Power & Pipes

FERC, CFTC, and State Energy Law Developments

The Federal Energy Regulatory Commission recently issued a final rule, Order No. 880, revising its hydropower project inspection and safety regulations. The updates revise part 12 of FERC’s regulations and conclude an approximately year and a half of rulemaking in Docket No. RM20-9.

The revisions are intended to promote continued safe operation, maintenance, and repair of hydropower projects to ensure the protection of life, health, and property—one of the oldest areas of FERC regulation.

The new regulations provide increased certainty to hydropower developers and operators and, more importantly, address FERC’s concerns about the potential dangers from inadequate operations and maintenance of hydropower projects, which FERC has made a priority over the last few years following certain high-visibility safety failures at FERC-jurisdictional hydroelectric facilities.

For example, the final rule echoes FERC’s concerns over public safety present in FERC’s ongoing rulemaking in Docket No. RM21-9 on final assurance measures for hydroelectric projects that we previously discussed here, and FERC’s recently proposed penalty for hydro license violations that we discussed here.

FERC summarized the final rule as achieving three goals (along with making various minor revisions) to improve hydropower dam safety:

  1. Incorporating two tiers of project safety inspections by independent consultants
  2. Codifying existing guidance requiring certain licensees to develop Owners’ Dam Safety Programs (ODSPs) and public safety plans
  3. Updating existing regulations related to public safety incident reporting

Inspection Program

The final rule’s two-tier inspection program builds on the existing requirement that independent consultant safety inspections be conducted every five years. However, the final rule requires that the inspections alternate between a comprehensive assessment and a periodic inspection. The comprehensive assessment must be in-depth and include a detailed review of the project’s design, engineering analyses and construction history, a spillway adequacy evaluation, and a risk analysis.

The final rule also codifies the existing Potential Failure Mode Analysis as part of the scope of a part 12 inspection (specifically during a comprehensive assessment and typically at a 10-year interval). The Potential Failure Mode Analysis began as a licensee pilot program by FERC’s Office of Energy Projects, Division of Dam Safety and Inspections (D2SI) in 2002 and has been informally used ever since.

Independent Consultants

The final rule also revises the qualification process for independent consultants that conduct part 12 inspections, by incorporating recommendations from the Federal Emergency Management Agency.

For the review and evaluation of the qualifications of independent consultants, FERC will require that inspections be conducted by an independent consultant team. Licensees must submit to the director of D2SI an “independent consultant team proposal,” which includes one or more independent consultants and may include additional engineering or scientific team members, and licensees must demonstrate that the proposed team has an appropriate level of expertise for the specific project under consideration.

FERC explained that this change ensures that the independent consultant team possesses the appropriate experience and technical expertise to evaluate all aspects of a particular project. The existing requirement that all independent consultants must be licensed professional engineers with at least 10 years of experience in dam design and safety was not revised.

Owners’ Dam Safety Programs

In addition, the final rule codifies FERC’s existing guidance on ODSPs developed in response to the December 2005 failure of Taum Sauk Dam. An ODSP must be submitted by any licensee that has a dam or other project work with a high or significant hazard potential. Licensees must also file, review, and update their ODSP on a periodic basis. Further, licensees must designate a person to be the Chief Dam Safety Engineer or Chief Dam Safety Coordinator responsible for overseeing the implementation of the ODSP.

Reporting & Preparedness

Finally, the final rule amends the current reporting and preparedness requirements related to public safety at or near licensed hydroelectric projects. FERC revised the definition of a “project-related” incident to clarify that licensees are required to report those public safety incidents that are related to project operation; to report rescues in addition to deaths and serious injuries; and to prepare, maintain, and submit a public safety plan to D2SI.

Effective Date

The final rule will take effect 90 days after publication in the Federal Register.