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Power & Pipes

FERC, CFTC, and State Energy Law Developments

FERC issued guidance on October 17, 2019, that may significantly aid hydroelectric developers in planning and siting potential projects. FERC issued a list, jointly developed with the secretary of the US Army, secretary of the US Department of the Interior, and secretary of the US Department of Agriculture (collectively, the Secretaries), of 230 existing nonpowered federal dams that FERC and the Secretaries agree have the greatest potential for nonfederal hydropower development. FERC also issued guidance to assist applicants for licenses or preliminary permits for closed-loop pumped storage projects at abandoned mine sites. These actions fulfill FERC’s requirements under the America’s Water Infrastructure Act of 2018 (AWAI) and are intended to encourage development of renewable energy resources by developing hydroelectric power at sites where the addition of hydroelectric capabilities would not add significant additional environmental impacts.

Nonpowered federal dams can be ideal choices for hydropower projects because much of the significant and costly construction and regulatory processes have already been accomplished. In addition, the age of a nonpowered federal dam generally does not prohibit the installation of generation turbines. Similarly, abandoned mines (e.g., surface mine pits or underground mines) are particularly well suited to function as reservoirs in a closed-loop project because of the reduced construction costs and lower potential for new environmental harm.

Moreover, by focusing on existing nonpowered federal dams and abandoned mines, FERC can direct hydropower project developers to mitigate and improve environmental conditions at existing sites. Many of these locations were originally developed under regulations with less stringent environmental requirements than exist today, and if a developer constructs a hydropower project at one of these sites, FERC can ensure that the site is brought up to modern standards.

Nonpowered Federal Dams with Potential for Nonfederal Hydropower Development

Pursuant to Section 3003 of the AWAI, FERC established Docket No. AD19-7-000 to develop the list of existing nonpowered federal dams. FERC developed an initial draft list of nonpowered federal dams through cooperation with the Secretaries and reports by those agencies, as well as with information from the US Department of Energy. The draft list was expanded by Oak Ridge National Laboratory, and then filtered by FERC staff to include only federally owned dams and cross-checked to remove redundancies and to exclude dams with development authorities reserved to the federal owners. Finally, FERC staff filtered the list by potential capacity.

The final list of nonpowered federal dams excludes the following:

  1. Dams that are or will be used by a nonfederal hydropower project under an existing Commission-issued hydropower license
  2. Dams identified by the US Forest Service as incompatible with the purposes of existing forest management plans or reservation authority
  3. Dams identified by the US Army Corps of Engineers as incompatible with hydropower generation due to certain circumstances that would hinder hydropower development (e.g., pending dam removal, extenuating construction activities)
  4. Dams identified by the National Park Service as having the potential to affect the national park system or the national wild and scenic river system

Closed-Loop Pumped Storage Projects at Abandoned Mine Sites

Pursuant to Section 3004 of the AWAI, FERC established Docket No. AD19-8-000 to develop guidance for the development of closed-loop pumped storage projects at abandoned mine sites. The guidance includes an overview of the application process for licenses and preliminary permits for closed-loop pump storage projects at abandoned mine sites. It also provides best practices and considerations including typical environmental issues, issues to consider during site selection, and consultations with local stakeholders.

Pumped storage projects move water between reservoirs located at different elevations (i.e., upper and lower reservoirs) to store and generate electricity, generally pumping water to the upper reservoir using excess generation capacity when demand is low, and releasing water to the lower reservoir through a turbine to generate electricity when demand is high. A closed-loop pumped storage project is generally defined as a pumped storage project that uses reservoirs situated at locations other than natural waterways, lakes, wetlands, and other natural surface water features. The Department of the Interior’s Bureau of Land Management estimates there may be as many as 500,000 abandoned mines in the United States.