Regulations for the Relicensing of Hydroelectric Projects; Notice of Proposed Rulemaking

SUMMARY: The Federal Energy Regulatory Commission (Commission) is

proposing to revise its procedural regulations governing applications

for licenses for hydroelectric projects. The proposed regulations

respond to a petition for rulemaking filed by the National Hydropower

Association and are intended to offer an alternative administrative

process whereby in appropriate circumstances the pre-filing

consultation process and the environmental review process can be

integrated. This alternative process is designed to be tailored to the

facts and circumstances of the particular proceeding. The proposed

regulations would not delete or replace any existing regulations.

DATES: Comments on the Notice of Proposed Rulemaking are due February

3, 1997 and March 3, 1997 for reply comments. Comments should be filed

with the Office of the Secretary and should refer to Docket No. RM95-

16-000.

ADDRESSES: Federal Energy Regulatory Commission, 888 First Street,

N.E., Washington, DC 20426.

FOR FURTHER INFORMATION CONTACT:

Edward Abrams, Office of Hydropower Licensing, 888 First Street, N.E.,

Washington, DC 20426, (202) 219-2773.

Merrill Hathaway, Office of the General Counsel, 888 First Street,

N.E., Washington, DC 20426, (202) 208-0825.

SUPPLEMENTARY INFORMATION: In addition to publishing the full text of

this document in the Federal Register, the Commission provides all

interested persons an opportunity to inspect or copy the contents of

this document during normal business hours in Room 2A, 888 First

Street, N.E., Washington, DC 20426. The last page of Appendix A

consists of a flow chart that is not being published in the Federal

Register but is available from the Commission's Public Reference Room.

The Commission Issuance Posting System (CIPS), an electronic

bulletin board service, provides access to the texts of formal

documents issued by the Commission. CIPS is available at no charge to

the user and may be accessed using a personal computer with a modem by

dialing (202) 208-1397 if dialing locally or 1-800-856-3920 if dialing

long distance. To access CIPS, set your communications software to use

19200, 14400, 12000, 9600, 7200, 4800, 2400 or 1200bps, full duplex, no

parity, 8 data bits, and 1 stop bit. The full text of this document

will be available on CIPS indefinitely in ASCII and WordPerfect 5.1

format for one year. The complete text on diskette in WordPerfect

format may also be purchased from the Commission's copy contractor, La

Dorn Systems Corporation, also located in Room 2A, 888 First Street,

N.E., Washington, DC 20426.

The Commission's bulletin board system also can be accessed through

the FedWorld system directly by modem or through the Internet. To

access the FedWorld system by modem:

Dial (703) 321-3339 and logon to the FedWorld system.

After logging on, type: /go FERC

To access the FedWorld system through the Internet, a telnet

application must be used either as a stand-alone or linked to a Web

browser:

Telnet to: fedworld.gov

Select the option: [1] FedWorld

Logon to the FedWorld system

Type: /go FERC

Or:

Point your Web Browser to: http://www.fedworld.gov

Scroll down the page to select FedWorld Telnet Site

Select the option: [1] FedWorld

Logon to the FedWorld system

Type: /go FERC

I. Introduction

The Federal Energy Regulatory Commission (Commission) is proposing

to revise its procedural regulations governing applications for

licenses for hydroelectric projects. The proposed regulations respond

to a petition for rulemaking filed by the National Hydropower

Association (NHA) and are intended to offer an alternative

administrative process whereby in appropriate circumstances the pre-

filing consultation process and the environmental review process can be

integrated. This alternative process is designed to be tailored to the

facts and circumstances of the particular proceeding. The proposed

regulations would not delete or replace any existing regulations.

II. Reporting Burden

The regulations proposed herein would not impose any new

information collection requirements.

III. Background

A. Order Nos. 513 and 533 Proceedings

The Commission last made comprehensive revisions of its procedural

regulations governing hydropower applications in two major rulemakings.

In Order Nos. 513 and 513-A,1 the Commission revised its

regulations governing the relicensing of hydropower projects to

implement provisions added to the Federal Power Act (FPA) 2 by the

Electric Consumers Protection Act of 1986 (ECPA).3 The Commission

adopted more detailed regulations for applicants for new licenses to

conduct pre-filing consultation with resource agencies, to specify the

information to be contained in the applications, and to set forth

procedures for processing and considering the applications. These

regulations are principally contained in 18 C.F.R. Part 16. In Order

Nos. 533 and

[[Page 64032]]

533-A,4 the Commission adopted further revisions to its procedural

regulations for all applications for hydropower licenses, implemented

other provisions of ECPA, especially Section 10(j) of the FPA, and

streamlined the hydropower licensing process by making it more

efficient, fairer, and more understandable for all participants. In the

rule, the Commission codified and improved many of its regulations

governing pre-filing consultation and hearing practices, explaining how

most hydropower proceedings are conducted by notice and comment rather

than by trial-type hearings. This rulemaking established deadlines for

participation in hydropower proceedings, clarified a number of

Commission practices in the conduct of such proceedings,5 required

the Commission to resolve disputes concerning necessary scientific

studies in the pre-filing consultation process for hydropower

applicants, and provided greater opportunities for the public and

Indian tribes to participate in the proceedings.

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\1\ Order No. 513 (1989), 54 FR 23756 (June 2, 1989), FERC Stats

& Regs., Regulations Preambles 1986-1990 para. 30,854; Order No.

513-A (1989), 55 FR 4 (January 2, 1990), FERC Stats & Regs.,

Regulations Preambles 1986-1990 para. 30,869.

\2\ 16 U.S.C. Secs. 791a-825r.

\3\ Pub. L. No. 99-495, 100 Stat. 1243 (Oct. 16, 1986).

\4\ Order No. 553 (1991), 56 FR 23108 (May 20, 1991), FERC Stats

& Regs., Regulations Preambles 1991-1996 para. 30,921; Order No.

553-A (1991), 56 FR 61137 (December 2, 1991), FERC Stats. & Regs.,

Regulations Preambles 1991-1996 para. 30,932.

\5\ These related to the requirements governing pre-filing

consultation for applicants for amendment of licenses, when a water

quality certification must be obtained, and how the Commission

begins its review of hydropower applications.

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In one important respect, however, the Commission took no action in

these rulemakings in response to comments made by some resource

agencies and citizens' groups. They believed that in the revised

regulations the Commission should have integrated the environmental

review process pursuant to the National Environmental Policy Act of

1969 (NEPA) 6 with the pre-filing consultation process required of

hydropower applicants. The Commission stated that this was not the

Commission's historical practice, and that the results of the pre-

filing consultation process and the comments, recommendations,

conditions, and prescriptions of concerned parties were a necessary

predicate to a successful NEPA review by the Commission of a hydropower

application.

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\6\ 42 U.S.C. Secs. 4321-4307a.

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B. Implementation of Energy Policy Act of 1992

In section 2403 of the Energy Policy Act of 1992,7 Congress

authorized the Commission, in preparing a NEPA document in hydropower

licensing proceedings, subject to certain conditions, to permit the

applicant or its contractor or consultant to prepare an Environmental

Assessment (EA) or a contractor or consultant chosen by the Commission

and funded by the applicant to prepare an Environmental Impact

Statement (EIS).8 The provision left untouched the Commission's

own responsibilities under NEPA.

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\7\ Pub. L. No. 102-486, 106 Stat. 2776, 2905-21. Codified at 42

U.S.C. Secs. 13201-13556 (Supp. 1993).

\8\ Section 2403 provides:

(a) ENVIRONMENTAL IMPACT STATEMENTS.--Where the Federal Energy

Regulatory Commission is required to prepare a draft or final

environmental impact statement . . . in connection with an

application for a [hydropower] license . . ., the Commission may

permit, at the election of the applicant, a contractor, consultant,

or other person funded by the applicant and chosen by the Commission

. . ., to prepare such statement for the Commission. . . . Nothing

herein shall affect the Commission's responsibility to comply with

the National Environmental Policy Act of 1969.

(b) ENVIRONMENTAL ASSESSMENTS.--Where an environmental

assessment is required . . . in connection with an application for a

[hydropower] license . . ., the Commission may permit an applicant,

or a contractor, consultant or other person selected by the

applicant, to prepare such environmental assessment. The Commission

shall institute procedures, including pre-application consultations,

to advise potential applicants of studies or other information

foreseeably required by the Commission. The Commission may allow the

filing of such applicant-prepared environmental assessment as part

of the application. Nothing herein shall affect the Commission's

responsibility to comply with the National Environmental Policy Act

of 1969.

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The Commission has implemented this provision of the Act by

permitting hydropower applicants to explore alternative licensing

procedures. The Commission has received from potential hydropower

applicants requests for guidance as to whether they could submit an EA

or an EIS as part of their license applications. Applicants have asked

whether they could integrate the NEPA process with the Commission's

pre-filing consultation process, obtain greater involvement of

Commission staff in this effort, and substitute such actions and the

resulting NEPA document for the requirements for pre-filing

consultation and filings set forth in the Commission's regulations.

The Commission's staff has responded to such requests on a case-by-

case basis.9 Staff advised potential applicants that it could not

participate unless entities that might reasonably have an interest in

the contemplated hydropower application are invited to participate in

the pre-filing process. Such entities included all resource agencies,

Indian tribes, local governments, citizens groups, and members of the

general public affected by the proposed project. Staff advised that

following this process requires a number of waivers of the Commission's

regulations, in order to achieve the purposes of the Act. The principal

waivers required are:

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\9\ The Office of Hydropower Licensing has developed

``Guidelines for the Applicant Prepared Environmental Assessment

(APEA) Process.'' See Appendix A.

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(1) the requirement for the applicant to file Exhibit E, containing

environmental information 10--the draft NEPA document prepared by

the applicant or contractor or consultant, together with additional

information, satisfies this requirement;

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\10\ E.g.,18 CFR 4.51(f).

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(2) the provision allowing parties to request additional scientific

studies after the application is tendered for filing 11--the

waiver procedures move this opportunity forward in time;

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\11\ 18 CFR 4.32(b)(7).

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(3) the requirement for issuing a notice that the application is

ready for environmental analysis 12--integrating preparation of

the draft NEPA document with the pre-filing consultation process should

ensure that the necessary environmental data concerning the application

have already been developed prior to filing; and

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\12\ 18 CFR 4.34(b).

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(4) the requirement for the applicant to document the pre-filing

process in detail 13--this is replaced by periodic reports during

the pre-filing process that are available to the public.

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\13\ E.g., 18 CFR 4.38.

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Before staff acts on a potential applicant's request for waiver of

these regulatory requirements, the applicant must demonstrate that a

cooperative atmosphere exists regarding the participation of concerned

entities in the pre-filing process and that the applicant has reached

an agreement with such entities on accepted procedures. Staff has

advised the participants on procedures that have worked in similar

circumstances to produce good NEPA documents or that show promise of

working in this respect. Staff's objective has been to encourage the

participants to focus analysis on a preferred environmental alternative

and, insofar as possible, reach agreement on the issues raised by the

application.14

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\14\ The alternative process is designed to facilitate the

negotiation of settlements in appropriate cases, that could be

submitted to the Commission with the application as an offer of

settlement.

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The applicant is also required to develop a communications

protocol, governing how the participants, including Commission staff,

may communicate with each other during the pre-filing process.

Oversight and technical committees may be formed. At least three public

notices are required during this process, each of which consists of

notice placed in the Federal

[[Page 64033]]

Register by the Commission, notice placed in local newspapers by the

potential applicant, and notice mailed directly to a mailing list of

interested entities.15 These notices are typically given: (1) at

the beginning of the pre-filing process, when the applicant releases

its initial information package, which may include a schedule for the

first NEPA scoping meeting; 16 (2) when the results of the

applicant's scientific studies are available, which may be combined

with additional NEPA scoping and study requests; and (3) when the

preliminary draft environmental document and related application have

been prepared.

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\15\ The mailing list is developed by the applicant under the

guidance of Commission staff. The list will include federal and

state resource agencies, Indian tribes, local governments,

environmental groups and others that may be affected by the proposed

hydropower project. The mailing list may expand as a result of

responses to the applicant's initial pre-filing consultation meeting

and public notices, including local newspaper notice.

\16\ Scoping is the formal process to solicit comments to help

determine the environmental issues and how they should be addressed

in an EIS or EA.

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Prior to the signing of the communications protocol, staff has not

communicated with any interested entity other than on procedural

matters. Once the protocol is executed, pursuant to its provisions

staff may enter into substantive discussions with any entity on the

merits of the potential applicant's proposal, so long as the results of

those discussions are subsequently made available in the relevant

public files. These consist of the Commission's files for the project

in question and a file maintained by the potential applicant.

For the majority of the many applications for new license currently

undergoing pre-filing consultation, the applicants are using the

process set forth in the Commission's rules. In 20 proceedings where a

potential applicant is seeking a new or original license, the staff's

alternative pre-filing procedures are being explored or are in use. In

one proceeding, use of the alternative process has already resulted in

an order issuing a license.17 In most of the pending proceedings

the applicant or its agent is preparing an EA; in some of the cases a

contractor funded by the applicant is preparing an EIS. Some of the

proceedings involve multiple projects on the same river basin.

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\17\ See Georgia Power Company, 74 FERC para. 62,146 (1996)

(Sinclair Project No. 1951). No requests for rehearing were filed.

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C. NHA Petition for Rulemaking

On July 10, 1995, NHA filed a Petition for Rulemaking Regarding

Regulations for the Relicensing of Hydroelectric Projects.18 In

its petition, NHA described its consultation with a large number of

entities on how to improve the Commission's regulations in this area.

NHA expressed its views on problems it perceives in the existing

process for relicensing hydroelectric projects and proposed a

comprehensive regulatory scheme for that purpose, which would replace

the existing regulations governing the preparation, filing, and hearing

process for hydropower applications for new licenses.

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\18\ NHA is an association that represents the hydropower

industry.

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As described by NHA, its proposal is intended to integrate the

application preparation process under the FPA with the environmental

review process under NEPA, to provide an earlier start to the NEPA

process, to involve Commission staff prior to the filing of an

application, and to afford resource agencies and the public greater

opportunity to participate in the pre-filing process. The goal is to

shorten and simplify relicensing proceedings, which NHA claimed take

too long to complete and impose unnecessary burdens on the

participants, by eliminating repetitious steps in the pre-filing and

post-filing stages. NHA also sought to promote settlements and to allow

greater communication among parties and Commission staff by relaxing

restrictions on ex parte communications. NHA proposed a ``collaborative

option'' by which participants could agree to an alternative process

for preparing and evaluating a hydropower application for new license.

NHA proposed 49 pages of regulatory text, which would substitute

for sections in Parts 4 and 16 of the Commission's rules governing

relicensing proceedings. NHA's proposed regulations specify 52 steps in

such proceedings, through the filing of a final license application.

The applicant would prepare and file with the Commission a Notice of

Intent Package, an Initial Information Package, a study plan, and an

application for new license. Under detailed guidelines, the Commission

would give public notice of each of these filings, review them to

determine their adequacy, and either accept or reject them.\19\

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\19\ See NHA Petition, Draft Regulations, at sections 6, 7, 18,

23, 24, 27, and 29.

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Under NHA's proposed regulations, a proceeding before the

Commission would begin no later than the filing of the Initial

Information Package, when interested persons could formally intervene

in the proceeding as parties under Sec. 385.214 of the Commission's

rules.\20\ The applicant's Initial Information Package would be

``comprised primarily of baseline data from the exhibits in [existing]

18 CFR Sec. 4.51.'' \21\ These requirements were spelled out in section

19 of NHA's proposal, describing seven required ``schedules''

containing detailed information on the project, its operation and

resource utilization, need for power and alternative sources of power,

costs and financing, the environment, design drawings and other

information showing the safety and adequacy of project structures, and

a project map.

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\20\ Id. at 5, section 8(c).

\21\ Id. at 13.

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The environmental schedule would contain seven major elements,

including a description of the locale and reports on water use and

quality; fish, wildlife, and botanical resources; historic and

archeological resources; recreational resources; socio-economic

impacts; and land management and aesthetics. This information would

describe not only the existing project and its impacts but also

mitigation and other measures proposed for the new license period.

Unlike existing Sec. 4.51 and similar regulations (including Sec. 16.8)

now governing the preparation of license applications, no consultation

with resource agencies, Indian tribes, or the public would be required

in the preparation of these proposals of the applicant.

Under NHA's proposed rules, the Commission would conduct the NEPA

process beginning immediately after the receipt of the Initial

Information Package. The rules specify deadlines for the Commission and

all participants defining ``the latest point at which a decision or

action should be taken * * *'' \22\ The Commission would be required to

publish public notice of the Initial Information Package within 30 days

of its filing and at the same time issue and serve on each interested

person a copy of ``Scoping Document I,'' pursuant to NEPA. This

document would include: (1) a description of the scoping process, the

project and its history; (2) a discussion of the applicant's proposal,

reasonable alternatives, and competing proposals; (3) a discussion of

resource and environmental issues (including cumulative impacts, other

relevant projects and alternatives); (4) a schedule for preparing the

NEPA document; (5) an outline for the final scoping document; and (6) a

mailing list of recipients with intervenors identified.\23\

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\22\ Id. at 33, section 22(b) (emphasis in original).

\23\ Id. at 35, section 24.

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[[Page 64034]]

Sixty days would be allowed for filing comments on Scoping Document

I, and within 45 days the Commission would be required to hold a site

visit and public scoping meeting.\24\ Within 45 days of the completion

of the public comment period on Scoping Document I, the Commission

would be required to issue Scoping Document II, reviewing all the

issues identified and the comments provided.\25\ This document would

identify all the data needs that must be satisfied by studies to be

conducted by the applicant. Persons would have 45 days to file comments

on Scoping Document II, including requests for additional or

alternative studies. Not less than 14 days after issuance of Scoping

Document II, the Commission would be required to issue public notice of

a final public scoping meeting.

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\24\ Id. at 37, section 26.

\25\ Id. at 37, section 27.

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Within 30 days after the final scoping meeting, the Commission

would be required to issue a final scoping document, which would

``identify all reasonable alternatives that need to be considered,

identify cumulative effects and significant issues that need to be

addressed in the environmental review process, document issues that

were found not to be significant, and list all study and additional

information requirements * * *'' \26\ At this point, applicants would

have the right to elect to prepare an EA or to have a contractor

prepare an EIS.\27\

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\26\ Id. at 39, section 31.

\27\ Id. at 39, section 32.

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Pursuant to a set of detailed deadlines, NHA would allow a period

of 150 days for the applicant to prepare a study plan, comments on it

to be filed, and the Commission to resolve any disputes and review the

plan.\28\ Agencies and citizens groups would have the burden of asking

the Commission to resolve any dispute over the adequacy of the

applicant's study plan.\29\ If the agencies or groups failed to request

such a resolution, they would waive any right to raise this issue

subsequently in the relicensing proceeding. The Commission would have

60 days after the filing of the Final Study Plan for the first year's

study to resolve any disputes presented to the Commission over the plan

and to accept, reject, or modify the plan accordingly.\30\ The

applicant would be required to submit a report summarizing the results

of each study completed at the conclusion of the first year's study,

and the Commission would hold a meeting to discuss the report.\31\

Similar steps would be required in reference to a study plan for the

second year, with further restrictions on the ability of others to

request additional studies, and deadlines for the Commission to resolve

any disputes presented to it.

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\28\ Id. at 40-47, sections 34-37.

\29\ NHA's proposed rules do not recognize any right of Indian

tribes to dispute the adequacy of the applicant's study plan.

\30\ NHA Petition, Draft Regulations, at 43, section 34(e).

\31\ Id. at 45, section 35(g).

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The final stage of NHA's rulemaking proposal would require the

applicant to prepare a ``final license application'' for filing with

the Commission.\32\ This application would incorporate the Notice of

Intent Package, the Initial Information Package, the scoping documents

and the study reports made in the pre-filing process. This information

would be updated as necessary, and recommendations of agencies or

citizens groups that were rejected would be explained.\33\ This filing

would ``constitute the complete application upon which the Commission

will base its decision to accept, reject, or accept with modifications

the final application submitted by the Applicant.'' \34\

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\32\ Id. at 47-48, section 38.

\33\ As in the pre-filing process, NHA's proposed regulations do

not recognize any role for Indian tribes.

\34\ NHA Petition, Draft Regulations, at 47, section 38(b).

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NHA's proposed rules would also require the Commission to make more

information about the relicensing process available on the Commission

Issuance Posting Systems (CIPS); \35\ provide that the Commission's ex

parte rule, Sec. 385.2201, does not apply to the proposed hydropower

proceeding until after the filing of a final license application; \36\

and give an applicant the right to elect a collaborative option, by

which the applicant and interested parties may jointly design rules--

different from the detailed rules proposed by NHA--to govern a

hydropower proceeding.\37\

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\35\ Id. at 6, section 9(a).

\36\ Id. at 6, section 10.

\37\ Id. at 6-7, section 12.

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NHA acknowledged that there are a number of relevant subject areas,

where it has not proposed regulations, that require further analysis.

These areas include: \38\

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\38\ NHA Petition at 12.

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(1) the impact of the relicensing process on small hydropower

projects;

(2) the interaction of the Commission's process with administrative

processes of other agencies, such as those conducted pursuant to the

Endangered Species Act,\39\ and FPA sections 4(e) and 18;

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\39\ 16 U.S.C. Sec. 1531, et seq.

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(3) how to integrate cumulative impact analysis into an accelerated

NEPA process;

(4) how to evaluate the appropriateness of the time deadlines

proposed for comment and Commission action; and

(5) how to develop transition provisions regarding ongoing

licensing proceedings.

D. Comments Received on NHA's Petition

On October 31, 1995, the Commission issued a notice of NHA's

petition and invited comment on it.\40\ The Commission received 43

comments and four reply comments. The commenters are listed in Appendix

B.

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\40\ The notice was published in the Federal Register on

November 8, 1995 (60 FR 56278). On January 4, 1996, the Commission

issued a notice extending the deadline for comments and reply

comments to February 5 and March 4, 1996, respectively.

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A number of licensees of hydropower projects \41\ and other

industry associations \42\ filed comments supportive of NHA's petition.

A number of state agencies filed comments supporting NHA.\43\ A number

of federal agencies supported NHA's petition,\44\ but other federal

agencies, while approving of a Commission rulemaking that would

integrate the NEPA and pre-filing consultation processes, objected to

the short time frames and other aspects of NHA's proposed rules.\45\

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\41\ E.g., Comments of Adirondack Hydro Development Corp.,

Alabama Power Co., Idaho Power Co., Minnesota Power & Light Co.,

Montana Power Co., Pacific Gas and Electric Co., and Southern

California Edison Co.

\42\ E.g., Comments of American Public Power Association and

Edison Electric Institute.

\43\ E.g., Comments of Idaho Public Utilities Commission and

State of Washington, Department of Ecology.

\44\ Comments of the U.S. Environmental Protection Agency and

the U.S. Department of Energy.

\45\ Comments of U.S. Department of Agriculture and U.S.

Department of Commerce.

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Many hydropower licensees filed comments critical of various

aspects of NHA's petition, supporting the goal of greater integration

of the NEPA and pre-filing processes but asking for more flexibility in

the proposed rules in order to accommodate different circumstances.\46\

Questions about the appropriateness of the time frames established in

NHA's proposal were raised,\47\ and the Commission was asked

[[Page 64035]]

to codify the alternative procedures staff had used on a case-by-case

basis.\48\ Some licensees believed that NHA's Initial Information

Package was too detailed, amounting to a draft license application.\49\

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\46\ Comments of Duke Power Co., Georgia Power Co., Nebraska

Public Power District, and Niagara Mohawk Power Co.

\47\ Comments of Public Utility District No. 2 of Grant County.

\48\ Comments of Power Authority of the State of New York.

\49\ Comments of Georgia Power Co. and Safe Harbor Water Power

Corp.

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New England Power Company opposed adoption of NHA's proposed rule,

except in situations where the parties agreed on such an approach as an

alternative. The company doubted that NHA's proposal would help when

there was no such consensus, especially in light of the importance of

other related legal processes, such as those involving fishway

prescriptions under section 18 of the FPA and certifications under

section 401 of the Clean Water Act.\50\ New England Power did not

believe that the Commission would have the resources to be as involved

in the pre-filing process as NHA's proposed rule would require. The

company thought that NHA did not recognize the importance of the

flexible, case-by-case procedures the Commission's staff had been using

in recent years when there was a consensus supporting this approach.

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\50\ 33 U.S.C. Sec. 1341(a)(1).

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Some commenters characterized NHA's petition as discouraging

competing relicense applications, because the petition would seriously

delay a potential competitor's access to project information that

section 15(b)(2) of the FPA requires the incumbent licensee to make

available, and that the potential competitor needs in order to decide

whether to file an application.\51\

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\51\ Comments of the Confederated Tribes of the Warm Springs

Reservation and the City of Santa Clara, California, Holyoke Gas &

Electric Dept., and the Northern California Power Agency.

Section 15(b)(2) of the FPA provides that, at the time an

existing licensee notifies the Commission whether it intends to file

an application for a new license (which shall be at least 5 years

before the expiration of the existing license), the existing

licensee must make publicly available such information about

construction and operation of the project as the Commission shall

require. The Commission's regulations implementing this provision

(18 CFR 16.7) require extensive and detailed information about the

project.

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A number of state agencies opposed adoption of NHA's proposed rule

as unnecessary.\52\ They objected to its rigidity and to many of its

features that in their view favored the applicant at the expense of

other participants. They considered NHA's time deadlines on

participants in the process unreasonable and opposed the elimination of

draft applications and the shifting of responsibility from the

applicant to others. A number of federal agencies, while supporting the

goal of greater integration of the pre-filing and NEPA processes, made

similar criticisms of NHA's petition and reminded the Commission of its

trust responsibilities for Indian tribes, which they asserted NHA

ignored.\53\

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\52\ E.g., State of Washington Department of Fish and Wildlife

and State of Wisconsin Department of Natural Resources.

\52\ Comments of the U.S. Department of the Interior, Fish and

Wildlife Service, and Bureau of Indian Affairs.

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Citizens' groups were very much opposed to adoption of the

regulations NHA proposed.\54\ These commenters asked the Commission to

continue its current practice of flexibly implementing the existing

hydropower procedural regulations.

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\54\ Comments of the Adirondack Mountain Club, the Defenders of

Wildlife, and the Hydropower Reform Coalition, which includes

American Rivers, American Whitewater Affiliation, Appalachian

Mountain Club, Conservation Law Foundation, Michigan Hydro

Relicensing Coalition, Natural Heritage Institute, New England

F.L.O.W., New York Rivers United, River Alliance of Wisconsin, Trout

Unlimited, and Sierra Club Legal Defense Fund.

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Hydro Reform Coalition (HRC) stated that the Commission's current

procedural regulations for hydropower applications were adopted for

good reasons, to cure real problems in the licensing process, have been

working reasonably well and are not the chief cause of any delays

encountered in the process.\55\ Rather, HRC asserted that applicants

have brought such delays on themselves by not conducting adequate

studies of a project's resource impacts and not filing required

information with their applications. Other delays are necessary to

allow sufficient time to address such critical issues as cumulative

impacts. HRC stated: ``NHA's package of changes drastically alters the

equities of the relicensing process in favor of a front-end loaded,

fast track, where licensees gain at the expense of all other

participants--resource agencies, conservation groups, competing

applicants * * *.'' \56\

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\55\ HRC at 3-8. HRC pointed to many recent relicense

proceedings, primarily involving some kind of cooperative approach,

that were expeditiously conducted under the current regulations.

\56\ HRC at 4.

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HRC noted that a hydropower licensing proceeding is a learning

process for most parties, who do not have the information and knowledge

of the applicant. It takes some time for them to learn about and

evaluate the proposed project's resource impacts so that they can

usefully participate in the process and assist the Commission in

considering reasonable alternatives and in compiling an adequate record

for a decision in the public interest. While the current procedural

regulations allow this process to unfold, in HRC's view NHA's proposal

would replace them with new regulations designed to curtail this

process and serve the interests of the license applicants.\57\

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\57\ HRC at 8.

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IV. Discussion

A. NHA's Petition

The Commission recognizes that the present procedures for licensing

hydroelectric projects are complicated and can result in lengthy

proceedings. We agree with NHA that every effort should be made to

lessen the burden of such proceedings on the participants. To a

considerable extent, however, we believe the burdens are an unavoidable

product resulting from statutory mandates and the often conflicting

objectives of the large number of parties, including state and federal

agencies with overlapping roles, Indian tribes, and citizens' groups,

interested in the licensing process. Nevertheless, we believe there

continues to be room for taking reasonable measures to improve the

efficiency of the process, while remaining faithful to the statutory

mandates and public interest the Commission serves. Our hope is that

the licensing process can be both expedited in time and improved in

results, while treating all parties fairly.

We commend NHA and the other representatives of the hydropower

industry who devoted substantial time and effort in evaluating the

Commission's hydropower licensing procedures. We appreciate NHA's

consultation with other participants in the licensing process and the

submission of a petition for rulemaking, and we welcome the comments of

all those who responded. We believe that the comments show that

everyone who has studied and addressed this subject shares common

goals, making licensing proceedings more efficient while maintaining

procedures that will protect the participatory rights of interested

parties and compile an adequate record for decision.

A critical difference between the avenues explored by the

Commission staff in light of the Energy Policy Act and by NHA is in

their basic design. The staff process was designed to supplement and

not replace the existing procedures in licensing proceedings and can be

flexibly applied on a case-by-case basis, with the alternative

procedures tailored to the expressed needs and desires of the

participants. This process places a lot of responsibility on the

participants to come together and reach

[[Page 64036]]

a consensus on how the environmental impacts of the applicant's

proposal should be evaluated. If such a consensus cannot be achieved,

the standard procedures set forth in the Commission's regulations must

be followed by the applicant.

NHA has proposed enactment of comprehensive generic procedures that

would apply to all relicensing proceedings, regardless of whether such

a consensus exists and the prospect for success. NHA's proposal would

require the Commission's staff to be involved in developing every

application for a new license and to render decisions on the details of

the steps required in that development. The Commission does not have

the resources to carry out such an open-ended mandate. Furthermore, if,

as NHA proposed, Commission staff assumed the role of decisionmaker in

pre-filing consultation for all proceedings, concerned parties

(including the applicant) could be discouraged from trying to form a

consensus on how to study and resolve critical issues in a mutually

satisfactory manner.

We share with the critics of NHA's petition a concern that NHA's

proposed regulations would not improve hydropower licensing

proceedings. In effect, NHA's proposal would eliminate the pre-filing

consultation process. NHA would have an applicant for a new license

develop a detailed package, called the ``Initial Information Package,''

that is for all intents and purposes a draft license application. We

think such proposals are best developed based on prior consultation

with affected resource agencies, Indian tribes, and the public. Before

doing such consultation and conducting the studies that are required as

part of the pre-filing process, an applicant cannot know in detail what

mitigation and enhancement measures it should propose.

To require the Commission staff to step in to direct every

hydropower relicensing proceeding prior to any pre-filing consultation

would consume too much of the Commission's limited resources without

providing any assurance that the process would be improved. The

Commission did not have the resources to undertake this role in the

past; we certainly do not have the resources to do so now, a time when

federal agencies are being called upon to tighten their budgets.

NHA has described as critical its proposal to waive the ex parte

rule prior to the filing of what it calls the ``final license

application'' with the Commission. But its proposal would have the

Commission conducting a proceeding prior to that time, with the

intervention of parties, and NHA itself also recognized that the

proceeding may be highly contentious. Under those circumstances, it

would be unwise and may be unlawful for the Commission to consider

itself and its advisory staff as not subject to any ex parte restraint.

We also share the concern of those who question how NHA's proposal

would afford potential competitors the timely access to project

information that section 15(b)(12) of the FPA calls for.

Nor has NHA justified the short time frames it sets for responses

and decisions during its proposed hydropower process. The periods

allowed are much shorter than similar time frames in the existing

regulations, whose deadlines have been considered strict by various

participants in the licensing process. Any successful process will

necessarily require more flexibility than may be contemplated in NHA's

proposal.

NHA's proposed rules might also not result in a more efficient

proceeding if other state or federal agencies with related statutory

responsibilities, such as Clean Water Act certification, do not wish to

participate in the accelerated NEPA process that NHA would require in

all cases. Lacking a consensus for an alternative approach to front-

load the NEPA process would risk wasting a large amount of resources by

all participants and might require the NEPA process to be repeated,

once the other agencies decided how they wished to proceed in reference

to the applicant's proposal. The Commission cannot by rule mandate a

positive spirit of mutual understanding and cooperation among the

applicant, resource agencies, Indian tribes, and the public, or fully

integrate related processes that occur under separate statutes.\58\

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\58\ NHA has also not explained its apparent omission of Indian

tribes from its proposed rules. The Commission included the tribes

in the pre-filing consultation process in recognition of their

special interests and status. NHA claimed that it consulted with

Indian tribes in developing its proposal, but NHA did not identify

them or their positions.

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We do, however, believe there is considerable merit in the part of

NHA's proposal called a ``collaborative option.'' This appears to be

similar to the alternative procedures that the Commission's staff has

been using on a case-by-case basis at the request of license

applicants, where there is a consensus among the interested entities

that such an approach would be fruitful. If an applicant is willing to

devote itself to working on a cooperative basis with all the entities

interested in its proposed hydropower project, including affected

resource agencies, Indian tribes, and the public, and those entities

have a similar attitude and commitment, the Commission is willing to

commit its staff to active involvement in the proceeding prior to the

filing of an application, to the extent our limited resources permit.

In such cases, the staff's participation has been more as a resource

and guide to the parties rather than as a decisionmaker.

Such an approach, tailored to the needs and requirements of the

particular circumstances and facts presented, has worked in many cases

and in our view offers the best hope of achieving the goal of

expediting the licensing process in a way that is fair to all parties

and in the public interest. Such proceedings can front-load not only

NEPA, but also the completion of other processes related to hydropower

licensing that are not in the Commission's control, such as state water

quality certification for the project.

In the following section, we describe the Commission's proposed

rule on this alternative process. The proposed rule is intended to

refine, clarify, and codify the alternative procedures that the

Commission's staff has evolved over the past few years on a case-by-

case basis. By articulating these procedures in the form of a notice of

proposed rulemaking, we are providing a forum in which all interested

persons will have an opportunity to comment on them, in light of

experience with the alternative procedures as well as with the existing

procedures. This rulemaking should provide an opportunity to consider

how the alternative procedures have worked to date, and how they might

be refined to improve the efficiency of the licensing process while

preserving the rights of all of the participants in it.

B. Proposed Rule

We propose to codify an alternative process that affords case-by-

case flexibility and opportunity for continued innovation for all

concerned. We recognize that some of the procedures that participants

may agree to use and that the Commission may approve in individual

cases might well be similar to those that NHA has proposed in generic

form. The proposal would leave intact the existing pre-filing and

hearing procedures for use in all proceedings where there is neither a

consensus on suitable alternative procedures nor any reasonable

prospect for their success in expediting the proceeding.

We see no reason to restrict the proposal to applicants for new

licenses, but, consistent with Commission practice and the Energy

Policy Act,

[[Page 64037]]

would extend the ability to apply for this option to all applicants for

licenses, whether original, new or subsequent, and to amendments to

existing licenses where pre-filing consultation is required (pursuant

to Sec. 4.38(a)(4) of the regulations).59

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\59\ By revising Sec. 4.34 of the regulations, which governs the

hearing process for all hydropower applications, the proposal would

apply to all licensing proceedings, including those subject to Part

16.

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The Commission proposes to revise Sec. 4.34 of the regulations,

governing the hydropower hearing process, to add a new subsection (i).

Under this subsection, a potential applicant could request that it be

permitted to conduct the pre-filing consultation and hearing processes

pursuant to an alternative procedure. Under this procedure, the pre-

filing consultation process and the NEPA process would be integrated

and the applicant or its contractor or consultant would prepare a

preliminary draft environmental assessment or a contractor or

consultant chosen by the Commission and funded by the applicant would

prepare a preliminary draft environmental impact statement, to be filed

with the application.

In appropriate circumstances, the Commission could approve the

request and participate in the alternative process, if the applicant

demonstrated that it had reached out to interested entities and a

consensus exists supporting the use of alternative procedures. The

requester would also have to submit a communications protocol,

supported by interested entities, that would describe how the applicant

and other participants in the pre-filing consultation process,

including Commission staff, would communicate concerning the merits of

the applicant's proposal.

The alternative process would integrate the NEPA process and the

pre-filing consultation process. The applicant, contractor or

consultant would be required to conduct an initial information meeting,

to scope environmental issues, to complete scientific studies and

release them, to conduct further scoping if appropriate, and to prepare

the preliminary draft environmental document for filing with the

Commission. The process would allow for public participation, and

public notice would be given of critical stages (including the filing

of the request for alternative procedures) by the Commission in the

Federal Register and by the applicant in a local newspaper.

Every quarter, the applicant would be required to report to the

Commission on the progress of the pre-filing consultation process.

Public files of relevant documents would be maintained by the

Commission and the applicant. The Commission's file would contain

summary information while the applicant's file would contain all

relevant information compiled during the process.

Under the alternative process, the applicant could substitute a

draft NEPA document for Exhibit E to its application, and the applicant

would not need to document all the details of the pre-filing

consultation process. Requests for scientific studies would be due

during the pre-filing process, and requests for additional studies

could be made after filing of the application only upon a showing that

it was not possible to request them during the pre-filing process.

Preliminary fish and wildlife recommendations, prescriptions, mandatory

conditions, and comments would be due during the pre-filing period, to

be finalized after the filing of the application. No notice that the

application is ready for environmental analysis would be given by the

Commission after filing of the application.

The proposed rule would also reserve the Commission's authority,

upon request and on a case-by-case basis, to participate in the pre-

filing consultation process and assist in the integration of this

process with the NEPA process where, e.g., the applicant, contractor or

consultant funded by the applicant would not prepare an environmental

assessment or environmental impact statement. In such cases, the

Commission could approve suitable modifications to the procedures

otherwise applicable during the pre-filing and post-filing periods,

similar to those made for alternative procedures set forth in the

proposed rule.

The Commission invites comment on all aspects of its proposal, as

described above. The Commission particularly invites comment on what

should happen if the consensus for use of alternative procedures

disappears prior to the filing of an application. Should the Commission

still allow alternative procedures to be followed in such a situation?

If not, what procedures should apply?

Would any transition provisions be necessary for the proposed rule,

so as not to upset applications currently being prepared pursuant to

staff-granted waivers?

The Commission also proposes to add a new Sec. 375.314(u) to its

regulations, to clarify and codify the authority of the Director of the

Office of Hydropower Licensing to approve the use of the alternative

procedures and to assist in the pre-filing consultation process. In

appropriate cases, for example, the Director could decide to actively

assist a potential applicant in the pre-filing consultation process,

including the preparation of a NEPA document.

V. Environmental Analysis

Commission regulations describe the circumstances where preparation

of an environmental assessment or an environmental impact statement

will be required.60 The Commission has categorically excluded

certain actions from this requirement as not having a significant

effect on the human environment.61 No environmental consideration

is necessary for the promulgation of a rule that is clarifying,

corrective, or procedural, or that does not substantially change the

effect of legislation or regulations being amended.62

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\60\ Regulations Implementing National Environmental Policy Act,

52 FR 47897 (Dec. 17, 1987), codified at 18 CFR Part 380.

\61\ 18 CFR 380.4(a)(2)(ii).

\62\ 18 CFR 380.4.

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This proposed rule is procedural in nature. It proposes alternative

procedures that participants to a hydroelectric licensing proceeding

may wish to use. Thus, no environmental assessment or environmental

impact statement is necessary for the requirements proposed in the

rule.

VI. Regulatory Flexibility Certification

The Regulatory Flexibility Act of 1980 (RFA) 63 generally

requires a description and analysis of final rules that will have

significant economic impact on a substantial number of small entities.

Pursuant to section 605(b) of the RFA, the Commission hereby certifies

that the proposed regulations, if promulgated, will not have a

significant economic impact on a substantial number of small entities.

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\63\ 5 U.S.C. Secs. 601-612.

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The procedures proposed herein are purely voluntary in nature, and

are designed to reduce burdens on small entities (as well as large

entities) rather than to increase them. More fundamentally, the

alternative process we are proposing herein would be purely voluntary.

The procedures proposed herein would be a potential alternative to the

procedures currently prescribed in our regulations, and would not be

adopted unless all of the persons and entities interested in the

proceeding affirmatively agreed to use them. Under this approach, each

small entity would be able to evaluate for itself whether the

alternative procedures would be beneficial or burdensome, and could

decline to agree to their adoption

[[Page 64038]]

if they appeared to be burdensome. Under these circumstances, the

economic impact of the proposed rule would be either neutral or

beneficial to the small entities affected by it.

VII. Information Collection Requirements

The Office of Management and Budget's (OMB) 64 regulations

require that OMB approve certain information collection requirements

imposed by agency rules. The regulations proposed in this Notice do not

require the collection or filing of any information, nor would they

amend any existing information collection requirement.

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\64\ 5 CFR 1320.13.

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VIII. Comment Procedure

The Commission invites interested persons to submit written

comments on the matters proposed in this notice. An original and 14

copies of the written comments must be filed with the Commission no

later than February 3, 1997, for comments and March 3, 1997, for reply

comments. Comments should be submitted to the Office of the Secretary,

Federal Energy Regulatory Commission, 888 First Street, N.E.,

Washington, D.C. 20426, and should refer to Docket No. RM95-16-000.

Written comments will be placed in the public files of the

Commission and will be available for inspection at the Commission's

Public Reference Room, at 888 First Street, N.E., Washington, D.C.

20426, during regular business hours.

List of Subjects

18 CFR Part 4

Electric power, Reporting and recordkeeping requirements.

18 CFR Part 375

Authority delegations (Government agencies), Seals and insignia,

Sunshine Act.

By direction of the Commission.

Lois D. Cashell,

Secretary.

In consideration of the foregoing, the Commission proposes to amend

parts 4 and 375 of chapter I, title 18, Code of Federal Regulations, as

set forth below.

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

COSTS

1. 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.

2. In Sec. 4.34, the heading is revised and a new paragraph (i) is

added to read as follows:

Sec. 4.34 Hearings on applications; consultation on terms and

conditions; motions to intervene; alternative procedures.

* * * * *

(i) Alternative procedures. (1) An applicant may submit to the

Commission a request to approve the use of alternative procedures for

pre-filing consultation and the filing and processing of an application

for an original, new or subsequent hydropower license, or for the

amendment of a license that is otherwise subject to the provisions of

Sec. 4.38.

(2) The goal of such alternative procedures shall be to:

(i) Integrate the pre-filing consultation process with the

environmental review process;

(ii) Facilitate the greater participation of the public and

Commission staff in the pre-filing consultation process;

(iii) Allow for the preparation of an environmental assessment by

an applicant or its contractor or consultant or of an environmental

impact statement by a contractor or consultant chosen by the Commission

and funded by the applicant; and

(iv) Encourage the applicant and interested persons to narrow any

areas of disagreement and promote settlement of the issues raised by

the hydropower proposal.

(3) A potential hydropower applicant requesting the use of

alternative procedures must:

(i) Demonstrate that a reasonable effort has been made to contact

all resource agencies, Indian tribes, citizens' groups and others

affected by the applicant's proposal, and that a consensus exists that

the use of alternative procedures is appropriate under the

circumstances; and

(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 applicant's

proposal.

(4) As appropriate, the alternative procedures shall include

provision for an initial information meeting, the scoping of

environmental issues, the analysis of completed scientific studies and

further scoping, and the preparation of a preliminary draft

environmental assessment or environmental impact statement and related

application.

(5) The Commission will give public notice inviting comment on the

applicant's request to use alternative procedures.

(6) If the Commission accepts the use of alternative procedures,

the following provisions will apply.

(i) To the extent feasible under the circumstances of the

proceeding both the Commission and the applicant will give public

notice at each of the stages described in paragraph (i)(4) of this

section. The applicant will also send notice of these stages to a

mailing list approved by the Commission.

(ii) Every quarter, the applicant shall furnish the Commission with

a report summarizing the progress made in the pre-filing consultation

process and referencing the applicant's public file, where additional

information on that process can be obtained.

(iii) At a suitable location, the applicant will maintain a public

file of all relevant documents, including scientific studies,

correspondence, and minutes of meetings, compiled during the pre-filing

consultation process. The Commission will maintain a public file of the

applicant's initial proposal and information package, scoping

documents, periodic reports on the pre-filing consultation process, and

the preliminary draft environmental document.

(iv) An applicant authorized to use alternative procedures may

substitute a preliminary draft environmental document and specified

additional material instead of Exhibit E to its application and need

not document the pre-filing consultation process.

(v) The procedures approved may require all resource agencies,

Indian tribes, citizens groups, and interested persons to submit to the

applicant requests for scientific studies during the pre-filing

consultation process, so long as additional requests may be made to the

Commission for good cause after the filing of the application,

explaining why it was not possible to request the study during the pre-

filing period.

(vi) During the pre-filing process the Commission may require the

filing of preliminary fish and wildlife recommendations, prescriptions,

mandatory conditions, and comments, to be finalized after the filing of

the application; no notice that the application is ready for

environmental analysis need be given by the Commission after the filing

of an application pursuant to these procedures.

(7) The Commission may participate in the pre-filing consultation

process and assist in the integration of this process and the

environmental review process in appropriate cases where the applicant,

contractor or consultant

[[Page 64039]]

funded by the applicant is not preparing a preliminary draft

environmental assessment or environmental impact statement, but where

staff assistance is available and will expedite the proceeding.

PART 375--THE COMMISSION

3. The authority citation for part 375 continues to read as

follows:

Authority: 5 U.S.C. 551-557; 15 U.S.C. 717-717w, 3301-3432; 16

U.S.C. 791-825r, 2601-2645; 42 U.S.C. 7101-7352.

4. In Sec. 375.314, paragraph (u) is added to read as follows:

Sec. 375.314 Delegations to the Director of the Office of Hydropower

Licensing.

* * * * *

(u) Approve, on a case-specific basis, the use of alternative

procedures for the development of an application for an original, new

or subsequent license or of an application for a license amendment

subject to the pre-filing consultation process, and assist in the pre-

filing consultation process.

Note: The appendices will not appear in the Code of Federal

Regulations.

Appendix A--Guidelines for the Applicant Prepared Environmental

Assessment (APEA) Process

(November 26, 1996--Office of Hydropower Licensing Division of Project

Review)

Section 2403(b) of the Energy Policy Act of 1992 (Act) allows an

applicant to file a draft environmental assessment (DEA), pursuant

to the National Environmental Policy Act of 1969 (NEPA),65 with

its license application. The Act also requires the Federal Energy

Regulatory Commission (Commission) to institute procedures to advise

applicants who choose this route. This document provides general

advice consistent with the statutory provisions.

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\65\ National Environmental Policy Act of 1969, as amended.

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We've divided the process into three stages, consistent with the

Commission's three stage consultation regulations. In each stage,

we: 1) highlight the objective; and 2) discuss the major milestones

and work products. The process, as outlined by the bullet items and

arrows, provides a framework for applicants, consultants, Commission

staff and other interested entities to complete the process

successfully. The guidance herein is intended to be flexibly

administered, to suit the circumstances of specific cases.

Applicant Prepared EA (APEA) Process

Commission Staff Goal: 1) front-load NEPA review and other

licensing requirements (i.e., 401 water quality certification,

section 106--historic preservation consultation, section 7--

endangered species consultation, etc.) by providing oversight for an

applicant who prepares a DEA during the prefiling consultation

period; 2) facilitate a process whereby the draft EA fully evaluates

and balances the interests of all stakeholders involved; and 3)

expedite the licensing process.

Stage 1 Consultation

Stage 1 Consultation sets the tone for the process and has two

important features: participation in the activities ancillary to the

licensing process and the beginning of NEPA scoping, including a

site visit. Part of the licensing process includes the applicant

inviting the federal, state, and local agencies, nongovernmental

organizations (NGOs), and other interested members of the public to

participate in the process. Once the applicant has gathered a group

to participate, the applicant and participants should prepare a

communications protocol and a request for waiver of specific three-

stage consultation regulations. If a federal land managing agency is

involved and desires cooperating agency status in the Commission's

NEPA document, a Letter of Understanding (LOU) should be prepared by

staff.

NEPA scoping and a site visit may begin in Stage 1. Basically,

there are two options: 1) the applicant can begin the NEPA scoping

by combining the 1st Stage joint agency and public meeting [required

in 18 C.F.R. Sec. 4.38(b)(3) and 16.8] with a NEPA scoping meeting;

or 2) the applicant can hold the 1st Stage meeting and postpone NEPA

scoping until Stage 2. The Commission and the Council on

Environmental Quality (CEQ) prefer to scope the issues as early as

possible.

There are advantages and disadvantages of beginning NEPA scoping

at the 1st Stage consultation meeting. The advantage is that the

applicant and participants can focus on identifying the issues up-

front to develop study plans for the project. This may help

eliminate the ``cart before the horse'' syndrome where the applicant

is requested to study everything to find out if it's an issue.

Another advantage is that the applicant can ask for input regarding

project alternatives and ask the meeting participants to provide

information, such as existing studies, that other agencies or NGOs

might have. Most APEA efforts have completed NEPA scoping in Stage

1.

It may not be possible to combine NEPA scoping with the 1st

Stage consultation meeting, because the participants may not be able

to identify the issues owing to a lack of data.

Consider combining the NEPA scoping and 1st Stage joint meeting

when:

1) applicants ask to begin the APEA process at the beginning of

Stage 1, and

2) project issues and potential impacts are fairly well-known.

This option is most appropriate for relicenses or unlicensed

projects (UL's).

Here Are the Milestones and Work Products for Stage 1 Consultation

Applicant decides to do APEA--preferably at the

preliminary permit stage (original license) or at the notice of

intent to file stage (relicense) or earlier.66

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\66\ Applicant and interested stakeholders can request to meet

with staff to discuss the process.

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Applicant generates a project mailing list (federal,

state, local agencies, NGOs, and any other interested entities, such

as property owners along the river).

Applicant writes to the Commission (cc: the mailing

list) requesting that the Commission agree to advise it in the APEA

process.

Commission responds to the applicant's letter and

specifies staff's role in the process. Staff sends samples of

communications protocol, if one hasn't been proposed, as well as

samples of other EAs, scoping documents, etc.

==> Commission staff are selected to advise applicant

Applicant requests a waiver of certain regulations

(such as a waiver allowing the filing of the DEA in lieu of an

exhibit E), as appropriate.

The applicant, Commission staff, and other participants

develop a Communications protocol (merits and procedures

discussions) and a timeline (milestones). Participants are

encouraged to sign the communications protocol. The applicant mails

a copy of these documents to the mailing list.

If applicable, the Commission or applicant will

executes a Letter of Understanding (LOU) with cooperating federal

managing agencies.

Applicant mails Initial Stage Consultation Document

(ISCD). The ISCD must be comprehensive and contain adequate

information to provide a basis for participants to comment and make

recommendations concerning study plans, etc.

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BASED ON THE AMOUNT OF AVAILABLE PROJECT INFORMATION, THE COMMISSION

STAFF WILL ADVISE THE APPLICANT TO: (A) HOLD THE 1ST STAGE MEETING

ONLY; OR (B) COMBINE THE 1ST STAGE AND NEPA SCOPING MEETINGS.

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(A) Applicant holds joint agency and public meeting within 60

days of mailing the ISCD; conducts a site visit; Applicant requests

that the agencies, NGOs provide initial study needs.

==> Comments from agencies/NGOs on the ISCD are due 60 days after

joint meeting. Agencies, NGOs, and the public should request initial

studies.

Applicant, agencies, or NGOs can, if needed, request

dispute resolution on study requests.

(B) Applicant prepares Scoping Document 1 (SD1) 67 and

mails 30 days before joint agency/public meeting. Applicant can

attach Scoping Document I to the ISCD and mail together.

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\67\ SDI can be very brief since the ISCD will provide a great

deal of information.

==> Commission issues a notice of scoping.

==> Applicant holds NEPA scoping meetings (public and agency);

conducts site visit.

==> Comments from agencies/NGOs on the ISCD and SDI are due 60 days

after joint meeting. This includes requests for initial studies.

Applicant, agencies, or NGOs can, if needed, request

dispute resolution on study requests.

Applicant issues Scoping Document II (SDII).

[[Page 64040]]

Applicant should apply for the 401 WQC so that the WQC

agency can determine whether it requires any additional information

to act on water quality certification.

Stage 2 Consultation

Several activities occur during Stage 2: 1) data collection and

analysis [1-2 field seasons]; 2) scoping [if not completed in Stage

1]; 3) final request for additional studies pursuant to 18 C.F.R.

Section 4.32 (b)(7); 4) development of the preliminary DEA and draft

license application; 5) request for agency/NGO/public preliminary

recommendations, terms and conditions; and 6) issuance of the draft

license application and preliminary DEA for comment [as required in

18 C.F.R. Sec. 4.38(c)(4); Sec. 16.8].

Here Are the Milestones and Work Products for Stage 2

Applicant will copy Commission and all participants on

study plans (Commission staff reviews, advises, comments).

Applicant completes first field season of studies.

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IF NEPA SCOPING WASN'T DONE IN STAGE 1, PROCEED WITH (A); IF NEPA

SCOPING WAS DONE IN STAGE 1, FOLLOW (B).

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(A) Applicant provides study results to all interested

participants along with SD1.

==> In SD1, applicant issues a request for any further study

recommendations.

Applicant holds a Scoping meeting and site visit 30

days after mailing SDI.

Comments on scoping and additional study requests are

due to the Applicant, with a copy to the Commission staff, 60 days

after SD1 is mailed; 30 days after the NEPA scoping meeting.

If a dispute regarding an additional study request can

not be resolved, an applicant, agency, or NGO may request dispute

resolution.

(B) Since scoping meetings were held in Stage 1, the Applicant

mails study results to all participants for 60-day review.

==> Applicant issues a request for any further study recommendations

30 days after study results have been mailed and allows 60 days

after issuance of that letter for agencies, NGOs, public, to request

additional studies, if needed.

If a dispute regarding an additional study request can

not be resolved, an applicant, agency, or NGO may request dispute

resolution.

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ALL APPLICANTS FOLLOW THE STEPS OUTLINED BELOW

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Second field season of studies, if needed.

Applicant begins preparing draft license application

and preliminary DEA (PDEA).

Applicant requests preliminary terms and conditions

from the stakeholders to analyze in the PDEA.

Applicant presents and analyzes its proposal for

licensing/relicensing the project in the PDEA along with any

preliminary terms and conditions, prescriptions and recommendations

from the participants and sends to all participants for review and

comment.68 The PDEA should contain the results of any

additional studies that were completed in stage 2.

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\68\ To allow sufficient time for the applicant to evaluate and

balance the participants' recommendations and preliminary terms and

conditions, the applicant should mail the PDEA about 8 months prior

to the deadline date for filing the final license application and

DEA with the Commission.

==>NOTE: The PDEA must include the applicant's proposal and

reasonable alternatives.

==> Commission issues a notice of availability of the PDEA with a

request for preliminary terms and conditions, prescriptions and

recommendations.

The applicant will incorporate comments, preliminary

terms and conditions and recommendations from the participants into

the DEA and final license application.

==> Comments from agencies, NGOs, and the public are due to the

applicant 90 days from mailing the draft license application and

PDEA.

Hold a meeting, if needed, (not later than 60 days from

the disagreeing parties' letter) to discuss the applicant's

proposal, analyses, etc., that were presented in the PDEA and

discuss any changes (such as settlement agreements, the preliminary

conditions and recommendations) to be incorporated and analyzed in

the DEA and final license application.

Prepare final application and DEA.

Stage 3 Consultation

At this stage, the Commission staff conducts an independent

analysis and makes a recommended decision.

Here Are the Milestones for Stage 3

Applicant files license application and DEA with

Commission, and distributes it to the mailing list.

==> Staff reviews the application and DEA for adequacy.

The Commission issues a notice of acceptance, provides

opportunity for interested entities to request intervenor status,

and requests final terms, conditions [including final 401 WQC

conditions] recommendations, and 4(e) conditions if applicable, from

participants.

==> 60-day period to file a motion to intervene with the Commission.

==> 105-day comment period (60 days for agency final

recommendations; 45 days for the applicant's response to agency

final recommendations.

==> This 60-day recommendation period is also an opportunity for

agencies, NGOs, and other interested entities to comment on the

applicant's license application and DEA.

Commission staff receives final agency terms and

conditions, prescriptions and participants' final recommendations.

Commission staff modifies the DEA in light of responses

to final agency and participants' recommendations.

==> Staff completes comprehensive development analysis; writes

Finding of Significant Impact or of No Significant Impact.

Commission issues staff DEA.

==> 30-day comment period on the DEA or 45 days comment if section

10(j) issues apply.

Commission staff revises DEA in light of comments

received and the results of section 10(j) negotiations, if

applicable.

Commission issues Final EA.

Commission requests Final 4(e) conditions, if

applicable.69

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\69\ Some 4(e) agencies have a practice of providing only

preliminary terms and conditions before a final NEPA document is

issued. However, Staff will work with cooperating agencies with the

goal of expediting final 4(e) conditions so that they may be

incorporated into the Final EA, rather than have those conditions

provided afterward.

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License order issued.70 Note: The Applicant-

Prepared EA Process flow chart that follows is not being published

in the Federal Register but is available from the Commission's

Public Reference Room.

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\70\ Assumes 401 WQC has been received/waived and no intervenors

in opposition.

Note: The Applicant-Prepared EA Process flow chart that follows

is not being published in the Federal Register but is available from

the Commission's Public Reference Room.

Appendix B--Commenters

U.S. Department of Agriculture, U.S. Forest Service

U.S. Department of Commerce, National Marine Fisheries Service

U.S. Department of Energy

U.S. Department of the Interior, Bureau of Indian Affairs

U.S. Department of the Interior, U.S. Fish and Wildlife Service

U.S. Environmental Protection Agency

Environmental Council of States

Idaho Public Utility Commission

Minnesota Department of Natural Resources

Washington Department of Ecology

Washington Department of Fish and Wildlife

Wisconsin Department of Natural Resources

Confederated Tribes of the Warm Springs Reservation of Oregon

National Hydropower Association

Edison Electric Institute

American Public Power Association

Western Urban Water Coalition

Northwest Hydroelectric Association

Association of California Water Agencies

Hydro Reform Coalition

Adirondack Mountain Club

Defenders of Wildlife

Denver Water Department

Nebraska Public Power District

New York State Power Authority

Sacramento Municipal Power District

Santa Clara County, Holyoke Gas & Electric Company, and California

Water Agency Alabama Power Company

Duke Power Company

Georgia Power Company

Idaho Power Company

Minnesota Power & Light Company

[[Page 64041]]

Montana Power Company

Niagara Mohawk Power Company

New England Power Services

Pacific Gas & Electric Company

Portland General Electric Company

Safe Harbor Power Company

Southern California Edison Company

Washington Water Power Company

TAPOCO

Adirondack Hydro Development Corporation

Reply comments were filed by NHA, Hydro Reform Coalition,

Georgia Power, and Niagara Mohawk.

[FR Doc. 96-30715 Filed 12-2-96; 8:45 am]

BILLING CODE 6717-01-P