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Power & Pipes

FERC, CFTC, and State Energy Law Developments

FERC issued an original license for a period of 25 years, pursuant to Part I of the Federal Power Act, to Oregon State University (OSU) to construct, operate, and maintain the proposed PacWave South Hydrokinetic Project No. 14616 (PacWave Project). The PacWave Project is a first-of-its-kind wave energy testing facility that will be sited approximately seven miles off the coast of the state of Oregon and consists of both offshore and onshore components.

The purpose of PacWave Project is to provide a venue for clients to test technologies that generate electricity using wave energy converters (WECs) anchored to the seafloor. In addition, clients will test different technologies for transmitting energy to the electrical grid. The development of the PacWave Project may enhance the development of WECs, which convert the motion of the ocean to electricity to create renewable energy. Although the vast majority of hydroelectric projects licensed by FERC are on rivers and lakes within the US, the license is a reminder that FERC’s jurisdiction includes navigable waters of the United States generally.

The licensing process took approximately 10 years, in part because the PacWave Project is the first commercial-scale, utility grid-connected wave energy testing facility to be issued a license. The PacWave Project will consist of four offshore test berths containing a maximum of 20 WEC devices with a maximum total installed capacity of 20 MW. Buried underwater transmission cables will interconnect the PacWave Project with the mainland. OSU stated that it will oversee and manage all activities at the PacWave Project, and clients testing WECs would be subject to test center protocols and procedures.

Although an original license has been issued, the PacWave Project must file for approval several environmental and engineering plans before construction is authorized. OSU currently anticipates the facility will be operational by 2023. The project is supported in part by the US Department of Energy and the state of Oregon.

WECs deployed off the coast of certain states may lead to significant generation capacity. Oregon is an ideal state to site a WEC test facility, as Oregon has a high potential for wave energy generation. The Oregon Department of Energy estimates that near-shore WECs have the potential to power 28 million homes annually. And while there are no marine energy projects yet in commercial operation in Oregon, the state recognizes marine energy as an eligible resource in its Renewable Portfolio Standard. The remainder of the US west coast, including Alaska, also has the potential to generate significant wave energy.