New U.S. Hydro Dam Licensing Rules Dilute River Protections

WASHINGTON, DC, November 17, 2005 (ENS) - The Departments of the Interior, Commerce, and Agriculture jointly announced new Interim Final Rules Wednesday that the agencies say will improve licensing procedures for hydropower while protecting threatened and endangered fish species, water quality, and federal and tribal resources.

But conservationists contend that the new rules allow utilities to retroactively challenge protection measures - even after they have been finalized as part of the licensing process - and despite years of negotiations over environmental standards for dam operations conducted by states, local governments, tribes, and federal agencies.


Alabama Power's Lewis Smith Dam, which forms Smith Lake, impounds the Sipsey Fork of the Black Warrior River. (Photo courtesy Alabama Power)
They warn that utilities will be able to exploit this unfair advantage to evade the installation of fish ladders, avoid improving water flow and ignore fish and wildlife up and downstream of their dams on rivers across the country.

Hydropower provides about seven percent of America's electricity. The new rules mark the first time that the three departments have established joint procedures for dispute resolution regarding hydropower licensing. The Energy Policy Act of 2005 requires that the three departments jointly develop such rules in consultation with the Federal Energy Regulatory Commission (FERC). Hydropower licenses for non-federal operations, including many dams, are issued by FERC.

The new Interim Final Rules apply to any current license proceeding before FERC, including those in which a license has not yet been issued, as well as to all future license proceedings.

The Interim Final Rules will affect ongoing negotiations at 112 hydropower licensing projects on 95 rivers in 24 states, including major new dams from Alabama to Alaska.

Hydropower licenses authorize operations for decades, after which the facilities must be relicensed for operations to continue. Relicensing is an opportunity to deal with specific resource protection concerns, such as enabling fish passage for species listed as threatened or endangered or to improve water quality.

The new rules enable hydropower license or relicense applicants and other parties to hydropower license proceedings to request trial-type hearings on disputed issues of material fact, such as whether fish were historically present in a river.


Water released from four upstream dams is used at Fort Randall Dam on the Upper Missouri River where generators provide enough electricity to meet the needs of 245,000 homes. The annual hydropower revenue is about $30 million. (Photo courtesy USACE)
The rules provide for expedited hearings before an administrative law judge. The participating parties will be able to present evidence and examine witnesses as in similar administrative proceedings. The rules include details on how to request hearings, materials that are required and time frames.

The conservation group American Rivers objects to the measure, saying it favors electric utility lobbyists at the expense of states, tribes, communities, and the environment.

The new policy will grant sweeping new authorities to electric utilities to scrap already completed negotiations over the future of dammed rivers, says American Rivers, and then restart talks under the new rules that stack the deck against measures to protect river wildlife, provide public river access, or otherwise accommodate the needs of up and downstream neighbors.

"This measure is profoundly unfair to everybody who has negotiated with electric utilities in good faith, sometimes for years and years," said Robbin Marks, who directs the hydropower reform campaign at American Rivers. "The energy bill was bad enough, but now the Bush administration is going the extra mile for hydropower lobbyists to pad industry profits at the expense of rivers and their neighboring communities."

The rules go far beyond what Congress required in the Energy Policy Act, American Rivers says, objecting to the fact that the agencies released "final" rules without ever providing the public an opportunity to comment on a draft.

"The new rules skew and dilute so many protections for rivers that our government is ashamed to let us comment on them," said Steve Moyer, vice president of government affairs and volunteer operations of Trout Unlimited.

The rules are effective immediately as Interim Final Rules. A proposed rule is not being issued "because Congress made clear its intent that a rule be put in place 90 days after enactment of the Energy Policy Act," the federal agencies said.


Built in 1962 for flood control and irrigation, Applegate Dam is located on the Applegate River 23 miles southwest of Medford, Oregon. Symbiotics, LLC is applying to FERC for a license to install turbines that will produce 10 megawatts of electricity. (Photo courtesy Symbiotics)
The Energy Policy Act allows parties to license proceedings to submit alternative conditions or prescriptions attached to licenses for consideration by the federal departments, which said they will accept them unless they make specific findings as to why they cannot.

Conditions or prescriptions are developed by federal agencies such as the Interior Department's U.S. Fish and Wildlife Service, Bureau of Land Management, and Bureau of Indian Affairs; the Department of Commerce's National Marine Fisheries Service; and the Department of Agriculture's U.S. Forest Service.

Such alternatives might propose ways to lower costs to utilities and consumers while still protecting critical resources. The Interim Final Rules include details on how and where to submit alternative conditions or prescriptions for consideration.

The new processes Congress has enacted are open to license applicants and other parties that may include Indian Tribes, states and other governmental units and nongovernmental organizations, such as environmental groups.

But the conservation groups say only industry can afford to participate because, "The timelines for participation in the trial-type hearings are ridiculously short and the information requirements are huge. No additional funding is being provided to resource agencies to do the extra work, and the burden on other stakeholders is so onerous that they may be precluded from participating altogether."

Both the trial-type hearings and the process for the submittal and consideration of alternative conditions and prescriptions will be completed within the tight timeframe mandated by FERC's licensing rules, the federal agencies say.

The new rules, effective immediately, are published in the Federal Register today. The public will have 60 days to review and submit comments on the rules, which could result in changes in a revised Final Rule. The departments will consider the comments and their initial experience in implementing the new processes, and consider issuing revised Final Rules within about 18 months.