe that the
PAD contents should not be limited to existing information, but should
include all information needed to evaluate potential effects of project
operations, and that the applicant should be required to conduct
whatever studies or information searches are necessary to fill in any
gaps in the existing information before the PAD is filed. They assert
generally that NEPA scoping cannot be done unless there already exists
a complete baseline of existing environmental data, and suggest that
existing licensees should have acquired such data during the term of
the existing license.\65\
---------------------------------------------------------------------------

\65\ CDWR, Cal A-G, CSWRCB, AMC.
---------------------------------------------------------------------------

59. HRC similarly states that the PAD should include a systematic
discussion of the project's resource impacts, so that post-NOI
information gathering and studies are minimal, even if that requires
potential applicants to conduct environmental monitoring or original
studies not required under the existing license.
60. Agency and NGO commenters generally recognize however that
complete information on all resource impacts attributable to a project
is unlikely to be available when the NOI is issued and the PAD is
filed. These commenters recommend that potential applicants be subject
to a due diligence standard with respect to obtaining existing
information; that is, make a good faith effort to determine what
relevant information is available and to obtain it.\66\
---------------------------------------------------------------------------

\66\ CDFG, HRC. At least one licensee, PG&E, agrees that a due
diligence standard is reasonable.
---------------------------------------------------------------------------

61. We agree that a due diligence standard will apply to the
development of the PAD. The regulations we are adopting provide some
guidance on what constitutes due diligence, but we are not able to
provide a detailed definition. Rather, the determination of whether due
diligence is exercised will have to be made on case-by-case basis.
2. PAD Contents, Format, and Distribution
a. Contents
62. There is a considerable gap between the industry and other
commenters on the range and level of detail that should be required in
the PAD. PG&E and Georgia Power for instance, suggest that instead of
specific requirements, the content requirements should be stated as
broad subject matter categories, with information required to the
extent reasonably known, available, and applicable. Troutman similarly
recommends that specific requirements in the regulations be replaced by
a policy statement or guidance document from which applicants would
determine what information is relevant and appropriate.
63. In contrast, agencies and NGOs generally prefer explicit and
detailed requirements. For example, Wisconsin DNR and VANR recommend
that the PAD include the original license order and all amendment
orders and management plans; any document that explains the existing
license requirements; a layman's summary of all of the license and
management plan requirements; and a list of every entity consulted by
the potential applicant prior to filing the NOI and the issues those
entities raised. Another recommendation is that the PAD include study
plans for restoration of essential fish habitat; data needed for water
quality certification; information on cumulative environmental impacts
throughout the river basin; and studies of fish passage conditions and
plans for improvements thereto, including restoration of historic fish
habitat. CHRC states that flow data should be provided on the finest
available scale, even to daily or hourly flow for the entire historical
record.
64. HRC suggests that licensee compliance with the requirements can
best be ensured by having the Commission evaluate whether the PAD meets
certain standards for completeness and commiting to taking measures to
enforce compliance with the standards beyond finding that an
application is deficient. These might include requiring the applicant
to file a revised PAD before the proceeding continues, and interim
environmental measures in annual licenses, or civil penalties.
65. Because these disagreements relate to how the document is
formatted and distributed, we will defer their resolution to the
conclusion of the following section concerning those matters.
b. Distribution
66. Several industry commenters made recommendations with respect
to the format and distribution requirements for the PAD.\67\ NHA
proposes that the PAD be reformatted, some of the content requirements
be deferred to the license application, and the distribution
requirements modified. The PAD itself would contain basic information
about the licensee, project description and existing and proposed
operations, a general description of the river basin, including
pertinent information about land use, other dams, and management plans,
a discussion of environmental impacts based on existing information, a
list of issues in the form of a scoping document, and a plan and
schedule for pre-application activities.\68\ Exhibits showing project
structures and features, historical information on amendments,

[[Page 51077]]

compliance, and generation, and information pertaining to dam and
project safety would be located in the potential applicant's project
files and would be provided to anyone who requested it at a reasonable
cost of production.\69\ Distribution of other generally uncontroversial
information would be deferred until the license application is
filed.\70\ NHA contends that these changes would reduce the burden on
applicants, make the document better suited to its purpose, and make it
more accessible to stakeholders. Georgia Power and Duke support NHA's
proposal.
---------------------------------------------------------------------------

\67\ Duke, PG&E, Troutman, WPPD, Xcel, CHI, Sullivan, NHA, SCE.
\68\ See proposed 18 CFR 5.4(c)(2)(A)-(B), (D)-(G), (J) and (P).
\69\ See proposed 18 CFR 5.4(c)(2)(H), (I), (K), and (L). NHA
adds that critical energy infrastructure information (CEII) would be
viewable only at the potential applicant's offices. CEII is
discussed in Section III. X below.
\70\ See proposed 18 CFR 5.4(c)(2) (M) and (O), and (G)(xi).
---------------------------------------------------------------------------

67. NHA's concerns are shared and the essence of its proposal
supported by many licensees. They acknowledge the importance of
explaining the current license requirements based on the original
license and any amendments, existing management plans, and other
requirements, but state that the expense of producing, packaging and
distributing the underlying licensing documents and existing studies to
many recipients will be burdensome in general and enormous in some
cases. They say that study results are generally useful only to a few
stakeholders with appropriate expertise, such as resource agencies. The
common thread of these comments is that general information about
existing project facilities and operations would be broadly
distributed, while more detailed information would be identified and
made available on request, via the internet or another means of
distribution.\71\
---------------------------------------------------------------------------

\71\ PG&E, Suloway, Normandeau, M&H, Consumers, Long View,
Reliant, AEP, Oroville, SCE.
---------------------------------------------------------------------------

68. SCE has a somewhat different proposal. It recommends that the
PAD be limited to: (1) A general description of the project, similar to
existing Exhibit A;\72\ (2) monthly energy data for the prior five
years;\73\ (3) five years of existing streamflow data;\74\ (4) a
description of existing recreation facilities and use based on the most
recent Form 80, and of the applicant's policies, if any, with respect
to management of project lands and waters; (5) a single line diagram
showing the electrical path between all project components; (6)
existing and available environmental data obtainable from resource
agencies or in the applicant's possession.\75\
---------------------------------------------------------------------------

\72\ See e.g., 18 CFR 4.41(b).
\73\ SCE states that licensee's methods of maintaining
information on dependable capacity are not consistent and would
therefore be misleading if required to be included. At the least,
SCE suggests, the term should be defined if it is required to be
reported.
\74\ SCE does not specify how the required information would be
reported; for instance the vintage of the data or its periodicity
(e.g., hourly, daily, monthly).
\75\ SCE's rewrite of proposed 18 CFR 5.4 is at pp. 8-18 of its
comments. SCE would also have us put language in the regulations
encouraging agencies to cooperate in the development of the PAD by
providing available environmental data to the applicant. Given the
concerns expressed by agency commenters about the potential for an
incomplete PAD and, in general, the importance of a quality
evidentiary record, we think agencies and other potential
participants have sufficient incentive to assist potential
applicants in this regard.
---------------------------------------------------------------------------

69. Long View and Xcel recommend that the PAD have the same format
as license application requirements for the classification of the
project; e.g., major unconstructed project, major project-existing dam,
or major water power project-5 megawatts or less, with the gaps to be
filled in as the prefiling consultation and information gathering
process proceeds.\76\
---------------------------------------------------------------------------

\76\ Long View, Xcel.
---------------------------------------------------------------------------

70. Agency and NGO commenters appear to be less concerned with the
format of the document than with its contents. They generally contend
that the range of data and level of detail set forth in the NOPR should
be affirmed in the final rule.
71. WPSR opposes having to provide the PAD at all. It recommends
instead that the existing requirement to make public information
viewable by the public in various locations, such as company
headquarters and public libraries, be retained.
72. AW/FLOW states that internet or CD distribution is good in
theory, but that people attending meetings generally have paper, so
this means of distribution would unfairly force cash-strapped NGOs to
bear the cost of printing materials.
73. The Documents Group agreed that it makes sense for a potential
applicant to incorporate into the PAD by reference voluminous
information such as raw data and existing studies. They agreed that the
substantial effort and expense does not necessarily make the document
more useful and may, owing to sheer volume, make it less useful. This
information could be summarized in the relevant section of the PAD
using appropriate methods. In addition, the PAD would contain an
appendix describing all materials summarized in the text, and
explaining how to obtain those materials from the potential applicant.
74. The Documents Group agreed that the goal is to target insofar
as is practicable the needs of various stakeholders, agencies, and
Indian tribes. To that end, the potential applicant would have to
deliver the summarized information upon request to any agency, Indian
tribe, NGO, or other stakeholder within 20 days of the request, in a
mutually agreeable format that does not require conversion by the
potential applicant from paper to an electronic format. Potential
applicants would have to be able to deliver electronically formatted
materials in a variety of formats.
75. We are adopting requirements for the PAD that substantially
incorporate the recommendations of the Documents Group. The purpose of
the PAD is to provide the Commission and the consulted entities with
existing information relevant to the project proposal that is in the
potential applicant's possession or that it can obtain with the
exercise of due diligence. Distribution of the information will enable
the consulted entities to identify issues and related information
needs, develop study requests and study plans, and help the Commission
to analyze any application that may be filed. We will not require a
potential applicant to conduct studies in order to generate information
for inclusion in the PAD. The basic content requirements will be a
description of the existing and proposed project facilities and
operations, a description of the existing environment, existing data or
studies relevant to the existing environment, and any known and
potential impacts of the proposed project on relevant resources.
76. A potential applicant will not be required to include all of
the studies and information sources on which the descriptions in the
PAD are based, but will be required to provide these materials upon
request to recipients of the PAD. Potential applicants and participants
in pre-filing consultation are encouraged to accomplish such
distribution by electronic means, including compact disks, but a
requester is entitled to receive such materials in hard copy form. The
PAD will also be required to include a process plan and schedule, a
preliminary issues and studies list, and an appendix summarizing any
contacts with agencies, Indian tribes, and others in obtaining relevant
information. We think that the foregoing format, content, and
distribution provisions should result in PADs that serve the purpose
for which this document is established and

[[Page 51078]]

reasonably balance the competing interests of the participants.\77\
---------------------------------------------------------------------------

\77\ We cannot do away with the ``library'' requirement, as it
is required by FPA Section 15(b)(2). In part 5, it appears at 18 CFR
5.2(a).
---------------------------------------------------------------------------

F. NEPA Scoping and Study Plan Development

1. In General
77. Most commenters support having a Commission-approved study plan
in the integrated process,\78\ but many request clarifications of or
modifications to the proposed study plan development process. Only
Idaho Power objects to this feature. It asserts that the current study
planning and dispute resolution provisions generally work well, and are
less costly and labor-intensive than what is included in the integrated
process. We do not dispute that there are instances where the current
study planning and dispute resolution processes are adequate. They
undeniably contribute in many cases however to the undue length of the
licensing process by deferring identification and resolution of
fundamental issues about what information gathering and studies are
necessary until after the application is filed. The integrated process
is designed to eliminate that problem.
78. HRC requests that we affirm that the purpose of an approved
study plan is to develop a record that allows for the adequate
evaluation of reasonable alternatives to mitigate ongoing impacts to
resources from project operations, and not to prejudge potential
mitigation measures. The purpose of an approved study plan is to bring,
to the extent possible, pre-filing finality to the issue of what
information gathering and studies will be required by the Commission to
provide a sound evidentiary basis on which the Commission and other
participants in the process can make recommendations and provide terms
and conditions. The study plan is developed in conjunction with NEPA
scoping, and the latter inevitably involves judgments about which
potential alternatives are reasonable to consider, and which
alternatives will be eliminated from detailed consideration. It
therefore follows that the Commission-approved study plan will reflect
those determinations.
---------------------------------------------------------------------------

\78\ E.g., NYSDEC, S-P, California, Interior. S-P states that
approved study plans are needed to ensure confidential treatment of
tribal cultural practices. This matter is addressed in Section
III.N.
---------------------------------------------------------------------------

79. Washington states that study requests should not be rejected
merely because they do not employ generally accepted practices, because
new methodologies or techniques may be appropriate in some cases. We
agree. As noted elsewhere, with the exception of the establishment of a
nexus between the study request and operation of the project, no one
criteria establishes a ``litmus test'' for study requests.
80. Georgia DNR states that study plans should be project-specific
and that the study criteria should not be interpreted so as to mandate
standard form study plans. We agree. Although we would expect specific
study plans for projects with features identical or similar to one
another to have the same or similar components, every project is likely
to have unique features that need to be accounted for in the
development of the study plan.
81. NYSDEC states that the unique aspects of individual projects
make extrapolated data acceptable, if at all, only if it is technically
infeasible to produce site-specific data. We do not agree with blanket
assertions of this nature. We agree with Oregon that the
appropriateness of extrapolated data is a decision properly made on a
case-by-case and issue-by-issue basis.
82. Under the proposed rule, the NEPA scoping meeting and site
visit would be followed by an opportunity for participants to make
comments and preliminary study requests before the potential applicant
files its draft study plan.\79\ Interior would insert after the
comments and preliminary study requests a six-month period for the
participants to negotiate a mutually agreeable study plan. Interior
reasons that this might permit elimination of the following steps up to
the potential applicant filing a revised study plan for approval,\80\
and thereby minimize the need for formal dispute resolution,
eliminating as much as 200 days from the pre-filing process. PG&E and
SCE think the proposed study plan development process is weighted too
heavily toward notice and comment and not enough toward interaction
between the participants. PG&E and SCE would also like to see more time
for the participants to resolve their study differences. The Process
Group agreed in general with these commenters that there should be more
time in the process for such interaction.
---------------------------------------------------------------------------

\79\ Proposed 18 CFR 5.5 and 5.6.
\80\ Interior refers to proposed 18 CFR 5.7 through 5.12.
---------------------------------------------------------------------------

83. As discussed below, we have modified the process to extend the
time for participants to discuss the potential applicant's proposed
study plan and to provide more flexibility concerning interactions
during that period.\81\
---------------------------------------------------------------------------

\81\ See Section III.T below, and 18 CFR 5.12.
---------------------------------------------------------------------------

2. Study Criteria
84. The NOPR proposed that an information-gathering or study
request be required to address seven criteria:
(1) Describe the goals and objectives of the study and the
information to be obtained;
(2) If applicable, explain the relevant resource management goals
of the agencies or Indian tribes with jurisdiction over the resource to
be studied;
(3) If the requester is not a resource agency, explain any relevant
public interest considerations in regard to the proposed study;
(4) Describe existing information concerning the subject of the
study proposal, and the need for additional information;
(5) Explain any nexus between project operations and effects
(direct, indirect, and/or cumulative) on the resource to be studied;
(6) Explain how any proposed study methodology (including any
preferred data collection and analysis techniques, or objectively
quantified information, and a schedule including appropriate field
season(s) and the duration) is consistent with generally accepted
practice in the scientific community or, as appropriate, considers
relevant tribal values and knowledge;
(7) Describe considerations of cost and practicality, and why any
proposed alternatives would not be sufficient to meet the stated
information needs.\82\
---------------------------------------------------------------------------

\82\ See proposed 18 CFR 5.10.
---------------------------------------------------------------------------

a. General Comments
85. Commenters generally approved of the proposed study criteria
subject to various recommendations for minor changes.\83\ With the
exception of issues concerning what consideration should be given to
study costs, few had criterion-specific comments. Commenters also
offered a variety of more general comments on how the study criteria
should be applied. We consider the general comments first.
---------------------------------------------------------------------------

\83\ VANR, Normandeau, HRC, NHA, Long View, Duke, PG&E, Advisory
Council, Oregon. In contrast to the broad expression of support from
all stakeholder perspectives, Minnesota DNR states that Criteria
(2), (5), (6), and (7) are either exceedingly general or unduly
specific and speculates that they were designed to obstruct or limit
resource agency study requests.
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86. PG&E, SCE, and Duke request that we affirm in the preamble that
the study criteria are not a check list; rather, they need to be
considered as a whole, with each criterion addressed, and that no
single criterion is determinative. The Studies Group agreed. We so
stated in

[[Page 51079]]

the NOPR,\84\ and affirm that statement here.
---------------------------------------------------------------------------

\84\ 68 FR at p. 13995; IV FERC Stats. & Regs. ]
32,568 at p.
34,705.
---------------------------------------------------------------------------

87. Long View states that the preamble should clarify that
requesters' desires for information must be tempered by practical
considerations of relevancy, the value of the information sought in the
context of the proceeding, and the complexity and effort required to
obtain the information. NHA states that requesters should be required
to explain the merits of their requests in the context of the case and
the FPA. We think a practical application of the proposed criteria,
with the minor modifications we are making in this rule, should result
in the adoption of study requests that have merit, and the exclusion of
those that do not. As we stated in the NOPR, ``the * * * criteria
implicitly require that study requests not be frivolous and add some
appreciable evidentiary value to the record.'' \85\
---------------------------------------------------------------------------

\85\ 68 FR at p. 13996; IV FERC Stats. & Regs. ]
32,568 at p.
34,706.
---------------------------------------------------------------------------

88. HRC asks us to clarify how ongoing environmental impacts will
be considered in light of our policy that the baseline for
environmental analysis is current conditions.\86\ The study criteria
should be applied in the same manner regardless of whether an impact
from project operations on a resource is characterized as ongoing or
otherwise. The requesting party would have to reasonably demonstrate
the nexus between project operations and resource impacts and, in the
context of addressing the other criteria, show how the proposed study
reasonably relates to the development of potential mitigation or
enhancement measures.
---------------------------------------------------------------------------

\86\ S-P and PFMC state that the environmental baseline for
studies should be pre-project conditions. Georgia DNR states that
pre-project baseline studies may be appropriate in some cases. SCE,
Duke, and PG&E ask us to restate in the regulations our policy that
the baseline is current conditions. We are not changing our well-
established and judicially approved policy, and see no need for it
to be written into our procedural regulations.
---------------------------------------------------------------------------

89. Duke wants us to emphasize that decisions on study requests
will be consistent with Commission policy and practice. We think the
regulation text is sufficiently clear in this regard.\87\
---------------------------------------------------------------------------

\87\ See 18 CFR 5.14(l).
---------------------------------------------------------------------------

90. The Advisory Council states that it would be helpful to include
a more complete definition of what cultural resources studies are
needed. The Advisory Council makes no specific suggestions in this
connection, and we continue to believe that the best forum for
determining appropriate data needs and study requirements is in
individual cases.
91. Oregon suggests, particularly in light of the time frames, that
participants' study requests should only need to be general in nature,
with the burden on potential applicants to produce detailed study
plans. We disagree. As discussed below,\88\ we have modified the
process in response to comments by moving NEPA scoping, including the
issuance of Scoping Document 1, to a place prior to the participants'
submittal of their study requests. Under the revised process, these
study requests should be as detailed as possible.
---------------------------------------------------------------------------

\88\ See Section III.T and 18 CFR 5.8(c).
---------------------------------------------------------------------------

92. The NOPR states that judgment calls on study requests will be
made ``in light of the principle that the integrated licensing process
should to the extent reasonably possible serve to establish an
evidentiary record upon which the Commission and all agencies or Indian
tribes with mandatory conditioning authority can carry out their
responsibilities.''\89\ Duke states that this is inconsistent with a
prior order in which Duke asserts that the Commission stated that it
will not require data that other agencies deem necessary to support the
exercise of their mandatory conditioning authority. In fact, in the
order cited by Duke, Curtis/Palmer Hydroelectric Company LP and
International Paper Company,\90\ we merely restated our judicially
affirmed position that the Commission has no statutory obligation to
provide a record to support other agencies' decision making, or to
require studies that it does not deem necessary to evaluate the public
interest in light of the record evidence and argument provided by other
parties.\91\ The principle underlying the integrated process expressed
above is not inconsistent with that position.
---------------------------------------------------------------------------

\89\ 68 FR at p. 13995; IV FERC Stats. & Regs. ]
32,568 at p.
34,705.
\90\ 92 FERC ]
61,037 (2000).
\91\ 92 FERC at p. 61,089.
---------------------------------------------------------------------------

93. No comments were filed on proposed criteria (1), (4), and (6).
Comments on the other proposed criteria are considered below.
b. Criterion (2)
(2) If applicable, explain the relevant resource management goals
of the agencies or Indian tribes with jurisdiction over the resource to
be studied.
94. NYSDEC states that the relationship of a study request to
agency management goals should not be the sole or even the primary
measure of the need for a study because agencies may request studies
that do not relate directly to agency management objectives, but do
relate to mandates established in law or regulation or derive from
agency policy. A statement by an agency connecting its study request to
a legal, regulatory, or policy mandate is, of course, entitled to
appropriate consideration. Any requester should however appreciate that
the more broadly stated the legal, regulatory, or policy mandate is,
the more clearly the requester needs to explain how the mandate relates
to the study request and, in turn, project impacts.
95. Massachusetts DER states that only a resource agency may
appropriately determine what study requests apply to its management
goals, so neither the Commission nor potential applicants should make
determinations of applicability. As explained in the NOPR, the
Commission does not intend to second guess the appropriateness or
applicability of resource agency management goals.\92\ A requesting
agency is required however to establish the connection, if any, between
its study request and its management goals. In the great majority of
cases, the connection should be obvious.
---------------------------------------------------------------------------

\92\ 68 FR at p. 13995; IV FERC Stats. & Regs. ]
32,568 at p.
34,705.
---------------------------------------------------------------------------

c. Criterion (3)
(3) If the requester is not a resource agency, explain any relevant
public interest considerations in regard to the proposed study.
96. NYSDEC states that the requirement to explain relevant public
interest considerations should also apply to agencies. It would be
desirable for any entity requesting a study to explain how its study
request relates to the public interest, but it should suffice for an
agency requester to explain the connection of the study request to its
resource management goals.
d. Criterion (5)
(5) Explain any nexus between project operations and effects
(direct, indirect, and/or cumulative) on the resource to be studied.
97. EEI requests us to state that a nexus between project
operations and effects on the resource in question is a threshold
requirement that must be demonstrated in every case.\93\ This issue was
discussed by the Studies Group, which agreed with EEI's request, as do
we. Otherwise, the door would be open

[[Page 51080]]

to study requests having nothing to do with project impacts.\94\
---------------------------------------------------------------------------

\93\ Duke and PG&E similarly state that the Commission should
affirm that it will strictly apply this criterion.
\94\ Geosyntec appears to state that a requester should only
have to show a nexus between the study request and an issue, rather
than a nexus between a study request and the project. We think this
is a distinction without a difference, because the impacts of the
project on resources creates the issues, which in turn are the basis
for study requests.
---------------------------------------------------------------------------

98. CHRC counters that a study might be required to establish the
existence of a nexus. Taken to its extreme, CHRC's position would have
us approving study proposals that amount to mere speculation. We think
a common sense approach to demonstrating a nexus between project
operations and resource impacts, informed by the professional judgment
of qualified agency, Commission, and tribal staff, should ensure that
this criterion is reasonably applied.
99. Oregon approaches the nexus issue from a different perspective;
that is, if a nexus is demonstrated between project operations and
resource impacts (e.g., fish entrainment mortality), then related study
requests must be approved. We do not agree. As stated above, the
criteria are to be considered as a whole, in light of the circumstances
of the individual proceeding, and any applicable Commission policies
and practices.
100. NHA and PG&E also request that we add an additional criterion
requiring requesters to describe how the information would be used in
the proceeding in relation to resource management measures. This
proposed criterion appears to be intended to elicit an explanation how
the information could be used to develop protection, mitigation, or
enhancement measures by the Commission or agencies with conditioning
authority. The Studies Group discussed this matter and recommended that
the following phrase be added to the end of Criterion (5): ``and how
study results would inform the development of license conditions.'' We
agree that this is an important aspect of study requests and are
adopting the proposed modification.
e. Criterion (7)
(7) Describe considerations of cost and practicality, and why any
proposed alternatives would not be sufficient to meet the stated
information needs.\95\
---------------------------------------------------------------------------

\95\ See proposed 18 CFR 5.10.
---------------------------------------------------------------------------

101. This proposed criterion received the most comments. Several
state agencies state that resource agencies should not be required to
provide detailed cost estimates of proposed studies because specific
knowledge concerning study costs lies with applicants or their
contractors. They contend that potential applicants should have the
burden of addressing cost and practicality. They also add that this may
be a difficult matter on which to reach a merits conclusion, because
the value of the information developed is not always known until after
a study is completed.\96\
---------------------------------------------------------------------------

\96\ Georgia DNR, Minnesota DNR, NCWRC, PFBC, MPRB. MPRB would
eliminate this criterion altogether on the ground that once a need
for information is established, cost is irrelevant. We rejected such
assertions in the NOPR. 68 FR at p. 13995; IV FERC Stats. & Regs. ]
32,568 at p. 34,705.
---------------------------------------------------------------------------

102. NYSDEC states that the criterion should be modified to require
a requester to address the proposed study's scope and level of effort.
We conclude the proposed modification is not necessary because there is
a built-in incentive for requesters to do so. It is implicit that cost
and practicality can be addressed only to the extent the study request
includes a description of the scope and level of effort. The less
specificity a requester provides, the more difficult it will be to
apply the criterion in its favor.
103. Finally, various Indian tribes and agencies state that where
protection of tribal trust resources is at issue, the Commission's
trust responsibility prohibits it from considering factors of cost and
practicality, or that such factors are entitled to minimal weight. They
state that the only applicable considerations are consistency with
treaties, statutes, and case law defining obligations to protect the
trust resources. Some add that the FPA requires the Commission to
protect non-developmental resources, so matters of study cost and
practicality are entitled under that Act to minimum weight.\97\ As we
stated in the NOPR, our responsibility to balance all aspects of the
public interest with respect to any project proposal necessarily
encompasses the exercise of independent judgment concerning the
relative cost and value of obtaining information.\98\
---------------------------------------------------------------------------

\97\ Menominee, Wisconsin DNR, MPRB, Interior, Skokomish.
\98\ 68 FR at p. 13995; IV FERC Stats. & Regs. ]
32,568 at p.
34,705.
---------------------------------------------------------------------------

104. The NOPR also discussed certain additional criteria proposed
by NHA and SCE,\99\ and requested comments on whether their proposed
criterion (3) (``The cost of the study must be justified relative to
the value of the incremental information provided'') or the
Commission's proposed Criterion (7) more appropriately deals with the
issue of study costs.\100\
---------------------------------------------------------------------------

\99\ 68 FR at pp. 13995-996; IV FERC Stats. & Regs. ]
32,568 at
p. 34,706.
\100\ 68 FR at p. 13995; IV FERC Stats. & Regs. ]
32,568 at p.
34,706.
---------------------------------------------------------------------------

105. Industry commenters preferred the NHA/SCE language because it
requires a conclusion concerning whether the cost of the study is
justified by the expected value of the information.\101\ Agency and NGO
commenters aver that the NHA/SCE language is more theoretical than
practical and likely to cause more disputes than it prevents because
the full value of a study cannot be known until it is completed. They
add that any criterion that purports to measure study results against
dollars is an apples to oranges comparison and prejudices everyone's
interests but the applicant's. They therefore favor the Commission's
Criterion (7).\102\ Interior and MPRB state that scientific standards
should be paramount. Interior adds that cost and practicality can be
assessed by the proposed Advisory Panel, if the study request goes to
dispute resolution.
---------------------------------------------------------------------------

\101\ NHA, Normandeau, WPPD, SCE, PFMC, EEI, NEU, Duke, PG&E,
CSWC.
\102\ California, Oregon, HRC, NCWRC, Interior, MPRB.
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106. California recommends that if Criterion (7) is not adopted, a
better alternative than the NHA/SCE language would be to follow
California's requirement that the burden of studies, including their
costs, must bear a reasonable relationship to the need for the study
and the benefits to be obtained therefrom. PG&E and NHA in their
comments also attempt to find some middle ground by recommending that
NHA/SCE criterion (3) be revised to require the requester to ``Assess
the relative value of the anticipated incremental information compared
to the effort, including time and cost, required to obtain it.'' There
is clearly no agreement between the industry on the one hand, and
agencies, Indian tribes, and NGOs on the other hand about how to
consider cost and practicality.
107. The Studies Group considered this question at length and
agreed that this criterion is not concerned solely with cost, but also
generally with the level of effort the potential applicant should have
to make to gather information or conduct studies with respect to an
issue. They proposed to insert the words ``and/or level of effort''
after the word ``cost'' to reflect that agreement. After considering
all the comments, we conclude Criterion (7), modified as recommended by
the Studies Group, provides an appropriate basis for consideration of
cost and

[[Page 51081]]

practicality in weighing the merits of any study request.\103\
---------------------------------------------------------------------------

\103\ See 18 CFR 5.9(b)(7).
---------------------------------------------------------------------------

f. Proposed Additional Criteria
108. Various industry commenters recommend that we add a criterion
requiring a requester to discuss whether or a not a resource problem
has been identified that relates to the request.\104\ This proposed
criterion is too subjective. A principal feature of hydroelectric
licensing in recent decades has been disagreements between license
applicants and others concerning the extent to which proposed or
existing projects have negative effects on natural and other resources.
Whether an identified impact is or is not a problem, and the extent of
the problem, are often matters of perspective. Moreover, the finding of
a ``problem'' is not a required predicate for Commission action under
the comprehensive development standard of FPA Section 10(a)(1). Rather,
that standard contemplates license conditions for the ``protection,
mitigation, and enhancement'' of fish and wildlife * * *, and for other
beneficial public uses, including irrigation, flood control, water
supply, and recreational and other resources.'' [emphasis supplied]
\105\
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\104\ PG&E, SCE, NHA, WPPD, EEI. Other additional criteria were
suggested, which were considered above in the context of
modifications to the existing proposed criteria.
\105\ 16 U.S.C. 803(a)(1).
---------------------------------------------------------------------------

109. Normandeau suggests that we consider adding a criterion that
requires a requester to address the effect the information gathering or
study would have on timely completion of the overall process. Criterion
(6) requires each proposed study to include a schedule, including
appropriate field season(s) and the study duration, so all parties
should be able to assess the potential effect of the request on the
timeliness of the proceeding. The appropriate length of a proposed
study will, of course, be a matter best determined in the context of
the specific case.
110. Menominee recommends that we add a criterion to recognize
study requests made in connection with the Federal government's trust
responsibility to protect the resources of Indian tribes. This does not
appear to be necessary because the relationship between a study request
and the trust responsibility can be addressed in Criteria (2) or (6).
111. The study criteria, modified in accordance with the foregoing
discussion and as set forth in the regulations we are adopting, are set
forth here:
(1) Describe the goals and objectives of each study proposal and
the information to be obtained;
(2) If applicable, explain the relevant resource management goals
of the agencies or Indian tribe with jurisdiction over the resource to
be studied;
(3) If the requester is a not resource agency, explain any relevant
public interest considerations in regard to the proposed study;
(4) Describe existing information concerning the subject of the
study proposal, and the need for additional information;
(5) Explain any nexus between project operations and effects
(direct, indirect, and/or cumulative) on the resource to be studied,
and how the study results would inform the development of license
requirements;
(6) Explain how any proposed study methodology (including any
preferred data collection and analysis techniques, or objectively
quantified information, and a schedule including appropriate filed
season(s) and the duration) is consistent with generally accepted
practice in the scientific community or, as appropriate, considers
relevant tribal values and knowledge; and
(7) Describe considerations of level of effort and cost, as
applicable, and why any proposed alternative studies would not be
sufficient to meet the stated information needs.
3. Progress and Study Reports and Additional Study Requests
a. Progress Reports and Initial and Updated Study Reports
112. The proposed rule would have required the potential applicant
to file an initial status report with study results and analyses
following the first season of studies, or at another appropriate time
following the date of the study plan order. The report would be
followed by a meeting with parties and Commission staff. The potential
applicant would file a meeting summary and, if necessary, a request to
modify the study plan and schedule. The request to modify the plan, if
any, would be deemed approved unless any party filed a notice of
disagreement. Disagreements would be resolved based on written
submissions to the Director. Any request for new information or studies
following the initial status report would have to address the study
criteria and show good cause why the request should be approved.\106\
---------------------------------------------------------------------------

\106\ Proposed 18 CFR 5.14 (Conduct of studies).
---------------------------------------------------------------------------

113. An updated status report would follow after a second season of
studies or at another appropriate time. It would be subject to the same
review, comment, and disagreement resolution procedures, except that
any request for new information or studies must address the study
criteria and show extraordinary circumstances why the request should be
approved.\107\
---------------------------------------------------------------------------

\107\ Id.
---------------------------------------------------------------------------

114. SCE states that this is unduly burdensome for all
participants. It questions the practicality of one report at a
specified time because of the likelihood of multiple studies conducted
on different schedules, and states that preliminary results could lead
participants to false conclusions. SCE also objects to sending study
results to entities that have not previously requested to be involved
in the issue under study. SCE and NHA would instead require the
potential applicant to distribute a status report explaining actions
taken to date, any unexpected findings, and a schedule for completing
the studies.
115. SCE adds that the meeting following the initial status report
would be unworkable because of the large numbers of studies required to
be reported in detail, and because most participants will be interested
in a limited number of studies. SCE would have the potential applicant
determine the need for study review meetings based on comments received
on the abbreviated status report, unless a majority of participants
requested a meeting with respect to a particular study. NHA would also
make the meeting optional for the potential applicant. If participants
wanted a meeting not proposed by the potential applicant, they would so
request in their comments on the initial status report, and the
Commission staff would decide if it is needed.
116. Long View shares NHA's and SCE's concerns about the status
reports and meetings. It would modify the rule to allow potential
applicants to issue study-specific status reports and hold study-
specific meetings at appropriate times with appropriate people.
117. NYSDEC would modify the rule to state that the potential
applicant's meeting summary must include a brief statement that the
meeting summary is deemed to be approved unless a party files a notice
of disagreement.
118. These and other concerns about the status report proposal were
considered at length by the Studies Group, including the fundamental
issue of whether it makes more sense to have one status report and
meeting, or to issue separate reports for each study or group of
related studies at different

[[Page 51082]]

times. The Studies Group concluded that it would be best for the
participants to negotiate the timing of periodic progress reports on
studies,\108\ including the manner and extent to which information will
be shared, which may include meetings, and sufficient time for
technical review of the analysis and results, when the study plan and
schedule is developed. The progress reports would have to describe the
study progress and data collected to date in a manner that enables
participants to determine if the study plan is being followed, and to
describe any proposed changes. Documentation of study results would be
provided to participants upon request. An annual study report would be
issued, but would be in the form of a summary of the overall progress
of study plan implementation and would serve as a trigger point for
requests, if any, to modify existing studies or conduct additional
studies.
---------------------------------------------------------------------------

\108\ For clarification, here and in the regulations we are
referring to the potential applicant's comprehensive annual report
as the ``study report,'' and to other periodic reports on studies as
``progress reports.''
---------------------------------------------------------------------------

119. These modifications should make it easier for individual
participants to focus on issues of concern to them, should result in
early identification of any implementation issues, and should ease the
distribution and consultation burden on the potential applicant.
Accordingly, this is a reasonable approach to the matter of study plan
implementation and is reflected in the final rules.\109\
---------------------------------------------------------------------------

\109\ 18 CFR 5.11 and 5.15.
---------------------------------------------------------------------------

120. Finally, the Studies Group and Minnesota DNR recommend that
parties have 30 days to respond to the initial and updated study
reports, instead of the 15 days proposed. We have so provided.\110\
---------------------------------------------------------------------------

\110\ 18 CFR 5.15.
---------------------------------------------------------------------------

b. Modified Study Requests
121. NHA also addressed the standard for requesting modifications
to the approved study plan in response to the initial study report. NHA
would require a requester to address each of the study criteria and
subject the request to the same good cause standard as a request for
new information or new studies. We think such a requirement is
unnecessary. Requests for modifications to an ongoing study are likely
to be focused on specific concerns about how the study was conducted,
or straight forward matters such as whether to extend the study for an
additional field season because of drought conditions. A participant
with such concerns should not have to reestablish the need for the
study in the first instance. Rather, it should only be required to show
good cause for the proposed modification.
122. We also think good cause standard should apply to proposals to
modify ongoing studies following the updated study report. The proposed
regulation text was not clear on the distinction between the standards
applicable to requests for modifications to existing studies versus
requests for new information gathering or studies. We have modified the
regulation text to make the applicable standards clear.\111\
---------------------------------------------------------------------------

\111\ See 18 CFR 5.15.
---------------------------------------------------------------------------

c. New Study Requests
123. We requested comments on whether participants should be
permitted to make new information-gathering or study requests (as
opposed to requests for modification of, or disputes concerning the
implementation of, existing studies) following the updated study
report.\112\
---------------------------------------------------------------------------

\112\ 68 FR at p. 14010; IV FERC Stats. & Regs. ]
32,568 at p.
34,731.
---------------------------------------------------------------------------

124. NHA and Long View would like the rules to provide more
certainty regarding the potential applicant's study obligations. They
propose that after the updated study report participants would be
permitted to make recommendations regarding the implementation of
previously approved studies, but not permitted to make new information
gathering or study requests. They state that participants should know
when the initial study report is made whether any new studies are
needed, and allowing new study requests after the updated study report
would make participants less likely to focus their efforts on
developing study requests at the beginning of the process.
125. Other licensees share the desire for certainty, but support
the ``extraordinary circumstances'' standard as an alternative to a
prohibition on new study requests.\113\ SCE would permit a new study
request only if: first year studies reveal unexpected results that
require further review not possible under the current study plan; a
change in applicable law that requires another goal to be considered;
or there is a valid dispute regarding implementation of the plan.
---------------------------------------------------------------------------

\113\ PG&E, Springer, NEU, Idaho Power, EEI.
---------------------------------------------------------------------------

126. Agencies and NGOs support the opportunity to request new
studies at this point.\114\ Interior and MPRB state that many
unanticipated events could cause a change in circumstances or that
study results could show that more information is needed. Oregon and
PFBC similarly state that studies may reveal specific sources of
project impacts, and that follow-up studies may be needed to determine
if negative impacts can be corrected without extensive mitigation.
---------------------------------------------------------------------------

\114\ California, Oregon, PFMC, Menominee, Interior, MPRB,
Skagit.
---------------------------------------------------------------------------

127. Some agencies and NGOs accept the premise that the standard
for new study requests should increase as the proceeding progresses,
and do not oppose an extraordinary circumstances standard at this
point.\115\ Examples of extraordinary circumstances proffered by these
entities include:
---------------------------------------------------------------------------

\115\ California, HRC, NYSDEC, NCWRC.
---------------------------------------------------------------------------

?
A finding late in the study of a listed species in the area
affected by the project; \116\
---------------------------------------------------------------------------

\116\ NCWRC, PFBC, Georgia DNR.
---------------------------------------------------------------------------

?
Initial studies uncover information that must be considered
to ensure agency mandates and important management objectives are
met.\117\
---------------------------------------------------------------------------

\117\ NCWRC, PFBC, Georgia DNR.
---------------------------------------------------------------------------

?
A nexus between project impacts and the study request is
shown;
?
A good reason is offered why the study was not previously
requested;
?
Circumstances have changed;
?
Study results indicate a new study is necessary; or
?
There are changes in laws, regulations, or
environment.\118\
---------------------------------------------------------------------------

\118\ The last five examples were provided by NYSDEC. Minnesota
DNR states that study requests should not be foreclosed simply
because they may not have been identified early in the consultation
process, and MPRB contends that the proposed limitations should be
relaxed to ensure that project proposals are fully understood.
---------------------------------------------------------------------------

128. After considering the comments, we have decided to adopt the
proposed rule in this regard. We appreciate the desire of potential
applicants for certainty when the study plan is approved, but until the
study plan is completed, it appears premature to prohibit any
additional study requests. An extraordinary circumstances standard,
conscientiously applied, is sufficiently strict to provide ample
incentive for participants to make their study requests early on,
during development of the study plan. We will not attempt to further
specify in the rules what constitutes extraordinary circumstances. This
is the kind of decision that needs to be made in the context of a
specific proceeding.\119\
---------------------------------------------------------------------------

\119\ New study requests made at later points in the process are
considered in Section III.L.2 below.
---------------------------------------------------------------------------

129. Finally, HRC, apparently fearing that the ``good cause''
standard will be too restrictive, requests clarification of that term.
Troutman, apparently fearing that ``good cause'' and ``extraordinary
circumstances,'' will be interpreted too broadly, requests
clarification of both terms. We think it inadvisable to attempt more
specificity at this point. The only practical approach is to apply

[[Page 51083]]

these standards in the light of case-specific facts.
d. Comments on Study Reports
130. We also requested comments on whether parties should be
required to file written comments on the potential applicant's initial
and updated study reports prior to the required meeting to discuss the
report(s).\120\ Most commenters oppose such a requirement. Long View,
Oregon, and ADK say that the written comments are likely to reflect
misunderstandings or misinterpretations and the best place to clear
such things up is in a face-to-face meeting. These parties suggest that
written comments be filed after the meeting. California, PFBC, ADK,
Georgia DNR also think it would be unproductive and would allow anyone
who cannot attend the meeting to file their comments in lieu thereof.
On the other hand, HRC, PFMC, and NEU think such a requirement would
encourage effective preparation by the potential applicant for the
meeting. Interior and Skokomish think pre-meeting comments should be
optional.
---------------------------------------------------------------------------

\120\ 68 FR at p. 14010; IV FERC Stats. & Regs. ]
32,568 at pp.
34,732-733.
---------------------------------------------------------------------------

131. In light of these comments, we will not impose such a
requirement. Instead, we will leave it to the parties to determine
individually whether they think the time and effort to file comments
before the meeting will be beneficial in the circumstances of the
proceeding.
132. Finally, S-P seeks assurance that the study development
process will include consultation on means of keeping confidential
sensitive Indian cultural practices. Our regulations and practices
ensure that Indian tribes' confidentiality concerns will be
appropriately addressed.\121\
---------------------------------------------------------------------------

\121\ See discussion of this issue in the NOPR; 68 FR at
p.14002; IV FERC Stats. & Regs. ]
32,568 at p. 34,717.
---------------------------------------------------------------------------

G. Study Dispute Resolution Process

133. The NOPR proposed to establish a dispute resolution process
that serves two purposes. In the informal stage, the applicant files a
draft study plan for comment; the participants (including Commission
staff) meet to discuss the draft plan and attempt to informally resolve
differences. The Commission then approves a study plan with any needed
modifications after considering the applicant's proposed plan and the
participants' comments (study plan order).\122\
---------------------------------------------------------------------------

\122\ This was referred to in the NOPR as the ``Preliminary
Determination.'' We have change the name to Study Plan Order to
recognize that it is not preliminary with respect to study requests
that do not directly involve the exercise by agencies or Indian
tribes of mandatory conditioning authority.
---------------------------------------------------------------------------

134. In the formal dispute resolution process, resource agencies
with mandatory conditioning authority under FPA sections 4(e) and 18,
and states or Indian tribes with water quality certification authority
under Clean Water Act section 401, would be able to file a notice of
study dispute with respect to studies pertaining directly to the
exercise of their authorities under the aforementioned sections of the
FPA or CWA. An Advisory Panel considers the dispute and makes
recommendations to the Director of Energy Projects, who resolves the
dispute.
135. We also proposed that the applicant, by virtue of the fact
that it must conduct any studies required by the Commission and
implement the license, has a special interest in the outcome of study
dispute resolution, and should be afforded the opportunity to submit to
the panel information and arguments with respect to a dispute.\123\
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\123\ Proposed 18 CFR 5.1213(i).
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136. The NOPR requested comments on what modifications, if any,
should be made to the proposed study dispute resolution process and, in
particular, the proposed advisory panel.\124\ Responses were received
on nearly every aspect of the proposed process. Most commenters
supported the proposed study dispute resolution process, but nearly all
requested clarifications or modifications to cure perceived
deficiencies. A few commenters opposed the panel and made alternative
recommendations. All of these comments are considered in this section.
---------------------------------------------------------------------------

\124\ 68 FR at p. 13998; IV FERC Stats. & Regs. ]
32,568 at p.
34,711.
---------------------------------------------------------------------------

1. Informal Dispute Resolution
137. NHA and WPPD recommend that a peer review process be added for
study disagreements prior to issuance of the study plan determination,
to provide unbiased expert opinion on establishment of study request
goals and objectives, technical design in relation to goals and
objectives and the state of the art, and the anticipated utility of the
study results to meeting the study goals and objectives. If the
disagreement was not resolved as a result of consultation with the peer
reviewers, the peer reviewers' comments would become part of the
record, which would be available to the panel in formal dispute
resolution, if any.
138. We will not adopt this recommendation. A peer review process
would add additional time and expense to the process, and would largely
replicate the formal dispute resolution process, which would be
inconsistent with our goal of having a study plan development process
that ensures, as best the Commission can, that the participants come
together for the purpose of resolving study disagreements themselves.
2. Formal Dispute Resolution--Subject Matter and Eligibility
139. Many commenters recommend that the formal process be made
available to any participant for study requests regarding any
matter.\125\ California states that the formal process should be
available for all study disputes raised by agencies and Indian tribes.
Some agencies suggest that the fact that they have a statutorily
established role in licensing process, such as making fish and wildlife
agency recommendation pursuant to FPA Section 10(j), establishes an
obligation on the part of the Commission to ensure that the record
contains information to support their recommendations.\126\ Others
suggest that eligibility for informal dispute resolution only
undermines state agency management of state fish and wildlife
resources.\127\
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\125\ Interior, ODFW, Duke, Nez Perce, S-P, AW/FLOW, AMC, MDEP,
Washington, AmRivers, ADK, RAW, EPA, MPRB, PFBC, CRITFC, SC League,
MPRB, WGA, Skagit.
\126\ Interior, IDFG, Oregon, Washington.
\127\ Oregon, IDPR, PFMC, WGA, California, IDFG.
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140. The NOPR explained that agencies and Indian tribes with
mandatory conditioning authority, to extent they are exercising that
authority, are differently situated than participants whose role is to
make recommendations pursuant to FPA sections 10(a) and 10(j), National
Historic Preservation Act (NHPA) Section 106,\128\ or other applicable
statutes. The former have a duty to make reasoned decisions based on
substantial evidence, and their decisions are subject to judicial
review. Those making recommendations have no such responsibility.\129\
None of the proponents of broadening eligibility for the formal process
addresses this fundamental distinction. They also gloss over the fact
that the study plan determination is the culmination of the study plan
development process in which potential applicants, study requesters,
and the Commission staff consult intensively on what information
gathering and studies are needed, study requests and responses thereto
are accompanied by discussion of the study criteria, and the study plan
determination must explain its decision

[[Page 51084]]

on each disputed study with reference to the study criteria and any
applicable Commission policies and practices. We think this provides
ample opportunity for development of the record and consideration of
study requests related to recommendations.
---------------------------------------------------------------------------

\128\ 16 U.S.C. 470f.
\129\ See 68 FR at p. 13998; IV FERC Stats. & Regs. ]
32,568 at
p. 34,710.
---------------------------------------------------------------------------

141. Interior contends that the National Park Service should be
eligible for formal dispute resolution with respect to study
recommendations that relate to potential project impacts on a unit of
the National Park System or other areas of special management concern,
such as National Recreation Areas. Interior offers no basis for
distinguishing these studies related to FPA Section 10(a)
recommendations from those of other entities, and we see none.
142. GLIFWC, Menominee, and Nez Perce suggest that the Commission's
trust responsibility requires Indian tribes to be eligible for formal
dispute resolution with respect to studies related to impacts to
reservation lands within the project boundary and ceded lands on which
tribes have treaty reserved rights. We do not agree. The study plan
development and formal dispute resolution components of the integrated
process are not required by any treaty or statute, and are being
created solely to provide a means of creating an evidentiary record to
support, to the extent reasonably possible, the actions of agencies or
Indian tribes with decisional authority.
143. Finally, NHA and PG&E request that the regulations make more
clear that the formal process is available only to agencies or Indian
tribes with respect to their study requests related directly to
exercise of their mandatory conditioning authority, and not for study
requests relating to matters wherein these entities may only make
recommendations, such as FPA Section 10(j) fish and wildlife agency
recommendations. We have clarified the regulatory text in this
regard.\130\
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\130\ See 18 CFR 5.14(a). EPA requests that we modify the
regulation text to make eligible any agency that has water quality
certification authority, so as to permit EPA to file notices of
dispute in instances where it, rather than the state, is responsible
for issuing water quality certification. We agree to this
modification, and modified the regulatory text accordingly.
---------------------------------------------------------------------------

3. Advisory Panel
a. Need for Panel
144. Several commenters object to, or express concerns about, the
efficacy of, the Advisory Panel. Some licensee commenters assert that
the existing dispute resolution provisions work well enough.\131\ They
assert generally that allowing the disputing agency to be represented
on the panel violates fundamental fairness, accepted notions of due
process, and the Administrative Procedure Act (APA).\132\
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\131\ EEI, Idaho Power, Alabama Power, Xcel, NEU.
\132\ 5 U.S.C. 551-559.
---------------------------------------------------------------------------

145. Some commenters also fear that the panel proposal is not
practical, citing the lack of monetary compensation for the third-party
panelist's time and effort; and the short time frames, particularly in
light of the panelists' lack of familiarity with the project and
background of the issues.\133\ They recommend instead a technical
conference, narrowly focused on the specific dispute, with input from
the potential applicant and any other interested participant, and that
the record of the technical conference be filed with Director to inform
his decision on the dispute. The Skokomish Tribe fears that the panel
process will be unwieldy, take longer than the existing process, and
increase costs. VANR recommends that eligible study disputes be
resolved by the Director using the existing process and, if the panel
is used at all, it be only as a forum for appeals from the Director's
decision. Duke recommends instead a modified version of the existing
dispute resolution process; written submissions followed by a technical
conference including Commission staff, or a panel including a
representative of the applicant. PFBC recommends that the formal
process be used only after the disputants have first attempted to
resolve the matter using the ALP dispute resolution process.
---------------------------------------------------------------------------

\133\ Suloway, NPS, Long View, VANR.
---------------------------------------------------------------------------

146. These alternative recommendations generally have the virtue of
being less complicated than the Advisory Panel proposal. They lack
however the presence of a third party technical expert and panelists
from Commission staff and the disputing agency who have no prior
connection to the proceeding, and must work cooperatively with the
third party expert and one another. We have also provided for a
technical conference, discussed below, at which the potential applicant
may directly address the Advisory Panel. For these reasons, we will
adopt the Advisory Panel proposal.
b. Panel Membership
147. Many comments were received on the membership of the Advisory
Panel. Various licensee commenters contend that the Advisory Panel is
unfair because it includes a panelist from the disputing agency, but
not the potential applicant.\134\ They assert that requiring the agency
representative to be someone not previously involved with the
proceeding,\135\ or even from another agency, will not obviate an
institutional bias that resource agency staff have in favor of other
resource agency staff.\136\ Others contend that the panel would be more
fair without a disputing agency representative because the disputing
agency is a party to the dispute, while the Commission is the
decisional authority.\137\ Troutman expresses skepticism that resource
agencies will be able to find qualified representatives who have not
been involved in the proceeding and suggests that agency
representatives will be unwilling to act independently of higher level
agency officials who support the agency's position in the dispute.
---------------------------------------------------------------------------

\134\ Duke, Long View, Xcel, Snohomish. These entities reiterate
assertions previously made that the Advisory Panel abdicates the
Commission's responsibility to decide the issues before it. The
Advisory Panel has no decisional authority; it is limited to making
recommendations concerning the consistency of the study request with
the study criteria.
\135\ This is required by 18 CFR 5.14(d).
\136\ WPSC, WPSR.
\137\ Duke, Progress, Troutman.
---------------------------------------------------------------------------

148. Suggested remedies for this alleged bias include having two
Commission staff members not previously associated with the proceeding
and one third party expert,\138\ replacing the disputing agency on the
panel with a licensee representative,\139\ adding a licensee
representative to the panel,\140\ and replacing the third party expert
with a third member designated by the potential applicant.\141\
---------------------------------------------------------------------------

\138\ Duke, Progress, Troutman.
\139\ WPSR.
\140\ Xcel.
\141\ Snohomish.
---------------------------------------------------------------------------

149. We do not agree that the proposal for panel membership is
unfair to potential applicants. Again we remind industry commenters
that the purpose of the Advisory Panel is to help resolve a dispute
between the Commission staff and an agency or Indian tribe with
mandatory conditioning authority concerning the adequacy of the record
to support agency decision-making. Potential applicants will have ample
opportunity through their written submission and participation in the
technical conference to make their case to the Advisory Panel and the
Office Director. A potential applicant that believes the Advisory Panel
recommendation and study plan determination are not based on
substantial evidence or are otherwise improper may file a request for
rehearing.
150. EEI states that the agency representatives are not bound by
the

[[Page 51085]]

Commission's ex parte rules and suggest that they will consult in
private with the agency staff who filed the dispute. The Process Group
considered this issue and agreed that as a condition of serving on a
panel, all panelists would have to agree to be strictly bound by the
Commission's prohibition on ex parte communications. This is
unnecessary however, as the regulations state that all communications
to and from the Commission staff concerning the merits of the potential
application shall be filed with the Commission.\142\
---------------------------------------------------------------------------

\142\ 18 CFR 5.8(b)(3)(v).
---------------------------------------------------------------------------

151. The few agency commenters on panel membership state that
fairness and balance require the disputing agency to be on the panel
because that is the only way to ensure that its position on biological
and technical issues is properly represented.\143\ Their principal
concern is that the panel members have appropriate technical expertise
relative to the specific issues in dispute.\144\ NOAA Fisheries, for
instance, contends that the expertise must be very specific to the
issues; for instance, a study dispute involving gas bubble disease in
fish would require experts on that topic, not merely general expertise
in fisheries or other related specialized knowledge. Wisconsin DNR
similarly argues that regional-specific expertise is needed; for
instance, an expert in west coast anadromous fish would be unsuitable
for a dispute concerning the study of resident, freshwater fish in
Wisconsin.
---------------------------------------------------------------------------

\143\ Catawba, SC League, Wisconsin DNR.
\144\ Interior, Oregon, NOAA Fisheries.
---------------------------------------------------------------------------

152. We think it would be a sterile exercise to try to craft
regulatory language that more precisely defines the type or degree of
expertise that may be necessary for the myriad of potential dispute
resolution issues. The most practical approach is to leave the
selection of an appropriate third party expert from the list of
technical experts to the agency or tribe and Commission staff panel
members in light of the facts of the case.
153. Interior requests that the requirement that the Commission and
disputing agency panel members be ``not otherwise involved in the
proceeding'' \145\ be modified to bar only persons not ``directly''
involved. In this way, Interior would make eligible a supervisor in the
same office as the agency staff who invoked the formal dispute
resolution process. California would exclude only those who have not
been ``actively involved in the proceeding as an advocate or negotiator
for the agency or tribe's position.'' \146\ This, too, would allow
supervisory employees with direct responsibility for the agency's
participation in the case to serve as a panel member. We decline to add
this qualification because it would blur the line between those who are
eligible to serve and those who are not, and would undercut the
appearance, and probably the reality, that the panel is composed of
technical experts using their independent judgment. The best way to
ensure acceptance of the Advisory Panel approach is to ensure that the
panel members are working on a clean slate with respect to the specific
proceeding.
---------------------------------------------------------------------------

\145\ 18 CFR 5.14(d).
\146\ California, p. 13.
---------------------------------------------------------------------------

154. Oregon and IDPR state that the Advisory Panel should not be
limited to three members because every agency that objects to the study
plan determination on a particular study needs to have its own
representative. We have limited the panel to three for two reasons.
First, we seek to minimize the possibility of deadlock. Second, the
larger the panel is, the greater are the logistical challenges
associated with the panel convening, meeting, and making a
recommendation. To these we add the concern that the panel not appear
to be weighted in favor of disputing agencies. We see moreover no
reason why two Federal agencies with disputes concerning the same or
similar study requests cannot be represented by one individual with the
requisite expertise.
155. The NOPR proposed that if there is no timely agreement on a
third party expert, the two existing panel members carry out the
panel's functions.\147\ Mr. Groznik recommends that in such a case the
Director should be required to appoint a third party expert. Interior
contends that three panel members are needed to ensure that there is
either a majority or unanimous recommendation. Oregon states that the
panel should not be allowed to proceed in the absence of a technically-
qualified third party, principally to ensure that there is appropriate
technical expertise on the panel.
---------------------------------------------------------------------------

\147\ Proposed 18 CFR 5.13(d).
---------------------------------------------------------------------------

156. We expect instances where a third panel member cannot timely
be selected by the Commission staff and disputing agency
representatives to be rare. We recognize however the importance of the
third panel member in providing assurance that the impartiality of the
panel's recommendations. We have therefore amended the rule to provide
that in such an event, an appropriate third panel member will be
selected at random from the list of experts maintained by the
Commission.\148\
---------------------------------------------------------------------------

\148\ 18 CFR 5.14(d).
---------------------------------------------------------------------------

157. Washington thinks a state agency expert should be able to
serve on the Advisory Panel. We agree. A Federal agency or Indian tribe
that initiates a dispute resolution could request a state agency expert
to represent it on the Advisory Panel. Likewise, for instance, a state
water quality certification agency could certainly appoint as its
representative a member from its own ranks, or from another state or
Federal agency, or Indian tribe. There is also no reason a qualified
state agency employee could not serve as a third party expert if that
person was selected by the other panel members and the state's
regulations and policies permit that person to engage in such
activities. We think this flexibility should make it easier to quickly
assemble panels with the right expertise.
158. The Studies Group agreed that it would be appropriate for the
Commission staff representative to initially organize the Advisory
Panel and serve as chair. We think this makes sense because the notice
of dispute will first be filed with the Commission, which will maintain
the list of eligible technical experts, and some individual needs to be
responsible to ensure that the process starts quickly and stays on
track. We have so provided in the regulation text.\149\
---------------------------------------------------------------------------

\149\ See 18 CFR 5.14(d)(1). To further assist the rapid
formation of the panel, the disputing agency is required to identify
its panel member in its notice of dispute. 18 CFR 5.14(b).
---------------------------------------------------------------------------

c. Non-Member Participation
159. Some commenters contend that parties other than the potential
applicant should be allowed to respond to the notice of dispute, even
if they cannot initiate a dispute resolution, because they may have an
interest in the outcome of the process not represented by the disputing
agency or the potential applicant.\150\ To do otherwise, suggests HRC,
violates fundamental due process. SCE asserts that a potential
applicant should be permitted to meet face-to-face with the Advisory
Panel instead of being limited to written submissions. We believe the
concerns of these parties are addressed by our decision in the
following section to include the technical advisory meeting in the
formal dispute resolution process.
---------------------------------------------------------------------------

\150\ HRC, CHRC, Whitewater, Advisory Council, TU.
---------------------------------------------------------------------------

160. The Advisory Council, citing 36 CFR 800.4, seeks assurance
that State Historic Preservation Officers (SHPO), Tribal Historic
Preservation Officers (THPO), and Indian tribes have an

[[Page 51086]]

opportunity to participate in formal dispute resolution before any
dispute pertaining to implementation of NHPA Section 106 is resolved.
Subsection 800.4(a) provides for the action agency to determine whether
the action could result in changes to any historic properties located
in the area of potential effects. If so, the agency is to review
existing information on potentially affected historic properties,
request the views of the SHPO or THPO on further action to identify
historic properties that may be affected, and seek relevant information
from local governments, Indian tribes and others. Based on its
assessment, the action agency is to determine the need for further
actions, such as field surveys, to identify historic properties.
Subsection 800.4(b) requires the action agency to make a good faith
effort to identify potentially affected historic properties and to
evaluate their eligibility for the National Register in consultation
with the SHPO or THPO.
161. The integrated process is fully consistent with this
requirement. The study plan and schedule development process discussed
above contemplates the active participation of the SHPO or THPO, local
governments, Indian tribes, and any interested agency or member of the
public in determining what information needs to be gathered or studies
conducted with respect to historic properties. Because these entities
do not have mandatory conditioning authority, they would not be
eligible to initiate the formal dispute resolution process. They would
however have the benefit of informal dispute resolution and be eligible
to participate in the technical conference.
162. We emphasize in this connection that the study plan
development process merely determines, in consultation with the
participants in the Section 106 process, which information gathering
and studies the potential applicant should undertake. It assists the
Commission in obtaining the information needed to identify what
historic properties may be present. It makes no determination whether
any aspect of the potential license application or reasonable
alternatives would have an adverse effect on historic properties. That
determination is made later in the context of the environmental
document and other elements of the Section 106 process; specifically,
the Commission must, when applying the criteria of effect and, if
necessary, consult with the SHPO/THPO on ways to avoid or mitigate
these effects, usually by entering into a PA.
d. Technical Conference
163. NHA recommended inclusion of an ``Advisory Technical
Conference (ATC),'' which would convene just prior to the meeting of
the Advisory Panel. The ATC would include representatives of the
Commission staff, the agency or Indian tribe with the dispute, the
potential applicant, and a neutral expert or experts. It is not clear
from NHA's submission how the Advisory Panel would interact with the
conferees. Commission staff with appropriate expertise would moderate
the ATC,\151\ and the Commission staff would be responsible for
maintaining a conference record.
---------------------------------------------------------------------------

\151\ It is not clear if NHA intends for the Commission staff
moderator to be someone other than the Commission staff panel
member.
---------------------------------------------------------------------------

164. Prior to the ATC, the potential applicant and the resource
agency that filed the dispute would file information and arguments.
During the ATC, the agency or Indian tribe would summarize its
arguments based on the study criteria, the potential applicant would
respond, and the conferees would then discuss the issue in dispute
relative to the study criteria. NHA would, to the extent feasible, have
all studies in dispute addressed at one ATC. Following the ATC, the
Advisory Panel would meet without the applicant, then make its
recommendation to the Director, who would also have available the
record of the ATC, including the opinions of the third party technical
experts.
165. The Studies Group agreed that it would assist the formal
dispute resolution process to add a technical conference, to be
presided over by the Advisory Panel. This meeting would be held after
the written submissions to the Advisory Panel by the disputing agency
and the potential applicant are made by disputing agencies and the
Commission staff, and just prior to the deliberative meeting(s) of the
Advisory Panel. The meeting would be open to all parties, but the
topics would be restricted to the specific studies in dispute and the
applicability to them of the study criteria. The Advisory Panel would
determine how it wished to receive information, but we anticipate that
a question and answer format would work well.
166. The NHA proposal has merit in the sense that it would bring in
additional technical expertise, but it also would entail additional
steps requiring more time, additional Commission resources to provide a
moderator and to keep a record, and would add to the overall burden by
creating additional written record material of questionable incremental
utility. NHA's proposal also does not provide an avenue for other
participants with an interest in the outcome of the dispute to
participate in the process.
167. We conclude that a technical conference based on the Studies
Group's recommendation would benefit the process. The opportunity for
the members of the Advisory Panel to hear directly from and be able to
question the disputing agency or Indian tribe, the potential applicant,
or other participants who have an interest in the outcome of the
dispute should enable them to clear up any questions about the written
submissions and quickly focus on the most important elements of the
dispute. This should, in turn, assist the Advisory Panel to develop its
recommendation in a timely fashion.\152\
---------------------------------------------------------------------------

\152\ See 18 CFR 5.14(j). EEI recommended that we consider
turning over disputes to the Commission's Dispute Resolution Service
(DRS). The DRS is not an appropriate alternative to the formal
dispute resolution process because the DRS is not a decision-making
body and cannot ensure a resolution of the dispute through voluntary
mediation. The DRS' role as a mediator or facilitator is more
appropriate at other points in the process.
---------------------------------------------------------------------------

e. Activities of the Advisory Panel
168. Various comments were received about the role of the Advisory
Panel and how it should go about its work. EEI urges us to require the
Advisory Panel to specifically address the potential applicant's
submissions. An explicit direction in this regard is unnecessary;
particularly in light of our decision to include the technical
conference.
169. Troutman and Oregon request generally more definition of how
the Advisory Panel will do its work, including with whom it will
communicate, and how. The technical conference proposal and
clarification that strict application of the prohibition on ex parte
communications will apply should address these commenters' concerns.
Also, as discussed above, we have determined that the Commission staff
panel member should chair the panel. These provisions provide
sufficient guidance to panelists and assurance to others that the panel
will make its recommendations through procedures that are fair and
reasonable.
170. EEI believes the disputing agency representative should be
barred from writing the Advisory Panel's report on the ground that this
person is likely to be biased in favor the disputing agency's position
and, by having control over the drafting, will wield undue influence.
We reject this suggestion. First, we trust that the panelists will
apply their expertise in a professional manner consistent with the
purpose of the

[[Page 51087]]

panel. We are moreover confident that no single panelist will be able
to dictate the recommendation to the other panelists. The panel chair
should have the leeway to make this assignment in consultation with the
other panelists.
171. California contends that it is important for the Advisory
Panel to convene in the vicinity of the project (and perhaps to visit
the project) in order for the panel to better understand the disputed
issues and so that state agencies and local entities with limited
budgets are more likely to be able to appear before the panel. Whether
it is necessary for the panel to meet in the project vicinity or visit
the project is a matter best determined in light of the facts and
circumstances of each case.
5. Timing Issues
172. Some commenters state that some or all of the time frames for
the formal dispute resolution process are insufficient.\153\ OWRC is
particularly concerned that if more than one agency brings the same
dispute, insufficient time is allowed for the agencies to agree on who
should represent both of them. We disagree. This is a matter that
agencies should be able to quickly settle over the telephone.
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\153\ OWRC, California, NYSDEC, IDEQ, HRC.
---------------------------------------------------------------------------

173. HRC suggests that the response times can be alleviated and the
panel's deliberations better focused if the notice of dispute and
potential applicant's responsive comments, if any, are required to
include proposed findings and recommendations. The agency or Indian
tribe's notice of dispute is already required to address the study
criteria, which we expect would encompass its proposed findings and
recommendations, but only from its own perspective. Any response from
the potential applicant is likely to similarly address the criteria
from its perspective. The task of the Advisory Panel will be to discuss
and attempt to resolve differences between the submissions. The
addition of the technical conference is also likely to result in
clarifications to the written submissions that will influence the
opinions of individual panelists. Thus, the proposed findings and
recommendations are largely included in the record. Although we are not
inclined to require the disputing agency or Indian tribe, or the
potential applicant, to separately state its proposed findings and
recommendations, they are encouraged to do so if they think it will
benefit the record.
174. The NOPR proposes to require a notice of study dispute
resolution to be filed within 20 days of the study plan
determination.\154\ NYSDEC and Interior state that this is not
sufficient time to assemble the supporting evidence. NYSDEC would give
the disputing agency at least the 25 days afforded to the potential
applicant to submit responsive comments.\155\ Interior recommends 30-60
days. Twenty days is not a great deal of time, but a disputing agency
will have written out the support for its notice of dispute when it
makes its study request prior to the study plan determination.
---------------------------------------------------------------------------

\154\ Proposed 18 CFR 5.13(a).
\155\ The 25-day period for potential applicants to respond to
the notice was not selected to give the potential applicant an
advantage, but to provide time following convening of the panel for
the service addresses of the panelists to be posted on the
Commission's Web site in order that the potential applicant will be
able to serve the panel members. See proposed 18 CFR 5.13(h).
---------------------------------------------------------------------------

175. IDEQ recommends a 90-day period for the participants to
informally resolve remaining differences after the study plan
determination before a notice of dispute must be filed. We decline to
adopt this recommendation. As discussed below, we have modified the
rules to provide a 90-day period before comments are filed on the
potential applicant's draft study plan for this purpose.\156\
Participants in the formal dispute resolution process may also try to
resolve differences during that process as a result of reviewing one
another's written submissions, or following the technical conference.
---------------------------------------------------------------------------

\156\ 18 CFR 5.12 and Section III.T.
---------------------------------------------------------------------------

6. Third Party Technical Expert
176. The principal concern raised about the third party technical
expert is whether qualified persons will be willing to serve. Some
commenters think the absence of compensation for professional time
beyond reimbursement of expenses will make recruiting difficult.\157\
Washington states that this is inequitable, but does not explain why,
in light of the fact that panelists would be volunteers. Others suggest
that unpaid panelists won't invest the necessary time and effort to
result in a well-reasoned recommendation. They also think that a
compensated third party expert is more likely to be truly neutral.
These commenters recommend that third party experts be paid for their
services as part of the cost of the hydropower program.\158\ SCE
recommends that the Commission and the disputing agency share the cost
to compensate the third party expert.
---------------------------------------------------------------------------

\157\ Wisconsin DNR, Washington, HRC, Idaho Power, EEI, NEU,
SCE.
\158\ HRC, Washington.
---------------------------------------------------------------------------

177. We believe potential third party technical experts may be
motivated to volunteer their services for reasons other than financial
gain. One reason would be that service on the panel would enhance that
person's professional standing as a technical expert, or in the area of
alternative dispute resolution. It would also be an opportunity to
provide a public service.
178. IDFG is concerned that there may not be a sufficient number of
qualified people in the pool for certain issues due to lack of
familiarity with local resources or limited field level experience with
the resources. We think the Commission staff and disputing agency
panelists will be competent to determine who among the pool of experts
is qualified to serve.
179. The other principal concern of commenters is how to ensure
that third party experts are truly neutral. Minnesota DNR indicates
that technical experts employed by consulting firms are biased in favor
of the industry and recommends using only experts from academia who
have no recent ties to the industry. EEI, on the other hand, would have
us prohibit the use of academics, on the ground that they are biased in
favor of expansive and expensive studies. We decline to make any such
blanket characterizations about large and very diverse classes of
persons. This is the kind of concern that is best dealt with by the
Commission staff and agency representatives to the panel in the context
of a specific proceeding.
7. Multiple Panels and Multi-Issue Panels
180. A few commenters favor the use of multiple panels. NOAA
Fisheries, for instance, states that there should be a separate panel
for each issue relating to each study dispute; e.g., if NOAA Fisheries
and the U.S. Fish and Wildlife Service each had different issues with
respect to the same study, they would file separate notices and there
would be separate panels.
181. We hope that the formal dispute resolution process will rarely
be invoked, but must take care to structure it so as to ensure that
when it is, it can accomplish its purpose of timely bringing finality
to study disputes. The regime favored by NOAA Fisheries is simply not
practical. A contentious case with multiple study requests and disputes
could paralyze the dispute resolution process for months. The more
resources, studies, and agencies involved in a proceeding, and the more
integrated processes being undertaken in the same general time frame,
the more panels would be required, and the more difficult it would be
to timely recruit panel members.

[[Page 51088]]

182. The majority of commenters on this issue, and the Process
Group, support the use of a single panel to deal with related resource
issues in the same proceeding, subject to various caveats. They
indicate that it may be necessary to reduce costs, avoid delay, and
prevent sequential disputes over the same study. For instance, one
panel would consider all issues relating to fishery studies in a single
proceeding or, perhaps, in a multi-project proceeding.\159\ A few
commenters suggest that one panel ought to suffice for all disputes in
a proceeding, without regard to resource differences.\160\ In this
regard, Troutman likens the role of the panelists to that of judges in
a court, and states that expertise is less important than a good
record.
---------------------------------------------------------------------------

\159\ HRC, NYSDEC, NCWRC, PFMC, NEU, SCE, Alabama Power, GLIFWC,
IDFG, Troutman, Interior, California.
\160\ B&B, Troutman, Alabama Power.
---------------------------------------------------------------------------

183. The most frequent caveat of those who agree that a single
panel may consider more than one dispute is that the panelists have
appropriate expertise.\161\ Interior adds that the decision to have one
panel for multiple disputes needs to be made on a case-by-case basis,
and that it needs to be clear at the outset what issues the panel will
consider so that disputing agencies can appoint an appropriate
representative and identify appropriate technical experts. We agree.
---------------------------------------------------------------------------

\161\ Interior, IDFG, NYSDEC, NCWRC.
---------------------------------------------------------------------------

184. California would have the panel chair determine which disputes
the panel will hear. In light of the goal of expeditious resolution, we
think it falls to the Commission staff, under the direction of the
Director of Energy Projects, to quickly assess the disputes and
determine how many panels are needed and which issues each will
consider.
185. Oregon requests clarification as to whether there will be
standing panels for various resources that are likely to be the subject
of many study requests at many projects, such as anadromous fisheries,
or project-specific panels. Oregon does not appear to support this, but
rather to recommend project-specific panels in order to help ensure
that appropriate technical expertise is brought to bear. We agree.\162\
---------------------------------------------------------------------------

\162\ We note however that the concept of standing panels is
worth considering, as it may be more administratively efficient. As
experience is gained with the integrated process we will further
consider this idea and, if experience indicates that it would be
beneficial, will consult with stakeholders concerning whether
modifications to the rule are necessary.
---------------------------------------------------------------------------

186. GLIFWC indicates that if a panel is to consider issues
pertaining to different resources, it should be supplemented with a
technical expert for each resource. We do not envision that the same
panel would consider issues relating to, for instance, the need for a
requested turbine entrainment study and the need for additional or
modified recreational use surveys. The same panel might however
consider disputes concerning studies requested on turbine entrainment
and bypass reach flows for fishery habitat purposes. It would be a
matter for the Commission staff and agency or tribal panel members to
determine which persons on the list of potential technical experts are
qualified and able to serve with respect to the subject of the
dispute(s).
8. Panel Recommendation
187. The proposed rule provides for the Advisory Panel to make a
finding ``as to whether the criteria * * * are met or not, and
why.''\163\ PG&E and GLIFWC state that the Advisory Panel should be
required to determine whether each of the study criteria has been met.
This is a reasonable recommendation, and we are modifying the
regulation text accordingly. We make however two observations. First,
not all the criteria necessarily apply to all the requesters. For
instance, a requester may not be an agency or Indian tribe with
established resource management goals for the relevant resource
(Criterion 2). There is moreover no bright line by which to determine
if some of the criteria have been met.
---------------------------------------------------------------------------

\163\ Proposed 18 CFR 5.13(j).
---------------------------------------------------------------------------

188. PG&E also suggests that the Advisory Panel should address, in
addition to the study criteria, ``any other relevant
consideration.''\164\ SCE recommends that panel's recommendation be
explicitly limited to whether the criteria have been satisfied. We
agree with SCE. The study criteria were carefully developed with the
intention that every participant in a dispute resolution proceeding
would understand the criteria by which study requests should be
formulated and would be judged. PG&E's recommendation would introduce
substantial uncertainty into the process.
---------------------------------------------------------------------------

\164\ PG&E, p. 24.
---------------------------------------------------------------------------

189. NEU states that if all three panelists do not support a
recommendation, the disagreeing panel member should be required to
provide a statement of the reason for their disagreement, in order to
ensure a more complete record. We think this decision is best left to
individual panelists. We could not, in any case, require compliance
with such a provision.
9. Director's Determination
190. The Director's determination is to be made ``with reference to
the study criteria * * * and any applicable law or Commission policies
and practices.''\165\ Several commenters think the Director has too
much discretion regarding whether or not to accept a panel's
recommendation.\166\ NOAA Fisheries, Interior, and MPRB would have the
Director bound by a majority vote of the panel. GLIFWC indicates that a
requirement for deference to panel recommendations should be written
into the rules. The commenters identify no deficiency with these
requirements or other specific concern, but evince only a desire to
make the panel recommendation binding. The Commission cannot delegate
its decisional authority to the Advisory Panel. We have however
modified the regulations to clarify that the Director will take into
account the technical expertise of the panel, and will explain why any
panel recommendation was rejected if that occurs.
---------------------------------------------------------------------------

\165\ See proposed 18 CFR 5.13(k).
\166\ NOAA Fisheries, Interior, MPRB, GLIFWC, FWS.
---------------------------------------------------------------------------

191. Some licensee commenters suggest that a potential applicant
should be permitted to file a response to the panel recommendation
before the Director's determination is made.\167\ We think that the
study plan development process, plus the right in formal dispute
resolution to make a written submission to the Advisory Panel and to
participate in the technical conference provide sufficient
opportunities for potential applicants to plead the merits of their
study proposals.
---------------------------------------------------------------------------

\167\ CWRC, NEU, SCE.
---------------------------------------------------------------------------

192. Interior recommends that the Director be required to obtain
Commission approval before issuing a decision that does not adopt the
Advisory Panel's recommendation. We see no reason why such a decision
needs to be elevated to the full Commission.
193. Interior also states that it does not know which technical
experts the Director may consult before the decision is issued, which
could result in the Director's objectivity being compromised. The
regulations provide that all communications to or from the Commission
staff, which includes the Director, related to the merits of the
potential application shall be placed into the record.\168\
---------------------------------------------------------------------------

\168\ 18 CFR 5.8(b)(3)(v).
---------------------------------------------------------------------------

194. Finally, several states request that we reaffirm that the
Commission's dispute resolution process does not bind state water
quality certification agencies

[[Page 51089]]

in the sense that participation by a such agencies in the Commission's
processes does not affect whatever independent authority it has to
require a potential license applicant to produce data or information in
the context of the water quality certification application.\169\ Alaska
states that this holds for state CZMA processes as well. We affirm our
prior statement.\170\
---------------------------------------------------------------------------

\169\ Washington, Massachusetts DER, Georgia DNR, NYSDEC,
California, WGA.
\170\ California requested that this statement be included in
the regulations. We think it is unnecessary to do so, as the
authority of states and Indian tribes in this connection is not
affected by anything in our regulations.
---------------------------------------------------------------------------

10. Study Plan Implementation
195. Several commenters \171\ state that a dispute resolution panel
should be convened to resolve any disagreements over the interpretation
of study results, whether study plans need to be modified, and whether
any additional studies are needed. They contend that such disagreements
are no less important than disputes over what the study plan
requirements should be in the first instance. Interior and RAW add that
disagreements concerning a matter which was previously the subject of a
panel recommendation should be considered by the same panel.
---------------------------------------------------------------------------

\171\ HRC, AmRivers, Wisconsin DNR, Interior, and RAW.
---------------------------------------------------------------------------

196. Our decision to limit formal study dispute resolution to
development of the study plan does not imply that any subsequent
decisions with respect to studies are less important. Rather, it
reflects the fact that convening an Advisory Panel at every point in
the overall process where there are likely to be disagreements would
severely hamper the timely conclusion of the proceeding. Subsequent
resolution of disagreements over study results, modifications to the
approved plan, and additional study needs are also not likely to result
in substantial changes to the overall study plan. Interior's and RAW's
recommendation to reconvene an Advisory Panel for later disagreements
pertaining to matters previously considered by that panel is
impractical. There is no assurance that the same panelists would be
available in a timely manner, or at all, and it would likely hamper the
recruitment of third party technical experts if by committing to serve
on one panel they were also committing to serve on an undetermined
number of future panels at undetermined times.

H. Compliance With Study Plan

197. As proposed, the study plan order would require the potential
applicant to proceed with the approved study plan. The Director's order
in formal dispute resolution could amend the study plan order and, if
so, would require the potential applicant to carry out the study plan
as modified.\172\
---------------------------------------------------------------------------

\172\ Proposed 18 CFR 5.13(k).
---------------------------------------------------------------------------

198. SCE and others \173\ request that we clarify in the rules
whether the proposed study plan order (if no dispute resolution is
initiated) and the proposed Director's order following formal dispute
resolution are final orders to which rehearing applies. SCE seeks
certainty on this point so that it may know whether a potential license
applicant is subject to the compliance provisions of FPA Section 31.
Duke and SCE request that we make these orders non-binding so that
potential applicants are not forced to file requests for rehearing or
judicial review to protect themselves against the possibility of
sanctions under Section 31 \174\ or, at least, that we permit the plan
and schedule to be modified based on unforeseen circumstances. PG&E
suggests that the rules state that an application lacking the required
information ``may'' be found deficient, rather than ``will'' be found
deficient, since an existing licensee might want to avoid doing pre-
filing studies to prevent potential competitors from copying the
results. WUWC similarly requests that we make clear that any failure to
comply with a study plan determination will not result in civil
penalties, but will be treated as a deficiency in the application.
---------------------------------------------------------------------------

\173\ Long View and PG&E recommend that the Director's decision
in formal study dispute resolution be appealable to the Commission
or an administrative law judge. PG&E would extend this right to
agencies, tribes, and the potential applicant, but states that it
should be limited to alleged errors of fact. Long View would allow
an appeal in ``extraordinary circumstances,'' which it indicates
would include a study recommendation that significantly increases
the cost of the study plan over the applicant's budget.
\174\ Duke adds that if rehearing is requested, the Commission
would have to suspend the study requirements in dispute pending
rehearing or judicial review in order to preserve the potential
applicant's rights.
---------------------------------------------------------------------------

199. California, Interior, and AmRivers request that the rule be
amended to ensure that there are consequences for the potential
applicant if study requirements, objectives, and expectations are not
met. Menominee requests that applicants be required to develop a
``Quality Assurance Project Plan'' prior to implementation of the study
plan.
200. Orders regarding studies plans will be binding on potential
license applicants, and we expect that they will comply with them.
Failure to do so will put potential applicants at risk of having their
applications, when filed, found to be deficient or rejected. The
question of whether such orders are subject to rehearing and appellate
review may have differing answers, based on the facts of individual
cases. In addition, review of study plan orders could significantly
lengthen the licensing process, and thus is to be avoided to the extent
possible.
201. More to the point, it is crucial to the success of the
integrated process that issues regarding development of the record be
identified and resolved at an early stage in the licensing proceeding.
To this end, the process has been designed to give all participants the
opportunity to examine existing information, make proposals regarding
necessary studies, work with other participants to achieve consensus
regarding information-gathering and, on matters that cannot otherwise
be resolved, to obtain the opinion of a three-person panel of experts
and a determination from the Director based on the record compiled by
the participants. It is our hope and expectation that this consensus-
building process will succeed, as has the collaborative alternative
licensing process, in keeping disputes regarding studies to an absolute
minimum, such that all participants can meet their information needs
with the study plan as approved by the Director, without the need for
further proceedings.
202. Some licensee commenters \175\ state that it is unfair that an
existing licensee which is a potential applicant could be sanctioned
under Section 31 for failing to comply with study plan determinations,
while non-licensee potential competitors for the same project license
could not.\176\ PG&E and others fear that non-licensee potential
competitors might fail to comply with the study orders, then submit an
application that relies on the studies undertaken by the existing
licensee. They recommend that the Commission address this imbalance by
specifying that the penalty for failure to comply with the study plan
determinations will be the same for licensee and non-licensee potential
applicants; that is, the application will be found deficient.\177\
Alternatively, SCE states that a non-licensee potential competitor
should also be required to have a formal study plan and schedule, and
that its

[[Page 51090]]

application should be found deficient and rejected if it attempts to
use the licensee's studies for that purpose.
---------------------------------------------------------------------------

\175\ Duke, PG&E, NHA, SCE.
\176\ SCE evidently has in mind Wolverine Power Co. v. FERC, 963
F.2d 446 (D.C. Cir. 1992), which holds that the civil penalty
provisions of FPA section 31 apply only to licensees, permittees,
and exemptees, not to unlicensed project operators.
\177\ They refer to 18 CFR 4.38(b)(6)(I) and 16.8(b)(6)(I).
---------------------------------------------------------------------------

203. Given that the thrust of Section 31 is the enforcement of
Commission requirements with respect to the construction, operation,
and maintenance of licensed projects, and not the license application
process, it is not clear that the section is applicable to licensees as
potential applicants. In any event, we consider imposing civil
penalties to be inappropriate in this context and do not propose to do
so.
204. With respect to the concern raised by PG&E about the unfair
use by a competitor of another competitor's work product, the
Commission has pointed out that any improper use of a copyrighted
filing is subject to remedy in an appropriate judicial forum.\178\
There has not been an instance of a potential competitor copying
another applicant's license application since the late 1980s,\179\ and
since ECPA was enacted in 1986, there have been but two instances of
competing applications for a new license.\180\ We are aware of only one
instance where a potential competitor and an existing licensee have
been involved in a dispute over whether an existing licensee should
have to share with a potential competitor information required to be
made public.\181\
---------------------------------------------------------------------------

\178\ See WV Hydro, Inc. and the City of St. Mary's, WV, 45 FERC
]
61,220 (1988).
\179\ Id.
\180\ One case was N.E.W. Hydro, Inc. and City of Oconto Falls,
WI, 81 FERC ]
1,238 (1997), order on reh'g, 85 FERC ]
61,222 (1998),
aff'd, sub nom. City of Oconto Falls, WI v. FERC, 204 F.3d 1154
(D.C. Cir. 2000). The other was Holyoke Water and Power Co., et al.,
88 FERC ]
61,186 (1999). In neither case did the competitor prevail.
\181\ See P.U.D. No. 2 of Grant County, WA, 96 FERC ]
61,211
(2001) and ]
61,362 (2001). In that instance, the non-licensee
potential competitor elected not to file a license application.
---------------------------------------------------------------------------

205. In any event, as discussed below, we are requiring non-
licensee potential applicants for a new license to file the NOI and PAD
no later than the statutory deadline for an existing licensee to file
its NOI.\182\ Under these circumstances, it will be difficult for a
potential non-licensee competitor to game the regulations.
---------------------------------------------------------------------------

\182\ See Section III.S and 18 CFR 5.5(a).
---------------------------------------------------------------------------

206. NHA similarly requests that we add to the regulations a
requirement that as a condition of invoking the formal dispute
resolution process agencies must agree to be bound by the Director's
decision. This, NHA states, would ensure that the cost and effort of
formal dispute resolution is not wasted. As just stated, we cannot bind
states or Indian tribes with respect to the administration of their
water quality certification programs under the Clean Water Act. NHA
does not moreover speak for a united industry on this issue. Several
licensee commenters indicate that they may feel compelled to seek
rehearing of the Director's decision, and we can see no distinction
between a potential applicant, agency, or Indian tribe in this regard.
207. Finally, PG&E and SCE request that we modify the proposed rule
to make clear that agencies and Indian tribes with mandatory
conditioning authority may not invoke the Commission's dispute
resolution processes and then use authorities they have under other
statutes to require potential applicants to do information gathering or
studies in addition to those the Commission requires. We cannot do
this, for we have no authority to control the activities of these
entities under other statutes. We do however fully expect these
entities to participate in the integrated process in good faith in
order that the Commission's decisional record will, to the extent
reasonably possible, serve as the basis for the decisions of entities
with conditioning authority, and that any additional information these
entities may require is known early in the process.

I. Other Uses for Dispute Resolution

208. Washington DNR recommends that the Commission establish a
conflict resolution process for disputes between potential applicants
and the owners of lands on which a project would be located, and that
the license application not be accepted until the conflict resolution
process has run its course. Such a conflict is likely to occur only in
the case of a new project proposal. We think it is inappropriate to
hold processing of the application in abeyance until the concerns of
one party are resolved. Affected landowners, like all interested
entities, are encouraged to participate in the pre-filing consultation
process and to intervene if a license application is filed. If the
potential applicant and the landowner are not able to resolve any
differences,\183\ the Commission will do so in the context of its
public interest analysis under the FPA.
---------------------------------------------------------------------------

\183\ We note that the Commission's Dispute Resolution Service
is available to assist willing parties to resolve disagreements.
---------------------------------------------------------------------------

209. Skagit recommends that we require tribal approval of
consultants engaged by potential applicants for tribal cultural
resources analysis. Nez Perce recommends that a dispute resolution
process be made available for disagreements between Indian tribes and
potential applicants over the identity of consultants engaged by the
potential applicant to do information gathering or studies related to
tribal cultural resources because potential applicants sometimes engage
persons who are not acceptable to the Indian tribe. As discussed in the
NOPR, we agree that it is appropriate for potential applicants to
consult with interested tribes concerning the identity of consultants
and, indeed, it is in their best interest to do so, but we also think
that applicants need flexibility in this regard and should not be
required to obtain tribal approval before engaging a consultant.\184\
We note however that our regulations require potential applicants and
those in their service to protect sensitive cultural resources
information from disclosure.\185\
---------------------------------------------------------------------------

\184\ 68 FR at p. 14003; IV FERC Stats. & Regs. ]
32,568 at p.
34,718.
\185\ See discussion of this issue in the NOPR; 68 FR at p.
14002; IV FERC Stats. & Regs. ]
32,568 at p. 34,717.
---------------------------------------------------------------------------

J. Evidentiary Hearings

210. A few licensee commenters \186\ want the rules to provide that
a party is entitled to an evidentiary hearing before an administrative
law judge (ALJ) whenever there are disputed issues of fact.\187\ They
indicate that such hearings would not be for resolving study disputes,
but for ``disputed issues of fact material to disputed mandatory terms
and conditions.''\188\ They state that such hearings would help foster
settlements, and improve the quality and probative value of the record
by encouraging resource agencies to support their terms and conditions,
and help to limit post-license litigation. They add that such hearings
should not delay the process because they would be narrowly focused on
specified factual disputes and an ALJ decision could be rendered in
about six months.
---------------------------------------------------------------------------

\186\ NHA, WPPD, Idaho Power, EEI, NEU.
\187\ EEI recommends that the regulations include the following
language from APA Section 556(d): ``a party is entitled to present
his case or defense by oral or documentary evidence, and to conduct
such cross-examination as may be required for a full and true
disclosure of the facts.''
\188\ EEI, p.15. Such a rule would however also logically apply
to disputed facts pertaining to license conditions originating with
the Commission staff.
---------------------------------------------------------------------------

211. Substantially the same recommendation was made by some of the
same commenters prior to the NOPR. We there stated that while we do not
intend to change our general practice of resolving most hydroelectric
licensing matters by means of notice and comment procedures, we are
open to setting discrete issues of fact for hearing before an ALJ in
appropriate circumstances, and will give due

[[Page 51091]]

consideration to such requests.\189\ We also included a provision in
the proposed rules providing for such hearings.\190\
---------------------------------------------------------------------------

\189\ 68 FR at p. 13998; IV FERC Stats. & Regs. ]
32,568 at p.
34,711.
\190\ See proposed 18 CFR 5.28(e). The provision is now at 18
CFR 5.29(e).
---------------------------------------------------------------------------

212. In the Final Rule, we retain the proposed language on this
issue. Resolving factual disputes before an ALJ is a time-tested means
of decision making; factual records developed in such hearings are
useful to courts which may be called upon to review the final decision
on the license.

K. Draft License Application Replaced

213. The integrated process was proposed to include the filing for
comment of a draft license application containing, insofar as possible,
the same contents as a final license application.\191\ Exhibit E, the
environmental report, would be significantly different from the
traditional Exhibit E because it would be prepared following the
guidelines for preparation of an applicant-prepared environmental
analysis.\192\ Any entity requesting additional information or studies
in its comments on the draft application would be required to show
extraordinary circumstances, and to address in its request certain
criteria, as applicable to the facts of that case.\193\
---------------------------------------------------------------------------

\191\ Proposed 18 CFR 5.15 (Draft license application).
\192\ Proposed 18 CFR 5.17 (Application content).
\193\ Proposed 18 CFR 5.15.
---------------------------------------------------------------------------

1. Need for Draft Application
214. We requested comments on whether, in lieu of filing a draft
license application for comment, it would be a better use of the
participants' time to continue informally working on the resolution of
any outstanding issues, or whether other considerations weigh for or
against a draft license application.\194\
---------------------------------------------------------------------------

\194\ 68 FR at p. 14010; IV FERC Stats. & Regs. ]
32,568 at p.
34,732.
---------------------------------------------------------------------------

215. Several industry commenters state that the potential applicant
should decide if a draft license application is needed, because many
potential applicants feel the time and effort devoted to it would be
better spent on other matters such as settlement discussions and
completing study requirements.\195\ They state that the draft
application requirement is burdensome and redundant because of the cost
of creating, reproducing and distributing the document to many
stakeholders, and then quickly revising and again reproducing and
distributing a final application. Some state that other Federal
agencies, such as the U.S. Army Corps of Engineers, do not require
draft applications, and that it causes no problems.
---------------------------------------------------------------------------

\195\ NHA, Suloway, Long View, SCE, Snohomish.
---------------------------------------------------------------------------

216. These commenters contend that the other participants do not
need to see the potential applicant's proposed resource protection,
mitigation, and enhancement (PM&E) measures until the application is
filed, and that they should have a good general idea of what the
potential applicant is likely to propose from the PAD, NEPA scoping,
and study plan requirements. NHA would have the potential applicant
consult with the parties with the objective of an agreement on whether
a draft application should be circulated.\196\ NHA and Long View also
suggest that the draft license application may be eliminated for
relatively simple cases, such as small projects that operate run-of-
river or have no anadromous fish issues.
---------------------------------------------------------------------------

\196\ PFBC, viewing the matter from the opposite side of the
coin, would eliminate the draft license application only if most or
all parties agree.
---------------------------------------------------------------------------

217. Resource agencies and NGOs urge us to retain the draft license
application. They state that it is the first time the potential
applicant's whole proposal, including PM&E measures, is consolidated
and revealed to agencies, which helps them to understand the entire
effect of the project and to prepare for filing of the application in
final. Some indicate that the draft application is necessary to ensure
that potential applicants consider all participants' comments. Others
state that it is an important last pre-filing chance to influence the
potential applicant's proposed PM&E measures, and to identify areas
where additional information may be needed, including for water quality
certification purposes. Some also suggest that the draft license
application fosters settlement negotiations. Finally, some commenters
indicate that the time required to review a draft license application
will not prevent parties from continuing to work on outstanding issues,
such as settlements or the completion of studies.\197\
---------------------------------------------------------------------------

\197\ MDEP, FWS, ADK, Wisconsin DNR, IDFG, VANR, NEU, Oregon,
HRC, PFMC, NCWRC, California, Interior, GLIFWC, Skokomish, Skagit.
One industry commenter, PG&E recommends against eliminating the
draft application, at least Exhibit E. PG&E states that the comment
deadline on the draft application tends to focus participants on the
matters most important to them.
---------------------------------------------------------------------------

218. Agency and NGO commenters also suggest that the cost of a
draft application should be modest because it is circulated so close to
the filing deadline that the draft must very closely resemble the final
application, and some favor permitting control of costs by e-
filing.\198\ AMC would retain the draft application if there are no
settlement negotiations taking place when it would otherwise be due.
Interior suggests that the burden entailed by a draft license
application could be minimized by permitting the potential application
to incorporate by reference information from the PAD or study results
that have not changed.
---------------------------------------------------------------------------

\198\ Oregon, HRC, PFMC, NCWRC, ADK, California, Interior, VANR,
GLIFWC, Skokomish.
---------------------------------------------------------------------------

219. As indicated above, much of the disagreement about whether to
require a draft license application turns on the contrast between the
industry view that it is burdensome and of questionable utility, and
the agency and NGO view that it is helpful to the participants. Our
task then is to devise a document that reduces the burden imposed on
the potential applicant but retains the features of the draft license
application that the agencies and NGOs find useful. To that end, we
must consider the commenters' views on the appropriate contents of a
draft license application.
2. Contents of Draft Application
220. The NOPR requested comments on whether a draft application, if
required to be filed, should track the contents of the final license
application, or whether it would be preferable to require it only to
include a revised Exhibit E or other materials.\199\
---------------------------------------------------------------------------

\199\ 68 FR at p. 14010; IV FERC Stats. & Regs. ]
32,568 at p.
34,732.
---------------------------------------------------------------------------

221. NHA and others \200\ state that if a draft application is
required it should be limited to a description and analysis of the
potential applicant's proposal, plus Exhibit E or an abbreviated
version thereof. They state that most recipients are only interested in
those parts of the draft application and rarely comment on any other
part of it.\201\ They add that any other information in the record will
already have been filed with the Commission and served on the parties,
and may be incorporated in a draft application or comments by
reference.\202\ They conclude that the comments are seldom useful
because of

[[Page 51092]]

the limited time available to review the draft, but the potential
applicant nonetheless must revise the draft application to respond to
them before it files the application in final form.\203\
---------------------------------------------------------------------------

\200\ Oregon, HRC, PFMC, NCWRC, ADK, California, Interior, VANR,
GLIFWC, Skokomish, Long View, Acres.
\201\ Long View, Acres. Acres indicates that Exhibits A (project
description) and B (description of proposed project operation and
alternatives considered) may also be appropriate if the potential
applicant for a new license is proposing material changes in project
operation.
\202\ Longview, Acres. These commenters state that the contents
of Exhibits A, B, C (proposed construction schedule), and G (project
map) would already have been circulated in the PAD or a PAD
supplement, or already provided for in the study plan and schedule.
They recommend reference to the Commission's EA Handbook as the
guidance for preparing Exhibit E.
\203\ Long View, NPS, SCE.
---------------------------------------------------------------------------

222. Long View states that if a draft license application contains
the potential applicant's specific proposal, then commenting agencies
should be required to provide preliminary terms and conditions. This,
it states, would allow the potential applicant to refine its proposal
and help make Commission action more timely.
223. Agencies and NGOs, on the other hand, recommend that the draft
license application continue to follow the format and content of the
final application. They wish particularly to have a requirement for a
specific operating proposal, and stress the need for a quality Exhibit
E.\204\ They contend that these are essential for a thorough review and
opportunity to comment, and emphasize the importance of the potential
applicant's response to comments in the final application. One of the
few industry proponents of the existing draft license application
format, NEU adds that having a consistent format between draft and
final license applications will make reading and comprehension of the
documents easier than if the draft application is in a different
format.
---------------------------------------------------------------------------

\204\ HRC, NCWRC, PFBC, Georgia DNR, California, NYSDEC,
Interior.
---------------------------------------------------------------------------

224. Several commenters also state that the draft license
application should include all the data and information needed for the
state to consider the potential applicant's clean water act
certification application.\205\ Oregon states that its process is
complex and iterative, so this requirement would help to expedite the
state process. IDEQ states that if a state has specific information
requirements for the application, the information should be included in
the draft application, or the potential applicant should be required to
explain when the information will be supplied.
---------------------------------------------------------------------------

\205\ Oregon, HRC, PFMC, NCWRC, ADK, California, Interior, VANR,
GLIFWC, Skokomish.
---------------------------------------------------------------------------

225. Clearly, there is no meeting of the minds on this issue in the
written comments. The Process Group however discussed this issue at
length and agreed that, in lieu of a draft license application, an
applicant could be permitted to file a document discussing its proposal
for operation of the project facilities, a range of PM&E measures under
consideration by the potential applicant,\206\ and a summary of the
environmental analysis of the impacts of the range of PM&E's and
proposed project operations. This document would be called the
potential applicant's ``Preliminary Licensing Proposal.''
---------------------------------------------------------------------------

\206\ As we understand the Process Group's recommendation, a
``range'' of PM&E measures encompasses measures with respect to each
of the affected resources, and could include potential alternative
PM&E measures with respect to a particular issue. An example of the
latter might be enhancing bypassed reach flows to benefit aquatic
resources or, alternatively, providing enhancements to wetlands in
the project reservoir.
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226. The underlying premise of the Process Group's compromise is
that sufficient information is available through the PAD and completion
of information gathering and studies under the approved study plan to
support development of a range of PM&E measures and a draft
environmental document.\207\ The Process Group further agreed that, if
the participants are amenable, this filing could be waived by the
Commission. The issue of whether to request a waiver would be initially
considered in the development of the study plan and schedule.\208\ A
potential applicant would also have the option to prepare a complete
draft license application with the format and contents of the final
application.
---------------------------------------------------------------------------

\207\ In recognition of the fact that information gathering and
studies will not always be complete at this stage of the proceeding,
we have moved acceptance of the application to the point were the
study plan is completed.
\208\ The Preliminary Licensing Proposal is issued for comments,
which could include requests for new or modified studies. The
Process Group's expectation appeared to be that this opportunity
would be preserved even if the Preliminary Licensing Proposal were
waived. We disagree. Since the purpose of that document is to obtain
comments with respect to the potential applicant's proposal, waiver
of the requirement to distribute that document should likewise
eliminate the opportunity to request new or modified studies at this
point.
---------------------------------------------------------------------------

227. We think the Process Group's agreement is by and large a
reasonable attempt to bridge the gap between license applicants and
other participants because the proposed document should be less
burdensome for potential applicants, yet provide the specificity sought
by agencies and NGOs with respect to the potential applicant's proposal
and environmental impacts analysis. We have two concerns with this
recommendation however. First, a document which contains a ``range'' of
potential PM&E measures will not be very helpful to commenters, who
will not know which of the potential PM&E measures the potential
applicant is seriously considering. It would also needlessly complicate
commenting on the draft environmental analysis. We will therefore
require the Preliminary Licensing Proposal to include one set of
proposed PM&E measures. Second, the utility of the Preliminary
Licensing Proposal would also be compromised if the potential applicant
merely provided a ``summary'' of its draft environmental analysis. The
term ``summary'' is quite elastic and we do not intend to further
complicate the process by trying to specify the contents of the
summary. Instead, we will require the Preliminary Licensing Proposal to
include the potential applicant's draft environmental analysis of its
preliminary licensing proposal.
3. Preliminary Draft Terms and Conditions
228. The NOPR states that in most cases the updated study report
should indicate that all of the information required by the approved
study plan, or all of the information required to support the filing of
FPA Section 10(j) recommendations or mandatory terms and conditions or
fishways, has been collected and distributed to the relevant agencies
at the draft application stage. We suggested that in such
circumstances, it may be appropriate for the parties to file
preliminary draft 10(j) recommendations, terms and conditions, or
fishway prescriptions, and for the Commission staff to make a
preliminary response, including initial 10(j) consistency findings, to
those filings. Modified recommendations, and terms and conditions would
be filed in response to the Commission's ready for environmental
analysis (REA) notice.\209\ In this regard, we requested comments on
whether we should in each case make a determination following the
updated study report of whether the record is sufficiently complete to
require the filing of preliminary draft recommendations and terms and
conditions with comments on the draft license application.\210\
---------------------------------------------------------------------------

\209\ 68 FR at p. 14010; IV FERC Stats. & Regs. ]
32,568 at p.
34,732. The proposed regulation test inadvertently states that the
modified PM&E measures would be final.
\210\ 68 FR at p. 14010; IV FERC Stats. & Regs. ]
32,568 at p.
34,732.
---------------------------------------------------------------------------

229. A few licensee commenters responded affirmatively. SCE states
that under these circumstances we should require draft PM&E measures to
be filed 45 days after the license application is filed because the
record will be complete. SCE would have final PM&E measures filed 60
days after the REA notice. Idaho Power and EEI suggest that if parties
are not required to provide recommendations and terms and conditions
when the studies are completed, the goals of the integrated process
will not be realized. NEU also supports earlier filing of draft PM&E
measures.

[[Page 51093]]

230. One state agency, IDFG also supports this idea, at least with
respect to fish and wildlife agency recommendations made pursuant to
FPA Section 10(j).\211\ Under IDFG's proposal, the Commission staff
would not respond to the preliminary 10(j) recommendations. IDFG states
that this would enable potential applicants to consider the preliminary
10(j) measures without being influenced by the Commission staff's
preliminary response. IDFG thinks this might provide an incentive to
the parties to enter into settlement negotiations.
---------------------------------------------------------------------------

\211\ 16 U.S.C. 803(j).
---------------------------------------------------------------------------

231. Nearly all respondents however opposed this idea for various
reasons. Wisconsin DNR and NCWRC state that the potential applicant
needs to make its licensing proposal, at least in draft, in order for
agencies to assess the potential impacts so that they can develop
mitigation measures or craft water quality certification
conditions.\212\ NCWRC adds that the time frames provided in the
proposed rule are already too tight, and it would be unreasonable to
require another document from the commenters in the same overall time
frame.\213\
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\212\ Wisconsin DNR, NOAA Fisheries, and HRC also indicate that
this would needlessly create an additional step in the process, and
Wisconsin DNR states that it does not have the necessary resources.
\213\ PFMC suggests that the Commission and the agencies should
negotiate dates for filing of PM&E measures. That would be
inconsistent with a central goal of the integrated process, reducing
the time required to process license applications.
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232. NOAA Fisheries and HRC indicate that completion of the study
plan does not complete the record because, at a minimum, the license
application including the applicant's proposal needs to be filed.\214\
NOAA Fisheries indicates that the lack of complete information would
require it to file prescriptions and recommendations based on a worst
case scenario. California and PG&E agree that it would be unproductive
for parties to file anything before the Commission declares that the
application is ready for environmental analysis. California adds that,
in any event, if the studies are complete, parties will soon be making
the same filing in response to an REA notice and after the Commission
has reviewed the application.\215\ NHA similarly indicates that
agencies would need to respond on a case-by-case basis, depending on
their view of whether the record is complete.
---------------------------------------------------------------------------

\214\ HRC adds that if preliminary PM&E measures are required,
then the record should also be complete enough for the Commission
staff to provide draft license articles. Draft license articles are
however based on the Commission's evaluation of the reasonable
alternatives, which may consist largely of the alternatives
recommended by agencies, Indian tribes, and NGOs.
\215\ California adds that in the context of its water quality
certification, state law requires a final environmental document
before its final certification conditions can be issued, and that it
would have to repeat the entire water quality certification process.
We did not however suggest that the state should issue water quality
certification at this juncture.
---------------------------------------------------------------------------

233. GLIFWC and Skokomish state that preliminary draft conditions
before the REA notice would not afford Indian tribes sufficient time to
consult with Federal agencies that have authority pursuant to FPA
Section 4(e) to require mandatory conditions for projects located on
Indian reservations.
234. Among agencies and NGOs, only NYSDEC and Oregon do not object
to filing preliminary draft PM&E measures. Oregon's tentative assent
however assumes a period of one year between the draft and final
license applications, in contrast to the approximate period of 150 days
in the proposed rule.\216\ We are not inclined, particularly in light
of our decision to adopt the Preliminary Licensing Proposal, to extend
the comment period.
---------------------------------------------------------------------------

\216\ 90 days to comment on the Preliminary Licensing Proposal
or draft license application, followed by 60 days for the applicant
to file the final application.
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235. Finally, Interior states that this might be acceptable, but
only at the option of the entity filing the PM&E measures. Interior
also questions the purpose of this proposal on the ground that the
Commission's draft environmental document is likely to provide
significant information and analysis not found in the studies or
applicant's proposal. Interior adds that filing preliminary PM&E
measures before the REA notice is pointless since modified PM&E
measures are not due until 60 days after the comments are due on the
draft NEPA document.\217\
---------------------------------------------------------------------------

\217\ Proposed 18 CFR 5.22.
---------------------------------------------------------------------------

236. We conclude that the arguments against requiring preliminary
draft PM&E measures are persuasive and will not require them to be
filed.

L. License Applications

1. Contents
237. Only a few comments were filed on the contents of the final
license application. Long View seeks clarification that Exhibit C
(proposed construction schedule) applies only to proposed construction,
and need not discuss any previous construction. Long View's
understanding is correct.
238. Long View requests an explanation of why the maps required in
Exhibit G need to be stamped by a Registered Land Surveyor. This
ensures accuracy in the maps because Registered Land Surveyors are
accountable for the accuracy of their work.
239. Nez Perce indicates that the license application should
include a map showing the political boundaries of any Indian
reservation that may be affected, and identifying ceded and non-ceded
territories where treaty rights apply. In our view, this is information
that can best be provided to a potential applicant by the Indian tribe
itself or with the assistance of Interior.
240. Nez Perce also states that the Exhibit E should be prepared
after consultation with affected Indian tribes on the scope of
cumulative environmental impacts, and should be prepared on a watershed
basis. The integrated process provides ample opportunity for Indian
tribes to participate in pre-filing consultation and NEPA scoping. In
addition, the Commission staff's Scoping Document 1 will state what the
Commission staff considers to be the geographical and temporal scope of
the analysis.
241. Some commenters requested changes to the license application
requirements that touch on economic analysis. Nez Perce and NOAA
Fisheries request that Exhibit E include, in addition to discussion of
the cost of PM&E measures, a dollar valuation of the benefits of
environmental and cultural resources PM&E measures. This analysis would
include, among others things, potential increases in revenues from
commercial and sport fishing, increased non-fishing recreation, and
potential property value increases resulting from better environmental
protection.
242. Our views concerning the attachment of dollar values to
natural and cultural resource benefits are set forth in Great Northern
Paper, Inc.\218\ and City of Tacoma, Washington.\219\
---------------------------------------------------------------------------

\218\ 85 FERC ]
61,316 (1998), reconsideration denied, 86 FERC ]
61,184 (1999), aff'd, Conservation Law Foundation v. FERC, 216 F.3d
41 (DC Cir. 2000) (nothing in the FPA requires the Commission to
place a dollar value on nonpower benefits; nor does the fact that
the Commission assigned dollar figures to the licensee's economic
costs require it to do the same for nonpower benefits.). See also,
Namekegon Hydro Co., 12 FPC 203, 206 (1953), aff'd, Namekegon Hydro
Co. v. FPC, 216 F.2d 509 (7th Cir. 1954) (when unique recreational
or other environmental values are present such as here, the public
interest cannot be evaluated adequately only by dollars and cents);
and Eugene Water & Electric Board, 81 FERC ]
61,270 (1997) aff'd,
American Rivers v. FERC, 187 F.3d 1007 (9th Cir. 1999) (rejecting
request for economic valuation of environmental resources that were
the subject of 10(j) recommendations).
\219\ 84 FERC ]
61,107 (1998), order on reh'g, 86 FERC ]
61,311
(1999), appeal pending, City of Tacoma v. FERC, DC Cir. No. 99-1143,
et al.
---------------------------------------------------------------------------

The public-interest balancing of environmental and economic impacts
cannot be done with mathematical

[[Page 51094]]

precision, nor do we think our statutory obligation to weigh and
balance all public interest considerations is served by trying to
reduce it to a mere mathematical exercise. Where the dollar cost of
enhancement measures, such as diminished power production, can be
reasonably ascertained, we will do so. However, for non-power resources
such as aquatic habitat, fish and wildlife, recreation, and cultural
and aesthetic values, to name just a few, the public interest cannot be
evaluated adequately only by dollars and cents.\220\
---------------------------------------------------------------------------

\220\ 85 FERC at p. 62,244-245. Interior states that
environmental and cultural resource benefits of PM&E measures need
to be better articulated by the Commission to counter the cost
arguments of applicants, but does not seek to have them translated
into dollar values. We agree that it is important to explain the
benefits, economic or otherwise, of the PM&E measures we approve,
and believe our NEPA documents and orders do so. By the same token,
agencies that provide mandatory conditions or recommendations have
the same obligation with respect to the PM&E measures they sponsor.
---------------------------------------------------------------------------

* * * * *
In the context of public interest balancing for long-term
authorizations, it is inappropriate to rely too heavily on the accuracy
of current dollar estimates of non-power resource values, calculated
using any number of reasonably disputable assumptions and methods.\221\
---------------------------------------------------------------------------

\221\ 84 FERC at pp. 61,571-72.
---------------------------------------------------------------------------

243. AW/FLOW and FWS state that the final application should
include projections of project revenues for the purpose of testing
applicant assertions that proposed PM&E measures are too costly. That
would be inconsistent with the fundamental determination underlying our
policy of using current costs to value project power; that is, the
futility of attempts to estimate power values on a long-term
basis.\222\
---------------------------------------------------------------------------

\222\ See Mead Corporation, Publishing Paper Division., 72 FERC
]
61,027 (1995), order on reh'g, 76 FERC ]
61,352 (1996).
---------------------------------------------------------------------------

244. Long View and PG&E state that Exhibit E (which is in the form
of a draft environmental document) which requires an economic analysis
of ``any other action alternative'' \223\ would unreasonably require an
applicant to conduct an economic analysis of every PM&E measure
recommended by any participant in pre-filing consultation. They would
like for the applicant to determine which such measures are reasonable
to analyze.
---------------------------------------------------------------------------

\223\ See proposed 18 CFR 5.17(b)(1)(E).
---------------------------------------------------------------------------

245. The action alternatives typically include PM&E measures
proposed by agencies, Indian tribes, and NGOs. If such measures are not
provided before the application is filed, the potential applicant has
little to work with and a commensurately minor obligation in this
regard. In such cases Exhibit E then will contain an economic analysis
of the existing project as it currently operates and the license
applicant's proposal. We expect however there will also be cases in
which preliminary action alternatives or individual PM&E measures will
exist when the application is filed. We share PG&E's concern about
license applicants being held responsible for developing cost
information about or analyses of PM&E measures of varying specificity
and practicality, or those that involve long-term activity not easily
translated into current costs. We would only expect a potential
applicant to provide an analysis of preliminary PM&E measures if they
were sufficiently specific to make that possible.\224\ We have modified
the regulation text to reflect this view.\225\
---------------------------------------------------------------------------

\224\ For instance, the cost of a specific recommendation for
instream flows in a bypassed reach can be determined. A fishway
prescription, on the other hand, may be too vague, particularly as a
preliminary measure, for the costs to be reasonably determined. See
the discussion in Section III.O.2.
\225\ 18 CFR 5.18(b)(5)(i)(B).
---------------------------------------------------------------------------

2. Post-Application Study Requests
246. The proposed rule makes no provision for new information-
gathering or study requests after a license application is filed, based
on the premise that participants are provided ample opportunity before
the application is filed and during the study period to make such
requests. Industry commenters agree with this proposal.\226\
---------------------------------------------------------------------------

\226\ We infer this from the fact that the only industry member
to comment on the matter was NHA, which endorsed the proposal.
---------------------------------------------------------------------------

247. Some agency and NGO commenters do not agree. They appear to
concede that if such requests are permitted, the bar should be set
high, but assert that to prohibit them entirely would exclude from the
record information warranted by unforeseen circumstances. They cite as
examples unexpected study results which establish a need for a new
study; failure of the applicant to meet document production and
disclosure obligations during the pre-filing period or in the
application; and material changes in circumstance with respect to the
environment, the applicant's license proposal or information contained
therein, and applicable laws or regulations.\227\
---------------------------------------------------------------------------

\227\ NYSDEC, HRC, Interior, MPRB, NJDEP.
---------------------------------------------------------------------------

248. The mere fact that study results are unexpected does not
indicate that a new study is needed. It is possible for study results
to be so different from what was expected that questions arise
concerning whether it was properly conducted, but such events are
exceedingly rare in our experience. The failure of an applicant to
satisfy the terms of the study plan or filing requirements is not a
cause for new study requests. It is rather the cause of a deficiency
that must be remedied, and may also raise compliance issues.
249. It is also possible for a material change in circumstances to
occur between the completion of the study plan and the conclusion of a
licensing proceeding that requires additional information to be
provided. That has always been the case, and the Commission has always
exercised its authority to require applicants to provide additional
information for the record in appropriate cases. We will continue to do
so. However, we remain convinced that the multiple opportunities to
request information and studies and to resolve any study disputes
during the pre-filing phase of the integrated process will ensure that
the application will include all information needs.

M. Consultation and Coordination With States

1. General Comments
250. PFMC requests that we clarify the relationship between
licensing and other Federal and state processes. The relationships
between licensing and state and tribal water quality certification and
consistency certification under the Coastal Zone Management Act (CZMA)
are discussed in this section.\228\
---------------------------------------------------------------------------

\228\ The relationship of ESA consultation to the licensing
process is discussed in Section III.O.3.
---------------------------------------------------------------------------

251. Minnesota DNR asks us to affirm that the changes we are
adopting are not designed to weaken the authority of state fish and
wildlife agencies. We have carefully developed the final rule to ensure
that the rights and views of all participants, including all state
agencies, are accorded the full consideration to which they are
entitled by law, and in many instances have provided procedural rights
exceeding any legal requirements.\229\ Indeed, our expansive approach
to stakeholder participation in this rulemaking, which greatly exceeds
the notice and comment requirements of the APA, is indicative of our
approach to stakeholder participation in our processes.
---------------------------------------------------------------------------

\229\ Georgia DNR states that all state agencies should receive
equal consideration in the licensing process. If, by this, Georgia
DNR means each agency should receive the full consideration to which
it is entitled by the law and implementing regulations, we agree.
---------------------------------------------------------------------------

252. Long View requests that the Commission designate specific
members of staff to be familiar with the water quality certification
requirements of

[[Page 51095]]

each state for the purpose of coordinating with the state at various
milestones in the process to ensure that its information needs are
being met. Long View expects that this would minimize post-application
requests by states for additional information. We decline to adopt this
recommendation. State or tribal officials are the persons responsible
for administering water quality certification programs, and the
integrated process we are establishing includes opportunities and
inducements for them to participate in the licensing process and make
their information gathering and study needs known early. We also expect
the water quality certification process will be coordinated with the
licensing process through the development of the process plan and
schedule.\230\
---------------------------------------------------------------------------

\230\ See 18 CFR 5.8(d)(4).
---------------------------------------------------------------------------

2. Timing of Water Quality Certification Application
253. The existing regulations require license applicants to file an
application for a water quality certification for both the traditional
process and ALP no later than the date on which the application is
filed.\231\ In the NOPR, we noted that this assumes that the potential
applicant has consulted with the water quality certification agency,
determined what data is required, and obtained that data before the
license application is filed.\232\ This premise however frequently does
not reflect reality.
---------------------------------------------------------------------------

\231\ 18 CFR 4.38(f)(7) and 16.8(f)(7).
\232\ 68 FR at p. 14010; IV FERC Stats. & Regs. ]
32,568 at p.
34,714.
---------------------------------------------------------------------------

254. We proposed to make the license application date the deadline
date for filing the water quality certification application in the
integrated process because the integrated process is designed to better
ensure that water quality certification data needs are timely
identified and met.\233\ We proposed to change the deadline date for
the traditional process from the license application date to 60 days
after the REA notice is issued because there is less assurance under
the traditional process that water quality certification matters will
be resolved when the application is filed. We requested comments on
that proposal and on an appropriate deadline date for this filing in
the ALP.\234\
---------------------------------------------------------------------------

\233\ Proposed 18 CFR 5.17(f) and 68 FR at p. 14000; IV FERC
Stats. & Regs. ]
32,568 at p. 34,714.
\234\ Proposed 18 CFR 4.34(b)(5) and 68 FR 13988 at p. 14000; IV
FERC Stats. & Regs. ]
32,568 at p. 34,714.
---------------------------------------------------------------------------

255. Commenters on this issue seldom distinguished between
processes, and opined that it would be confusing for participants to
have a different deadline date depending on the process selection. They
recommended a deadline date for all processes based on their views of
how the Commission's processes should be coordinated with state water
quality certification processes.
256. Only PFMC, NEU, and NJDEP recommended that the deadline date
continue to be the filing date of the license application. Several
commenters recommended that the deadline for filing of the water
quality certification application should be 30-60 days following the
Commission's REA notice.\235\ The rationale for this recommendation is
that the REA notice establishes that the record is complete, so there
is sufficient data to support the water quality certification
application, and the state should be able to act on the application
within one year. NHA also suggests that allowing additional time after
the license application is filed would afford time for the state and
the applicant to work together in ways that may lead to earlier
issuance of water quality certification.
---------------------------------------------------------------------------

\235\ NHA, PG&E, MDEP, SCE, EPA, NYSDEC.
---------------------------------------------------------------------------

257. In this connection, the Process Group agreed that the
integrated process will work best when states and Indian tribes
recognize and are actively involved throughout the pre-filing process,
and that the Commission, state or Indian tribe, and applicant should
discuss schedules and procedures for their respective processes early
on. We wholeheartedly agree, and if this is done the integrated process
should result in all parties knowing what water quality-related data
the Commission will require the potential applicant to produce when the
study plan determination is issued or, at the latest, the conclusion of
any relevant formal dispute resolution process. This should leave ample
time before the license application is filed, about two and one-half
years, for the potential applicant to consult with the state regarding
what, if any, additional data is required for certification, and to
collect that data. If the potential applicant and the state or Indian
tribe are diligent in this regard, the potential applicant should be
able to file the water quality certification application by the time
the license application is filed.\236\
---------------------------------------------------------------------------

\236\ We hasten to add that this is a minimum time. We are aware
of no reason why a potential applicant cannot consult with the water
quality certification agency when the NOI and PAD are filed and
begin collecting required data before the Commission's study plan
determination is issued.
---------------------------------------------------------------------------

258. There may however be instances where the license application
is required to be filed, but some information required by the
Commission-approved study plan or by the water quality certification
agency has not yet been obtained. In these circumstances, the REA
notice will not be issued until the study plan is completed, so using
the REA notice as the triggering date to file the water quality
certification application allows an additional increment of time past
the license application date in case there is also outstanding water
quality data.\237\
---------------------------------------------------------------------------

\237\ The Process Group agreed that the license application
should include the information required by the water quality
certification agency. That would of course be desirable, but we
cannot impose such a requirement since new license applications must
be filed on a schedule determined by the FPA, and we cannot control
the timing of the state's process. We likewise decline to tie
issuance of the REA notice to a state's determination that the
record in its separate process is complete. The Commission cannot
delegate its procedural or substantive responsibilities to other
entities.
---------------------------------------------------------------------------

259. California, VANR, and the Process Group propose that the
deadline date be negotiated by the state or Tribe and the license
applicant. As a default in the event there is no agreement, California
proposes a deadline of 60 days following issuance of the Commission's
draft NEPA document.\238\ EPA thinks there may be merit in California's
proposal. This recommendation is based on the concept that one
environmental document should serve for all Federal and state
authorizations; e.g., water quality certification, CZMA consistency
certification, and Clean Water Act Section 404 \239\ dredge and fill
permits issued by the U.S. Army Corps of Engineers. California explains
that it must prepare an environmental document akin to the Federal NEPA
document after an opportunity for public notice and comment (SEQA
analysis). It does not consider a water quality certification
application to be complete until its SEQA analysis is complete, and it
would prefer that the SEQA analysis be the same document as the
Commission's NEPA document. It states that by waiting until after the
Commission's draft NEPA document is issued, it may be able to use the
comments filed on that document to satisfy its own public notice and
comment requirements, and still have sufficient time to take
substantive action on the water quality certification application
within a one-year period.\240\ Although VANR supports the single
environmental document concept, it

[[Page 51096]]

concludes that either the license application or REA notice deadline
should generally be late enough to ensure that its processes can be
concluded before an existing license expires.
---------------------------------------------------------------------------

\238\ Alaska suggests that for projects in that state an even
later time may be appropriate if at some time it exercises water
quality certification authority, because a CZMA consistency
certification in that state would have to precede issuance of water
quality certification.
\239\ 33 U.S.C. 1344.
\240\ California, WGA, EPA.
---------------------------------------------------------------------------

260. Oregon and HRC similarly recommend that the deadline date
should be established by agreement between the participants and the
state on a project-by-project basis. They state that the best time to
file the water quality certification application is when the studies
are sufficiently complete to provide reasonable assurance of a
supportable decision, so long as there is sufficient remaining time to
complete the Commission's NEPA analysis and other steps and issue a new
license before an existing license expires. Other factors Oregon would
take into account include whether the state has public participation
and SEPA requirements that rely on the federal environmental analysis.
261. We cannot accept an open-ended deadline date to be negotiated
in each proceeding. That would introduce an enormous element of
uncertainty into the process and subordinate the Commission's license
process to the convenience of the parties or the processes of the water
quality certification agency. Neither can we accept a deadline of 60
days following issuance of the draft NEPA document. First, this would
be well over three years after the Commission-approved study plan is
finalized. Second, in some states the potential license applicant may
learn from pre-filing consultation with the certifying agency or tribe
all of the data it will be required to produce, but in others this is
not determined until an application has been filed. The draft NEPA
document is issued at a point approximately 14 months prior to
expiration of an existing license. Even if the state promptly
determines what additional information is required, it is highly
unlikely that the data could be gathered and a certification issued
within the remaining time before license expiration. If the state does
not act promptly, as much as a year could be lost from the remaining
time.
262. California does not explain how the Commission's draft NEPA
document could serve that state's public notice and comment
requirements when there is no application pending for water quality
certification. Absent that application, there would be no reason to
think the state would consider the evidentiary record complete, or that
the alternatives considered in the Commission's NEPA document would
resemble the contents of a water quality certification. In this
connection, New York states that it requires water quality
certification applicants to submit studies or data based on pre-project
conditions. Maine states that its water quality certification agency
will not participate in the Commission's study dispute resolution
process because of state sovereignty concerns and because an
unfavorable decision in the Commission's process would make it more
difficult to require the requested data through its own processes.
263. California indicates that the Commission need not establish a
water quality application deadline because states have an incentive to
informally consult with the potential applicant before the water
quality application is filed to ensure that they have the data
necessary to issue water quality certification before the existing
license expires and thereby ensure that the environmental improvements
included in the certification will timely go into effect. That
incentive exists now, yet the single most common cause of new licenses
not being issued prior to expiration of the existing license is the
absence of water quality certification.
264. In sum, the latest date we can accept for filing of the water
quality certification application is 60 days following the REA notice
for all processes. This provides two to two and one-half years
following issuance of the Commission-approved study plan for the
potential applicant and the state agency or Indian tribe to determine
what, if any, additional information will be required for a complete
water quality certification application, and for the applicant to
collect the data and file an application before the Commission issues
its REA notice.\241\ If an application is filed at that point and the
state has not yet determined what additional information it will
require, it is highly unlikely that the certification will be issued
before an existing license expires.
---------------------------------------------------------------------------

\241\ As discussed above in this section, this is a minimum time
that assumes the certification agency has not previously made its
information requirements known to the potential applicant.
---------------------------------------------------------------------------

265. Since 1991, our policy has been to deem a water quality
certification agency to have waived certification if it has not denied
or granted a request for certification within one year after the
request is filed. A few commenters recommend that we change the policy
so that the statutory one-year period for action established by CWA
Section 401 is deemed to begin when the state deems the application to
be complete.\242\ We decline to do so. This was our practice prior to
1991, but it was found to be unduly burdensome because it put the
Commission in the frequently difficult posture of trying to ascertain
and construe the requirements of many and divergent state statutes and
regulations. The existing rule, in contrast, is clear and simple.\243\
---------------------------------------------------------------------------

\242\ VANR, PFBC, IDEQ, EPA.
\243\ See Order No. 533, Regulations Governing Submittal of
Proposed Hydropower License Conditions and other Matters, 55 FR
23108 (May 20, 1991); FERC Stats. & Regs. Regulations Preambles
1991-1996 ]
32,921 at p. 30,135 (May 8, 1991).
---------------------------------------------------------------------------

3. Coastal Zone Management Act
266. Alaska seeks assurance that our consideration of coordination
and consultation with states includes CZMA issues. Coordination with
state agencies that issue consistency certifications under the states'
approved Coastal Zone Management Plans should begin with development of
the process plan and schedule, in the same manner as coordination with
the water quality certification process. We have added state agencies
with CZMA authorities to the list of agencies with which a potential
applicant must consult,\244\ and strongly encourage such agencies to
participate in the pre-filing consultation process.
---------------------------------------------------------------------------

\244\ 18 CFR 5.1(d).
---------------------------------------------------------------------------

N. Tribal Issues

267. In the NOPR we proposed to establish the position of Tribal
Liaison as a single, dedicated point of contact and a resource to which
Native Americans can turn for assistance in dealing with the Commission
regardless of the proceeding or issue. We also proposed to contact
Indian tribes likely to be interested in a relicense proceeding in a
time frame consistent with the advance notification to initiate
discussions concerning consultation procedures.\245\
---------------------------------------------------------------------------

\245\ 68 FR at p. 14002; IV FERC Stats. & Regs. ]
32,568 at p.
34,717.
---------------------------------------------------------------------------

1. Consultation Policy
268. Indian tribes offered many comments on the Commission's trust
responsibility as it relates to treaty rights, legislation, and
executive orders. Several tribes state that as sovereign entities, they
have government-to-government consultation rights which differ from
those applicable to agencies and the general public, because they must
be determined by mutual agreement between the Commission and individual
tribes in a case-specific and issue-specific context.\246\
---------------------------------------------------------------------------

\246\ S-B, S-P, CRITFC, NW Indians, Nez Perce, Umatilla, GLIFWC,
NF Rancheria.

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[[Page 51097]]

269. Many commenters \247\ also noted their appreciation for the
Commission's discussion, but stated that the government-to-government
consultation process should be specifically defined in the regulations,
so as to clarify the role of tribes in the licensing process and to
prevent confusion between tribal consultation and consultation with
other entities. They state that the rules should be sufficiently
flexible to accommodate case-specific circumstances and incorporate
recognition of treaty rights into decisions on studies, resource impact
analyses, and license conditions.
---------------------------------------------------------------------------

\247\ Nez Perce, Menominee, NF Rancheria, Maidu, NW Indians,
CRITFC, S-P, CRITFC. NHA and Interior agree.
---------------------------------------------------------------------------

270. Various specific suggestions were also made regarding tribal
consultation. For instance, the Tribal Group indicates that tribal
consultation should begin when the Commission sends the licensee the
advance notice of license expiration. GLIFWC, citing tribal government
decision-making processes, and NF Rancheria, asserting a need for as
complete a record as possible when the NOI is filed, support pre-NOI
contacts between the Tribal Liaison and the potentially affected
tribes. Catawba and Choctaw state that consultation needs to begin with
the chief or governing body, rather than other tribal members or
employees. Catawba also recommends that Commission staff visit tribal
lands in order to understand local issues. The Tribal Group recommends
including in the regulations a requirement for a meeting between the
Commission, potentially affected tribes, and other concerned Federal
agencies shortly after notice of the NOI and PAD is issued. The Tribal
Group and others \248\ also recommend that certain points in the
licensing process be designated at which the Commission and tribes
would assess consultation to date and seek agreement on next steps to
ensure that appropriate communication takes place throughout the
process.\249\ Maidu states that the regulations must specifically
recognize the tribes' right to comment on cultural and historical
resources study proposals.
---------------------------------------------------------------------------

\248\ Nez Perce, Umatilla, Interior.
\249\ Interior recommends that, in addition to a pre-NOI check,
there should be a check point when the parties receive the potential
applicant's proposed study plan and another when the application has
been filed.
---------------------------------------------------------------------------

271. Concerns were also expressed about the timing of consultation.
One example is that some tribes require any agreement with another
entity to be ratified by an executive board, while some require only
the agreement of the tribal chief.\250\ Another concern is that tribal
councils don't meet according to Commission schedules, but have their
own schedules. This may involve meetings on a monthly, quarterly, or
other basis, so that advance notice of schedules is very
important.\251\
---------------------------------------------------------------------------

\250\ Fort Peck, NF Rancheria.
\251\ Catawba, Choctaw.
---------------------------------------------------------------------------

272. S-P states that tribal sovereignty requires issues scoping to
be separate for tribes. NW Indians, on the other hand, suggest that
tribes need to be in the same scoping process with other entities
because they are likely to have overlapping issues and because the
interests of other participants (such as recreational users of project
lands) may be adverse to those of the tribes.
273. In light of these comments, we have decided to take a three-
pronged approach to better fulfill our trust responsibility. The first
prong is to publish in our regulations a policy statement on tribal
consultation. The policy statement was developed from our review of the
written policies of other Federal agencies concerning the trust
responsibility and government-to-government consultation.\252\ The
policy statement is being issued contemporaneous with this final rule
in a separate docket \253\ and will appear in part 2 of the
Commission's regulations, ``General Policy and Interpretations.'' \254\
The policy statement will apply to all of the Commission's program
areas and, for hydroelectric licensing, to all licensing proceedings,
regardless of which process is used.
---------------------------------------------------------------------------

\252\ We reviewed the policies of other independent agencies,
including the Federal Communications Commission, FCC No. 00-207
(June 8, 2000), 16 FCC Rcd 4078; 2000 FCC LEXIS 3245; 20 Comm. Reg.
(P&F) 1316; the Federal Emergency Management Agency, ``Final Agency
Policy for Government-to-Government Relations with American Indian
and Alaska Native Tribal Governments (Sept. 25, 1998), 64 Fed. Reg.
2096 (Jan. 12, 1999); the Environmental Protection Agency (EPA),
Memorandum to all EPA Employees from Christine Todd Whitman, EPA
Administrator, dated July 12, 2001; and the Nuclear Regulatory
Commission (NRC), Memorandum to NRC Commissioners from William D.
Travers, Executive Director for Operations, dated February 2, 2001.
\253\ Order No. 635 Policy Statement on Consultation with Indian
Tribes in Commission Proceedings (PL03-4-000), III FERC Stats. &
Regs., Regulations Preambles 104 FERC ]
61,108 (July 23, 2003).
\254\ 18 CFR 2.1(c).
---------------------------------------------------------------------------

274. The policy statement recognizes the unique relationship
between the Federal government and Indian tribes as defined by
treaties, statutes, and judicial decisions. It acknowledges the
Commission's trust relationships. It states that the Commission will
endeavor to work with the tribes on a government-to-government basis
pursuant to trust responsibilities, the FPA, and any other statutes
governing the Commission's authority. It notes that the Commission
functions as a neutral, quasi-judicial body and as such is bound by the
APA and Commission rules regarding off-the-record communications. It
states that the Commission will assure tribal issues and interests are
considered in making decisions. Specifically to the hydroelectric
program, it states that the Commission will notify tribes at the time
of the NOI and will consider comprehensive plans prepared by tribes or
intertribal organizations.
275. The second prong of our approach is to establish the Tribal
Liaison position, discussed below. The third prong is inclusion in the
regulations of a meeting with willing Indian tribes no later than 30
days after filing of the NOI.\255\
---------------------------------------------------------------------------

\255\ 18 CFR 5.7.
---------------------------------------------------------------------------

276. NW Indians and S-B state that the Commission's rules must
acknowledge that the trust responsibility supersedes public interest
balancing under the FPA. We do not agree. The Commission carries out
its trust responsibility towards Indian tribes in the context of the
FPA, and the trust responsibility does not require the Commission to
afford tribes greater rights than they would otherwise have under the
FPA.\256\
---------------------------------------------------------------------------

\256\ City of Tacoma, WA, 71 FERC ]
61,381 at p. 62,493 (1995);
Skokomish Indian Tribe, 72 FERC ]
61,268 (1995); See also FPC v.
Tuscarora Indian Nation, 362 U.S. 99 at p. 118 (1960), reh. denied,
362 U.S. 956; and City of Tacoma, WA, 89 FERC ]
61,275 (1999). In
this regard, we note particularly that the Tribal Group agreed that
government-to-government consultation must be consistent with the
Commission's ex parte regulations.
---------------------------------------------------------------------------

277. We will not attempt to further define the government-to-
government consultation process in the regulations. The review of
tribal comments above makes clear that there is no consensus on what
such specific provisions might be. The one consistent comment is that
an effective process needs to be established in consultation with
individual tribes. Under these circumstances, we conclude that the most
effective way to move forward is to issue the policy statement; include
a provision in the integrated process regulations to ensure that tribal
consultation begins, at the latest, no later than 30 days after
issuance of the NOI; and establish the Tribal Liaison.
278. Although some other Federal agencies have done so, we will
also not include a more general definition of tribal consultation in
the regulations. BIA, for instance, is guided by the definition of the
Advisory Council in the latter's regulations governing

[[Page 51098]]

consultation under Section 106 of the NHPA, 36 CFR 800.16(f). This
regulation, which is not specific to tribal consultation, defines
consultation as ``the process of seeking, discussing and considering
the views of other participants, and, where feasible, seeking agreement
with them regarding matters arising in the Section 106 process.'' It
adds that ``[The Secretary of Interior's]
`Standards and Guidelines for
Federal Agency Preservation Programs pursuant to the National Historic
Preservation Act' provide further guidance on consultation.''
279. In our view, tribal consultation pursuant to our trust
responsibility encompasses far more than implementation of NHPA Section
106. It includes every issue of concern to an Indian tribe related to a
treaty, statute, or executive order where the Commission can, through
the exercise of its authorities under the FPA, fulfill its trust
responsibility. That is a very broad concept, and we are convinced that
establishing the consultation process with respect to any particular
case through direct communications with the affected tribes will be
more meaningful than any general language we could put in the
regulations.\257\
---------------------------------------------------------------------------

\257\ S-P states that the rules should require each license
proceeding to include an assessment of treaty rights and an
agreement with the tribe on how those rights will be honored.
Although treaty rights need to be considered, S-P appears to suggest
that the Commission and the tribe must reach agreement on the
substantive disposition of the license application. That is
something we cannot do consistent with our statutory
responsibilities.
---------------------------------------------------------------------------

2. Tribal Liaison
280. Our proposal to establish a Tribal Liaison was supported by
all of the commenting tribes and the Advisory Council.\258\ There is a
consensus among the commenters that the liaison should not be merely a
clerical position, but should also not have decisional authority.\259\
---------------------------------------------------------------------------

\258\ S-P, Nez Perce, NW Indians, CRITFC, Umatilla, GLIFWC, HRC,
Advisory Council, Menominee, Skokomish, Interior, NF Rancheria.
\259\ S-P, Nez Perce, NW Indians, CRITFC, Umatilla, GLIFWC,
Menominee.
---------------------------------------------------------------------------

281. Commenters suggest various roles and responsibilities for the
Tribal Liaison. These include facilitating government-to-government
consultation by directing tribes to the right person or persons to deal
with substantive or policy issues; ensuring that communications are
maintained between tribal representatives and Commission staff
throughout the proceeding; \260\ assisting tribal knowledge of and
participation in the Commission's processes; \261\ educating Commission
staff about tribes and the trust responsibility and treaty
obligations,\262\ assisting tribes in learning how to access and
effectively use the informational resources of the Commission's Web
site; \263\ and informing tribes of activities at a project during
licensing and throughout the term of a license that may affect tribal
resources on or off the reservation.\264\
---------------------------------------------------------------------------

\260\ NW Indians, Nez Perce, Umatilla, GLIFWC, Menominee. They
indicate that the correct person would depend on the issues under
consideration; e.g., a technical issue dealing with a fisheries
study would be dealt with by a fishery biologist, while an issue
concerning the appropriate elements of government-to-government
consultation with the tribe might be directed to senior Commission
staff. We agree.
\261\ SCE.
\262\ GLIFWC, Menominee.
\263\ GLIFWC.
\264\ Interior.
---------------------------------------------------------------------------

282. GLIFWC and Menominee state that because the process for
government-to-government consultation needs to be developed in
agreement with each tribe, the roles and responsibilities of the Tribal
Liaison cannot be fully determined at the outset, but must evolve in
response to the development of tribal-specific agreements.
283. The Tribal Group essentially endorsed all of these recommended
responsibilities and added the following:
?
Coordinate with tribal liaisons at other agencies;
?
Help determine which tribes may be affected by likely
future relicensing applications or original license applications;
?
Inform potentially affected tribes about potential future
relicensing applications and facilitate tribal participation in
rulemaking proceedings;
?
Become educated about the rights of Indians;
?
Assist tribes in making known their issues and views on
compliance with treaties and the trust responsibility;
?
Ensure that tribes are informed of studies and information
with cultural resources or treaty rights implications;
?
Manage communications between the Commission and tribes
when the ex parte rule is in effect;
?
Facilitate communications between applicants and tribes;
and
?
Facilitate informal dispute resolution between the
applicant and a tribe.
284. Only Skokomish and NW Indians suggest that the Tribal Liaison
should play an active role in the substantive resolution of licensing
proceedings. NW Indians recommend that the Tribal Liaison or Liaisons
should be educated about individual tribes and their interests in
specific proceedings and act as their advocate within the Commission.
285. We agree with the majority of the commenters that the Tribal
Liaison should be a facilitator of government-to-government
consultation, and should not be responsible for resolution of
substantive issues. The latter requires expertise with specific
resources, plus a thorough knowledge of the facts relevant to a
specific case. The Commission employs technical experts for such
matters, as do many tribes. The Tribal Liaison will provide expertise
with respect to matters of process.
286. Regarding the specific responsibilities of the position, the
Tribal Liaison will seek to educate Commission staff about tribal
governments and cultures and to educate tribes about the Commission's
various statutory functions and programs. The Tribal Liaison will work
with the tribes during Commission proceedings, to ensure that the
tribes' views are appropriately considered at every step of the
process. The Tribal Liaison will act as a guide for the tribes to
Commission processes, and will strive to ensure that consultation
requirements are met The Tribal Liaison will have considerable
flexibility in carrying out these responsibilities, consistent with the
evolving nature of tribal consultation.
287. Various commenters indicate that there are too many tribes and
too many tribe-specific, case-specific, and interrelated regional or
watershed issues for one person to understand and act upon. Some
suggestions in this regard include multiple liaison positions based on
regions of the country, watersheds or river basins, or sub-regions
within a state.\265\ Pacific Legacy suggests that the efforts of the
Commission's liaison should be complemented by a liaison from each
tribe for each project, to be funded by the applicant. The Tribal Group
stated that the Tribal Liaison should be a regional position, with an
overall coordinator position at the Commission's headquarters.
---------------------------------------------------------------------------

\265\ Pacific Legacy, GLIFWC, Menominee, CRITFC, S-P,
California, Interior.
---------------------------------------------------------------------------

288. Our decision on the number of Commission staff serving as
Tribal Liaison involves two basic considerations; the responsibilities
of the position and the level of effort necessary to effectively carry
out the responsibilities. At this point we can define the
responsibilities of the position, but only time and experience will
tell us with certainty what level of effort is necessary.

[[Page 51099]]

3. NHPA Section 106
289. In response to licensee requests, the NOPR clarified how the
Commission meets its responsibilities to Indian tribes under NHPA
Section 106.\266\ The Advisory Council states that this discussion is
accurate. NHA however states that while the Historic Resources
Management Plan (HPMP) guidance document issued jointly by the
Commission and the Advisory Council \267\ is useful, the documentation
requirements for license applications are inconsistently applied. It
states that some staff require a draft Programmatic Agreement (PA) when
the application is filed, others want the HPMP to be complete before
the application and prior to the PA, and in other cases these documents
are allowed to be completed after the license is issued. NHA states
that the proposed integrated process regulations are clear that a draft
HPMP needs to be filed with the application when the potential
applicant has been designated as the Commission's non-Federal
representative, but that the traditional process and ALP regulations
need to provide the same clarity.
---------------------------------------------------------------------------

\266\ 68 FR at pp. 14001-003; IV FERC Stats. & Regs. ]
32,568 at
pp. 34,716-718.
\267\ This document provides guidance to applicants and
licensees for preparing their historic resource management plans. It
is available on the Commission's Web site at
http://www.ferc.gov/hydro/docs/hpmp.pdf .
---------------------------------------------------------------------------

290. NHA and others \268\ also request that we explain how the
Section 106 consultation process relates to the overall licensing
process. Section 106 consultation begins at the same time as the
licensing process; that is, when the NOI and PAD are filed and
distributed. 18 CFR Sec. 5.8(b)(2) provides for the license applicant
to request to initiate consultation at the beginning the pre-filing
consultation or, if it is not designated as the Commission's
representative for this purpose, for the Commission to initiate
consultation.\269\ The Commission-approved study plan and schedule
provided for in 18 CFR 5.11 through Sec. 5.13 should include studies
pertaining to issues raised pursuant to Section 106. The PA must be
completed prior to license issuance, but the HPMP can be prepared prior
to or following issuance of the license.
---------------------------------------------------------------------------

\268\ E.g., Spiegel.
\269\ The Advisory Council and NHA requested this provision.
---------------------------------------------------------------------------

291. They also request that the Commission undertake in such
circumstances to do any necessary studies itself. The fact that a
potential applicant does not become the Commission's non-Federal
representative, for whatever reason, does not relieve it, as the
project proponent, of the responsibility to undertake the information
gathering or studies the Commission determines are necessary to provide
the evidentiary record to support a reasoned decision.
4. Other Matters
292. The Tribal Group recommended that the regulations require each
potential applicant to designate one person as its point of contact for
Indian tribes. We think this is a matter best worked out via
consultation between potential applicants and individual tribes.
293. Finally, Washington, Maidu, and Skagit indicate that
participation in licensing is costly and that the Commission should
work with states and tribes to identify and develop sources for funding
of tribal participation that will foster consistent, active
participation and rapid turn-around times by tribes. CRITFC recommends
that the Commission require applicants to fund liaisons under the
control and direction of tribes. NW Indians add that even if the
Commission cannot require applicants to fund tribal participation, it
should encourage them to do so.
294. The Commission is aware that participation in licensing
proceedings can entail significant expense. Federal funding for Indian
tribes is however the responsibility of other Federal agencies. We note
however that some applicants have found such funding to be beneficial
in specific circumstances, and we encourage applicants to consider
whether it may be beneficial in the context of their potential
applications.

O. Environmental Document Preparation

1. Cooperating Agencies Policy
295. The NOPR proposed to modify, as to federal agencies, the
Commission's policy that an agency which has served as a cooperator in
the preparation of a NEPA document may not thereafter intervene in the
same proceeding, and to make conforming revisions to our ex parte rule.
The rationale for the existing policy is that cooperating agency staff
will necessarily engage in off-the-record communications with the
Commission staff concerning the merits of issues in the proceeding, so
that, if the agency is allowed to become an intervenor, it will then
have access to information that is not available to other parties, in
violation of the prohibition in the APA and our rule against on ex
parte communications.\270\
---------------------------------------------------------------------------

\270\ See, e.g., Rainsong Company, 79 FERC ]
61,338 at 62,457
n.18 (1997).
---------------------------------------------------------------------------

296. In the NOPR, we concluded that the likely benefits of better
coordination between federal agencies in the exercise of their
responsibilities, a more complete record, and reduced duplication of
effort outweighed the potential for prejudice to other parties that
would not have access to some information and decisional communications
between the Commission and the cooperating agency. To minimize the
potential for prejudice to other parties, we proposed to require that
any cooperating agency that provides the Commission with study results
or other information also serve such materials on parties to the
proceeding.
297. State agencies and NGOs generally support this proposal, and
request that we also reverse the policy for state agencies, including
water quality certification agencies.\271\ SCE also supports the
proposed change, provided that cooperating agencies are precluded from
challenging the content and completeness of a jointly-prepared
environmental document.
---------------------------------------------------------------------------

\271\ Washington, Georgia DNR, Wisconsin DNR, Washington DNR,
California, CSWRCB, Interior, NOAA, HRC. California asserts that the
prohibition on ex parte communications would not be an issue with
respect to states if the Commission were to change its practice of
preparing NEPA documents that include, in addition to an
environmental impact analysis, analysis and recommendations to the
Commission concerning which of the reasonable alternatives
considered is the preferred alternative. California would have us
put all such analysis in a separate document. California further
suggests that the ex parte issue could be obviated if the Commission
staff who process the application and prepare the NEPA document were
separate from the decisional staff that advised the Commission. We
will not adopt California's suggestions because preparing two
environmental documents in each case and requiring that two separate
sets of Commission staff be assigned to every proceeding would
likely add expense and delay to proceedings, and would place an
undue burden on our resources. Moreover, given that decisions about
the scope and conduct of the environmental analysis may have a
significant bearing on the ultimate outcome of a proceeding, we are
unsure that California's proposals would obviate concerns about
fairness and ex parte requirements.
---------------------------------------------------------------------------

298. NHA does not take a position on the proposed policy change,
but suggests that any change in policy occur after the transition
period, so as not to disrupt ongoing proceedings. PG&E and Duke assert
that if the policy change is to apply to gas certification proceedings
as well, the Commission should first provide public notice and an
opportunity for comment.
299. Several commenters strongly oppose the proposed change in
policy.\272\ They assert that the changed policy would make cooperating
agencies who also intervene ``super parties'' with

[[Page 51100]]

access to more information than others, and thus would violate the
APA's prohibition against ex parte communications.\273\ In support of
their contentions, these commenters cite the Commission's statement
when it amended its ex parte rule that ``a hearing is not fair when one
party has private access to the decision maker and can present evidence
or argument that other parties have no opportunity to rebut,''\274\ as
well as case law. See e.g., Home Box Office v. FCC, 567 F.2d 9 (D.C.
Cir. 1997) (HBO); Portland Audubon Society v. Endangered Species
Committee, 984 F.2d 1534 (9th Cir. 1993) (Audubon); Professional Air
Traffic Controllers Organization v. Federal Labor Relations Authority,
685 F.2d 547 (D.C. Cir. 1982) (PATCO).\275\
---------------------------------------------------------------------------

\272\ See, e.g., Alabama, Duke, EEI, Idaho, Spiegel.
\273\ See 5 U.S.C. 557(d)(1)(A) & (B).
\274\ Order No. 607, Regulations Governing Off-the-Record
Communications, 64 FR 51222 (Sept. 22, 1999); FERC Stats. & Regs. ]
31,079 at 30,878 (Sept.15, 1999).
\275\ APA Section 557(d)(1) bans ex parte communications to or
from ``interested persons'' outside the agency. The PATCO court held
that the ban is not intended to have limited application and that
``[t]he term `interested person' is intended to be a wide, inclusive
term covering any individual or other person with an interest in the
agency proceeding that is greater than the general interest the
public as a whole may have.'' 685 F.2d at 562. Audubon, which holds
that the President and White House staff are not exempt from Section
557(d)(1), similarly notes that the legislative history of the
provision confirms the ban is to be broadly construed in order to
achieve the appearance and reality of open decision-making. 984 F.2d
at 1543-44. HBO holds that all relevant information must be
disclosed in order to ensure the efficacy of judicial review. 567
F.2d at 54.
---------------------------------------------------------------------------

300. We continue to believe strongly that maximizing cooperation
between the Commission and the federal resource agencies will lead to
optimal results in the licensing process. However, we conclude that
precedent indicates that allowing federal agencies to serve both as
cooperators and intervenors in the same case would violate the APA. Our
proposal to change the existing policy rested on a plain meaning
reading of the APA provisions which the courts have not adopted.
Rather, the courts have interpreted the APA more broadly on this point
in order to ensure that the purposes of the statute are fulfilled. We
therefore will not change the policy precluding cooperating agencies
from also being intervenors.
2. NEPA Document Contents
301. California and PFBC state that the filing requirements for
license applications include information on the costs of the
applicant's proposed PM&E measures, but not information on the economic
benefits of those measures. They assert that the NEPA document should
contain a much expanded discussion of the latter. Our policy concerning
this matter was discussed above.\276\
---------------------------------------------------------------------------

\276\ See Section III.L.1.
---------------------------------------------------------------------------

302. NOAA Fisheries recommends that the regulations include a
standard methodology ``to calculate project economics.''\277\ Economic
evaluations in the context of our public interest analysis cannot be
reduced to a formula. For example, one component is a comparison of the
current cost of project power under each reasonable alternative to the
current cost of the most likely alternative source of power. The
comparison helps to support an informed decision concerning what is in
the public interest.\278\ The estimated current cost of project power
under each alternative is of course the sum of many other estimates,
principally of the costs of PM&E measures proposed by applicants,
agencies, Indian tribes, and NGOs. PM&E measures are moreover not
standardized in any way, but are made on a site-specific basis, and
often require, in addition to capital cost estimates, annualized
estimates of long-term operation and maintenance expenses. Such
estimates rest on myriad debatable assumptions upon which reasonable
people often disagree.
---------------------------------------------------------------------------

\277\ NOAA Fisheries, p. 8.
\278\ See Mead Corporation, Publishing Paper Division, 72 FERC ]
61,027 at pp. 61,068-069 (1995).
---------------------------------------------------------------------------

303. The means of determining the current cost of the most likely
alternative source of power also cannot be reduced to a formula. It is
based on the project-specific operating regime (e.g., run-of-river or
peaking) and is made in the context of regional power markets. For
instance, the most likely alternative to baseload hydroelectric
capacity in some regions is baseload power from a coal-fired plant. The
most likely alternative to hydroelectric energy is typically a combined
cycle gas-fired combustion turbine. The value of such power varies from
region-to-region and time-to-time. Each NEPA document fully explains
the determination of the most likely alternative source of power and
the basis for its valuation.
304. The NOPR proposed to accompany draft NEPA documents and
environmental assessments with draft special license articles (i.e.,
articles specific to a project).\279\ NHA supports this, but states
that standard form license articles should also be included in order to
enable the U.S. Forest Service to address concerns it purportedly has
about the Commission's administration of projects on National Forest
lands. The U.S. Forest Service did not raise this issue. In any event,
the standard form license articles are a matter of public record \280\
and anyone may request the Commission to modify them.
---------------------------------------------------------------------------

\279\ 68 FR at pp. 14004-005; IV FERC Stats. & Regs. ]
32,568 at
p. 34,722.
\280\ The current standard form articles are published at 54 FPC
1799-1928 (1975).
---------------------------------------------------------------------------

305. The NOPR proposed to revise our practice in preparing NEPA
documents to more clearly separate resource impact analysis from
decisional analysis.\281\ California reiterates its prior assertion
that we should issue NEPA documents containing only resource impact
analysis on the ground that it would eliminate any ex parte problem
associated with state agencies acting as cooperating agencies. We
rejected this argument in the NOPR \282\ and above.\283\
---------------------------------------------------------------------------

\281\ 68 FR at p. 14004; IV FERC Stats. & Regs. ]
32,568 at pp.
34,721-722.
\282\ 68 FR p. 14004; IV FERC Stats. & Regs. ]
32,568 at p.
34,721.
\283\ Section III.O.1.
---------------------------------------------------------------------------

306. NHA, SCE, HRC and others support our proposal to better
separate the environmental impact analysis from decisional analysis;
that is, decisional analysis will appear only in the comprehensive
development section of the NEPA document. NHA and SCE ask that we make
clear that discussion of alternatives and potential mitigation measures
in the NEPA document is part of the resource impact analysis under
NEPA. We are not entirely clear what these commenters are requesting.
We think it is self-evident that the environmental impact analysis
under NEPA will cover alternatives and potential mitigation measures.
These things are however also likely to be considered, or at the least
referred to, in the decisional analysis.
307. HRC requests that a NEPA document prepared in cooperation with
another agency include in the environmental analysis the views of each
agency where there is a disagreement in the agencies' conclusions
concerning impacts to resources. We think the cooperating agencies
should decide how best to present the resource impact analysis in such
a case.
308. RAW continues to assert that the baseline for environmental
analysis on relicensing should be pre-project conditions. We rejected
such assertions in the NOPR,\284\ and RAW offers no new arguments that
would cause us to change our well-established and judicially-approved
policy in this regard.
---------------------------------------------------------------------------

\284\ 68 FR at p. 13995; IV FERC Stats. & Regs. ]
32,568 at p.
34,706.
---------------------------------------------------------------------------

309. Finally, VANR opposes our practice of issuing a single

[[Page 51101]]

environmental assessment in some cases. VANR believes this increases
the likelihood of process delay in the form of requests for rehearing.
A single environmental assessment is issued only when the Commission is
able to make a finding of no significant impacts, which is generally in
cases where there is little or no controversy. The parties are in any
event afforded an opportunity to comment before the order acting on the
license application is issued. The integrated process makes no change
in this practice.\285\
---------------------------------------------------------------------------

\285\ See 18 CFR 5.24(d).
---------------------------------------------------------------------------

3. Endangered Species Act Consultation
310. NOAA Fisheries and Interior state that the integrated process
regulations should clearly identify points at which ESA consultation
occurs, such as initiation of formal and informal consultation.\286\
NOAA Fisheries also recommends language to encourage either the
potential applicant or the Commission staff to initiate informal or
formal consultation when the process begins.
---------------------------------------------------------------------------

\286\ Washington and Washington DNR state that ESA consultation
should begin with the NOI and be completed before the application is
accepted for filing.
---------------------------------------------------------------------------

311. The part 5 regulations are replete with references to ESA
consultation. The section on the NOI states that the NOI may include a
request by the potential applicant to be the Commission's designated
non-Federal representative for this purpose.\287\ The notice of
commencement of proceeding will contain, if appropriate, a request by
the Commission to initiate informal consultation and, if applicable,
designate a non-Federal representative.\288\ The PAD must include
existing information on threatened and endangered species.\289\ One of
the specified topics for the scoping meeting is a schedule for ESA
consultation in the process plan and schedule.\290\ Study requests
following this meeting should include requests related to threatened
and endangered species.\291\ The application contents include a
discussion of the status of ESA consultation.\292\ The tendering notice
will update the processing schedule, if required, including ESA
consultation.\293\
---------------------------------------------------------------------------

\287\ 18 CFR 5.5(e).
\288\ 18 CFR 5.8(b)(2).
\289\ 18 CFR 5.6(d)(3)(v).
\290\ 18 CFR 5.8(b)(3)(viii).
\291\ 18 CFR 5.9(a).
\292\ 18 CFR 5.18(b)(3)(ii).
\293\ 18 CFR 5.19(b).
---------------------------------------------------------------------------

312. In addition, although it is not reflected in the regulations,
our well-established practice is to issue a biological assessment with
the draft NEPA document, and the joint agency ESA regulations \294\ are
clear concerning how and when Interior and Commerce are to respond to
that document. In sum, we think the regulations we are adopting provide
sufficient clarity concerning the interaction between the licensing
process and ESA consultation.
---------------------------------------------------------------------------

\294\ 50 CFR part 402.
---------------------------------------------------------------------------

313. Interior, citing the Interagency Task Force report on ESA
consultation,\295\ also implies that information gathering and studies
for ESA purposes should be conducted independent of the rules for
information gathering and studies in the licensing process. Interior
offers no reason why this should be so, and it would be inconsistent
with the entire thrust of the integrated process, which is to maximize
coordination of Federal, state, and tribal processes.
---------------------------------------------------------------------------

\295\ This report provides guidance for integrating and
coordinating the procedural steps of the licensing and ESA Section 7
consultation processes. The intent of the agreement report is to
incorporate ESA issues into prefiling consultation on study needs,
the filing of a draft biological assessment with the license
application when possible, and integrating ESA issues with the NEPA
document and 10(j) negotiations, so that all processes are on the
same track. The ITF's guidance documents are posted on the
Commission's Web site at
http://www.ferc.gov on the hydro page.
---------------------------------------------------------------------------

314. Finally, Washington DNR states a license or license amendment
might be inconsistent with an existing Habitat Conservation Plan (HCP)
approved by the USFWS and NOAA Fisheries for various species in
Washington State and, if that were the case, the HCP would have to be
amended.\296\ Washington DNR indicates that the Commission should
require the licensee in such circumstances to reimburse Washington
State for any costs associated with the HCP amendment. Decisions
concerning funding of state agencies are however a legislative
responsibility.
---------------------------------------------------------------------------

\296\ The PAD is required to describe any applicable HCPs, so
that any potential conflicts with a license or amendment proposal
are brought to light early.
---------------------------------------------------------------------------

4. Fish and Wildlife Agency Recommendations
315. The NOPR proposed to modify our regulations which set forth
procedures for consideration under FPA Section 10(j)\297\ of
recommendations made by Federal and state fish and wildlife agencies
pursuant to the Fish and Wildlife Coordination Act.\298\ The proposed
modifications would, with one minor exception, not change the existing
procedures, but would simply restate the existing practices with more
clear reference to the statutory standards. The only change in
procedure would be that Federal and state fish and wildlife agencies
would no longer receive separate notice by letter of the preliminary
consistency determination that is made in the Commission's draft NEPA
document (or single environmental assessment). In the future, service
of the draft NEPA document would serve as notice.
---------------------------------------------------------------------------

\297\ 16 U.S.C. 803(j).
\298\ 16 U.S.C. 661 et seq.
---------------------------------------------------------------------------

316. Oregon objects to the proposal to give notice of preliminary
consistency determination in the draft NEPA document. Oregon suggests
that notice by letter is necessary to ensure that state agencies do not
miss the opportunity for 10(j) negotiations.\299\ This should not be a
matter of concern. We are not aware of any case in which a Federal or
state fish and wildlife agency has failed to receive the Commission's
draft or final NEPA document.
---------------------------------------------------------------------------

\299\ Oregon also urges us to defer to state agency
recommendations instead of requesting additional support for
recommendations that the Commission staff believes are not
adequately supported on the record. Such deference would be
inconsistent with the Commission's obligation to independently
analyze all public interest issues. Our approach to consideration of
10(j) recommendations is moreover long-established and judicially
approved. See National Wildlife Federation v. FERC, 912 F.2d 1471
(D.C. Cir. 1990); accord, American Rivers v. FERC, 187 F.3d 1007
(9th Cir. 1999).
---------------------------------------------------------------------------

317. Interior proposes that the regulations include criteria for
the acceptance of 10(j) recommendations, based on a ``team'' approach
in which the Commission staff and fish and wildlife agencies would
confer before issuance of any preliminary consistency determination.
However, at the point where the draft NEPA document or single
environmental assessment is ready to be issued there has already been
substantial consultation on these matters. Interior's proposal would
also, for all practical purposes, be a pre-draft NEPA document 10(j)
negotiation procedure. It would be inconsistent with our goal of
expeditious resolution of licensing applications to provide an
additional, duplicative process step.\300\
---------------------------------------------------------------------------

\300\ Implementation of section 10(j) has been discussed by the
Interagency Task Force on hydropower, which consists of staff from
the Commission and other Federal agencies. Additional discussions
may be conducted in the future, if necessary.
---------------------------------------------------------------------------

318. Snohomish states that the regulations should specify the step
in the integrated process at which the 10(j) process begins. The
regulations state that the process begins when federal and state
agencies submit their 10(j) recommendations in response to the REA
notice.\301\
---------------------------------------------------------------------------

\301\ 18 CFR 5.26(a).
---------------------------------------------------------------------------

319. California asserts that it cannot reasonably be asked to make
final 10(j)

[[Page 51102]]

recommendations without the benefit of the Commission's NEPA analysis.
It recommends that we provide for preliminary 10(j) recommendations,
which would be due 60 days after the REA notice, and final
recommendations, which would accompany the agency's comments on the
draft NEPA document. The 10(j) process however already includes a
response by Commission staff to the 10(j) recommendations (the
preliminary consistency determination), which initiates an opportunity
for agencies to file responsive comments, including modifications to
their 10(j) recommendations.\302\ That is not changed. We see no need
to burden the process with a second opportunity to modify these
recommendations.
---------------------------------------------------------------------------

\302\ Although the process has always been conducted in a manner
that contemplates modifications to 10(j) recommendations, the
regulations may not be entirely clear in this respect. We have
therefore clarified the regulation text. See 18 CFR 5.25(c).
---------------------------------------------------------------------------

320. The NOPR proposes that modified mandatory terms and conditions
be filed 60 days following the deadline date for comments on the draft
NEPA document or environmental assessment. Washington suggests that the
time frames for the 10(j) process should be on the same track as the
track for mandatory conditions because there may be related issues. It
states, for example, that a modified fishway prescription might be
inconsistent with an earlier-filed 10(j) recommendation. The 10(j)
recommendations and the Commission's preliminary consistency
determination are in the public record and served on all parties to the
proceeding. If a Federal or state agency or Indian tribe with mandatory
conditioning authority elects to impose a condition inconsistent with a
state agency's 10(j) recommendation, the mandatory condition would
prevail.
321. NOAA Fisheries states that the Commission's determinations
that 10(j) recommendations are inconsistent with the FPA often rest on
the conclusion that a recommended measure is too costly relative to the
expected environmental benefits. NOAA Fisheries states that these
determinations appear to be arbitrary because there is no standard
formula for determining the cost of 10(j) recommendations. It asks that
we establish a standard methodology for these determinations and
include it in the regulations. NOAA Fisheries' concerns in this regard
were addressed above.\303\
---------------------------------------------------------------------------

\303\ Section III.O.2.
---------------------------------------------------------------------------

322. In a related vein, Interior recommends that the regulations
specify in detail procedures for determining pursuant to the
comprehensive development standard of FPA Section 10(a) whether to
accept the recommendations of parties to licensing proceedings,
including 10(j) recommendations. The procedures for processing all
aspects of a license application are set forth in the integrated
process rules or in parts 4 and 16, as applicable. To the extent
Interior may be requesting the establishment of a formula for
determining the public interest, public interest determinations are
made with reference to a myriad of statutory and regulatory provisions
and case-specific factual circumstances and cannot be reduced to a
formula.
323. HRC does not request the establishment of a formula for
acceptance or rejection of 10(j) recommendations, but does request that
our consistency determinations provide a more specific explanation of
how cost figures into each decision. The Commission is committed to
providing a full explanation of how all relevant considerations are
factored into its decisions.\304\
---------------------------------------------------------------------------

\304\ HRC suggests that not making formal dispute resolution
available for study disputes related to possible 10(a) and 10(j)
recommendations increases the risk of disputes over the
recommendations themselves. It urges us to increase the use of
neutrals to resolve such disputes. We have not traditionally used
neutrals in disputes between Commission staff and the parties to
proceedings following the issuance of draft NEPA documents, but we
are not categorically opposed to HRC's suggestion. As experience is
developed with the formal pre-filing study dispute resolution
process, it may make sense to further consider whether neutral
technical experts could play a useful role in this area as well.
---------------------------------------------------------------------------

324. Georgia DNR requests that we include in the integrated process
formal guidelines to address state-listed threatened and endangered
species. We do not believe there is a need for any additional
guidelines concerning state-listed species, as consideration of them is
already built into the integrated process. State fish and wildlife
agencies should participate in development of the study plan and
schedule, including NEPA scoping, then make recommendations concerning
protection of state-listed species pursuant to FPA Section 10(j) in
response to the REA notice.

P. Time Frame for Integrated Process

325. The NOPR included a detailed, sequential description of the
process steps in the proposed integrated process, including time frames
for each of the process steps.\305\ We requested comments on which
process steps might need to be adjusted, and which time frames, if any,
should be specified in the regulations for purposes of guiding
development of a process plan and schedule (including studies), and
which may not be appropriate for specification in the regulations, but
should be developed entirely in the context of case-specific
facts.\306\ Many comments were filed on the proposed time frames. In
this section we consider comments on the overall process.\307\ Comments
on the time frames for specific steps are discussed with the relevant
subject matter.
---------------------------------------------------------------------------

\305\ NOPR Section III.E.2 and Appendix C.
\306\ 68 FR at p. 14011; IV FERC Stats. & Regs. ]
32,568 at p.
34,733.
\307\ The Commission received several hundred specific
recommendations regarding modifications to the regulation text.
These recommendations may be discussed in the preamble in the
context of a significant issue, but many recommendations are
redundant of the recommendations of other commenters, or are
technical corrections, or while meritorious and incorporated into
revised regulatory text, do not require discussion in the preamble.
---------------------------------------------------------------------------

326. Many commenters state that the overall process time frame of
5.5 years is unrealistic.\308\ They cite the complex, multi-party,
multi-jurisdictional nature of the proceeding; study requirements that
often require more than one or two years of data; \309\ the likelihood
of one or more occurrences that could impair the timely development of
the evidentiary record, such as droughts; weather conditions such as
heavy snowpack that can cause lengthy delays in the initiation of field
work or may force the revision of planned studies; newly listed
threatened and endangered species; the possibility that potential
applicants may not adequately fulfill the study plan; the likelihood
that some applications will be considered in the context of multi-
project environmental analyses covering projects in the same river
basis with different expiration dates; \310\ and potential difficulties
melding the integrated process with the processes of Indian tribal
governments, particularly those with modest resources.\311\
---------------------------------------------------------------------------

\308\ California, SCE, Oregon, PFMC, MPRB, PFMC, VANR, Oregon,
GLIFWC, NHA, WPPD, S-P, CRITFC, Noe, Wisconsin DNR, Long View, PG&E,
Snohomish, Xcel, Washington, ADK, IDEQ, Minnesota DNR, Interior,
HRC, Menominee.
\309\ California, Oregon, NOAA Fisheries, Interior, PFMC, and
CRITFC point to such examples as mortality studies of anadromous
fish, which require multiple release groups over as much as five
years to obtain data from just one brood year.
\310\ California.
\311\ S-P, Menominee, GLIFWC, CRITFC.
---------------------------------------------------------------------------

327. California and others state that strict adherence to a 5.5-
year time frame emphasizes speed at the expense of sound science and
quality decision-making, will stifle meaningful public and agency
participation, and will cause the process to break down, resulting in
needless rehearings and appeals.

[[Page 51103]]

California recommends that we assume a process requiring at least 6.5
years. Interior agrees and, if we adopt the 5.5-year process, change
all of the 15-30 day time frames to 45-90 days. California also
recommends that we modify the rule to provide for negotiated schedules.
328. We are aware that there may be instances in which factors such
as those cited above or others, such as lack of water quality
certification, will prevent a license application from being developed
and processed within the 5.5-year time frame, and that there will
continue to be cases where annual licenses are issued. That said, we
continue to think the best approach the Commission can take is to
design a process that, to the greatest extent possible under the
existing statutory scheme, addresses the causes of delay and disputes
over the sufficiency of the record. The proposed integrated process was
designed to do so. We are confident that the integrated process, with
modifications based on the post-NOPR comments and consultation
activities, offers the best means of meeting our goals.

Q. Settlement Agreements

1. Time Outs
329. Many commenters urge us to reconsider our decision not to
include specific provisions in the regulations for a ``time out''
period during which processing of a license application could be
suspended while settlement discussions take place.\312\ Oregon suggests
a period of 12-18 months would be appropriate. HRC similarly suggests
that the processing schedule could be developed to include time for
settlement discussions, with the schedule for the Commission's NEPA
document adjusted upon the request of the parties to ensure that any
settlement agreement which may be filed is one of the action
alternatives.
---------------------------------------------------------------------------

\312\ OWRC, Long View, Reliant, Oregon, CRITFC, Xcel, NHA, VANR,
IDFG, GKRSE, Interior, Process Group. NYSDEC states that explicit
provisions for time outs are not needed, but that the Commission
should grant reasonable requests for suspensions that will help
advance settlement talks. Georgia DNR supports a brief suspension of
the schedule only where the Commission determines it is ultimately
likely to expedite the licensing process. Only Alabama Power opposes
a time out provision.
---------------------------------------------------------------------------

330. These commenters do not disagree that the integrated process
should help to foster settlements by ensuring early issue
identification and production of information. They contend however that
the labor intensive nature of the integrated process and settlement
discussions, and the tight time frames in the integrated process, will
prevent participants from participating simultaneously in both
activities. They add that settlement agreements enhance the strength
and durability of the license, help to avoid conflicting Federal and
state license conditions, and minimize litigation.
331. They also challenge our statement that the pressure a firm
processing schedule places on the parties is an incentive to reach
settlement. They argue that time outs increase the likelihood of
settlements because it often takes significant time for all parties to
fully understand the implications of various potential provisions,
which is needed for complete buy-in to an agreement. They add that
enforcement of strict deadlines, such as for responses to REA notices,
will force parties to take adversarial positions.\313\ We continue to
adhere to our conclusion in this regard, which is based on our
experience.
---------------------------------------------------------------------------

\313\ Interior states in this connection that it cannot engage
in settlement negotiations that compromise its authorities,
presumably by causing it to lose its conditioning authority by
failing to meet deadlines in the licensing process. It states that
if it agrees to participate in settlement discussions, the
Commission must agree to accept as mandatory conditions any
resulting settlement provisions, or to accept as timely filed any
conditions that Interior may file if settlement negotiations fail.
We cannot strike such a bargain, which would compromise the
Commission's control of its own processes. Interior must weigh the
risks of participation in settlement negotiations in each case.
---------------------------------------------------------------------------

332. In response to the concerns expressed in the NOPR about
maintaining timeliness, the commenters indicate that reaching
settlement is more important than strict adherence to a schedule, and
that the Commission can place reasonable limits on the amount of time
that processing will be suspended while the parties negotiate and
require periodic status reports. These comments essentially restate
comments made prior to the NOPR.
333. We are not inclined to grant requests for regulatory language
that guarantees time outs or implies that they should be routinely
granted. We think however there is benefit to codifying the
considerations that should be addressed by parties who seek suspension
of the procedural schedule to pursue settlement agreements. The
provisions we are adopting in this connection make clear that a lack of
progress toward the timely filing of a settlement agreement may cause
the Commission to terminate any suspension of the procedural schedule
that it has granted.\314\
---------------------------------------------------------------------------

\314\ 18 CFR 5.29(g).
---------------------------------------------------------------------------

2. Other Matters Pertaining to Settlements
334. The NOPR responded to many commenters who requested guidance
in the regulations on what kinds of settlement provisions are or are
not acceptable, including adaptive management programs, mitigation
measures in lieu of additional studies, mitigation measures outside of
existing project boundaries, and confidentiality agreements. In
declining to adopt this recommendation, we explained our policies and
practices in this regard, with citations to relevant orders. We further
explained that it is inappropriate to put general guidance in the
regulations because each settlement agreement measure must be evaluated
individually in light of the entire record and factors identified in
the FPA and other relevant legislation.\315\
---------------------------------------------------------------------------

\315\ 68 FR at p. 14008; IV FERC Stats. & Regs. ]
32,568 at p.
34,727-728.
---------------------------------------------------------------------------

335. Several commenters renew their requests for guidance. Some
essentially repeat their earlier submissions. Others state that the
Commission's response in the NOPR, while helpful, is insufficient.
Interior and Oregon, for example, request that we provide additional
guidance by compiling case studies and examples of successful
agreements.\316\ Regarding the second point, Interior and Oregon appear
to be asking for guidance on the substantive content of settlement
agreements. The best general guidance we can give is that we strive to
approve and give effect to all uncontested settlement agreements to the
maximum feasible extent, within the bounds of the law and consistent
with the public interest. Instances where the Commission has rejected a
substantive provision of a hydroelectric licensing settlement that is
lawful and within our jurisdiction to enforce are quite rare. If there
is any question concerning whether a potential settlement provision has
been previously rejected by the Commission or is likely to be rejected,
we encourage the parties to confer with the Commission staff.
---------------------------------------------------------------------------

\316\ Interior makes the same request with respect to scientific
studies and adaptive management plans.
---------------------------------------------------------------------------

336. HRC acknowledges that decisions on settlement agreements are
based on the law and the record of individual cases, but requests
periodically updated guidance on the boundaries of the law concerning
what is acceptable, formatted similarly to the Council on Environmental
Quality's ``Forty Most Asked Questions Concerning CEQ's NEPA

[[Page 51104]]

Regulations.'' \317\ We think the statements concerning what the law
requires are better made in formal orders or regulations than in
guidance documents. The Commission staff stands ready to assist parties
if there are questions pertaining to a particular case.
---------------------------------------------------------------------------

\317\ 55 FR 18026 (Mar. 23, 1981). NYSDEC indicates that generic
guidance on such matters unnecessary.
---------------------------------------------------------------------------

337. NHA states that guidance on formats and components of
acceptable settlement agreements would be beneficial. As a general
matter, the parties are the persons best able to determine what issues
they wish to address in a settlement document and to organize the
document. Parties may find it particularly useful to review other
settlement documents and use as models those which address the same or
similar matters to their proceeding and that have a format useful to
them. As with other matters pertaining to settlement documents, there
have been several instances in which parties have requested informal
staff review of draft documents, a practice we encourage.
338. NOAA Fisheries states that the regulations should require a
communications protocol and ground rules for settlement discussions,
and should prohibit discussions until the record is complete. NYSDEC
disagrees. We responded to NOAA Fisheries' comment in the NOPR \318\
and it advances no new facts or arguments.
---------------------------------------------------------------------------

\318\ 68 FR at p. 14007; IV FERC Stats. & Regs. ]
32,568 at p.
34,727.
---------------------------------------------------------------------------

339. The NOPR also explained the various means of dispute
resolution available to parties to proceedings before the Commission,
including the use of administrative law judges and Commission staff as
facilitators, mediators, and neutrals.\319\ ADK states that to succeed
in these capacities, Commission staff need to be experienced in
hydroelectric licensing. While prior licensing experience is
unquestionably beneficial to anyone serving in one of these capacities,
it is not a prerequisite. What is essential is training and experience
in the relevant discipline. Our Alternative Dispute Resolution training
program provides the necessary training to Commission staff.
---------------------------------------------------------------------------

\319\ 68 FR at p. 14007; IV FERC Stats. & Regs. ]
32,568 at p.
34,727.
---------------------------------------------------------------------------

340. We also explained in the NOPR that we include in licenses
settlement agreement provisions that are beyond our authority to
enforce if they are included in mandatory terms and conditions.\320\
Interior states that there is confusion about how such settlement
provisions are to be enforced, and that the confusion would be cleared
up if each approved settlement provision the Commission can enforce was
incorporated into a numbered license article, and other provisions
clearly identified. Interior would like to see this done before
issuance of the license order, and the parties given time to amend the
settlement agreement in the light thereof.
---------------------------------------------------------------------------

\320\ 68 FR at p. 14008; IV FERC Stats. & Regs. ]
32,568 at p.
34,728.
---------------------------------------------------------------------------

341. In many cases, settlement agreement provisions approved by the
Commission are reformatted into numbered license articles.\321\ In
other cases, however, it makes more sense from the standpoint of
license administration to append the settlement agreement to the
license order and include numbered license articles which require the
licensee to provide plans to implement various components of the
settlement agreement. This is most often the case when the settlement
agreement is extremely lengthy or complex.\322\
---------------------------------------------------------------------------

\321\ See, e.g., Hudson River-Black River Regulating District,
100 FERC ]
61,319 (2002).
\322\ See, e.g., Central Nebraska Public Power and Irrigation
District and Nebraska Public Power District, 84 FERC ]
61,077
(1998).
---------------------------------------------------------------------------

342. In either case, if there are provisions the Commission cannot
enforce, they are identified in the body of the license order.\323\
Also, as we have pointed out, the parties are free to include in their
agreements other means of enforcing those provisions the Commission
itself cannot enforce. Some settlement agreements, for instance,
include language characterizing the agreement as a contract.
---------------------------------------------------------------------------

\323\ See, e.g., Avista Corporation, 90 FERC ]
61,167 at p.
61,512 n.25 (2000).
---------------------------------------------------------------------------

343. We think it would be inadvisable to amend the regulations to
add a time period for the parties to renegotiate the settlement
agreement if it contains provisions the Commission cannot enforce. As
we have stated, such provisions are almost always procedural and
involve the conduct of non-jurisdictional entities, and the precedent
\324\ is clear, so there is little likelihood of the parties being
surprised by such a finding. We are also aware of no case where the
settling parties in a hydroelectric licensing proceeding have modified
the agreement as a result of the Commission's statement that portions
of it are not enforceable by the Commission. Nevertheless, the
Commission believes that there may be merit in certain cases to
allowing parties a limited opportunity to renegotiate before the
Commission issues a license that would not include a critical component
of a settlement, or that would include a critical settlement component
in a mandatory condition, but that the Commission could not enforce.
Therefore, the Commission remains open to considering this approach on
a case-by-case basis.
---------------------------------------------------------------------------

\324\ Erie Boulevard Hydropower, L.P., 88 FERC ]
61,176 (1999).
---------------------------------------------------------------------------

344. Finally, we requested comments on whether the integrated
process regulations should encourage potential applicants to include
with their draft license application a non-binding statement of whether
or not they intend to engage in settlement discussions.\325\ Most
commenters agreed that this would be beneficial because it would
confirm the applicant's intentions with respect to settlement
negotiations, which would better enable the parties to assess the
prospects for settlement.\326\ One commenter suggested that it might
also help the Commission to determine the appropriate processing
schedule. HRC states that the Commission should also require any such
statement to be preceded by discussions with the participants so the
intentions of all parties are made clear. A few commenters responded
that such encouragement would be meaningless, since it requires the
applicant to do nothing, a statement of intent does not commit the
applicant to anything, or because the applicant cannot unilaterally
decide to conduct negotiations.\327\
---------------------------------------------------------------------------

\325\ 68 FR at p. 14007; IV FERC Stats. & Regs. ]
32,568 at p.
34,726.
\326\ PG&E, Oregon, HRC, IDFG, PFMC, GLIFWC, Menominee, NCWRC,
PFBC, Georgia DNR, NYSDEC.
\327\ NHA, Long View, NEU, Interior.
---------------------------------------------------------------------------

345. We have concluded that this is a matter best left to the
discretion of the potential applicant because it is likely that there
will be many situations in which the potential applicant has not
discussed the possibility of a settlement with the other participants
when the Preliminary Licensing Proposal or draft license application is
filed, or is only able to assess the prospects for settlement after
receiving comments on that document.

R. Original License Applications

346. We proposed to make the integrated process applicable to
original as well as new license applications, and requested comments on
that proposal.\328\ Most of the few commenters who addressed this issue
responded in the affirmative.\329\ NHA, California, and NOAA Fisheries
state

[[Page 51105]]

that it is important for the integrated process to be coordinated with
the issuance of preliminary permits, and offer specific proposals for
doing so.
---------------------------------------------------------------------------

\328\ 68 FR at p. 14009; IV FERC Stats. & Regs. ]
32,568 at p.
34,729.
\329\ NHA, California, HRC, PFBC, PFMC, GLIFWC, Interior. NEU
would, however, only apply the integrated process to projects
greater than 5 MW, which is about one third of all projects.
---------------------------------------------------------------------------

347. NHA's proposal is detailed. An applicant for a permit for a
project at an existing non-federal dam would be required to demonstrate
ownership of the dam or evidence of authorization from the existing dam
owner to evaluate the dam for potential generation. If the permit
applicant could not satisfy this requirement, the Commission would
issue an order to show cause why the permit application should not be
dismissed. If good cause to issue the permit was not shown, the permit
application would be declared patently deficient and dismissed. This,
states NHA, would prevent the issuance of permits to entities that do
not own the site or who lack real intent to construct a project.
348. Under NHA's proposal, six months before expiration of a first
permit, the permit holder would have to file its NOI,\330\ but would
not have to file a PAD. A public notice of the NOI would be issued
inviting potential competitors to also file an NOI. Thereafter, the
permittee and any potential competitors would have to file a skeletal
PAD, with both documents due on the same day in order to prevent either
party from copying the other's PAD. The Commission would also bar the
competitor from using the permittee's materials in any subsequent
filings.\331\ A PAD that did not meet minimum content standards would
be declared patently deficient and rejected, with no opportunity to
remedy the deficiency. The new permittee would have a specified period
of time to file a new NOI and the same PAD required of all other
potential license applicants. Thereafter the same integrated process
applicable to relicenses would apply.
---------------------------------------------------------------------------

\330\ NHA states that the permit regulations would have to be
modified to permit this.
\331\ We have previously held that an application will not be
rejected because it contains materials duplicated from another
application, even if the material is copyrighted. WV Hydro, Inc. and
City of St. Mary's, WV, 45 FERC ]
61,220 (1988).
---------------------------------------------------------------------------

349. NHA's proposal would impede development applications at
existing dams by entities other than the dam owner. That would be
fundamentally inconsistent with Congress' intent to promote competition
in hydropower development.\332\
---------------------------------------------------------------------------

\332\ Order No. 496, Information to be Made Available by
Hydroelectric Licenses under Section 4(c) of the Electric Consumers
Protection Act of 1986, 53 FR 15804 (May 4, 1989), FERC Stats. &
Regs., Regulations Preambles 1986-1990 ]
30,812 at p. 31,105 (Apr.
28, 1988).
---------------------------------------------------------------------------

350. California and NOAA Fisheries make much simpler proposals.
California would have us require each new permittee to begin prefiling
consultation within 30 days from issuance of the preliminary permit and
to file an NOI and PAD within 60 days. NOAA Fisheries would require
permit applicants to simultaneously file the NOI and PAD.
351. The California and NOAA Fisheries recommendations do not
account for the many uncertainties associated with developing an
unconstructed project, a lack of existing project-specific information
and studies, or the need to obtain other permits, such as a dredge and
fill permit under Section 404 of the Clean Water Act. These factors can
add significant time to the period needed to prepare a new development
application, or even an original license application for a project at
an existing dam. For this reason, successive permits are typical in
such circumstances. Other commenters recognize this,\333\ and some
suggest that the labor-intensive and time-sensitive integrated process
may be incompatible with original licenses.
---------------------------------------------------------------------------

\333\ Long View, Troutman, ADK, Wisconsin DNR.
---------------------------------------------------------------------------

352. We affirm our proposal to apply the integrated process to
original license applications. We conclude that the existing
preliminary permit program and the integrated process can exist side-
by-side and do not need any special provisions for coordination. There
is no need for the permit term and pre-filing consultation to begin
contemporaneously because a permit holder can file a license
application any time during the term of the permit, and pre-filing
consultation can and does go forward regardless of whether the
potential applicant has a preliminary permit.

S. Competition for New Licenses

353. The FPA requires an existing licensee that is a potential
applicant for a new license to file an NOI.\334\ Neither the FPA nor
our regulations require a non-licensee that is a potential competitor
for a new license to file an NOI. In the NOPR we rejected requests from
some licensees to require a potential non-licensee competitor to file
an NOI.\335\
---------------------------------------------------------------------------

\334\ 16 U.S.C. 15(b)(1).
\335\ 68 FR at p. 14009; IV FERC Stats. & Regs. ]
32,568 at p.
34,729. PG&E notes that the text of proposed 18 CFR 5.3(a) is
consistent with the body of the NOPR in this regard, but that
proposed 18 CFR 5.3(c) appears to require any potential applicant,
whether or not an existing licensee, to file an NOI. We are
modifying the language concerning this requirement in accordance
with our decision here to require any potential applicant for a new
license to file an NOI.
---------------------------------------------------------------------------

354. PG&E and NHA state that they are not concerned about this, as
long as we require a potential non-licensee competitor to file its PAD
no later than five years prior to license expiration. In effect, this
would ensure that the potential non-licensee competitor must show its
hand no later than the existing licensee. Likewise, an existing
licensee concerned about potential competitors could ensure that any
potential competitor may not copy its PAD by also issuing its NOI and
PAD at the statutory deadline.\336\
---------------------------------------------------------------------------

\336\ This would if adopted, take care of Long View's concern
that a competing non-licensee applicant could photocopy an existing
licensee's PAD.
---------------------------------------------------------------------------

355. Upon further reflection, we have decided that it is
appropriate for a potential non-licensee competitor to file both the
NOI and the PAD. We previously rejected the NOI requirement for non-
licensee potential competitors in order to encourage competition on
relicensing.\337\ Over two hundred new license applications have been
filed since the current rules were promulgated in 1989, but just a few
applications have been filed by a non-licensee in competition with a
timely-filed application by an existing licensee. It is clear that
relieving non-licensee potential applicants of the NOI requirement has
not had any effect or competition.
---------------------------------------------------------------------------

\337\ Order No. 513, IV FERC Stats. & Regs. ]
30,854 at p.
31,415.
---------------------------------------------------------------------------

356. More important, the existing policy was developed when only
the traditional licensing process existed. The adoption of the
integrated process and the requirement for Commission approval to use
the traditional process change the landscape considerably. The
integrated process is based on clearly delineated steps designed to be
completed before the license application is filed. The traditional
process is much less prescriptive. If there were competing
applications, it is mostly likely that we would require them to be
developed using the same process in the same time frame. In any event,
we would want to ensure that stakeholders have the same opportunity to
comment on both potential applicants' process proposals, and the
process proposal is required to be included with the PAD.\338\
---------------------------------------------------------------------------

\338\ 18 CFR 5.6(d)(1).
---------------------------------------------------------------------------

357. The remaining question is whether a non-licensee potential
competitor should be required to file its NOI and PAD within the same
six month window applicable to existing licensees. The importance of
process selection to efficient processing, discussed above, persuades
us that a potential non-licensee competitor should also be required to
file its NOI

[[Page 51106]]

and PAD no later than five years before expiration of the existing
license.\339\
---------------------------------------------------------------------------

\339\ 18 CFR 5.5(d).
---------------------------------------------------------------------------

T. Summary of Changes to Integrated Process--Regulation Text

358. In this section, we summarize the changes we are making to the
integrated process. The changes are discussed in the order in which
they occur in the part 5 regulations. A flowchart of the integrated
process with significant modifications in boldface print is posted on
the Commission's Web site.
359. The content and distribution requirements for the PAD have
been substantially modified.\340\
---------------------------------------------------------------------------

\340\ 18 CFR 5.6 and Section III.E.
---------------------------------------------------------------------------

360. At the time of the notice of commencement of proceeding, the
Commission will request commencement of informal ESA consultation if
the potential applicant is not designated as the Commission's non-
federal representative for this purpose.\341\
---------------------------------------------------------------------------

\341\ 18 CFR 5.8(b)(2) and Section III.O.3.
---------------------------------------------------------------------------

361. We are accepting the Tribal Group's request that early tribal
consultation be specifically acknowledged in the regulations. To that
end, we have added a new section providing for a meeting no later than
30 days following the filing of the NOI between each willing Indian
tribe likely to be affected by the potential license application and
the Commission staff and other relevant Federal agencies.\342\
---------------------------------------------------------------------------

\342\ 18 CFR 5.7 and Section III.N.
---------------------------------------------------------------------------

362. The NOPR proposed to have the Commission's NEPA Scoping
Document 1 issued following the potential applicant's issuance of a
revised PAD with a draft study plan. The Process Group concluded that
because the study plan should be issue-driven, and because the PAD and
other factors should enable participants to begin issue identification
from the beginning of the process, the integrated process would work
better if NEPA scoping begins earlier. Accordingly, we have modified
the rule to provide for the issuance of Scoping Document 1 at the same
time the Commission issues the notice that the proceeding has
commenced.\343\
---------------------------------------------------------------------------

\343\ See 18 CFR 5.8(c).
---------------------------------------------------------------------------

363. The proposed rule provided that comments on the PAD ``may''
include initial information and study requests. In light of the fact
that the beginning of NEPA scoping has been advanced to the same date
as notification that the proceeding has commenced, the regulations have
been modified to state that comments on the PAD ``shall'' include the
commenters' information and study requests, and should include
information and studies needed for consultation under ESA Section 7 or
water quality certification.\344\ Agencies or Indian tribes with
authority to issue water quality certification are strongly urged to
participate in this and all other aspects of the development of a
Commission-approved study plan and schedule.
---------------------------------------------------------------------------

\344\ See 18 CFR 5.9(a).
---------------------------------------------------------------------------

364. The proposed rule would have required the potential applicant
to file a revised PAD and a proposed study plan. The Process Group
concluded that there is no need for a revised PAD if the process is
modified to provide additional time for the participants to address the
potential applicant's draft study plan. As we are modifying the rule
for that purpose, as discussed below, the revised PAD has been
eliminated. We stress once again, however, the importance of potential
applicant's exercising due diligence in obtaining information and
preparing all components of the PAD. It is central to the success of
the enterprise.
365. At the same time the potential applicant files its draft study
plan, the Commission staff will issue, if necessary, Scoping Document
2.\345\ This previously occurred when the study plan determination is
issued.
---------------------------------------------------------------------------

\345\ See 18 CFR 5.10 (Scoping Document 2).
---------------------------------------------------------------------------

366. Comments on the draft study plan were proposed to be due 60
days after the draft study plan was filed, during which period the
Commission staff would have issued Scoping Document 1, with the draft
study plan appended.\346\ As recommended by the Process Group, Scoping
Document 1 has been advanced, and the draft study plan will be served
directly on the participants. The comment period on the draft study
plan has also been extended to 90 days, and provisions made for the
applicants and participants to hold meetings on the study plan during
the 90-day period, in order to encourage as much discussion and
negotiation as possible among the participants.\347\
---------------------------------------------------------------------------

\346\ Proposed 18 CFR 5.9 and 5.10.
\347\ 18 CFR 5.11(c).
---------------------------------------------------------------------------

367. As proposed, the potential applicant would file a revised
study plan for Commission approval, followed by the Commission's study
plan order.\348\ The Process Group recommended that we add an
opportunity for participants to file comments on the revised study plan
prior to the study plan order. We have added a 15-day period for this
purpose.\349\
---------------------------------------------------------------------------

\348\ Proposed 18 CFR 5.12.
\349\ 18 CFR 5.13(b).
---------------------------------------------------------------------------

368. The formal dispute resolution rules have been modified to
include a technical conference open to all parties, before the Advisory
Panel begins deliberations.\350\
---------------------------------------------------------------------------

\350\ 18 CFR 5.14(j) and Section III.G.3.d.
---------------------------------------------------------------------------

369. We have clarified the standards for requesting changes to
ongoing studies, and for requesting new information gathering or
studies following the initial and updated study reports.\351\ In brief,
requests made following the initial study report are subject to a good
cause standard, and requests made following the updated study report
are subject to an extraordinary circumstances standard.
---------------------------------------------------------------------------

\351\ 18 CFR 5.15.
---------------------------------------------------------------------------

370. The requirement to file for comment a draft license
application has been replaced by a requirement to file a ``Preliminary
Licensing Proposal,'' although a potential applicant may elect to file
a draft application.'' \352\
---------------------------------------------------------------------------

\352\ 18 CFR 5.16 and Section III.K.
---------------------------------------------------------------------------

371. The proposed rule provided for comments, interventions, and
the filing of preliminary recommendations and terms and conditions 60
days following issuance of the REA notice,\353\ to be followed by the
issuance of a draft EA or EIS, or an environmental assessment. We have,
consistent with our current rules, added a 45-day period for reply
comments, which would not affect the proposed time periods for issuance
of NEPA documents.\354\
---------------------------------------------------------------------------

\353\ Proposed 18 CFR 5.22.
\354\ 18 CFR 5.23(a).
---------------------------------------------------------------------------

U. Changes to Traditional Process and ALP

372. The NOPR proposed four significant changes to the traditional
process: (1) Full public participation; (2) mandatory, binding pre-
filing dispute resolution; (3) the requirement to file an NOI and PAD;
and (4) extending the deadline for filing the water quality
certification application until 60 days after the REA notice. The NOI
and PAD and related discussion of process selection and transition
provisions were discussed above.\355\ The water quality certification
deadline was also discussed previously.\356\
---------------------------------------------------------------------------

\355\ See Sections III.D. and III.F.
\356\ See Section III.M.2.
---------------------------------------------------------------------------

373. As discussed in this section, we are adopting the changes to
ensure full public participation, but have decided to maintain the
existing pre-filing dispute resolution process.

[[Page 51107]]

1. Traditional Process--Public Participation
374. In the NOPR we proposed to modify the traditional process pre-
filing consultation regulations to require potential applicants to make
reasonable efforts to bring into pre-filing consultation as early as
possible NGOs and other members of the public, and for these entities
to be involved in the development of the potential applicant's study
plans.\357\
---------------------------------------------------------------------------

\357\ 68 FR at p. 14011; IV FERC Stats. & Regs. ]
32,568 at p.
34,734.
---------------------------------------------------------------------------

375. Non-industry commenters favor this proposal. NHA and SCE
oppose it. NHA states that it could significantly increase the cost and
time of the process. It recommends that we maintain the existing
provisions for public participation, except that the public would be
encouraged to provide the potential applicant with comments on its
proposal following the public meeting required during stage one
consultation,\358\ and the potential applicant and agencies would be
required to respond contemporaneously to those comments. NHA indicates
that the availability of the PAD on the Commission's Web site should
enable the public to effectively participate in the public meeting, and
the potential applicant could decide what level of pre-filing public
participation was appropriate for the project. SCE also cites increased
costs and burdens and states that the public is already adequately
represented by the Commission and resource agencies.\359\
---------------------------------------------------------------------------

\358\ See 18 CFR 4.38(b)(3) and 16.8(b)(3).
\359\ Acres does not oppose the proposal, but states that the
Commission should help individual members of the public organize
themselves so that public participation is efficient and structured.
Participation by individuals may be inconvenient for applicants in
certain respects, but individuals are capable of determining for
themselves whether joint action is consistent with their individual
interests.
---------------------------------------------------------------------------

376. We are strongly inclined to adopt the rule as proposed. Under
NHA's proposal, the potential applicant would not be required to
distribute the PAD to members of the public likely to be interested in
any license application proceeding or include the public in the joint
meeting with agencies and Indian tribes. There would also be no
requirement for the public to provide comments and study requests
following the joint meeting, and they would not be eligible to
participate in the joint meeting following comments on the draft
license application.\360\ This would exacerbate the contribution that
lack of public input during pre-filing consultation now makes to
licensing delays. The proposal in the NOPR to include the public in all
aspects of pre-filing consultation substantially resolves this problem
for the traditional process.
---------------------------------------------------------------------------

\360\ See proposed 18 CFR 4.38(b) (1)(3)(4) and (5); 4.38(c)(2)
and (6); 4.38(d)(2); analagous sections of proposed 18 CFR part 16,
and proposed 18 CFR 5.4.
---------------------------------------------------------------------------

2. Traditional Process--Mandatory, Binding Dispute Resolution
377. The principal reasons the existing study dispute resolution
process is not used are that it is not required to be used and the
result is advisory only.\361\ We proposed to require consulted entities
in the traditional process who oppose a potential applicant's
information-gathering and study proposals to file a request for dispute
resolution during pre-filing consultation. Consulted entities that do
not request dispute resolution would thereafter be precluded from
contesting the potential applicant's study plan or results with respect
to the issue in question.
---------------------------------------------------------------------------

\361\ 68 FR at p. 13996; IV FERC Stats. & Regs. ]
32,568 at p.
34,707.
---------------------------------------------------------------------------

378. We also proposed to make the outcome of dispute resolution
binding on all participants; that is, the Director's order resolving
the dispute would, if information or a study is determined to be
necessary, direct the potential applicant to gather the information or
conduct the study. Consulted entities would not be permitted to revisit
the dispute after the application is filed. We further proposed to
eliminate from the traditional process the opportunity to request
additional scientific studies after the license application is
filed.\362\
---------------------------------------------------------------------------

\362\ See proposed changes to 18 CFR 4.38(b)(5), (c)(1), and
(c)(2); and 16.38(b)(5), (c)(1), and (c)(2) and related NOPR
discussion, 68 FR at p. 13996; IV FERC Stats. & Regs. ]
32,568 at
pp. 34,734-735.
---------------------------------------------------------------------------

379. NHA and EEI support the proposed change.\363\ NHA would also
modify the proposed rule by requiring study requesters to address the
study criteria applicable to the integrated process, and by requiring
the Director to address those criteria in his decision.
---------------------------------------------------------------------------

\363\ SCE supports mandatory pre-filing dispute resolution, but
states that it should be the same for all processes and should be
available only to agencies with mandatory conditioning authority.
---------------------------------------------------------------------------

380. Agency and NGO commenters were less enthusiastic. HRC and
Interior contend the proposed change could make the problem of post-
application study disputes worse and, along with TU urge that if pre-
filing binding dispute resolution is adopted, it be the same as formal
dispute resolution in the integrated process. Interior argues that
study disputes cannot be resolved without the aid of a panel of
technical experts and the views of Commission staff, so the goal of
developing a record during pre-filing consultation that will support
the actions of all agencies with decisional authority would be
thwarted. NYSDEC appears to support mandatory, binding dispute
resolution, but opposes elimination of post-application study requests.
HRC, echoing the concerns of commenters on binding dispute resolution
in the integrated process, adds that if the traditional process dispute
resolution is to be mandatory and binding, then the Commission must
permit rehearing of the Director's decisions. Finally, Interior and
NOAA Fisheries state that the Commission does not have authority to
issue a binding pre-filing dispute resolution in the traditional
process because in that process no formal proceeding commences until
the application is filed. We think Interior and NOAA Fisheries are
correct and will therefore not adopt this proposal.
381. Finally, NOAA Fisheries recommends that we modify the
traditional process by requiring applicants to submit for Commission
approval a study plan under conditions similar to development of the
study plan in the integrated process. Since we are not adopting
mandatory, binding dispute resolution in the traditional process, a
Commission-approved study plan would serve no purpose, and would blur
the distinction between the integrated and traditional process.
3. Traditional Process--Other Recommendations
382. Interior recommends that we make no changes in the traditional
process until the integrated process has become established and shown
to be effective because it opposes mandatory, binding dispute
resolution in the traditional process. As just discussed, we are not
adopting that proposal. Because Interior does not specifically oppose
increased public participation, we presume it has no objection to that
aspect of the proposed rule.
383. SCE states that the best way to streamline the process would
be to eliminate pre-filing consultation altogether for any project that
has previously been issued a license in which a NEPA document was
prepared, or for small projects where no operational or ground-
disturbing changes are contemplated. Under SCE's scenario, the pre-NOI
notice to the applicant would be published in a local newspaper. The
potential applicant would file the NOI and an abbreviated version of
the PAD, then file an application based on whatever pre-filing
consultation it decides is needed. In support, SCE states that it
already has relationships with the resource agencies and that anyone is
welcome to make

[[Page 51108]]

comments before an application is filed. It adds that Interior's Bureau
of Land Management and the U.S. Forest Service do not require pre-
filing consultation.
384. We think leaving pre-filing consultation to the discretion of
potential applicants is unlikely to result in any gains in the
timeliness or efficiency of the licensing process, and reject the
qualifying criteria proposed by SCE. A NEPA document issued many years
before a new license application is filed is likely to be of very
little value. Nor is a proposal to maintain the status quo as an
operating regime necessarily a guarantee that a new license application
will not raise substantial issues. Changes are likely to have occurred
over the term of the license with respect to recreational use of the
reservoir and shoreline, threatened and endangered species listings,
water quality standards, resource agency management goals, standards
for protection of cultural and historical resources, and others. That
SCE has established relations with certain agencies has no bearing on
this issue of general applicability.
385. SCE adds that if the PAD is required it should be scaled back
for applications using the traditional process because it is too
burdensome for small projects and the required amount of information is
not needed at the beginning because NEPA scoping will follow filing of
the application. SCE overlooks two important facts. First, the PAD is
one of the tools used to inform the opinions of the participants and
the Commission concerning whether to approve use of the traditional
process. Second, the PAD is only required to include existing relevant
information that can be obtained with the exercise of due diligence. An
existing licensee already has a substantially similar obligation to
produce information under the traditional process regulations.\364\
---------------------------------------------------------------------------

\364\ See 18 CFR 16.7(d) and 16.8(b).
---------------------------------------------------------------------------

4. Streamlined Process for Small Projects
386. The NOPR declined to adopt a proposal by NHA under which
applicants could file a request for waiver of all or part of the pre-
filing consultation requirements. We did so largely because the
existing regulations already provide for consensual waiver by agencies
and Indian tribes and owing to concerns about NHA's proposed
criteria.\365\ Nonetheless, in recognition of the important place of
small hydropower in the nation's energy infrastructure and in the hope
of eliminating potentially unnecessary costs of relicensing, we
requested comments on other approaches to streamlining the licensing
process for small projects that would not compromise the interests of
other stakeholders.\366\
---------------------------------------------------------------------------

\365\ 68 FR at p. 14012; IV FERC Stats. & Regs. ]
32,568 at pp.
34,735-736.
\366\ 68 FR at p. 14012; IV FERC Stats. & Regs. ]
32,568 at p.
34,736.
---------------------------------------------------------------------------

387. NHA responds that we should not have rejected its proposal
because no other agency requires pre-filing consultation, it is not
required by NEPA, and it is less important for licenses issued after
enactment of the Electric Consumers Protection Act \367\ because such
licenses were the subject of a recent NEPA document and are likely to
include many environmental protection measures. NHA adds that it does
not seek an exemption from NEPA, or to preclude analysis based on new
issues such as threatened or endangered species listings, but only
wants recognition that some impacts will already have been adequately
addressed. NHA also stresses that the existence of the PAD would enable
interested entities to comment prior to the license application even if
there is no formal opportunity to comment.
---------------------------------------------------------------------------

\367\ Public Law 99-495, 100 Stat. 1243 (Oct. 16, 1986)
(codified at 16 U.S.C. 791a et seq.).
---------------------------------------------------------------------------

388. We remain unpersuaded. That other agencies may not require
pre-filing consultation, or that it is not required by NEPA, has no
bearing on whether it makes sense for license applications. The FPA
licensing scheme is unique, and commenters were nearly unanimous that
the key to timely and efficient processing of applications is combining
pre-filing consultation with NEPA scoping. NHA may be correct that
post-ECPA licenses are likely to contain a greater level of resource
protection than pre-ECPA licenses. However, as noted in our response to
SCE's proposal in the preceding section, many factors are likely to
change over the term of any license, regardless of when it was
issued.\368\
---------------------------------------------------------------------------

\368\ We note in this regard that the minimum term for a new
license is 30 years, and the first relicenses of projects with post-
ECPA licenses are still approximately 15 years away.
---------------------------------------------------------------------------

389. NEU recommends that projects under 5 MW with minor licenses
should have the right to elect the traditional process without
Commission approval, and to file the initial consultation document
currently required by the regulations instead of the PAD. We think the
approval requirement has been framed so that licensees of small
projects will have a reasonable opportunity to make their case for
using the traditional process and, as noted, we have made the PAD less
burdensome for all potential applicants.
390. Agencies and NGOs continue to recommend that no special
allowances be made for projects of any size unless there has been
consultation with agencies, Indian tribes, and the public. They
reiterate that size is no indicator of environmental impacts, case-by-
case consideration of the issues is not unduly burdensome, and that if
there really are few issues or little controversy, then the study
design can reflect that.\369\
---------------------------------------------------------------------------

\369\ S-P, MPRB, NCWRC, Interior, Georgia DNR, Wisconsin DNR,
Oregon, California, HRC, NYSDEC.
---------------------------------------------------------------------------

391. Notwithstanding our rejection of NHA's and NEU's
recommendations, we think there are likely to be instances where
relicensing of a small project will be uncontroversial, and for which
study requirements should be modest. For such cases, waiver of part or
all of pre-filing consultation may not prejudice the timely and
thorough consideration of a relicense application. We are therefore
modifying Section 16.8(e) of the regulations that requires the consent
of a resource agency or Indian tribe in order to waive pre-filing
consultation with respect to that entity. We will now permit non-
consensual requests for waivers, but will require any such request to
be preceded by discussions with these other entities and for the
request to include documentation of the discussions and a response to
any objections to the waiver request. We will also provide an
opportunity for responses to the waiver request.\370\
---------------------------------------------------------------------------

\370\ 18 CFR 16.8(e).
---------------------------------------------------------------------------

5. Draft Applicant-Prepared Environmental Analyses
392. Under the current rules, a license applicant may include a
draft EA with its application if it uses the ALP (applicant-prepared
EA, or APEA). The NOPR declined to adopt recommendations that we permit
license applicants to include a draft EA or draft EIS with their
application even if they use the existing traditional process. We
stated that the limits on pre-filing public participation and the
history of post-application continuation of pre-filing study disputes
would likely make such documents no more useful, or even less useful,
than the existing Exhibit E. We did however note that by proposing full
public participation in pre-filing consultation and adding mandatory,
binding study dispute resolution, the problem of an incomplete record
when the application is filed should be alleviated. We requested
comments on whether, in light of these proposed changes, we

[[Page 51109]]

should change our rules in this regard.\371\
---------------------------------------------------------------------------

\371\ 68 FR at p. 14012; IV FERC Stats. & Regs. Sec. 32,568 at
p. 34,736.
---------------------------------------------------------------------------

393. Agencies and NGO commenters opposed this idea.\372\ HRC and
Interior state that this would not achieve the goals of the rulemaking
because there would still be no requirement comparable to the ALP or
even the integrated process to consult on a study plan or the APEA.
Thus, the APEA would reflect only the positions and interests of the
applicant, making it highly unlikely that the Commission could adopt it
without major revisions. California adds that even if the factual
record was satisfactory, the objectivity of the applicant's analysis
would be suspect.
---------------------------------------------------------------------------

\372\ HRC, Interior, PFMC, MPRB, NCWRC, California.
---------------------------------------------------------------------------

394. EEI and NEU favor this idea. EEI states that APEAs work well
in the gas pipeline certificates program.
395. We have decided to permit a license applicant to include a
draft EA with its application. The agency and NGO commenters may be
correct that an APEA prepared under the traditional process is less
likely to account for the views of all participants and may require
significant revisions pursuant to the Commission's independent review.
That however is not the central issue. The adequacy of an APEA for
purposes of filing a license application is determined by whether it
contains the information required in Exhibit E, the environmental
exhibit. If it contains that information, we are not concerned that it
appears in a nontraditional format. The parties will retain the same
rights they now enjoy to comment on the full application and make any
additional information requests. Regardless of whether an applicant
includes an APEA or a traditional Exhibit E in its application, the
Commission will issue its own independently prepared draft NEPA
document or single environmental assessment.
6. ALP--Applicability of Dispute Resolution
396. We proposed to leave the existing, non-mandatory and non-
binding dispute resolution procedures applicable to the ALP in place
because mandatory, binding dispute resolution appears to be
incompatible with the collaborative nature of the ALP. We did however
request comments on whether there may be circumstances in which binding
dispute resolution could be conducted in a manner that safeguards the
collaborative process.\373\
---------------------------------------------------------------------------

\373\ 68 FR at p. 14012; IV FERC Stats. & Regs. ]
32,568 at p.
34,735.
---------------------------------------------------------------------------

397. SCE recommends that the ALP include binding dispute
resolution. Most commenters however state that a binding process would
be inconsistent with the concept of a collaborative process and would
therefore have a chilling effect on participation.\374\ California and
PFMC state that there should be a negotiated dispute resolution
mechanism in the communications protocol for each ALP. PFBC recommends
that if the existing ALP dispute resolution process \375\ fails, the
proposed formal dispute resolution process for the integrated licensing
process should be used, modified to make it available to all parties.
\376\
---------------------------------------------------------------------------

\374\ Interior, HRC, NYSDEC, NEU.
\375\ Under 18 CFR 4.34(i)(6)(vii), participants in an ALP may
file a request with the Commission to resolve any disagreement
concerning the ALP (i.e., not limited to studies) after reasonable
efforts have been made by the participants to resolve the dispute.
\376\ CSWC recommends that numerous elements of the integrated
process be incorporated into ongoing ALP processes. Imposing such
requirements would be inconsistent with the collaborative nature of
these processes and would upset the settled expectations of the
potential applicants and stakeholders who have already established
the means by which they will work together.
---------------------------------------------------------------------------

398. After considering the comments, we have decided not to change
the existing ALP dispute resolution provision. Mandatory, binding
dispute resolution still seems to us inconsistent with the
collaborative process. For the same reason we decline to import into
the ALP the formal dispute resolution procedures of the integrated
process. The negotiated dispute resolution procedure contemplated by
California and PFMC could however be encompassed within a
communications protocol, if the participants agreed to request waiver
of the process provided for in the regulations.

V. Ancillary Matters

1. Intervention by Federal and State Agencies
399. We proposed to permit Federal agencies that commonly intervene
in Commission proceedings, and state fish and wildlife and water
quality certification agencies, to intervene by filing a notice instead
of the current requirement to file a motion to intervene.\377\
---------------------------------------------------------------------------

\377\ 68 FR at p. 14013; IV FERC Stats. & Regs. ]
32,568 at p.
34,737, and proposed 18 CFR 385.214.
---------------------------------------------------------------------------

400. No commenter objected to this proposal. Various commenters
request that we clarify that the intervention by notice policy extends
to, or will be expanded to include, state water rights agencies \378\
and Indian tribes with authority to issue water quality
certification.\379\ These requests are reasonable and will be
granted.\380\
---------------------------------------------------------------------------

\378\ Alaska DNR, EPA.
\379\ Interior, EPA.
\380\ See 18 CFR 385.214.
---------------------------------------------------------------------------

401. NYSDEC requests that late interventions also be allowed by
notice unless there is prejudice to others. We deny this request. The
best means of determining whether other parties would be prejudiced is
for the entity seeking untimely intervention to address that issue and
for potentially prejudiced parties to respond. Our regulations on this
matter make clear that this is one of the matters the Commission may
consider in acting on a late motion to intervene.\381\
---------------------------------------------------------------------------

\381\ 18 CFR 385.214(d)(1)(iv).
---------------------------------------------------------------------------

402. NOAA Fisheries and Interior renew their request for automatic
intervenor status, or for the ability to file one notice of
intervention good for all proceedings throughout the term of a license.
They advance no arguments that were not considered and rejected in the
NOPR.
2. Information Technology
403. In the NOPR we denied requests by a few commenters to require
that documents filed in a proceeding or required to be available to the
public be served or otherwise made available on the internet. We
acknowledged that there are many instances where this is very efficient
and more useful for participants than distribution of paper. We also
noted that many license applicants and others are taking advantage of
these benefits. We concluded however that such a requirement might be
an undue cost burden on licensees that are small enterprises, and noted
that we have granted waiver of the ``licensing library'' requirement
where the applicant agreed to make all of the information available on
the Internet and to provide hard copies by mail on request.\382\
---------------------------------------------------------------------------

\382\ 68 FR at pp. 14013-014; IV FERC Stats. & Regs. ]
32,568 at
p. 34,737-738.
---------------------------------------------------------------------------

404. SCE requests that we reconsider and allow applicants to use
Web sites and e-mail to disseminate information and effect service in
the ordinary course.\383\ The applicant would determine whether and to
what extent to employ this means of service and information
dissemination. SCE states that entities without access to the internet
would be accommodated by service of physical documents. HRC notes in a
similar vein that electronic service is critical to the tight deadlines

[[Page 51110]]

in the integrated process. It requests that we make electronic service
the presumptive form of service, as long as the potential applicant
agrees to paper service for anyone who requests it.
---------------------------------------------------------------------------

\383\ SCE states that oversized documents that are not
compatible with e-mail would be served by mail, and that critical
energy infrastructure information could be excluded.
---------------------------------------------------------------------------

405. We continue to be concerned with the situation of small
enterprises that operate jurisdictional projects, as well as small NGOs
or individuals that may lack the sophistication to fully participate
without physical service. We do however see the potential for great
savings in electronic service and the Commission is continuously
reviewing its filing and distribution requirements with a view toward
maximizing the use of electronic filing and distribution of
information. Thus, as noted above, the final rule encourages potential
applicants to distribute on-line information and analyses referenced in
the PAD, while preserving the right of a participant to receive these
materials in hard copy form. One recent innovation in this connection
is the advent of our e-subscription service, in which an entity may
sign up to receive e-mail notification of, and a link to our
Commission-wide information database (FERRIS \384\) for, every filing
made in a specified proceeding.\385\ Finally, we will also continue to
consider waiver requests in individual cases, and participants in
collaborative processes are free to negotiate agreements which take
advantage of e-mail and other Internet capabilities.
---------------------------------------------------------------------------

\384\ FERRIS stands for Federal Energy Regulatory Records and
Information System.
\385\ Entities wishing to establish e-subscriptions can find
instructions on the Commission's Web site at
http://www.ferconline@ferc.gov .
---------------------------------------------------------------------------

406. ADK states that the Commission should permit meeting notices
and other short documents to be served by facsimile machine instead of
by e-mail on the ground that facsimile service is more reliable. This
would be an extremely inefficient, if not impossible, means for the
Commission to issue public notices. ADK is however free to request that
license applicants or other participants in individual proceedings
serve documents on it in this manner.
407. GLIFWC states that all documents filed in the licensing
process should be made available on the Commission's Web site and an
applicant's Web site in both portable document format (pdf) and a word
processing format. All documents filed with the Commission are already
available to the public on the Commission's Web site via FERRIS in
various formats, including pdf. For this reason, there is no need to
impose this burden on a potential applicant.
3. Project Boundaries and Maps
408. The NOPR stated that for historical reasons the current
regulations do not require minor projects occupying non-federal lands
to have an established project boundary, although the boundary for such
projects has been considered to be the reservoir shoreline. We further
observed that this situation is inconsistent with our ongoing effort to
modernize project boundary mapping by conversion of such maps into
highly accurate, georeferenced electronic maps, and therefore proposed
to require all future license and exemption applicants, regardless of
license or exemption type, to provide a project boundary with each
application. We requested comments on this proposal.\386\
---------------------------------------------------------------------------

\386\ 68 FR at p. 14014; IV FERC Stats. & Regs. ]
32,568 at p.
34,738.
---------------------------------------------------------------------------

409. Agencies and NGOs support the proposal. They state that it is
important for compliance purposes because the Commission has said the
geographical limit of its compliance authority is the project
boundary.\387\ They state that the project boundary should include
generating facilities, bypass reaches, the reservoir to the high water
mark, all shoreline lands needed to meet project purposes other than
the generation of power, and all lands needed to implement mitigation
measures.\388\ All of these are required to be included in the project
boundary with the exception of bypassed reaches, which we have
explained may or may not be jurisdictional depending on case-specific
facts.\389\
---------------------------------------------------------------------------

\387\ See PacifiCorp, 80 FERC ]
61,334 (1997).
\388\ HRC, IDFG, NCWRC, PFBC, NYSDEC, PFMC, Menominee, Interior,
MPRB.
\389\ See Duke Power, a Division of Duke Energy Corporation, 100
FERC ]
61,294 (2002), in which we stated that where a license
requires ongoing programs in a bypassed reach (e.g., a habitat
restoration program) such that continued Commission oversight is
necessary to meet the program requirements, the reach is considered
to be part of the project.
---------------------------------------------------------------------------

410. NHA is not opposed to consistent standards for project
boundary maps, but objects to imposing the new standards on existing
minor licenses for which project boundary maps are already on file, or
on exemptions. NHA states that it would cost thousands of dollars for
field survey and drafting and that the Commission can obtain all the
information it needs under the current rules. NHA, SCE, and NEU also
state that licensees should only be required to revise their project
boundaries when a new license application is filed or the licensee
otherwise seeks approval to revise a particular Exhibit G drawing,
because requiring georeferenced, electronically-formatted maps for all
projects would be costly and extremely burdensome.
411. These commenters may misapprehend the proposed rule in this
regard. It is not our intention to require all existing licensees or
exemptees to file a georeferenced map of the project boundary. The
project boundary data would only be required when an application is
filed for a license or an exemption, or when an application to amend
either authorization already requires a revised Exhibit G.
412. SCE adds that standards similar to the electronic standards
required for project maps should also be established for design
drawings required in a license application. Duke requests clarification
of which electronic format is required for Exhibit G maps. It
recommends widely used formats such as JPG, TIFF, or PDF, which do not
require specialized software.
413. The revised regulations do not require Exhibit G maps to be in
a GIS format. The project boundary is only one feature of Exhibit G
maps, which also include the location of project features such as the
reservoir, powerhouse, and other facilities. An applicant can file the
Exhibit G map in a JPG, TIFF, or PDF file, or any other graphic format,
the project boundary data however, must be filed in a GIS format.
4. Miscellaneous Filing Requirements
414. The NOPR proposed minor additions to the application filing
requirements of Sec. Sec. 4.41, 4.51, and 4.61. These are: monthly
flow duration curves;\390\ minimum and maximum hydraulic capacities for
the powerplant;\391\ estimated capital and operating and maintenance
(O&M) expenses for each proposed PM&E measures;\392\ estimates of the
costs to develop the license application;\393\ on-peak and off-peak
values of project power, and the basis for the value
determinations;\394\ estimated annual increase or decrease in
generation at existing projects;\395\ remaining undepreciated net
investment or book value of project;\396\ a single-line electrical
diagram;\397\ and a statement of

[[Page 51111]]

measures taken or planned to ensure safe management, operation, and
maintenance of the project.\398\
---------------------------------------------------------------------------

\390\ See proposed modifications to 18 CFR 4.41(c)(2)(i),
4.51(c)(2)(i), and 4.61(c)(1)(vii).
\391\ Proposed modifications to 18 CFR 4.41(c)(4)(iii);
4.51(c)(2)(iii), and 4.61(c)(1)(vii).
\392\ Proposed 18 CFR 4.41(e)(4)(v); 4.51(e)(4), and
4.61(c)(1)(x).
\393\ Proposed 18 CFR 4.41(e)(9); 4.51(e)(7); and 4.61(c)(3).
\394\ Proposed 18 CFR 4.41(e)(10); 4.51(e)(8); and 4.61(c)(4).
\395\ Proposed 18 CFR 4.51(e)(9) and 4.61(c)(5).
\396\ Proposed 18 CFR 4.61(c)(6).
\397\ Proposed 18 CFR 4.61(c)(8).
\398\ Proposed 18 CFR 4.61(c)(9).
---------------------------------------------------------------------------

415. These are items of information not specifically required to be
included by the current regulations, but which the Commission staff
requests as additional information in nearly every license proceeding
in order to complete its NEPA and comprehensive development analyses.
The NOPR found that obtaining this information with the application
instead of via an additional information request will enable the staff
to move forward more expeditiously to process license applications. No
opposing comments were received on these proposed changes, and we are
adopting them. A few commenters raised other miscellaneous filing
requirement issues.
416. NOAA Fisheries requests a reduction in the number of paper
copies that are required to be filed, and that we consider allowing
filings to be made on compact disks (CDs) and by other electronic
means. The Commission allows, indeed strongly encourages, electronic
filing. Parties may also request waiver of the filing requirements in
order to substitute a compact disk or CD-ROM for a hard copy
filing.\399\ We are also reviewing our filing and distribution
requirements Commission-wide with a view toward maximizing the use of
e-filing and distribution of information, but that review is not
complete at this time.
---------------------------------------------------------------------------

\399\ Such waivers are granted under the Commission Secretary's
delegated authority in 18 CFR 375.302(i).
---------------------------------------------------------------------------

417. Interior requests that we require applicants to provide aerial
photographs and/or satellite images to provide an overview of the
project area. We think this is excessive in light of the requirements
we are already imposing for electronically formatted maps, and the
ready availability of United States Geological Survey and other maps.
5. Technical Changes
418. We are also taking this opportunity to correct various
sections of the regulations to update them, or to cure incorrect cross-
references, misspellings, or misstatements.\400\
---------------------------------------------------------------------------

\400\ Corrections have been made to 18 CFR 2.1(a)(1); 2.7(b);
4.30(b)(9)(ii); 4.30(b)(23); 4.32(a)(5)(vi); 4.32(e)(2); 4.32(h);
4.33(a); 4.33(b); 4.37 introductory text; 4.37(b)(1); 4.39(a);
4.39(b); 4.40(b); 4.41(f)(6)(v); 4.41(f)(9)(i); 4.60(b); 4.61(f)(2);
4.70; 4.90; 4.91; 4.92; 4.93; 4.101; 4.200(c); 9.1; 9.10;
375.308(d)(11), (k)(1), (k)(2)(ii), and (k)(3).
---------------------------------------------------------------------------

W. Delegations of Authority

419. The proposed rule contemplated certain new delegations of
authority to the Director, Office of Energy Projects, in the context of
the proposed integrated process. Specifically, these are authority to
issue: (1) Act on requests to use the traditional licensing process;
(2) issue a study plan determination; (3) resolve formal study
disputes; and (4) resolve disagreements brought during the conduct of
studies. Consistent with our decision to adopt the integrated process
as described herein, we are adopting conforming modifications to our
delegations to the Director.\401\
---------------------------------------------------------------------------

\401\ 18 CFR 375.308(aa).
---------------------------------------------------------------------------

X. Critical Energy Infrastructure Information

1. Order No. 630
420. In Order No. 630,\402\ the Commission established standards
and procedures for the handling of Critical Energy Infrastructure
Information (CEII) submitted to or created by the Commission. CEII is
information about existing or proposed critical infrastructure that
relates to the production, generation, transportation, transmission, or
distribution of energy; that could be useful to a person planning an
attack on critical infrastructure; is exempt from mandatory disclosure
under the Freedom of Information Act;\403\ and that does not simply
give the location of the critical infrastructure.\404\ Critical
infrastructure refers to existing or proposed systems and assets, the
damage or destruction of which would harm the national security of the
public health and safety.\405\ The purpose of the rule is to protect
information on critical energy infrastructure that could be used by
terrorists, while continuing to make public the information necessary
for participation in the Commission's processes.
---------------------------------------------------------------------------

\402\ 68 FR 9857 (Mar. 3, 2003); IV FERC Stats. & Regs. ]
31,140
(Feb. 21, 2003).
\403\ 5 U.S.C. 552.
\404\ 18 CFR 388.113(c)(1).
\405\ 18 CFR 388.113(c)(2).
---------------------------------------------------------------------------

421. CEII is required to be redacted from filings made with the
Commission. A hydroelectric license application could contain various
kinds of information that are CEII. The preamble to the rule gives
examples of such information, including: (1) General design drawings of
the principal project works, such as those found in Exhibit F; (2)
Maps, such as those found in Exhibit G; (3) Drawings showing technical
details of a project, such as plans and specifications, supporting
design reports, part 12 independent consultant reports,\406\ facility
details, electrical transmission systems, communication and control
center information; and (4) GPS coordinates of any project features.
---------------------------------------------------------------------------

\406\ See 18 CFR part 12, Subpart D.
---------------------------------------------------------------------------

422. Of particular concern to the Commission in defining CEII was
location information. Such information is particularly relevant, for
example, to participants in the NEPA process. Consequently, the
following types of location information were not considered to be CEII:
(1) USGS 7.5-minutes topographic maps showing the location of
pipelines, dams, or other aboveground facilities; (2) alignment sheets
showing the location of pipeline and aboveground facilities, right of
way dimensions, and extra work areas; (3) drawings showing site or
project boundaries, footprints, building locations and reservoir
extent; and (4) general location maps. Such information is classified
as ``non-Internet public access,'' that is, information to be included
in paper filings with the Commission and made be available in hard copy
and through the Commission's public reference room, but which will not
be available for viewing or downloading from Commission databases \407\
---------------------------------------------------------------------------

\407\ 68 FR at p. 9862.
---------------------------------------------------------------------------

423. Order No. 630 establishes procedures for persons to request
CEII that has been filed with the Commission or to challenge CEII
status.\408\
---------------------------------------------------------------------------

\408\ 18 CFR 388.113.
---------------------------------------------------------------------------

2. Conforming Rulemaking
424. Several commenters in the CEII rulemaking and on the NOPR in
this proceeding \409\ noted that the Commission also requires regulated
entities to provide directly to agencies, Indian tribes, and the public
certain information that is CEII. The Commission agreed and stated that
it would issue conforming rules to ensure consistent treatment of CEII
by the Commission and regulated entities. A proposed conforming rule
was issued on April 9, 2003.\410\ Comments were due on May 16, 2003,
and a final rule is being issued concurrent with this rule.\411\
---------------------------------------------------------------------------

\409\ Consumers, PSE, WPSR, NHA, WPPD, Oroville, EEI.
\410\ Critical Energy Infrastructure Information (RM02-4-001,
PL02-1-001), 68 FR 18538-18544 (Apr. 16, 2003); III FERC Stats. &
Regs. ]
32,569 (Apr. 9, 2003).
\411\ Order No. 643, III FERC Stats. & Regs. Regulations
Preambles 104 FERC ]
61,107 (July 23, 2003).
---------------------------------------------------------------------------

425. The final conforming rule identifies various sections of 18
CFR Parts 4 and 16 that require direct disclosure of information that
could include CEII. Public disclosure requirements in part 4 include:
(1) Notification of applications to affected

[[Page 51112]]

property owners, which must include Exhibit G to the application; \412\
(2) a copy of the application and all exhibits, available to the public
for inspection and reproduction at specified locations; \413\ (3) an
applicant using alternative procedures must distribute an information
package and maintain a public file of all relevant documents, including
scientific studies; \414\ and (4) in pre-filing consultation for an
original license application, the requirement to make available for
public inspection various items,\415\ including detailed maps \416\ and
a general engineering design.\417\
---------------------------------------------------------------------------

\412\ 18 CFR 4.32(a)(3)(ii).
\413\ 18 CFR 4.32(b)(3)(i), (b)(4)(ii)-(iv).
\414\ 18 CFR 4.34(i)(4)(i) and (i)(6)(iii).
\415\ 18 CFR 4.38(g).
\416\ 18 CFR 4.38(b)(1)(i).
\417\ 18 CFR 4.38(b)(1)(ii).
---------------------------------------------------------------------------

426. Public disclosure requirements in part 16 include: (1) When
the NOI is issued, a number of items, including the original
application, as-built drawings, diagrams, emergency action plans, and
operation and maintenance reports; \418\ and (2) during pre-filing
consultation, detailed maps and a general engineering design must be
made available for public inspection.\419\ Parts 4 and 16 also in
several instances require applicants to serve CEII on Indian tribes,
resource agencies, and other government offices.\420\
---------------------------------------------------------------------------

\418\ 18 CFR 16.7(d)(1)-(2).
\419\ 18 CFR 16.8(b)(2)(i)-(ii).
\420\ 18 CFR 4.32(b)(1)-(2); 4.38(b)(1), (c)(4), (d);
16.8(b)(1), (c)(4), (d).
---------------------------------------------------------------------------

427. The NOPR proposed to provide that regulated entities subject
to the disclosure requirements of Parts 4 and 16 omit CEII from the
information made available to agencies, Indian tribes, and the public.
Instead, they would include with their filing a statement briefly
describing the omitted information, without revealing CEII, and
referring the reader to the procedures for challenging CEII claims and
for requesting CEII under the procedures adopted in Order No. 630.\421\
Therefore, a member of the public could still obtain the information,
but would have to follow procedures different from those applicable
now. That proposal is adopted in the final rule.
---------------------------------------------------------------------------

\421\ See proposed 18 CFR 4.32(k), 4.34(i)(10), 4.38(i),
16.7(d)(7), and 16.8(k).
---------------------------------------------------------------------------

428. Neither the regulations promulgated in Order No. 630 nor the
proposals contained in the proposed conforming rule are intended to
require companies to withhold CEII. Instead, they are intended to
ensure that the Commission's regulations do not require companies to
reveal CEII. Consequently, the Commission anticipates that, in most
instances, companies will share CEII with participants in the licensing
process without requiring those entities to request access to CEII
through the Commission.
429. The rules also do not alter the ability of state agencies to
obtain data directly from regulated companies pursuant to whatever
authorities those agencies have. State agencies are also presumed to
have a need to know information involving issues that are within there
are of responsibility. They may submit requests for information
regarding entities outside their jurisdictions with an explanation of
the need.
3. CEII in the Integrated Process
430. Several commenters stated that the final rule needs to clarify
how the information filing and distribution aspects of the license
application process would work in concert with the CEII
regulations.\422\ They observe that some of the information in the PAD
required to be filed and distributed appears to be non-Internet public
information and CEII.\423\
---------------------------------------------------------------------------

\422\ Consumers, PSE, WPSR, NHA, WPPD, Oroville, EEI.
\423\ They cite proposed 18 CFR 5.4(c)(2)(H), (I), (K) and (L).
---------------------------------------------------------------------------

431. The information filing and disclosure requirements of part 5
are not covered by Order No. 630, or the proposed conforming rule. We
are therefore including in the new part 5 regulations a provision
consistent with the revisions to Parts 4 and 16 promulgated in Order
Nos. 630 and 630-A.\424\
---------------------------------------------------------------------------

\424\ 18 CFR 5.30 (Critical Energy Infrastructure Information).
---------------------------------------------------------------------------

432. Long View recommends that the requirements of Exhibit F to the
license application be made consistent with the CEII rules. This is not
a matter of conforming Exhibit F to the CEII rules, but rather making
Exhibit F subject to the rules, which it is.
433. One commenter stated that the form which entities requesting
CEII are to use is not available on the Commission's Web site and that
the form does not provide a name or office number for the person to
whom the submission is to be made. These omissions will shortly be
remedied.\425\
---------------------------------------------------------------------------

\425\ The CEII request form is being developed and will soon be
posted on the Commission's Web site at
http://www.ferc.gov .
---------------------------------------------------------------------------

Y. Transition Provisions

434. Nearly all the comments on the proposed transition provisions
were made by industry representatives. Only Idaho Power found the
three-month transition period to be reasonable, as long as flexibility
is provided for the few existing licensees who would be immediately
affected. HRC and NYSDEC agree.
435. Requests for extension of the transition period range from six
months to six years, during which time applicants would have complete
choice of process.\426\ The commenters assert that more time is needed
to fully consider the rule after it is finalized and to switch from the
initial consultation document and public information requirements of
the current rules to the PAD, and that a three-month period reduces the
six-month window provided by the rules for submittal of the NOI to
three months for some licensees.\427\ The Process Group recommended a
one to two year transition period.
---------------------------------------------------------------------------

\426\ Six months to one year (NHA); one year (Troutman, EEI,
PG&E, SCE, Georgia Power); one to two years (Process Group); and
five-six years (Long View).
\427\ This would be the case when the effective date of the rule
falls within the six-month window. In this regard, Georgia Power and
Troutman recommend against making the NOI deadline date the trigger
date for applicability of the rule. They recommend instead the six-
month period of five to five and one-half years before license
expiration. A licensee for whom the six-month period includes the
effective date of the rule could choose the traditional process by
filing its NOI prior to the effective date of the rule, or choose
the integrated process by filing its NOI after the effective date
(and not making a request to use the traditional process).
Alternatively, Georgia Power, Duke, and NEU request that guidance
and special consideration be given to requests for waiver of the
rule for the few projects for which the NOI is due very close to the
effective date of the rule.
---------------------------------------------------------------------------

436. In light of these comments, we have concluded that the
integrated process should become the default process on July 23, 2005.
Until that time, potential license applicants will be able to select
the integrated process or the traditional process as it currently
exists (except for increased public participation, changes in
miscellaneous filing requirements, and a later deadline date for filing
of the water quality certification application). At the end of the two-
year period, the integrated process will become the default process.
All potential applicants will have to file the NOI and PAD, and obtain
Commission authorization to use the traditional process.\428\
---------------------------------------------------------------------------

\428\ The two-year period is irrelevant for purposes of the ALP
because the requirements for approval do not change.
---------------------------------------------------------------------------

437. All other proposed changes to the regulations will, as
proposed, take effect on October 23, 2003.
438. EEI requests that changes to the ex parte rule in connection
with reversal of the policy on intervention by cooperating agencies
should not apply to any projects for which an NOI has

[[Page 51113]]

already been filed, because those potential applicants relied on the
existing rules. As we have decided to retain the existing cooperating
agencies policy, EEI's request is moot.
439. California asserts that any change in the deadline for
applying for water quality certification from the date of the
application to a later time should apply immediately. California states
that this would give all licensees that have filed an NOI, but not yet
filed the license application, the benefit of additional time to
resolve data requirements before filing their certification
request.\429\ We agree in general that licensee applicants should have
the benefit of our decision to move back the deadline date to 60 days
following issuance of the REA notice. To minimize confusion, however,
we will make that change effective October 23, 2003. Thus, a license
application filed after that date under any process will benefit from
the changed deadline date for filing the water quality certification
application.
---------------------------------------------------------------------------

\429\ California cites changes to 18 CFR 4.34(j) and 4.38(h).
---------------------------------------------------------------------------

440. SCE and the Process Group request that we ``grandfather'' any
potential applicant that has already been authorized to use the ALP,
even if the NOI date has not arrived. This request is reasonable and we
will grant it.
441. Duke requests that we grandfather ``existing licensing
proceedings,'' by which it apparently means that the potential
applicant has commenced pre-filing consultation. This request is moot
with respect to the process selection rules because a potential new
license applicant by definition begins pre-filing consultation when the
NOI and PAD are filed, and only those for whom the deadline date is two
years away will be affected. With respect to the miscellaneous filing
requirements, we think the three month transition period is sufficient.
442. Duke also states that potential applicants already engaged in
the traditional pre-filing process should be permitted to employ
features of the integrated process in the traditional process. We
proposed changes to the regulatory text which enable a potential
applicant to file a request to do so during first stage consultation
after consulting with potentially affected entities.\430\ No commenter
opposed the proposed provisions, which we are including in the final
rule.
---------------------------------------------------------------------------

\430\ Proposed 18 CFR 4.38(e)(4).
---------------------------------------------------------------------------

IV. Environmental Analysis

443. The Commission is required to prepare an Environmental
Assessment or an Environmental Impact Statement for any action that may
have significant adverse effect on the human environment.\431\ The
Commission has categorically excluded certain actions from this
requirement as not having a significant effect on the human
environment. Included in the exclusions are rules that are clarifying,
corrective, or procedural or that do not substantively change the
effect of the regulations being amended.\432\ This proposed rule is
procedural in nature and therefore falls under this exception.
Consequently, no environmental consideration is necessary.
---------------------------------------------------------------------------

\431\ Order No. 486, Regulations Implementing the National
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. &
Regs. Preambles 1986-1990 ]30,783 (Dec. 10, 1987).
\432\ 18 CFR 380.4(a)(2)(ii).
---------------------------------------------------------------------------

V. Regulatory Flexibility Act

444. The Regulatory Flexibility Act of 1980 (RFA)\433\ generally
requires a description and analysis of final rules that will have a
significant economic impact on a substantial number of small entities,
or a certification that the rule will not have a significant economic
impact on a substantial number of small entities.\434\ Pursuant to
section 605(b) of the RFA, the Commission hereby certifies that the
proposed licensing regulations, if promulgated, would not have a
significant economic impact on a substantial number of small entities.
We justify our certification on the fact that the efficiency and
timeliness of the proposed integrated licensing process (early
Commission assistance, early issue identification, integrated NEPA
scoping with application development, and better coordination among
federal and state agencies) will benefit small entities by minimizing
redundancy and waste in the processes of the Commission and the various
federal and state agencies associated with the hydroelectric licensing
process.
---------------------------------------------------------------------------

\433\ 5 U.S.C. 601-612 (2000).
\434\ Section 601(c) of the RFA defines a ``small entity'' as a
small business, a small not-for-profit enterprise, or a small
governmental jurisdiction. A ``small business'' is defined by
reference to Section 3 of the Small Business Act as an enterprise
which is ``independently owned and operated and which is not
dominant in its field of operation'' 15 U.S.C. 632(a).
---------------------------------------------------------------------------

VI. Information Collection Statement

445. The Office of Management and Budget's (``OMB's'') regulations
require that OMB approve certain information collection requirements
imposed by agency rule.\435\ This Final Rule does not make any
substantive or material changes to the information collection
requirements specified in the NOPR, which was previously submitted to
OMB for approval. OMB has elected to take no action on the NOPR. Thus,
the information collection requirements in this rule are pending OMB
approval.
---------------------------------------------------------------------------

\435\ 5 CFR part 1320.
---------------------------------------------------------------------------

446. The following collections of information contained in this
proposed rule will be submitted to the Office of Management and Budget
for review under section 3507(d) of the Paperwork Reduction Act of
1995, 44 U.S.C. 3507(d). The Commission identifies the information
provided for under parts 4, 5, and 16 and FERC-500 ``Application for
License/Relicense for Water Projects greater than 5 MW Capacity,'' and
FERC-505, ``Application for License for Water Projects less than 5 MW
Capacity.''
447. This Final Rule responds to comments concerning the
information collections requirements specified in the NOPR, and has
changed the PAD that was previously submitted to OMB. The changes make
the document less burdensome on potential applicants and easier for all
recipients to use. OMB did not make substantive comments on the NOPR,
but directed the Commission to calculate the burden for each of the
three available licensing processes and to estimate the proportion of
licensees that would select each process. The burden calculation is
based on the collection, dissemination of, and recordkeeping for
information in the licensing process, and does not include any costs of
license terms and conditions.
448. Public Reporting Burden: The Commission provided burden
estimates for the proposed requirements. Several commenters stated that
the PAD as proposed was unduly burdensome. These comments are addressed
elsewhere in the Final Rule. In summary, we have clarified that the PAD
requirements are limited to existing information and do not include any
requirement to conduct studies, are substantially similar to existing
requirements, and that the format and content requirements have been
modified to reduce the burden on potential applicants.\436\
---------------------------------------------------------------------------

\436\ See Section III.E.
---------------------------------------------------------------------------

449. Estimated Annual Burden

[[Page 51114]]

Table 1. Traditional Licensing Process
----------------------------------------------------------------------------------------------------------------
No. of Total
Data collection respondents No. of Hours per Percent use annual
\*\ responses response \**\ hours
----------------------------------------------------------------------------------------------------------------
FERC-500................................... 26 1 46,000 10 119,600
FERC-505................................... 15 1 10,000 10 15,000
----------------------------------------------------------------------------------------------------------------
\*\ Estimated number of licenses subject to renewal through 2009.
\**\ Estimate of the percentage of applications that may use the Traditional Licensing Process.

Total Annual Hours for Collection:

(Reporting + Recordkeeping, (if appropriate)) = 1,356,000 hours

Table 2. Alternative Licensing Process
----------------------------------------------------------------------------------------------------------------
Total
Data collection No. of No. of Hours per Percent annual
respondents\*\ responses response use\**\ hours
----------------------------------------------------------------------------------------------------------------
FERC-500.................................. 26 1 39,000 30 304,000
FERC-505.................................. 15 1 8,600 30 38,700
----------------------------------------------------------------------------------------------------------------
\*\ Estimated number of licenses subject to renewal through 2009.
\**\ Estimate of the percentage of applications that may use the Alternative Licensing Process.

Total Annual Hours for Collection:

(Reporting + Recordkeeping, (if appropriate)) = 1,152,000 hours

Table 3. Integrated Licensing Process
----------------------------------------------------------------------------------------------------------------
No. of Total
Data collection respondents No. of Hours per Percent use annual
\*\ responses response\***\ \**\ hours
----------------------------------------------------------------------------------------------------------------
FERC-500.................................. 26 1 32,200 60 502,320
FERC-505.................................. 15 1 7,000 60 63,000
----------------------------------------------------------------------------------------------------------------
\*\ Estimated no. of licenses subject to renewal through FY 2009.
\**\ Estimate of the percentage of applicants that may use the Integrated Licensing Process.
\***\Based on a 30% reduction through concomitant processes.

Total Annual Hours for Collection:

(Reporting + Recordkeeping, (if appropriate)) = 942,200 hours

Information Collection Costs: The Commission requested comments on
the cost to comply with these requirements. None were received. The
Commission has projected the average annualized cost per respondent to
be the following:

Annualized Costs:
(1) Using Traditional Licensing Process
(a) Projects less than 5 MW (average)-- $500,000.00
(b) Projects greater than 5 MW (average)--$2,300,000.00.
(2) Using Proposed Integrated Licensing Process
(a) Projects less than 5MW average--$350,000.00.
(b) Projects greater than 5 MW--$1,610,000.00.
Total Annualized Costs:
(1) Traditional Licensing Process-- $67,300,000 ($59.8 mil. + $7.5
mil.).
(2) Proposed Integrated Licensing Process-- $47,110,000 ($41.8 mil. +
($5.25 mil.)

The Office of Management and Budget's (OMB) regulations \437\
require OMB to approve certain information collection requirements
imposed by agency rule. The Commission is submitting notification of
this proposed rule to OMB.
---------------------------------------------------------------------------

\437\ 5 CFR 1320.11.
---------------------------------------------------------------------------

Title: FERC-500 ``Application for License/Relicense for Water
Projects greater than 5 MW Capacity,'' and FERC-505, ``Application for
License for Water Projects less than 5 MW Capacity.''
Action: Proposed Collections.
OMB Control No: 1902-0058 (FERC 500) and 1902-0115 (FERC 505).
Respondents: Business or other for profit, or non-profit.
Frequency of Responses: On occasion.
Necessity of the Information: The final rule revises the
Commission's regulations regarding applications for licenses to
construct, operate, and maintain hydroelectric projects. Specifically,
the revisions establish a new process for the development and
processing of license applications that combines during the pre-filing
consultation phase activities that are currently conducted during pre-
filing consultation and after the license application is filed. The
information to be collected is needed to evaluate the license
application pursuant to the comprehensive development standard of FPA
Sections 4(e) and 10(a)(1), to consider in the comprehensive
development analysis certain factors with respect to new licenses set
forth in FPA Section 15, and to comply with NEPA, ESA, and NHPA. Most
of the information is already being collected under the existing
regulations, and the new regulations would for the most part affect
only the timing of the collection and the form in which it is
presented.
Internal Review: The Commission has reviewed the requirements
pertaining to evaluation of hydroelectric license applications and has
determined that the revisions are necessary because the hydroelectric
licensing process is unnecessarily long and costly.
450. These requirements conform to the Commission's plan for
efficient information collection, communication, and management within
the hydroelectric power industry. The Commission has assured itself, by
means of internal review, that there is

[[Page 51115]]

specific, objective support for the burden estimates associated with
the information requirements.
451. Interested persons may obtain information on the reporting
requirements by contacting the following: Federal Energy Regulatory
Commission, 888 First Street, NE., Washington, DC 20426 (Attention:
Michael Miller, Office of the Executive Director, 202-502-8415 or
michael.miller@ferc.gov) or from the Office of Management and Budget
(OMB), Room 10202 NEOB, 725 17th Street, NW., Washington, DC 20503.
(Attention: Desk Officer for the Federal Energy Regulatory Commission,
fax: 202-395-7285.)
452. Comments on the collection of information and the associated
burden estimates should be submitted to the contact listed above and to
OMB. (Attention: Desk Officer for the Federal Energy Regulatory
Commission, fax: 202-395-7285 or by e-mail to
pamelabeverly.oirasubmissions @omb.eop.gov.)

VII. Effective Date and Congressional Notification

453. This final rule will take effect on October 23, 2003. The
Commission has determined, with the concurrence of the Administrator of
the Office of Information and Regulatory Affairs of the Office of
Management and Budget, that this rule is not a ``major rule'' within
the meaning of Section 251 of Small Business Regulatory Enforcement
Fairness Act of 1996.\438\ The Commission will submit the Final Rule to
both houses of Congress and the General Accounting Office.
---------------------------------------------------------------------------

\438\ 5 U.S.C. 804(2).
---------------------------------------------------------------------------

VIII. Document Availability

454. In addition to publishing the full text of this document in
the Federal Register, the Commission also provides all interested
persons an opportunity to view and/or print the contents of this
document via the Internet through the Commission's Home Page ( http://www.ferc.gov )
and in the Commission's Public Reference Room during
regular business hours (8:30 a.m. to 5 p.m. Eastern time) at 888 First
Street, NE., Room 2A, Washington, DC 20426.
455. From the Commission's Home Page on the Internet, this
information is available in the Federal Energy Regulatory Records
Information System (FERRIS). The full text of this document is
available on FERRIS in PDF and WordPerfect format for viewing,
printing, and/or downloading. To access this document in FERRIS, type
the docket number of this docket, excluding the last three digits, in
the docket number field. User assistance is available for FERRIS and
the Commission's Web site during regular business hours. For
assistance, contact FERC Online Support at FERCOnlineSupport@ferc.gov
or toll-free at (866) 208-3676, or for TTY, contact (202) 502-8659.

List of Subjects

18 CFR Part 2

Administrative practice and procedures, Electric power, Natural
Gas, Pipelines, Reporting, and recordkeeping requirements.

18 CFR Part 4

Administrative practice and procedure, Electric power, Reporting
and recordkeeping requirements.

18 CFR Part 5

Administrative practice and procedure, Electric power, Reporting
and recordkeeping requirements.

18 CFR Part 9

Electric power, Reporting, and recordkeeping requirements.

18 CFR Part 16

Administrative practice and procedure, Electric power, Reporting
and recordkeeping requirements.

18 CFR Part 375

Authority delegations (Government agencies).

18 CFR Part 385

Administrative practice and procedure, Electric power, Penalties,
Pipelines, Reporting and recordkeeping requirements.

By the Commission.
Magalie R. Salas,
Secretary.

0
In consideration of the foregoing, the Commission amends parts 2, 4, 9,
16, 375, and 385, and adds a new part 5 to, Chapter I, Title 18, Code
of Federal Regulations, as follows.

Regulatory Text

PART 2--GENERAL POLICY AND INTERPRETATIONS

0
1. The authority citation for part 2 continues to read as follows:

Authority: 5 U.S.C. 601; 15 U.S.C. 717-717w, 3301-3432; 16
U.S.C. 792-825y, 2601-2645; 42 U.S.C. 4321-4361, 7101-7352.

0
2. Amend Sec. 2.1 as follows:
0
a. Redesignate existing paragraph (a)(1)(xi)(K) as paragraph
(a)(1)(xi)(L).
0
b. Add a new paragraph (a)(1)(xi)(K).
The added text reads as follows:

Sec. 2.1 Initial notice; service; and information copies of formal
documents.

(a) * * *
(1) * * *
(xi) * * *
(K) Proposed penalties under section 31 of the Federal Power Act.

Sec. 2.7 [Amended]

0
3. Amend Sec. 2.7 by removing ``physically handicapped individuals''
in paragraph (b) and adding ``persons with disabilities'' in its place.

PART 4--LICENSES, PERMITS, EXEMPTIONS, AND DETERMINATION OF PROJECT
COSTS

0
4. The authority citation for part 4 continues to read as follows:

Authority: 16 U.S.C. 791a-825r, 2601-2645; 42 U.S.C. 7101-7352.

0
5. Amend Sec. 4.30 as follows:
0
a. Paragraph (a) is revised.
0
b. In paragraph (b)(9)(ii), remove ``Sec. Sec. 4.34(e)(2)'' and add
``Sec. 4.34(e)(1)'' in its place.
0
c. In paragraph (b)(23), remove ``Sec. 4.31(c)(2)'' and add ``Sec.
4.31(b)(2)'' in its place.
The revised text of paragraph (a) reads as follows:

Sec. 4.30 Applicability and definitions.

(a) (1) This subpart applies to applications for preliminary
permit, license, or exemption from licensing.
(2) Any potential applicant for an original license for which
prefiling consultation begins on or after July 23, 2005 and which
wishes to develop and file its application pursuant to this part, must
seek Commission authorization to do so pursuant to the provisions of
part 5 of this chapter.
* * * * *

0
6. Amend Sec. 4.32 as follows:
0
a. In Sec. 4.32, remove ``Office of Hydropower Licensing'' each place
it appears and add ``Office of Energy Projects'' in its place.
0
b. The second sentence of paragraph (b)(1) is revised.
0
c. Paragraph (b)(2) is revised.
0
d. In paragraph (h), remove ``Division of Engineering and Environmental
Review'' and add ``Division of Hydropower--Environment and
Engineering'' in its place.
The revised text reads as follows:

Sec. 4.32 Acceptance for filing or rejection; information to be made
available to the public; requests for additional studies.

* * * * *
(b) * * *
(1) * * * The applicant or petitioner must serve one copy of the
application or petition on the Director of the

[[Page 51116]]

Commission's Regional Office for the appropriate region and on each
resource agency, Indian tribe, and member of the public consulted
pursuant to Sec. 4.38 or Sec. 16.8 of this chapter or part 5 of this
chapter. * * *
(2) Each applicant for exemption must submit to the Commission's
Secretary for filing an original and eight copies of the application.
An applicant must serve one copy of the application on each resource
agency consulted pursuant to Sec. 4.38. For each application filed
following October 23, 2003, maps and drawings must conform to the
requirements of Sec. 4.39. The originals (microfilm) of maps and
drawing are not to be filed initially, but will be requested pursuant
to paragraph (d) of this section.
* * * * *

0
7. Amend Sec. 4.33 as follows:
0
a. In paragraph (a), redesignate paragraph (a)(2) as (a)(3), and add a
new paragraph (a)(2).
0
b. Paragraph (b) is revised.
The added and revised text reads as follows:

Sec. 4.33 Limitations on submitting applications.

(a) * * *
(2) Would interfere with a licensed project in a manner that,
absent the licensee's consent, would be precluded by Section 6 of the
Federal Power Act.
* * * * *
(b) Limitations on submissions and acceptance of a license
application. The Commission will not accept an application for a
license or project works that would develop, conserve, or utilize, in
whole or part, the same water resources that would be developed,
conserved, and utilized by a project for which there is:
* * * * *
(1) An unexpired preliminary permit, unless the permittee has
submitted an application for license; or
(2) An unexpired license, as provided for in Section 15 of the
Federal Power Act.
* * * * *

0
8. Amend Sec. 4.34 as follows:
0
a. In paragraph (b)(1), revise the third sentence to read as follows:
``In the case of an application prepared other than pursuant to part 5
of this chapter, if ongoing agency proceedings to determine the terms
and conditions or prescriptions are not completed by the date
specified, the agency must submit to the Commission by the due date:''
0
b. In paragraph (b)(4)(i): In the first sentence remove ``impact
statement'' and add ``document'' in its place. In the second sentence
remove ``statement'' and add ``document'' in its place.
0
c. Paragraph (b)(5) is added.
0
d. Paragraph (e) is revised.
0
e. In paragraph (h), remove ``consist of an original and eight copies''
and add ``conform to the requirements of subpart T of part 385 of this
chapter'' in its place.
0
f. Paragraph (i)(5) is revised.
0
g. Paragraph (i)(9) is removed.
The revised and added text reads as follows:

Sec. 4.34 Hearings on applications; consultation on terms and
conditions; motions to intervene; alternative procedures.

* * * * *
(b) * * *
(5)(i) With regard to certification requirements for a license
applicant under section 401(a)(1) of the Federal Water Pollution
Control Act (Clean Water Act), an applicant shall file within 60 days
from the date of issuance of the notice of ready for environmental
analysis:
(A) A copy of the water quality certification;
(B) A copy of the request for certification, including proof of the
date on which the certifying agency received the request; or
(C) Evidence of waiver of water quality certification as described
in paragraph (b)(5)(ii) of this section.
(ii) A certifying agency is deemed to have waived the certification
requirements of section 401(a)(1) of the Clean Water Act if the
certifying agency has not denied or granted certification by one year
after the date the certifying agency received a written request for
certification. If a certifying agency denies certification, the
applicant must file a copy of the denial within 30 days after the
applicant received it.
(iii) Notwithstanding any other provision in title 18, chapter I,
subchapter B, part 4, any application to amend an existing license, and
any application to amend a pending application for a license, requires
a new request for water quality certification pursuant to paragraph
(b)(5)(i) of this section if the amendment would have a material
adverse impact on the water quality in the discharge from the project
or proposed project.
* * * * *
(e) Consultation on recommended fish and wildlife conditions;
Section 10(j) process. (1) In connection with its environmental review
of an application for license, the Commission will analyze all terms
and conditions timely recommended by fish and wildlife agencies
pursuant to the Fish and Wildlife Coordination Act for the protection,
mitigation of damages to, and enhancement of fish and wildlife
(including related spawning grounds and habitat) affected by the
development, operation, and management of the proposed project.
Submission of such recommendations marks the beginning of the process
under section 10(j) of the Federal Power Act.
(2) The agency must specifically identify and explain the
recommendations and the relevant resource goals and objectives and
their evidentiary or legal basis. The Commission may seek clarification
of any recommendation from the appropriate fish and wildlife agency. If
the Commission's request for clarification is communicated in writing,
copies of the request will be sent by the Commission to all parties,
affected resource agencies, and Indian tribes, which may file a
response to the request for clarification within the time period
specified by the Commission. If the Commission believes any fish and
wildlife recommendation may be inconsistent with the Federal Power Act
or other applicable law, the Commission will make a preliminary
determination of inconsistency in the draft environmental document or,
if none, the environmental assessment. The preliminary determination,
for any recommendations believed to be inconsistent, shall include an
explanation why the Commission believes the recommendation is
inconsistent with the Federal Power Act or other applicable law,
including any supporting analysis and conclusions, and an explanation
of how the measures recommended in the environmental document would
adequately and equitably protect, mitigate damages to, and enhance,
fish and wildlife (including related spawning grounds and habitat)
affected by the development, operation, and management of the project.
(3) Any party, affected resource agency, or Indian tribe may file
comments in response to the preliminary determination of inconsistency,
including any modified recommendations, within the time frame allotted
for comments on the draft environmental document or, if none, the time
frame for comments on the environmental analysis. In this filing, the
fish and wildlife agency concerned may also request a meeting,
telephone or video conference, or other additional procedure to attempt
to resolve any preliminary determination of inconsistency.
(4) The Commission shall attempt, with the agencies, to reach a
mutually

[[Page 51117]]

acceptable resolution of any such inconsistency, giving due weight to
the recommendations, expertise, and statutory responsibilities of the
fish and wildlife agency. If the Commission decides, or an affected
resource agency requests, the Commission will conduct a meeting,
telephone, or video conference, or other procedures to address issues
raised by its preliminary determination of inconsistency and comments
thereon. The Commission will give at least 15 days' advance notice to
each party, affected resource agency, or Indian tribe, which may
participate in the meeting or conference. Any meeting, conference, or
additional procedure to address these issues will be scheduled to take
place within 90 days of the date the Commission issues a preliminary
determination of inconsistency. The Commission will prepare a written
summary of any meeting held under this subsection to discuss section
10(j) issues, including any proposed resolutions and supporting
analysis, and a copy of the summary will be sent to all parties,
affected resource agencies, and Indian tribes.
(5) The section 10(j) process ends when the Commission issues an
order granting or denying the license application in question. If,
after attempting to resolve inconsistencies between the fish and
wildlife recommendations of a fish and wildlife agency and the purposes
and requirements of the Federal Power Act or other applicable law, the
Commission does not adopt in whole or in part a fish and wildlife
recommendation of a fish and wildlife agency, the Commission will
publish the findings and statements required by section 10(j)(2) of the
Federal Power Act.
* * * * *
(i) * * *
(5)(i) If the potential applicant's request to use the alternative
procedures is filed prior to July 23, 2005, the Commission will give
public notice in the Federal Register inviting comment on the
applicant's request to use alternative procedures. The Commission will
consider any such comments in determining whether to grant or deny the
applicant's request to use alternative procedures. Such a decision will
not be subject to interlocutory rehearing or appeal.
(ii) If the potential applicant's request to use the alternative
procedures is filed on or after July 23, 2005 and prior to the deadline
date for filing a notification of intent to seek a new or subsequent
license required by Sec. 5.5 of this chapter, the Commission will give
public notice and invite comments as provided for in paragraph
(i)(5)(i) of this section. Commission approval of the potential
applicant's request to use the alternative procedures prior to the
deadline date for filing of the notification of intent does not waive
the potential applicant's obligation to file the notification of intent
required by Sec. 5.5 of this chapter and Pre-Application Document
required by Sec. 5.6 of this chapter.
(iii) If the potential applicant's request to use the alternative
procedures is filed on or after July 23, 2005 and is at the same time
as the notification of intent to seek a new or subsequent license
required by Sec. 5.5, the public notice and comment procedures of part
5 of this chapter shall apply.
* * * * *

Sec. 4.35 [Amended]

0
9. Amend Sec. 4.35 as follows:
0
In paragraph (f)(1)(iii) remove the word ``or'' and add the word ``of''
in its place.

Sec. 4.37 [Amended]

0
10. Amend Sec. 4.37 as follows:
0
a. In the introductory sentence, remove ``Sec. 4.33(f)'' and add
``Sec. 4.33(e)'' in its place.
0
b. In paragraph (b)(1), remove ``If both of two'' and add ``If both or
neither of two'' in its place.
0
11. Amend Sec. 4.38 as follows:
0
a. In Sec. 4.38, remove ``Office of Hydropower Licensing'' each place
it appears and add ``Office of Energy Projects'' in its place.
0
b. In paragraph (a), redesignate existing paragraphs (a)(2) through
(a)(7) as paragraphs (a)(4) through (a)(9), add new paragraphs (a)(2)
and (a)(3), and revise newly redesignated paragraph (a)(4).
0
c. Paragraph (b) is revised.
0
d. In paragraph (c)(1), remove ``(b)(5)'' and add ``(b)(6)'' in its
place.
0
e. In paragraph (c)(1)(ii), remove ``(b)(1)'' and add ``(b)(2)'' in its
place.
0
f. In paragraph (c)(2): remove ``(b)(6)'' and add ``(b)(7)'' in its
place; remove ``(b)(4)(i)-(vi)'' and add ``(b)(5)(i)-(vi)'' in its
place; and remove ``(b)(5)'' and add ``(b)(6)'' in its place.
0
g. In paragraph (c)(4)(ii), remove ``(b)(1)(vii)'' and add
``(b)(2)(vii)'' in its place.
0
h. In paragraph (d)(1), remove ``Indian tribes, and other government
offices'' and add ``Indian tribes, other government offices, and
consulted members of the public'' in its place.
0
i. In paragraph (d)(2), remove ``resource agency and Indian tribe
consulted and on other government offices'' and add ``resource agency,
Indian tribes, and member of the public consulted, and on other
government offices'' in its place.
0
j. In paragraph (e), a new paragraph (e)(4) is added.
0
k. In paragraph (f), paragraph (7) is removed, and paragraphs (8) and
(9) are redesignated (7) and (8), respectively, and in newly
redesignated paragraph (7), remove ``(b)(2)'' and add ``(b)(3)'' in its
place.
0
l. In paragraph (g)(1), remove the phrase ``(b)(2)'' and add the phrase
``(b)(3)'' in its place.
0
m. In paragraph (g)(1), ``(b)(2)'' is removed and ``(b)(3)'' is added
in its place.
0
n. Paragraph (g)(2) is revised.
0
o. Paragraph (h) is removed.
The revised and added text reads as follows:

Sec. 4.38 Consultation requirements.

(a) * * *
(2) Each requirement in this section to contact or consult with
resource agencies or Indian tribes shall be construed to require as
well that the potential applicant contact or consult with members of
the public.
(3) If a potential applicant for an original license commences
first stage pre-filing consultation on or after July 23, 2005 it shall
file a notification of intent to file a license application pursuant to
Sec. 5.5 and a pre-application document pursuant to the provisions of
Sec. 5.6.
(4) The Director of the Energy Projects will, upon request, provide
a list of known appropriate Federal, state, and interstate resource
agencies, Indian tribes, and local, regional, or national non-
governmental organizations likely to be interested in any license
application proceeding.
* * * * *
(b) First stage of consultation. (1) A potential applicant for an
original license that commences pre-filing consultation on or after
July 23, 2005 must, at the time it files its notification of intent to
seek a license pursuant to Sec. 5.6 of this chapter and a pre-
application document pursuant to Sec. 5.6 of this chapter and, at the
same time, provide a copy of the pre-application document to the
entities specified in Sec. 5.6(a) of this chapter.
(2) A potential applicant for an original license that commences
pre-filing consultation under this part prior to July 23, 2005 or for
an exemption must promptly contact each of the appropriate resource
agencies, affected Indian tribes, and members of the public likely to
be interested in the proceeding; 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 (including a

[[Page 51118]]

description of any existing facilities, their operation, and any
proposed changes), reasonable hydropower alternatives, and what studies
the applicant should conduct. The potential applicant must provide to
the resource agencies, Indian tribes and the Commission the following
information:
(i) Detailed maps showing project boundaries, if any, proper land
descriptions of the entire project area by township, range, and
section, as well as by state, county, river, river mile, and closest
town, and also showing the specific location of all proposed project
facilities, including roads, transmission lines, and any other
appurtenant facilities;
(ii) A general engineering design of the proposed project, with a
description of any proposed diversion of a stream through a canal or
penstock;
(iii) A summary of the proposed operational mode of the project;
(iv) Identification of the environment to be affected, the
significant resources present, and the applicant's proposed
environmental protection, mitigation, and enhancement plans, to the
extent known at that time;
(v) 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, the method used to generate the
streamflow data provided, and copies of all records used to derive the
flow data used in the applicant's engineering calculations;
(vi) (A) A statement (with a copy to the Commission) of whether or
not the applicant will seek benefits under section 210 of PURPA by
satisfying the requirements for qualifying hydroelectric small power
production facilities in Sec. 292.203 of this chapter;
(B) If benefits under section 210 of PURPA are sought, a statement
on whether or not the applicant believes diversion (as that term is
defined in Sec. 292.202(p) of this chapter) and a request for the
agencies' view on that belief, if any;
(vii) Detailed descriptions of any proposed studies and the
proposed methodologies to be employed; and
(viii) Any statement required by Sec. 4.301(a) of this part.
(3) (i) A potential exemption applicant and a potential applicant
for an original license that commences pre-filing consultation;
(A) On or after July 23, 2005 pursuant to part 5 of this chapter
and receives approval from the Commission to use the license
application procedures of part 4 of this chapter; or
(B) Elects to commence pre-filing consultation under part 4 of this
chapter prior to July 23, 2005; must:
(1) Hold a joint meeting at a convenient place and time, including
an opportunity for a site visit, with all pertinent agencies, Indian
tribes, and members of the public to explain the applicant's proposal
and its potential environmental impact, to review the information
provided, and to discuss the data to be obtained and studies to be
conducted by the potential applicant as part of the consultation
process;
(2) Consult with the resource agencies, Indian tribes and members
of the public on the scheduling and agenda of the joint meeting; and
(3) No later than 15 days in advance of the joint meeting, provide
the Commission with written notice of the time and place of the meeting
and a written agenda of the issues to be discussed at the meeting.
(ii) The joint meeting must be held no earlier than 30 days, but no
later than 60 days, from, as applicable;
(A) The date of the Commission's approval of the potential
applicant's request to use the license application procedures of this
part pursuant to the provisions of part 5 of this chapter; or
(B) The date of the potential applicant's letter transmitting the
information required by paragraph (b)(2) of this section, in the case
of a potential exemption applicant or a potential license applicant
that commences pre-filing consultation under this part prior to July
23, 2005.
(4) Members of the public must be informed of and invited to attend
the joint meeting held pursuant to paragraph (b)(3) of this section by
means of the public notice provision published in accordance with
paragraph (g) of this section. Members of the public attending the
meeting are entitled to participate in the meeting and to express their
views regarding resource issues that should be addressed in any
application for license or exemption that may be filed by the potential
applicant. Attendance of the public at any site visit held pursuant to
paragraph (b)(3) of this section will be at the discretion of the
potential applicant. The potential applicant must make either audio
recordings or written transcripts of the joint meeting, and must
promptly provide copies of these recordings or transcripts to the
Commission and, upon request, to any resource agency, Indian tribe, or
member of the public.
(5) Not later than 60 days after the joint meeting held under
paragraph (b)(3) of this Section (unless extended within this time
period by a resource agency, Indian tribe, or members of the public for
an additional 60 days by sending written notice to the applicant and
the Director of the Office of Energy Projects within the first 60 day
period, with an explanation of the basis for the extension), each
interested resource agency and Indian tribe must provide a potential
applicant with written comments:
(i) Identifying its determination of necessary studies to be
performed or the information to be provided by the potential applicant;
(ii) Identifying the basis for its determination;
(iii) Discussing its understanding of the resource issues and its
goals and objectives for these resources;
(iv) Explaining why each study methodology recommended by it is
more appropriate than any other available methodology alternatives,
including those identified by the potential applicant pursuant to
paragraph (b)(2)(vii) of this section;
(v) Documenting that the use of each study methodology recommended
by it is a generally accepted practice; and
(vi) Explaining how the studies and information requested will be
useful to the agency, Indian tribe, or member of the public in
furthering its resource goals and objectives that are affected by the
proposed project.
(6)(i) If a potential applicant 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 or gather information
referenced in paragraph (c)(2) of this section, the potential applicant
or resource agency or Indian tribe may refer the dispute in writing to
the Director of the Office of Energy Projects (Director) for
resolution.
(ii) At the same time as the request for dispute resolution is
submitted to the Director, the entity referring the dispute 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 to
the Director a written response to the referral within 15 days of the
referral's submittal to the Director.
(iii) Written referrals to the Director and written responses
thereto pursuant to paragraphs (b)(6)(i) or (b)(6)(ii) of this section
must be filed with the Commission in accordance with the Commission's
Rules of Practice and Procedure, and must indicate that they are for
the attention of the Director pursuant to Sec. 4.38(b)(6).
(iv) The Director will resolve the disputes by letter provided to
the

[[Page 51119]]

potential applicant and all affected resource agencies and Indian
tribes.
(v) If a potential applicant does not refer a dispute regarding a
request for a potential applicant to obtain information or conduct
studies (other than a dispute regarding the information specified in
paragraph (b)(2) of this section), or a study to the Director under
paragraph (b)(6) of this section, or if a potential applicant disagrees
with the Director's resolution of a dispute regarding a request for
information (other than a dispute regarding the information specified
in paragraph (b)(2) of this section) or a study, and if the potential
applicant does not provide the requested information or conduct the
requested study, the potential applicant must fully explain the basis
for its disagreement in its application.
(vi) Filing and acceptance of an application will not be delayed,
and an application will not be considered deficient or patently
deficient pursuant to Sec. 4.32(e)(1) or (e)(2) of this part, merely
because the application does not include a particular study or
particular information if the Director had previously found, under
paragraph (b)(6)(iv) of this section, that each study or information is
unreasonable or unnecessary for an informed decision by the Commission
on the merits of the application or use of the study methodology
requested is not a generally accepted practice.
(7) The first stage of consultation ends when all participating
agencies and Indian tribes provide the written comments required under
paragraph (b)(5) of this section or 60 days after the joint meeting
held under paragraph (b)(3) of this section, whichever occurs first,
unless a resource agency or Indian tribe timely notifies the applicant
and the Director of Energy Projects of its need for more time to
provide written comments under paragraph (b)(5) of this section, in
which case the first stage of consultation ends when all participating
agencies and Indian tribes provide the written comments required under
paragraph (b)(5) of this section or 120 days after the joint meeting
held under paragraph (b)(5) of this section, whichever occurs first.
* * * * *
(e) * * *
(4) Following October 23, 2003, a potential license applicant
engaged in pre-filing consultation under part 4 may during first stage
consultation request to incorporate into pre-filing consultation any
element of the integrated license application process provided for in
part 5 of this chapter. Any such request must be accompanied by a:
(i) Specific description of how the element of the part 5 license
application would fit into the pre-filing consultation process under
this part; and
(ii) Demonstration that the potential license applicant has made
every reasonable effort to contact all resource agencies, Indian
tribes, non-governmental organizations, and others affected by the
applicant's proposal, and that a consensus exists in favor of
incorporating the specific element of the part 5 process into the pre-
filing consultation under this part.
* * * * *
(g) * * *
(2)(i) A potential applicant must make available to the public for
inspection and reproduction the information specified in paragraph
(b)(2) of this section from the date on which the notice required by
paragraph (g)(1) of this section is first published until a final order
is issued on any license application.
(ii) The provisions of Sec. 4.32(b) will govern the form and
manner in which the information is to be made available for public
inspection and reproduction.
(iii) A potential applicant must make available to the public for
inspection at the joint meeting required by paragraph (b)(3) of this
section at least two copies of the information specified in paragraph
(b)(2) of this section.

0
12. Amend Sec. 4.39 as follows:
0
a. Paragraph (a) is revised.
0
b. Paragraph (b), introductory text, is revised.
0
c. Paragraph (e) is added.
The revised and added text reads as follows:

Sec. 4.39 Specifications for maps and drawings.

* * * * *
(a) Each original map or drawing must consist of a print on silver
or gelatin 35mm microfilm mounted on Type D (3\1/4\'' by 7\3/8\'')
aperture cards. Two duplicates must be made on sheets of each original.
Full-sized prints of maps and drawings must be on sheets no smaller
than 24 by 36 inches and no larger than 28 by 40 inches. A space five
inches high by seven inches wide must be provided in the lower right
hand corner of each sheet. The upper half of this space must bear the
title, numerical and graphical scale, and other pertinent information
concerning the map or drawing. The lower half of the space must be left
clear. Exhibit G drawings must be stamped by a registered land
surveyor. If the drawing size specified in this paragraph limits the
scale of structural drawings (exhibit F drawings) described in
paragraph (c) of this section, a smaller scale may be used for those
drawings.
(b) Each map must have a scale in full-sized prints no smaller than
one inch equals 0.5 miles for transmission lines, roads, and similar
linear features and no smaller than one inch equals 1,000 feet for
other project features, including the project boundary. Where maps at
this scale do not show sufficient detail, large scale maps may be
required.
* * * * *
(e) The maps and drawings showing project location information and
details of project structures must be filed in accordance with the
Commission's instructions on submission of Critical Energy
Infrastructure Information in Sec. Sec. 388.112 and 388.113 of
subchapter X of this chapter.

Sec. 4.40 [Amended]

0
13. Amend Sec. 4.40 as follows:
In paragraph (b), remove ``Division of Hydropower Licensing'' and
add ``Office of Energy Projects'' in its place.

0
14. Amend Sec. 4.41 as follows:
0
a. In paragraph (c)(4)(i), remove ``a flow duration curve'' and add
``monthly flow duration curves'' in its place. After the phrase
``deriving the'', remove ``curve'' and add ``curves'' in its place.
0
b. In paragraph (c)(4)(iii), add ``minimum and maximum'' between
``estimated'' and ``hydraulic''.
0
c. In paragraph (e)(4)(iii), remove ``and'' the first place it appears.
0
d. In paragraph (e)(4)(iv), add ``and'' after the word
``contingencies;''.
0
e. Paragraph (e)(4)(v) is added.
0
f. In paragraph (e)(7), remove ``and'' after ``constructed;''.
0
g. In paragraph (e)(8), remove the period after ``section'' and add a
semi-colon in its place.
0
h. Paragraphs (e)(9) and (e)(10) are added.
0
i. In paragraph (f)(9)(i), remove ``Soil Conservation Service'' and add
``Natural Resources Conservation Service'' in its place.
0
j. Paragraph (h), introductory text, is revised.
0
k. In paragraph (h)(2), second sentence, remove ``license'' from ``the
license application''.
0
l. Paragraph (h)(3)(iv) is added.
0
m. Paragraph (h)(4)(ii) is revised.
The revised and added text reads as follows.

Sec. 4.41 Contents of application.

* * * * *
(e) * * *
(4) * * *
(v) The estimated capital cost and estimated annual operation and
maintenance expense of each proposed environmental measure;
* * * * *

[[Page 51120]]

(9) An estimate of the cost to develop the license application; and
(10) The on-peak and off-peak values of project power, and the
basis for estimating the values, for projects which are proposed to
operate in a mode other than run-of-river.
* * * * *
(h) Exhibit G is a map of the project that must conform to the
specifications of Sec. 4.39. In addition, each exhibit G boundary map
must be submitted in a geo-referenced electronic format--such as
ArcView shape files, GeoMedia files, MapInfo files, or any similar
format. The electronic boundary map must be positionally accurate to +
40 feet, in order to comply with the National Map Accuracy Standards
for maps at a 1:24,000 scale (the scale of USGS quadrangle maps). The
electronic exhibit G data must include a text file describing the map
projection used (i.e., UTM, State Plane, Decimal Degrees, etc.), the
map datum (i.e., feet, meters, miles, etc.). Three copies of the
electronic maps must be submitted on compact disk or DVD. If more than
one sheet is used for the paper maps, the sheets must be numbered
consecutively, and each sheet must bear a small insert sketch showing
the entire project and indicate that portion of the project depicted on
that sheet. Each sheet must contain a minimum of three known reference
points. The latitude and longitude coordinates, or state plane
coordinates, or each reference point must be shown. If at any time
after the application is filed there is any change in the project
boundary, the applicant must submit, within 90 days following the
completion of project construction, a final exhibit G showing the
extent of such changes. The map must show:
* * * * *
(3) * * *
(iv) The project location must include the most current information
pertaining to affected Federal lands as described under Sec.
4.81(b)(5).
(4) * * *
(ii) Lands over which the applicant has acquired or plans to
acquire rights to occupancy and use other than fee title, including
rights acquired or to be acquired by easement or lease.

0
15. Amend Sec. 4.51 as follows:
0
a. In paragraph (c)(2)(i), remove ``a flow duration curve'' and add
``monthly flow duration curves'' in its place and remove ``curve'' the
second place it appears and add ``curves'' in its place.
0
b. In paragraph (c)(2)(iii), before the word ``maximum'', add ``minimum
and''.
0
c. Paragraph (e)(4) is revised.
0
d. Paragraphs (e)(7)-(9) are added.
0
e. Paragraph (g) is revised.
0
f. Paragraph (h) is revised.
The revised and added text reads as follows:

Sec. 4.51 Contents of application.

* * * * *
(e) * * *
(4) A statement of the estimated average annual cost of the total
project as proposed specifying any projected changes in the costs
(life-cycle costs) over the estimated financing or licensing period if
the applicant takes such changes into account, including:
(i) Cost of capital (equity and debt);
(ii) Local, state, and Federal taxes;
(iii) Depreciation and amortization;
(iv) Operation and maintenance expenses, including interim
replacements, insurance, administrative and general expenses, and
contingencies; and
(v) The estimated capital cost and estimated annual operation and
maintenance expense of each proposed environmental measure.
* * * * *
(7) An estimate to develop the cost of the license application;
(8) The on-peak and off-peak values of project power, and the basis
for estimating the values, for projects which are proposed to operate
in a mode other than run-of-river; and
(9) The estimated average annual increase or decrease in project
generation, and the estimated average annual increase or decrease of
the value of project power, due to a change in project operations
(i.e., minimum bypass flows; limits on reservoir fluctuations).
* * * * *
(g) Exhibit F. See Sec. 4.41(g) of this chapter.
(h) Exhibit G. See Sec. 4.41(h) of this chapter.
* * * * *

Sec. 4.60 [Amended]

0
16. Amend Sec. 4.60 as follows:
0
In paragraph (b), remove ``Division of Public Information'' and add
``Public Reference Room'' in its place.

0
17. Amend Sec. 4.61 as follows:
0
a. In paragraph (c)(1)(vii), after the first appearance of
``estimated'' add ``minimum and maximum''. After ``1.5 megawatts,''
remove ``a'' and add ``monthly'' in its place. Remove ``curve'' and add
in its place ``curves''.
0
b. Paragraph (c)(1)(x) is added.
0
c. Paragraphs (c) (3) through (9) are added.
0
d. Paragraph (e) is revised.
0
e. Paragraph (f) is revised.
The revised and added text reads as follows:

Sec. 4.61 Contents of application.

* * * * *
(c) * * *
(1) * * *
(x) The estimated capital costs and estimated annual operation and
maintenance expense of each proposed environmental measure.
* * * * *
(3) An estimate of the cost to develop the license application; and
(4) The on-peak and off-peak values of project power, and the basis
for estimating the values, for project which are proposed to operate in
a mode other than run-of-river.
(5) The estimated average annual increase or decrease in project
generation, and the estimated average annual increase or decrease of
the value of project power due to a change in project operations (i.e.,
minimum bypass flows, limiting reservoir fluctuations) for an
application for a new license;
(6) The remaining undepreciated net investment, or book value of
the project;
(7) The annual operation and maintenance expenses, including
insurance, and administrative and general costs;
(8) A detailed single-line electrical diagram;
(9) A statement of measures taken or planned to ensure safe
management, operation, and maintenance of the project.
* * * * *
(e) Exhibit F. See Sec. 4.41(g) of this chapter.
(f) Exhibit G. See Sec. 4.41(h) of this chapter.

Sec. 4.70 [Amended]

0
18. In Sec. 4.70, remove ``or other hydroelectric power project
authorized by Congress''.

Sec. 4.81 [Amended]

0
19. In Sec. 4.81, paragraph (b)(5) is revised to read as follows:
The revised text reads as follows:

Sec. 4.81 Contents of application.

* * * * *
(b) * * *
(5) All lands of the United States that are enclosed within the
proposed project boundary described under paragraph (e)(3) of this
section, identified and tabulated on a separate sheet by legal
subdivisions of a public land survey of the affected area, if
available. If the project boundary includes lands of the United States,
such lands must be identified on a completed land description form,
provided by the Commission. The

[[Page 51121]]

project location must identify any Federal reservation, Federal tracts,
and townships of the public land surveys (or official protractions
thereof if unsurveyed). A copy of the form must also be sent to the
Bureau of Land Management state office where the project is located;
* * * * *

Sec. 4.90 [Amended]

0
20. In Sec. 4.90, remove ``Sec. 4.30(b)(26)'' and add ``Sec.
4.30(b)(28)'' in its place.
0
21. Amend Sec. 4.92 as follows:
0
a. In Sec. 4.92 remove ``Sec. 4.30(b)(26)'' wherever it appears and
add ``Sec. 4.30(b)(28)'' in its place.
0
b. Paragraph (a)(2) is revised.
0
c. In paragraph (c), introductory text, remove ``Exhibit B'' and add
``Exhibit F'' in its place.
0
d. Paragraph (d) is revised.
0
e. Paragraph (f) is revised.
The revised text reads as follows:

Sec. 4.92 Contents of exemption application.

(a) * * *
(2) Exhibits A, E, F, and G.
* * * * *
(d) Exhibit G. Exhibit G is a map of the project and boundary and
must conform to the specifications of Sec. 4.41(h) of this chapter.
* * * * *
(f) Exhibit F. Exhibit F is a set of drawings showing the
structures and equipment of the small conduit hydroelectric facility
and must conform to the specifications of Sec. 4.41(g) of this
chapter.

Sec. 4.93 [Amended]

0
22. In Sec. 4.93, remove from paragraph (a) ``Sec. 4.30(b)(26)(v)''
and add ``Sec. 4.30(b)(28)(v)'' in its place.

Sec. 4.101 [Amended]

0
23. In Sec. 4.101, remove ``4.30(b)(27)'' and add ``4.30(b)(29)'' in
its place.

0
24. Amend Sec. 4.107 as follows:
0
a. Paragraph (d) is revised.
0
b. Paragraph (f) is revised.
The revised text reads as follows:

Sec. 4.107 Contents of application for exemption from licensing.

* * * * *
(d) Exhibit G. Exhibit G is a map of the project and boundary and
must conform to the specifications of Sec. 4.41(h) of this chapter.
* * * * *
(f) Exhibit F. Exhibit F is a set of drawings showing the
structures and equipment of the small hydroelectric facility and must
conform to the specifications of Sec. 4.41(g) of this chapter.

Sec. 4.200 [Amended]

0
25. In Sec. 4.200, remove from paragraph (c) ``on'' and add ``in'' in
its place.

0
26. Add part 5 to read as follows:

PART 5--INTEGRATED LICENSE APPLICATION PROCESS

Sec.
5.1 Applicability, definitions, and requirement to consult.
5.2 Document availability
5.3 Process selection.
5.4 Acceleration of a license expiration date.
5.5 Notification of intent.
5.6 Pre-application document.
5.7 Tribal consultation.
5.8 Notice of commencement of proceeding and scoping document, or of
approval to use traditional licensing process or alternative
procedures.
5.9 Comments and information or study requests.
5.10 Scoping document 2.
5.11 Potential Applicant's proposed study plan and study plan
meetings.
5.12 Comments on proposed study plan.
5.13 Revised study plan and study plan determination.
5.14 Formal study dispute resolution process.
5.15 Conduct of studies.
5.16 Preliminary licensing proposal.
5.17 Filing of application.
5.18 Application content.
5.19 Tendering notice and schedule.
5.20 Deficient applications.
5.21 Additional information.
5.22 Notice of acceptance and ready for environmental analysis.
5.23 Response to notice.
5.24 Applications not requiring a draft NEPA document.
5.25 Applications requiring a draft NEPA document.
5.26 Section 10(j) process.
5.27 Amendment of application.
5.28 Competing applications.
5.29 Other provisions.
5.30 Critical Energy Infrastructure Information.
5.31 Transition provision.

Authority: 16 U.S.C. 791a-825r, 2601-2645; 42 U.S.C. 7101-7352.

Sec. 5.1 Applicability, definitions, and requirement to consult.

(a) This part applies to the filing and processing of an
application for an:
(1) Original license;
(2) New license for an existing project subject to Sections 14 and
15 of the Federal Power Act; or
(3) Subsequent license.
(b) Definitions. The definitions in Sec. 4.30(b) of this parte and
Sec. 16.2 of this part apply to this part.
(c) Who may file. Any citizen, association of citizens, domestic
corporation, municipality, or state may develop and file a license
application under this part.
(d) Requirement to consult. (1) Before it files any application for
an original, new, or subsequent license under this part, a potential
applicant must consult with the relevant Federal, state, and interstate
resource agencies, including as appropriate the National Marine
Fisheries Service, the United States Fish and Wildlife Service, Bureau
of Indian Affairs, the National Park Service, the United States
Environmental Protection Agency, the Federal agency administering any
United States lands utilized or occupied by the project, the
appropriate state fish and wildlife agencies, the appropriate state
water resource management agencies, the certifying agency or Indian
tribe under Section 401(a)(1) of the Federal Water Pollution Control
Act (Clean Water Act), 33 U.S.C. 1341(c)(1)), the agency that
administers the Coastal Zone Management Act, 16 U.S.C. Sec. 1451-1465,
any Indian tribe that may be affected by the project, and members of
the public. A potential license applicant must file a notification of
intent to file a license application pursuant to Sec. 5.2 and a pre-
application document pursuant to the provisions of Sec. 5.3.
(2) The Director of the Office of Energy Projects will, upon
request, provide a list of known appropriate Federal, state, and
interstate resource agencies, Indian tribes, and local, regional, or
national non-governmental organizations likely to be interested in any
license application proceeding.
(e) Purpose. The purpose of the integrated licensing process
provided for in this part is to provide an efficient and timely
licensing process that continues to ensure appropriate resource
protections through better coordination of the Commission's processes
with those of Federal and state agencies and Indian tribes that have
authority to condition Commission licenses.
(f) Default process. Each potential original, new, or subsequent
license applicant must use the license application process provided for
in this part unless the potential applicant applies for and receives
authorization from the Commission under this part to use the licensing
process provided for in:
(1) 18 CFR part 4, Subparts D-H and, as applicable, part 16 (i.e.,
traditional process), pursuant to paragraph (c) of this section; or
(2) Section 4.34(i) of this chapter, Alternative procedures.

Sec. 5.2 Document availability.

(a) Pre-application document. (1) From the date a potential license
applicant files a notification of intent to

[[Page 51122]]

seek a license pursuant to Sec. 5.5 until any related license
application proceeding is terminated by the Commission, the potential
license applicant must make reasonably available to the public for
inspection at its principal place of business or another location that
is more accessible to the public, the pre-application document and any
materials referenced therein. These materials must be available for
inspection during regular business hours in a form that is readily
accessible, reviewable, and reproducible.
(2) The materials specified in paragraph (a)(1) of this section
must be made available to the requester at the location specified in
paragraph (a)(1) of this section or through the mail, or otherwise.
Except as provided in paragraph (a)(3) of this section, copies of the
pre-application document and any materials referenced therein must be
made available at their reasonable cost of reproduction plus, if
applicable, postage.
(3) A potential licensee must make requested copies of the
materials specified in paragraph (a)(1) of this section available to
the United States Fish and Wildlife Service, the National Marine
Fisheries Service, the state agency responsible for fish and wildlife
resources, any affected Federal land managing agencies, and Indian
tribes without charge for the costs of reproduction or postage.
(b) License application. (1) From the date on which a license
application is filed under this part until the licensing proceeding for
the project is terminated by the Commission, the license applicant must
make reasonably available to the public for inspection at its principal
place of business or another location that is more accessible to the
public, a copy of the complete application for license, together with
all exhibits, appendices, and any amendments, pleadings, supplementary
or additional information, or correspondence filed by the applicant
with the Commission in connection with the application. These materials
must be available for inspection during regular business hours in a
form that is readily accessible, reviewable, and reproducible at the
same time as the information is filed with the Commission or required
by regulation to be made available.
(2) The applicant must provide a copy of the complete application
(as amended) to a public library or other convenient public office
located in each county in which the proposed project is located.
(3) The materials specified in paragraph (b)(1) of this section
must be made available to the requester at the location specified in
paragraph (b)(1) of this section or through the mail. Except as
provided in paragraph (b)(4) of this section, copies of the license
application and any materials referenced therein must be made available
at their reasonable cost of reproduction plus, if applicable, postage.
(4) A licensee applicant must make requested copies of the
materials specified in paragraph (b)(1) of this section available to
the United States Fish and Wildlife Service, the National Marine
Fisheries Service, and the state agency responsible for fish and
wildlife resources, any affected Federal land managing agencies, and
Indian tribes without charge for the costs of reproduction or postage.
(c) Confidentiality of cultural information. A potential applicant
must delete from any information made available to the public under
paragraphs (a) and (b) of this section, specific site or property
locations the disclosure of which would create a risk of harm, theft,
or destruction of archeological or native American cultural resources
or of the site at which the sources are located, or would violate any
Federal law, include the Archeological Resources Protection Act of
1979, 16 U.S.C. 470w-3, and the National Historic Preservation Act of
1966, 16 U.S.C. 470hh.
(d) Access. Anyone may file a petition with the Commission
requesting access to the information specified in paragraphs (a) or (b)
of this section if it believes that the potential applicant or
applicant is not making the information reasonably available for public
inspection or reproduction. The petition must describe in detail the
basis for the petitioner's belief.

Sec. 5.3 Process selection

(a)(1) Notwithstanding any other provision of this part or of parts
4 and 16 of this chapter, a potential applicant for a new, subsequent,
or original license may until July 23, 2005 elect to use the licensing
procedures of this part or the licensing procedures of parts 4 and 16.
(2) Any potential license applicant that files its notification of
intent pursuant to Sec. 5.5 and pre-application document pursuant to
Sec. 5.6 after July 23, 2005 must request authorization to use the
licensing procedures of parts 4 and 16, as provided for in paragraphs
(b)-(f) of this section.
(b) A potential license applicant may file with the Commission a
request to use the traditional licensing process or alternative
procedures pursuant to this Section with its notification of intent
pursuant to Sec. 5.5.
(c)(1)(i) An application for authorization to use the traditional
process must include justification for the request and any existing
written comments on the potential applicant's proposal and a response
thereto.
(ii) A potential applicant requesting authorization to use the
traditional process should address the following considerations:
(A) Likelihood of timely license issuance;
(B) Complexity of the resource issues;
(C) Level of anticipated controversy;
(D) Relative cost of the traditional process compared to the
integrated process;
(E) The amount of available information and potential for
significant disputes over studies; and
(F) Other factors believed by the commenter to be pertinent
(2) A potential applicant requesting the use of Sec. 4.34(i)
alternative procedures of this chapter must:
(i) Demonstrate that a reasonable effort has been made to contact
all agencies, Indian tribes, and others affected by the applicant's
request, and that a consensus exists that the use of alternative
procedures is appropriate under the circumstances;
(ii) Submit a communications protocol, supported by interested
entities, governing how the applicant and other participants in the
pre-filing consultation process, including the Commission staff, may
communicate with each other regarding the merits of the potential
applicant's proposal and proposals and recommendations of interested
entities; and
(iii) Provide a copy of the request to all affected resource
agencies and Indian tribes and to all entities contacted by the
applicant that have expressed an interest in the alternative pre-filing
consultation process.
(d)(1) The potential applicant must provide a copy of the request
to use the traditional process or alternative procedures to all
affected resource agencies, Indian tribes, and members of the public
likely to be interested in the proceeding. The request must state that
comments on the request to use the traditional process or alternative
procedures, as applicable, must be filed with the Commission within 30
days of the filing date of the request and, if there is no project
number, that responses must reference the potential applicant's name
and address.
(2) The potential applicant must also publish notice of the filing
of its notification of intent, of the pre-application document, and of
any request to use the traditional process or alternative procedures no
later than the

[[Page 51123]]

filing date of the notification of intent in a daily or weekly
newspaper of general circulation in each county in which the project is
located. The notice must:
(i) Disclose the filing date of the request to use the traditional
process or alternative procedures, and the notification of intent and
pre-application document;
(ii) Briefly summarize these documents and the basis for the
request to use the traditional process or alternative procedures;
(iii) Include the potential applicant's name and address, and
telephone number, the type of facility proposed to be applied for, its
proposed location, the places where the pre-application document is
available for inspection and reproduction;
(iv) Include a statement that comments on the request to use the
traditional process or alternative procedures are due to the Commission
and the potential applicant no later than 30 days following the filing
date of that document and, if there is no project number, that
responses must reference the potential applicant's name and address;
(v) State that comments on any request to use the traditional
process should address, as appropriate to the circumstances of the
request, the:
(A) Likelihood of timely license issuance;
(B) Complexity of the resource issues;
(C) Level of anticipated controversy;
(D) Relative cost of the traditional process compared to the
integrated process; and
(E) The amount of available information and potential for
significant disputes over studies; and
(F) Other factors believed by the commenter to be pertinent; and
(vi) State that respondents must submit an electronic filing
pursuant to Sec. 385.2003(c) or an original and eight copies of their
comments to the Office of the Secretary, Federal Energy Regulatory
Commission, 888 First Street, NE., Washington, DC 20426.
(e) Requests to use the traditional process or alternative
procedures shall be granted for good cause shown.

Sec. 5.4 Acceleration of a license expiration date.

(a) Request for acceleration. (1) No later than five and one-half
years prior to expiration of an existing license, a licensee may file
with the Commission, in accordance with the formal filing requirements
in subpart T of part 385 of this chapter, a written request for
acceleration of the expiration date of its existing license, containing
the statements and information specified in Sec. 16.6(b) of this
chapter and a detailed explanation of the basis for the acceleration
request.
(2) If the Commission grants the request for acceleration pursuant
to paragraph (c) of this section, the Commission will deem the request
for acceleration to be a notice of intent under Sec. 16.6 of this
chapter and, unless the Commission directs otherwise, the licensee must
make available the Pre-Application Document provided for in Sec. 5.6
no later than 90 days from the date that the Commission grants the
request for acceleration.
(b) Notice of request for acceleration. (1) Upon receipt of a
request for acceleration, the Commission will give notice of the
licensee's request and provide a 45-day period for comments by
interested persons by:
(i) Publishing notice in the Federal Register;
(ii) Publishing notice once in a daily or weekly newspaper
published in the county or counties in which the project or any part
thereof or the lands affected thereby are situated; and
(iii) Notifying appropriate Federal, state, and interstate resource
agencies and Indian tribes, and non-governmental organizations likely
to be interested.
(2) The notice issued pursuant to paragraphs (b)(1)(A) and (B) and
the written notice given pursuant to paragraph (b)(1)(C) will be
considered as fulfilling the notice provisions of Sec. 16.6(d) of this
chapter should the Commission grant the acceleration request and will
include an explanation of the basis for the licensee's acceleration
request.
(c) Commission order. If the Commission determines it is in the
public interest, the Commission will issue an order accelerating the
expiration date of the license to not less than five years and 90 days
from the date of the Commission order.

Sec. 5.5 Notification of intent.

(a) Notification of intent. A potential applicant for an original,
new, or subsequent license, must file a notification of its intent to
do so in the manner provided for in paragraphs (b) and (c) of this
section.
(b) Requirement to notify. In order for a non-licensee to notify
the Commission that it intends to file an application for an original,
new, or subsequent license, or for an existing licensee to notify the
Commission whether or not it intends to file an application for a new
or subsequent license, a potential license applicant must file with the
Commission pursuant to the requirements of subpart T of part 385 of
this chapter a letter that contains the following information:
(1) The potential applicant or existing licensee's name and
address.
(2) The project number, if any.
(3) The license expiration date, if any.
(4) An unequivocal statement of the potential applicant's intention
to file an application for an original license, or, in the case of an
existing licensee, to file or not to file an application for a new or
subsequent license.
(5) The type of principal project works licensed, if any, such as
dam and reservoir, powerhouse, or transmission lines.
(6) The location of the project by state, county, and stream, and,
when appropriate, by city or nearby city.
(7) The installed plant capacity, if any.
(8) The names and mailing addresses of:
(i) Every county in which any part of the project is located, and
in which any Federal facility that is used or to be used by the project
is located;
(ii) Every city, town, or similar political subdivision;
(A) In which any part of the project is or is to be located and any
Federal facility that is or is to be used by the project is located, or
(B) That has a population of 5,000 or more people and is located
within 15 miles of the existing or proposed project dam;
(iii) Every irrigation district, drainage district, or similar
special purpose political subdivision:
(A) In which any part of the project is or is proposed to be
located and any Federal facility that is or is proposed to be used by
the project is located; or
(B) That owns, operates, maintains, or uses any project facility or
any Federal facility that is or is proposed to be used by the project;
(iv) Every other political subdivision in the general area of the
project or proposed project that there is reason to believe would be
likely to be interested in, or affected by, the notification; and
(v) Affected Indian tribes.
(c) Requirement to distribute. Before it files any application for
an original, new, or subsequent license, a potential license applicant
proposing to file a license application pursuant to this part or to
request to file a license application pursuant to part 4 of this
chapter and, as appropriate, part 16 of this chapter (i.e., the
``traditional process''), including an application pursuant to Sec.
4.34(i) alternative procedures of this chapter must distribute to
appropriate Federal, state, and interstate resource agencies, Indian
tribes, and members of the public likely to be interested in the

[[Page 51124]]

proceeding the notification of intent provided for in paragraph (a) of
this section.
(d) When to notify. An existing licensee or non-licensee potential
applicant must notify the Commission as required in paragraph (b) of
this section at least five years, but not more than five and one-half
years, before the existing license expires.
(e) Non-Federal representatives. A potential license applicant may
at the same time it files its notification of intent and distributes
its pre-application document, request to be designated as the
Commission's non-Federal representative for purposes of consultation
under section 7 of the Endangered Species Act and the joint agency
regulations thereunder at 50 CFR part 402, Section 305(b) of the
Magnuson-Stevens Fishery Conservation and Management Act and the
implementing regulations at 50 CFR 600.920. A potential license
applicant may at the same time request authorization to initiate
consultation under section 106 of the National Historic Preservation
Act and the implementing regulations at 36 CFR 800.2(c)(4).
(f) Procedural matters. The provisions of subpart F of part 16 of
this chapter apply to projects to which this part applies.
(g) Construction of regulations. The provisions of this part and
parts 4 and 16 shall be construed in a manner that best implements the
purposes of each part and gives full effect to applicable provisions of
the Federal Power Act.

Sec. 5.6 Pre-application document.

(a) Pre-application document. (1) Simultaneously with the filing of
its notification of intent to seek a license as provided for in Sec.
5.5, and before it files any application for an original, new, or
subsequent license, a potential applicant for a license to be filed
pursuant to this part or part 4 of this chapter and, as appropriate,
part 16 of this chapter, must file with the Commission and distribute
to the appropriate Federal, state, and interstate resource agencies,
Indian tribes, local governments, and members of the public likely to
be interested in the proceeding, the pre-application document provided
for in this section.
(2) The agencies referred to in paragraph (a)(1) of this section
include: Any state agency with responsibility for fish, wildlife, and
botanical resources, water quality, coastal zone management plan
consistency certification, shoreline management, and water resources;
the U.S. Fish and Wildlife Service; the National Marine Fisheries
Service; Environmental Protection Agency; State Historic Preservation
Officer; Tribal Historic Preservation Officer; National Park Service;
local, state, and regional recreation agencies and planning
commissions; local and state zoning agencies; and any other state or
Federal agency or Indian tribe with managerial authority over any part
of project lands and waters.
(b) Purpose of pre-application document. (1) The pre-application
document provides the Commission and the entities identified in
paragraph (a) of this section with existing information relevant to the
project proposal that is in the potential applicant's possession or
that the potential applicant can obtain with the exercise of due
diligence. This existing, relevant, and reasonably available
information is distributed to these entities to enable them to identify
issues and related information needs, develop study requests and study
plans, and prepare documents analyzing any license application that may
be filed. It is also a precursor to the environmental analysis section
of the Preliminary Licensing Proposal or draft license application
provided for in Sec. 5.16, Exhibit E of the final license application,
and the Commission's scoping document(s) and environmental impact
statement or environmental assessment under the National Environmental
Policy Act (NEPA).
(2) A potential applicant is not required to conduct studies in
order to generate information for inclusion in the pre-application
document. Rather, a potential applicant must exercise due diligence in
determining what information exists that is relevant to describing the
existing environment and potential impacts of the project proposal
(including cumulative impacts), obtaining that information if the
potential applicant does not already possess it, and describing or
summarizing it as provided for in paragraph (d) of this section. Due
diligence includes, but is not limited to, contacting appropriate
agencies and Indian tribes that may have relevant information and
review of Federal and state comprehensive plans filed with the
Commission and listed on the Commission's Web site at http://www.ferc.gov
.
(c) Form and distribution protocol.--(1) General requirements. As
specifically provided for in the content requirements of paragraph (d)
of this section, the pre-application document must describe the
existing and proposed (if any) project facilities and operations,
provide information on the existing environment, and existing data or
studies relevant to the existing environment, and any known and
potential impacts of the proposed project on the specified resources.
(2) Availability of source information and studies. The sources of
information on the existing environment and known or potential resource
impacts included in the descriptions and summaries must be referenced
in the relevant section of the document, and in an appendix to the
document. The information must be provided upon request to recipients
of the pre-application document. A potential applicant must provide the
requested information within 20 days from receipt of the request.
Potential applicants and requesters are strongly encouraged to use
electronic means or compacts disks to distribute studies and other
forms of information, but a potential applicant must, upon request,
provide the information in hard copy form. The potential applicant is
also strongly encouraged to include with the pre-application document
any written protocol for distribution consistent with this paragraph to
which it has agreed with agencies, Indian tribes, or other entities.
(d) Content requirements.--(1) Process plan and schedule. The pre-
application document must include a plan and schedule for all pre-
application activity that incorporates the time frames for pre-filing
consultation, information gathering, and studies set forth in this
part. The plan and schedule must include a proposed location and date
for the scoping meeting and site visit required by Sec.
5.8(b)(3)(viii).
(2) Project location, facilities, and operations. The potential
applicant must include in the pre-application document:
(i) The exact name and business address, and telephone number of
each person authorized to act as agent for the applicant;
(ii) Detailed maps showing lands and waters within the project
boundary by township, range, and section, as well as by state, county,
river, river mile, and closest town, and also showing the specific
location of any Federal and tribal lands, and the location of proposed
project facilities, including roads, transmission lines, and any other
appurtenant facilities;
(iii) A detailed description of all existing and proposed project
facilities and components, including:
(A) The physical composition, dimensions, and general configuration
of any dams, spillways, penstocks, canals, powerhouses, tailraces, and
other structures proposed to be included

[[Page 51125]]

as part of the project or connected directly to it;
(B) The normal maximum water surface area and normal maximum water
surface elevation (mean sea level), gross storage capacity of any
impoundments;
(C) The number, type, and minimum and maximum hydraulic capacity
and installed (rated) capacity of any proposed turbines or generators
to be included as part of the project;
(D) The number, length, voltage, and interconnections of any
primary transmission lines proposed to be included as part of the
project, including a single-line diagram showing the transfer of
electricity from the project to the transmission grid or point of use;
and
(E) An estimate of the dependable capacity, average annual, and
average monthly energy production in kilowatt hours (or mechanical
equivalent);
(iv) A description of the current (if applicable) and proposed
operation of the project, including any daily or seasonal ramping
rates, flushing flows, reservoir operations, and flood control
operations.
(v) In the case of an existing licensed project;
(A) A complete description of the current license requirements;
i.e., the requirements of the original license as amended during the
license term;
(B) A summary of project generation and outflow records for the
five years preceding filing of the pre-application document;
(C) Current net investment; and
(D) A summary of the compliance history of the project, if
applicable, including a description of any recurring situations of non-
compliance.
(vi) A description of any new facilities or components to be
constructed, plans for future development or rehabilitation of the
project, and changes in project operation.
(3) Description of existing environment and resource impacts.--(i)
General requirements. A potential applicant must, based on the
existing, relevant, and reasonably available information, include a
discussion with respect to each resource that includes:
(A) A description of the existing environment as required by
paragraphs (d)(3)(ii)-(xiii) of this section;
(B) Summaries (with references to sources of information or
studies) of existing data or studies regarding the resource;
(C) A description of any known or potential adverse impacts and
issues associated with the construction, operation or maintenance of
the proposed project, including continuing and cumulative impacts; and
(D) A description of any existing or proposed project facilities or
operations, and management activities undertaken for the purpose of
protecting, mitigating impacts to, or enhancing resources affected by
the project, including a statement of whether such measures are
required by the project license, or were undertaken for other reasons.
The type and amount of the information included in the discussion must
be commensurate with the scope and level of resource impacts caused or
potentially caused by the proposed project. Potential license
applicants are encouraged to provide photographs or other visual aids,
as appropriate, to supplement text, charts, and graphs included in the
discussion.
(ii) Geology and soils. Descriptions and maps showing the existing
geology, topography, and soils of the proposed project and surrounding
area. Components of the description must include:
(A) A description of geological features, including bedrock
lithology, stratigraphy, structural features, glacial features,
unconsolidated deposits, and mineral resources at the project site;
(B) A description of the soils, including the types, occurrence,
physical and chemical characteristics, erodability and potential for
mass soil movement;
(C) A description of reservoir shorelines and streambanks,
including:
(1) Steepness, composition (bedrock and unconsolidated deposits),
and vegetative cover; and
(2) Existing erosion, mass soil movement, slumping, or other forms
of instability, including identification of project facilities or
operations that are known to or may cause these conditions.
(iii) Water resources. A description of the water resources of the
proposed project and surrounding area. This must address the quantity
and quality (chemical/physical parameters) of all waters affected by
the project, including but not limited to the project reservoir(s) and
tributaries thereto, bypassed reach, and tailrace. Components of the
description must include:
(A) Drainage area;
(B) The monthly minimum, mean, and maximum recorded flows in cubic
feet per second of the stream or other body of water at the powerplant
intake or point of diversion, specifying any adjustments made for
evaporation, leakage, minimum flow releases, or other reductions in
available flow;
(C) A monthly flow duration curve indicating the period of record
and the location of gauging station(s), including identification
number(s), used in deriving the curve; and a specification of the
critical streamflow used to determine the project's dependable
capacity;
(D) Existing and proposed uses of project waters for irrigation,
domestic water supply, industrial and other purposes, including any
upstream or downstream requirements or constraints to accommodate those
purposes;
(E) Existing instream flow uses of streams in the project area that
would be affected by project construction and operation; information on
existing water rights and water rights applications potentially
affecting or affected by the project;
(F) Any federally-approved water quality standards applicable to
project waters;
(G) Seasonal variation of existing water quality data for any
stream, lake, or reservoir that would be affected by the proposed
project, including information on:
(1) Water temperature and dissolved oxygen, including seasonal
vertical profiles in the reservoir;
(2) Other physical and chemical parameters to include, as
appropriate for the project; total dissolved gas, pH, total hardness,
specific conductance, cholorphyll a, suspended sediment concentrations,
total nitrogen (mg/L as N), total phosphorus (mg/L as P), and fecal
coliform (E. Coli) concentrations;
(H) The following data with respect to any existing or proposed
lake or reservoir associated with the proposed project; surface area,
volume, maximum depth, mean depth, flushing rate, shoreline length,
substrate composition; and
(I) Gradient for downstream reaches directly affected by the
proposed project.
(iv) Fish and aquatic resources. A description of the fish and
other aquatic resources, including invasive species, in the project
vicinity. This section must discuss the existing fish and
macroinvertebrate communities, including the presence or absence of
anadromous, catadromous, or migratory fish, and any known or potential
upstream or downstream impacts of the project on the aquatic community.
Components of the description must include:
(A) Identification of existing fish and aquatic communities;
(B) Identification of any essential fish habitat as defined under
the Magnuson-Stevens Fishery Conservation and Management Act and
established by the National Marine Fisheries Service; and

[[Page 51126]]

(C) Temporal and spacial distribution of fish and aquatic
communities and any associated trends with respect to:
(1) Species and life stage composition;
(2) Standing crop;
(3) Age and growth data;
(4) Spawning run timing; and
(5) The extent and location of spawning, rearing, feeding, and
wintering habitat.
(v) Wildlife and botanical resources. A description of the wildlife
and botanical resources, including invasive species, in the project
vicinity. Components of this description must include:
(A) Upland habitat(s) in the project vicinity, including the
project's transmission line corridor or right-of-way and a listing of
plant and animal species that use the habitat(s); and
(B) Temporal or spacial distribution of species considered
important because of their commercial, recreational, or cultural value.
(vi) Wetlands, riparian, and littoral habitat. A description of the
floodplain, wetlands, riparian habitats, and littoral in the project
vicinity. Components of this description must include:
(A) A list of plant and animal species, including invasive species,
that use the wetland, littoral, and riparian habitat;
(B) A map delineating the wetlands, riparian, and littoral habitat;
and
(C) Estimates of acreage for each type of wetland, riparian, or
littoral habitat, including variability in such availability as a
function of storage at a project that is not operated in run-of-river
mode.
(vii) Rare, threatened and endangered species. A description of any
listed rare, threatened and endangered, candidate, or special status
species that may be present in the project vicinity. Components of this
description must include:
(A) A list of Federal- and state-listed, or proposed to be listed,
threatened and endangered species known to be present in the project
vicinity;
(B) Identification of habitat requirements;
(C) References to any known biological opinion, status reports, or
recovery plan pertaining to a listed species;
(D) Extent and location of any federally-designated critical
habitat, or other habitat for listed species in the project area; and
(E) Temporal and spatial distribution of the listed species within
the project vicinity.
(viii) Recreation and land use. A description of the existing
recreational and land uses and opportunities within the project
boundary. The components of this description include:
(A) Text description illustrated by maps of existing recreational
facilities, type of activity supported, location, capacity, ownership
and management;
(B) Current recreational use of project lands and waters compared
to facility or resource capacity;
(C) Existing shoreline buffer zones within the project boundary;
(D) Current and future recreation needs identified in current State
Comprehensive Outdoor Recreation Plans, other applicable plans on file
with the Commission, or other relevant local, state, or regional
conservation and recreation plans;
(E) If the potential applicant is an existing licensee, its current
shoreline management plan or policy, if any, with regard to permitting
development of piers, boat docks and landings, bulkheads, and other
shoreline facilities on project lands and waters;
(F) A discussion of whether the project is located within or
adjacent to a:
(1) River segment that is designated as part of, or under study for
inclusion in, the National Wild and Scenic River System; or
(2) State-protected river segment;
(G) Whether any project lands are under study for inclusion in the
National Trails System or designated as, or under study for inclusion
as, a Wilderness Area.
(H) Any regionally or nationally important recreation areas in the
project vicinity;
(I) Non-recreational land use and management within the project
boundary; and
(J) Recreational and non-recreational land use and management
adjacent to the project boundary.
(ix) Aesthetic resources. A description of the visual
characteristics of the lands and waters affected by the project.
Components of this description include a description of the dam,
natural water features, and other scenic attractions of the project and
surrounding vicinity. Potential applicants are encouraged to supplement
the text description with visual aids.
(x) Cultural resources. A description of the known cultural or
historical resources of the proposed project and surrounding area.
Components of this description include:
(A) Identification of any historic or archaeological site in the
proposed project vicinity, with particular emphasis on sites or
properties either listed in, or recommended by the State Historic
Preservation Officer or Tribal Historic Preservation Officer for
inclusion in, the National Register of Historic Places;
(B) Existing discovery measures, such as surveys, inventories, and
limited subsurface testing work, for the purpose of locating,
identifying, and assessing the significance of historic and
archaeological resources that have been undertaken within or adjacent
to the project boundary; and
(C) Identification of Indian tribes that may attach religious and
cultural significance to historic properties within the project
boundary or in the project vicinity; as well as available information
on Indian traditional cultural and religious properties, whether on or
off of any federally-recognized Indian reservation (A potential
applicant must delete from any information made available under this
section specific site or property locations, the disclosure of which
would create a risk of harm, theft, or destruction of archaeological or
Native American cultural resources or to the site at which the
resources are located, or would violate any Federal law, including the
Archaeological Resources Protection Act of 1979, 16 U.S.C. 470w-3, and
the National Historic Preservation Act of 1966, 16 U.S.C. 470hh).
(xi) Socio-economic resources. A general description of socio-
economic conditions in the vicinity of the project. Components of this
description include general land use patterns (e.g., urban,
agricultural, forested), population patterns, and sources of employment
in the project vicinity.
(xii) Tribal resources. A description of Indian tribes, tribal
lands, and interests that may be affected by the project Components of
this description include:
(A) Identification of information on resources specified in
paragraphs (d)(2)(ii)-(xi) of this section to the extent that existing
project construction and operation affecting those resources may impact
tribal cultural or economic interests, e.g., impacts of project-induced
soil erosion on tribal cultural sites; and
(B) Identification of impacts on Indian tribes of existing project
construction and operation that may affect tribal interests not
necessarily associated with resources specified in paragraphs
(d)(3)(ii)-(xi) of this Section, e.g., tribal fishing practices or
agreements between the Indian tribe and other entities other than the
potential applicant that have a connection to project construction and
operation.
(xiii) River basin description. A general description of the river
basin or sub-basin, as appropriate, in which the proposed project is
located, including information on:

[[Page 51127]]

(A) The area of the river basin or sub-basin and length of stream
reaches therein;
(B) Major land and water uses in the project area;
(C) All dams and diversion structures in the basin or sub-basin,
regardless of function; and
(D) Tributary rivers and streams, the resources of which are or may
be affected by project operations;
(4) Preliminary issues and studies list. Based on the resource
description and impacts discussion required by paragraphs (d)(1) and
(d)(2) of this section; the pre-application document must include with
respect to each resource area identified above, a list of:
(i) Issues pertaining to the identified resources;
(ii) Potential studies or information gathering requirements
associated with the identified issues;
(iii) Relevant qualifying Federal and state or tribal comprehensive
waterway plans; and
(iv) Relevant resource management plans.
(5) Summary of contacts. An appendix summarizing contacts with
Federal, state, and interstate resource agencies, Indian tribes, non-
governmental organizations, or other members of the public made in
connection with preparing the pre-application document sufficient to
enable the Commission to determine if due diligence has been exercised
in obtaining relevant information.
(e) If applicable, the applicant must also provide a statement of
whether or not it will seek benefits under section 210 of the Public
Utility Regulatory Policies Act of 1978 (PURPA) by satisfying the
requirements for qualifying hydroelectric small power production
facilities in Sec. 292.203 of this chapter. If benefits under section
210 of PURPA are sought, a statement of whether or not the applicant
believes the project is located at a new dam or diversion (as that term
is defined in Sec. 292.202(p) of this chapter), and a request for the
agencies' view on that belief, if any.

Sec. 5.7 Tribal consultation.

A meeting shall be held no later than 30 days following issuance of
the notification of intent required by Sec. 5.5 between each Indian
tribe likely to be affected by the potential license application and
the Commission staff if the affected Indian tribe agrees to such
meeting.

Sec. 5.8 Notice of commencement of proceeding and scoping document,
or of approval to use traditional licensing process or alternative
procedures.

(a) Notice. Within 60 days of the notification of intent required
under Sec. 5.5, filing of the pre-application document pursuant to
Sec. 5.6, and filing of any request to use the traditional licensing
process or alternative procedures, the Commission will issue a notice
of commencement of proceeding and scoping document or of approval of a
request to use the traditional licensing process or alternative
procedures.
(b) Notice contents. The notice shall include:
(1) The decision of the Director of the Office of Energy Projects
on any request to use the traditional licensing process or alternative
procedures.
(2) If appropriate, a request by the Commission to initiate
informal consultation under section 7 of the Endangered Species Act and
the joint agency regulations thereunder at 50 CFR part 402, section
305(b) of the Magnuson-Stevens Fishery Conservation and Management Act
and implementing regulations at 50 CFR 600.920, or section 106 of the
National Historic Preservation Act and implementing regulations at 36
CFR 800.2, and, if applicable, designation of the potential applicant
as the Commission's non-federal representative.
(3) If the potential license application is to be developed and
filed pursuant to this part, notice of:
(i) The applicant's intent to file a license application;
(ii) The filing of the pre-application document;
(iii) Commencement of the proceeding;
(iv) A request for comments on the pre-application document
(including the proposed process plan and schedule);
(v) A statement that all communications to or from the Commission
staff related to the merits of the potential application must be filed
with the Commission;
(vi) The request for other Federal or state agencies or Indian
tribes to be cooperating agencies for purposes of developing an
environmental document;
(vii) The Commission's intent with respect to preparation of an
environmental impact statement; and
(viii) A public scoping meeting and site visit to be held within 30
days of the notice.
(c) Scoping Document 1. At the same time the Commission issues the
notice provided for in paragraph (a) of this Section, the Commission
staff will issue Scoping Document 1. Scoping Document 1 will include:
(1) An introductory section describing the purpose of the scoping
document, the date and time of the scoping meeting, procedures for
submitting written comments, and a request for information or study
requests from state and Federal resource agencies, Indian tribes, non-
governmental organizations, and individuals;
(2) Identification of the proposed action, including a description
of the project's location, facilities, and operation, and any proposed
protection and enhancement measures, and other alternatives to the
proposed action, including alternatives considered but eliminated from
further study, and the no action alternative;
(3) Identification of resource issues to be analyzed in the
environmental document, including those that would be cumulatively
affected along with a description of the geographic and temporal scope
of the cumulatively affected resources;
(4) A list of qualifying Federal and state comprehensive waterway
plans;
(5) A list of qualifying tribal comprehensive waterway plans;
(6) A process plan and schedule and a draft outline of the
environmental document; and
(7) A list of recipients.
(d) Scoping meeting and site visit. The purpose of the public
meeting and site visit is to:
(1) Initiate issues scoping pursuant to the National Environmental
Policy Act;
(2) Review and discuss existing conditions and resource management
objectives;
(3) Review and discuss existing information and make preliminary
identification of information and study needs;
(4) Review, discuss, and finalize the process plan and schedule for
pre-filing activity that incorporates the time periods provided for in
this part and, to the extent reasonably possible, maximizes
coordination of Federal, state, and tribal permitting and certification
processes, including consultation under section 7 of the Endangered
Species Act and water quality certification or waiver thereof under
section 401 of the Clean Water Act; and
(5) Discuss the appropriateness of any Federal or state agency or
Indian tribe acting as a cooperating agency for development of an
environmental document pursuant to the National Environmental Policy
Act.

[[Page 51128]]

(e) Method of notice. The public notice provided for in this
section will be given by:
(1) Publishing notice in the Federal Register;
(2) Publishing notice in a daily or weekly newspaper published in
the county or counties in which the project or any part thereof or the
lands affected thereby are situated, and, as appropriate, tribal
newspapers;
(3) Notifying appropriate Federal, state, and interstate resource
agencies, state water quality and coastal zone management plan
consistency certification agencies, Indian tribes, and non-governmental
organizations by mail.

Sec. 5.9 Comments and information or study requests.

(a) Comments and study requests. Comments on the pre-application
document and the Commission staff's Scoping Document 1 must be filed
with the Commission within 60 days following the Commission's notice of
consultation procedures issued pursuant to Sec. 5.8. Comments,
including those by Commission staff, must be accompanied by any
information gathering and study requests, and should include
information and studies needed for consultation under section 7 of the
Endangered Species Act and water quality certification under Section
401 of the Clean Water Act.
(b) Content of study request. Any information or study request
must:
(1) Describe the goals and objectives of each study proposal and
the information to be obtained;
(2) If applicable, explain the relevant resource management goals
of the agencies or Indian tribes with jurisdiction over the resource to
be studied;
(3) If the requester is a not resource agency, explain any relevant
public interest considerations in regard to the proposed study;
(4) Describe existing information concerning the subject of the
study proposal, and the need for additional information;
(5) Explain any nexus between project operations and effects
(direct, indirect, and/or cumulative) on the resource to be studied,
and how the study results would inform the development of license
requirements;
(6) Explain how any proposed study methodology (including any
preferred data collection and analysis techniques, or objectively
quantified information, and a schedule including appropriate filed
season(s) and the duration) is consistent with generally accepted
practice in the scientific community or, as appropriate, considers
relevant tribal values and knowledge; and
(7) Describe considerations of level of effort and cost, as
applicable, and why any proposed alternative studies would not be
sufficient to meet the stated information needs.
(c) Applicant seeking PURPA benefits; estimate of fees. If a
potential applicant has stated that it intends to seek PURPA benefits,
comments on the pre-application document by a fish and wildlife agency
must provide the potential applicant with a reasonable estimate of the
total costs the agency anticipates it will incur and set mandatory
terms and conditions for the proposed project. An agency may provide a
potential applicant with an updated estimate as it deems necessary. If
any agency believes that its most recent estimate will be exceeded by
more than 25 percent, it must supply the potential applicant with a new
estimate and submit a copy to the Commission.

Sec. 5.10 Scoping Document 2.

Within 45 days following the deadline for filing of comments on
Scoping Document 1, the Commission staff shall, if necessary, issue
Scoping Document 2.

Sec. 5.11 Potential Applicant's proposed study plan and study plan
meetings.

(a) Within 45 days following the deadline for filing of comments on
the pre-application document, including information and study requests,
the potential applicant must file with the Commission a proposed study
plan.
(b) The potential applicant's proposed study plan must include with
respect to each proposed study:
(1) A detailed description of the study and the methodology to be
used;
(2) A schedule for conducting the study;
(3) Provisions for periodic progress reports, including the manner
and extent to which information will be shared; and sufficient time for
technical review of the analysis and results; and
(4) If the potential applicant does not adopt a requested study, an
explanation of why the request was not adopted, with reference to the
criteria set forth in Sec. 5.9(b).
(c) The potential applicant's proposed study plan must also include
provisions for the initial and updated study reports and meetings
provided for in Sec. 5.15.
(d) The applicant's proposed study plan must:
(1) Describe the goals and objectives of each study proposal and
the information to be obtained;
(2) Address any known resource management goals of the agencies or
Indian tribes with jurisdiction over the resource to be studied;
(3) Describe existing information concerning the subject of the
study proposal, and the need for additional information;
(4) Explain any nexus between project operations and effects
(direct, indirect, and/or cumulative) on the resource to be studied;
(5) Explain how any proposed study methodology (including any
preferred data collection and analysis techniques, or objectively
quantified information, and a schedule including appropriate field
season(s) and the duration) is consistent with generally accepted
practice in the scientific community or, as appropriate, considers any
known tribal interests;
(6) Describe considerations of level of effort and cost, as
applicable.
(e) The potential applicant's proposed study plan must be
accompanied by a proposal for conducting a study plan meeting or
meetings during the 90-day period provided for in Sec. 5.12 for the
purpose of clarifying the potential applicant's proposed study plan and
any initial information gathering or study requests, and to resolve any
outstanding issues with respect to the proposed study plan. The initial
study plan meeting must be held no later than 30 days after the
deadline date for filing of the potential applicant's proposed study
plan.

Sec. 5.12 Comments on proposed study plan.

Comments on the potential applicant's proposed study plan,
including any revised information or study requests, must be filed
within 90 days after the proposed study plan is filed. This filing must
also include an explanation of any study plan concerns and any
accommodations reached with the potential applicant regarding those
concerns. Any proposed modifications to the potential applicant's
proposed study plan must address the criteria in Sec. 5.9(b).

Sec. 5.13 Revised study plan and study plan determination.

(a) Within 30 days following the deadline for filing comments on
the potential applicant's proposed study plan, as provided for in Sec.
5.12, the potential applicant must file a revised study plan for
Commission approval. The revised study plan shall include the comments
on the proposed study plan and a description of the efforts made to
resolve differences over study requests. If the potential applicant
does not adopt a requested study, it must explain why the request was
not adopted, with

[[Page 51129]]

reference to the criteria set forth in Sec. 5.9(b).
(b) Within 15 days following filing of the potential applicant's
revised study plan, participants may file comments thereon.
(c) Within 30 days following the date the potential applicant files
its revised study plan, the Director of Energy Projects will issue a
Study Plan Determination with regard to the potential applicant's study
plan, including any modifications determined to be necessary in light
of the record.
(d) If no notice of study dispute is filed pursuant to Sec. 5.14
within 20 days of the Study Plan Determination, the study plan as
approved in the Study Plan Determination shall be deemed to be approved
and the potential applicant shall proceed with the approved studies. If
a potential applicant fails to obtain or conduct a study as required by
Study Plan Determination, its license application may be considered
deficient.

Sec. 5.14 Formal study dispute resolution process.

(a) Within 20 days of the Study Plan Determination, any Federal
agency with authority to provide mandatory conditions on a license
pursuant to FPA Section 4(e), 16 U.S.C. 797(e), or to prescribe
fishways pursuant to FPA Section 18, 16 U.S.C. 811, or any agency or
Indian tribe with authority to issue a water quality certification for
the project license under section 401 of the Clean Water Act, 42 U.S.C.
1341, may file a notice of study dispute with respect to studies
pertaining directly to the exercise of their authorities under sections
4(e) and 18 of the Federal Power Act or section 401 of the Clean Water
Act.
(b) The notice of study dispute must explain how the disputing
agency's or Indian tribe's study request satisfies the criteria set
forth in Sec. 5.9(b), and shall identify and provide contact
information for the panel member designated by the disputing agency or
Indian tribe, as discussed in paragraph (d) of this section.
(c) Studies and portions of study plans approved in the Study Plan
Determination that are not the subject of a notice of dispute shall be
deemed to be approved, and the potential applicant shall proceed with
those studies or portions thereof.
(d) Within 20 days of a notice of study dispute, the Commission
will convene one or more three-person Dispute Resolution Panels, as
appropriate to the circumstances of each proceeding. Each such panel
will consist of:
(1) A person from the Commission staff who is not otherwise
involved in the proceeding, and who shall serve as the panel chair;
(2) One person designated by the Federal or state agency or Indian
tribe that filed the notice of dispute who is not otherwise involved in
the proceeding; and
(3) A third person selected by the other two panelists from a pre-
established list of persons with expertise in the resource area. The
two panelists shall make every reasonable effort to select the third
panel member. If however no third panel member has been selected by the
other two panelists within 15 days, an appropriate third panel member
will be selected at random from the list of technical experts
maintained by the Commission.
(e) If more than one agency or Indian tribe files a notice of
dispute with respect to the decision in the preliminary determination
on any information-gathering or study request, the disputing agencies
or Indian tribes must select one person to represent their interests on
the panel.
(f) The list of persons available to serve as a third panel member
will be posted, as revised from time-to-time, on the hydroelectric page
of the Commission's Web site. A person on the list who is requested and
willing to serve with respect to a specific dispute will be required to
file with the Commission at that time a current statement of their
qualifications, a statement that they have had no prior involvement
with the proceeding in which the dispute has arisen, or other financial
or other conflict of interest.
(g) All costs of the panel members representing the Commission
staff and the agency or Indian tribe which filed the notice of dispute
will be borne by the Commission or the agency or Indian tribe, as
applicable. The third panel member will serve without compensation,
except for certain allowable travel expenses as defined in 31 CFR part
301.
(h) To facilitate the delivery of information to the dispute
resolution panel, the identity of the panel members and their addresses
for personal service with respect to a specific dispute resolution will
be posted on the hydroelectric page of the Commission's Web site.
(i) No later than 25 days following the notice of study dispute,
the potential applicant may file with the Commission and serve upon the
panel members comments and information regarding the dispute.
(j) Prior to engaging in deliberative meetings, the panel shall
hold a technical conference for the purpose of clarifying the matters
in dispute with reference to the study criteria. The technical
conference shall be chaired by the Commission staff member of the
panel. It shall be open to all participants, and the panel shall
receive information from the participants as it deems appropriate.
(k) No later than 50 days following the notice of study dispute,
the panel shall make and deliver to the Director of the Office of
Energy Projects a finding, with respect to each information or study
request in dispute, concerning the extent to which each criteria set
forth in Sec. 5.9(b) is met or not met, and why, and make
recommendations regarding the disputed study request based on its
findings. The panel's findings and recommendations must be based on the
record in the proceeding. The panel shall file with its findings and
recommendations all of the materials received by the panel. Any
recommendation for the potential applicant to provide information or a
study must include the technical specifications, including data
acquisition techniques and methodologies.
(l) No later than 70 days from the date of filing of the notice of
study dispute, the Director of the Office of Energy Projects will
review and consider the recommendations of the panel, and will issue a
written determination. The Director's determination will be made with
reference to the study criteria set forth in Sec. 5.9(b) and any
applicable law or Commission policies and practices, will take into
account the technical expertise of the panel, and will explain why any
panel recommendation was rejected, if applicable. The Director's
determination shall constitute an amendment to the approved study plan.

Sec. 5.15 Conduct of studies.

(a) Implementation. The potential applicant must gather information
and conduct studies as provided for in the approved study plan and
schedule.
(b) Progress reports. The potential applicant must prepare and
provide to the participants the progress reports provided for in Sec.
5.11(b)(3). Upon request of any participant, the potential applicant
will provide documentation of study results.
(c) Initial study report. (1) Pursuant to the Commission-approved
study plan and schedule provided for in Sec. 5.13 or no later than one
year after Commission approval of the study plan, whichever comes
first, the potential applicant must prepare and file with the
Commission an initial study report describing its overall progress in
implementing the

[[Page 51130]]

study plan and schedule and the data collected, including an
explanation of any variance from the study plan and schedule. The
report must also include any modifications to ongoing studies or new
studies proposed by the potential applicant.
(2) Within 15 days following the filing of the initial study
report, the potential applicant shall hold a meeting with the
participants and Commission staff to discuss the study results and the
potential applicant's and or other participant's proposals, if any, to
modify the study plan in light of the progress of the study plan and
data collected.
(3) Within 15 days following the meeting provided for in paragraph
(c)(2) of this section, the potential applicant shall file a meeting
summary, including any modifications to ongoing studies or new studies
proposed by the potential applicant.
(4) Any participant or the Commission staff may file a disagreement
concerning the applicant's meeting summary within 30 days, setting
forth the basis for the disagreement. This filing must also include any
modifications to ongoing studies or new studies proposed by the
Commission staff or other participant.
(5) Responses to any filings made pursuant to paragraph (c)(4) of
this section must be filed within 30 days.
(6) No later than 30 days following the due date for responses
provided for in paragraph (c)(5) of this section, the Director will
resolve the disagreement and amend the approved study plan as
appropriate.
(7) If no participant or the Commission staff files a disagreement
concerning the potential applicant's meeting summary and request to
amend the approved study plan within 15 days, any proposed amendment
shall be deemed to be approved.
(d) Criteria for modification of approved study. Any proposal to
modify an ongoing study pursuant to paragraphs (c)(1)-(4) of this
section must be accompanied by a showing of good cause why the proposal
should be approved, and must include, as appropriate to the facts of
the case, a demonstration that:
(1) Approved studies were not conducted as provided for in the
approved study plan; or
(2) The study was conducted under anomalous environmental
conditions or that environmental conditions have changed in a material
way.
(e) Criteria for new study. Any proposal for new information
gathering or studies pursuant to paragraphs (c)(1)-(4) of this section
must be accompanied by a showing of good cause why the proposal should
be approved, and must include, as appropriate to the facts of the case,
a statement explaining:
(1) Any material changes in the law or regulations applicable to
the information request;
(2) Why the goals and objectives of any approved study could not be
met with the approved study methodology;
(3) Why the request was not made earlier;
(4) Significant changes in the project proposal or that significant
new information material to the study objectives has become available;
and
(5) Why the new study request satisfies the study criteria in Sec.
5.9(b).
(f) Updated study report. Pursuant to the Commission-approved study
plan and schedule provided for in Sec. 5.13, or no later than two
years after Commission approval of the study plan and schedule,
whichever comes first, the potential applicant shall prepare and file
with the Commission an updated study report describing its overall
progress in implementing the study plan and schedule and the data
collected, including an explanation of any variance from the study plan
and schedule. The report must also include any modifications to ongoing
studies or new studies proposed by the potential applicant. The review,
comment, and disagreement resolution provisions of paragraphs (c)(4)-
(7) of this section shall apply to the updated study report. Any
proposal to modify an ongoing study must be accompanied by a showing of
good cause why the proposal should be approved as set forth in
paragraph (d) of this section. Any proposal for new information
gathering or studies is subject to paragraph (e) of this section except
that the proponent must demonstrate extraordinary circumstances
warranting approval. The applicant must promptly proceed to complete
any remaining undisputed information-gathering or studies under its
proposed amendments to the study plan, if any, and must proceed to
complete any information-gathering or studies that are the subject of a
disagreement upon the Director's resolution of the disagreement.

Sec. 5.16 Preliminary licensing proposal.

(a) No later than 150 days prior to the deadline for filing a new
or subsequent license application, if applicable, the potential
applicant must file for comment a preliminary licensing proposal.
(b) The preliminary licensing proposal must:
(1) Clearly describe, as applicable, the existing and proposed
project facilities, including project lands and waters;
(2) Clearly describe, as applicable, the existing and proposed
project operation and maintenance plan, to include measures for
protection, mitigation, and enhancement measures with respect to each
resource affected by the project proposal; and
(3) Include the potential applicant's draft environmental analysis
by resource area of the continuing and incremental impacts, if any, of
its preliminary licensing proposal, including the results of its
studies conducted under the approved study plan.
(c) A potential applicant may elect to file a draft license
application which includes the contents of a license application
required by Sec. 5.18 instead of the Preliminary Licensing Proposal. A
potential applicant that elects to file a draft license application
must include notice of its intent to do so in the updated study report
required by Sec. 5.15(f).
(d) A potential applicant that has been designated as the
Commission's non-Federal representative may include a draft Biological
Assessment, draft Essential Fish Habitat Assessment, and draft Historic
Properties Management Plan with its Preliminary Licensing Proposal or
draft license application.
(e) Within 90 days of the date the potential applicant files the
Preliminary Licensing Proposal or draft license application,
participants and the Commission staff may file comments on the
Preliminary Licensing Proposal or draft application, which may include
recommendations on whether the Commission should prepare an
Environmental Assessment (with or without a draft Environmental
Assessment) or an Environmental Impact Statement. Any participant whose
comments request new information, studies, or other amendments to the
approved study plan must include a demonstration of extraordinary
circumstances, pursuant to the requirements of Sec. 5.15(f).
(f) A waiver of the requirement to file the Preliminary Licensing
Proposal or draft license application may be requested, based on a
consensus of the participants in favor of such waiver.

Sec. 5.17 Filing of application.

(a) Deadline--new or subsequent license application. An application
for a new or subsequent license must be filed no later than 24 months
before the existing license expires.
(b) Subsequent licenses. An applicant for a subsequent license must
file its application under part I of the Federal Power Act. The
provisions of section 7(a) of the Federal Power Act do not

[[Page 51131]]

apply to licensing proceedings involving a subsequent license.
(c) Rejection or dism