OREC Offers Support, and Constructive Comments on FERC’s Conditional License Policy

In November 2007, the Federal Energy Regulatory Commission issued a Policy Statement announcing the Commission’s intent to issue conditional licenses for certain wave, tidal and hydrokinetic projects. The conditional license would enable FERC to approve the license, without waiting for other state and federal agencies to issue necessary authorizations. But the conditional license does not authorize any construction until the licensee obtains final approvals from other state and federal agencies. FERC anticipates that the conditional license will facilitate financing and allow licensees to move forward with other, non-construction related duties under the license, such as convening stakeholder meetings or developing monitoring plans.OREC generally supported the FERC’s efforts, in these comments.  However, OREC expressed some concerns about the potential for abuse of the conditional license without continuing oversight by FERC. And OREC asked FERC to clarify that developers who failed to meet the statutory deadline for commencement of construction would not lose the license where other agencies’ failure to grant necessary authorizations caused delay.

OREC Secures Some Benefits for Ocean Energy in New Energy Bill…But Tax Credits Must Wait Until Next Year

On December 19, 2007, President Bush signed into law the Energy Act 2007. OREC played an instrumental role in securing important benefits for the ocean and marine renewable energy industry, including:

* Authorizing $250 million for Research, Development, Demonstration and Commercial Application to Expand Marine and Hydrokinetic Renewable Energy Production.

* Authorizing the Secretary of the Department of Energy to Establish National Marine Renewable Energy Research, Development and Demonstration Centers.

* Directing the Department of Energy to Conduct a Report on Environmental Impacts and Recommendations to Mitigate Environmental Impacts.
While these provisions will help the marine renewables industry move forward, disappointingly, the Energy Act 2007 did not include other provisions which would have helped not just marine renewables, but all forms of renewable energy. For example, the Energy does not expand the Production Tax Credit (PTC) to include marine renewables (which currently do not qualify for the PTC), nor did the legislation extend the PTC, now due to expire at the end of 2008, for other renewables. Also missing from the bill was a national Renewable Portfolio Standard (RPS)that would have required utilities to obtain a mandatory percentage of their power supply from renewable energy sources.

Finally, one version of the bill would have resolved the ongoing jurisdictional spat between the Federal Energy Regulatory Commission and the Mineral Management Service. The final Energy Act did not include this provision, which means that MMS and FERC are likely to continue to work on the terms of an MOU that would delineate each agency’s role in authorizing marine renewable projects on the Outer Continental Shelf.

To read OREC’s official statement, visit this link.

Update on FERC Pilot Project Process

On October 2, 2007, FERC held a public hearing and technical conference on a proposed expedited process for pilot projects. Carolyn Elefant, legislative and regulatory counsel for OREC, delivered an abbreviated version of these comments which will be filed with the Commission. In addition, you can view the full transcript of the FERC conference at this link.

We’ve quickly reviewed the dozen or so comments filed. Many commenters have asked FERC to undertake a formal rulemaking and issue regulations to govern the pilot process. Indeed, some commenters have even suggested that FERC must issue a formal rulemaking to comply with the requirements of laws such as the Administrative Procedure Act. Other commenters do not believe that a rulemaking is required, but have asked FERC to clarify certain matters, such as whether a pilot license would have priority over a permit or whether developers could seek sequential pilot license.

Here at OREC, we support FERC’s initiative. We hope that the other agencies involved in the licensing process will come on board with the effort so that we begin to test these new technologies which offer so much promise.

President Sean O’Neill Gives Update on Legislative and Regulatory Developments

If you’d like to get a summary on what’s happening the wave and tidal industry, take a look at Sean O’Neill’s recent Ask the Expertscolumn that summarizes what’s been going on with wave and tidal energy over the past few months. There’s a run down on the status of tax incentives for the House and Senate, funding proposals for ocean renewables on the Hill and an overview of recent regulatory events, including FERC’s proposed pilot process and the jurisdictional conflict between FERC and MMS.

FERC Adopts OREC Recommendation for Short Term, Super-Expedited License

On July 19, 2007, the Commission issued this Press Release announcing that it will convene a technical conference to discuss a proposal for a process for new wave, tidal and hydrokinetic technologies that would allow them to complete licensing in as little as six months. The process would be available for projects 5 megawatts or smaller, removable on short notice and for the purpose of testing new technologies. The expedited licenses would issue for a term of five years.So where did FERC get this idea? OREC proposed the “supra-expedited” five year license for experimental and new commercial technologies back in February 2007 in our FERC Comments filed in response to the Notice of Inquiry on Preliminary Permits (see the comments at 10-13). Though many groups endorsed a speedy licensing process (a no brainer, after all), OREC was the sole entity to flesh out how the supra-expedited license process would work and to emphasize the need to allow projects to sell power during the five year experimental phase. And FERC listened. OREC will continue to represent the needs of the industry before FERC moving forward.

Comments on FERC Preliminary Permits for Tidal and Wave Power Due April 15

On February 15, 2007, the Federal Energy Regulatory Commission issued this Notice of Inquiry and Policy Statement on policies governing issuance of preliminary permits for wave and tidal projects. FERC seeks comment on whether its existing system governing issuance of preliminary permits should apply to wave and tidal technologies, whether to retain the existing system with stricter safeguards to prevent sitebanking or whether to eliminate the preliminary permit process entirely.

OREC previously prepared a White Paper on FERC’s permit policy that is available here and details some of the problems with FERC’s existing program. OREC intends to submit comments in response to the rulemaking, so please provide us your thoughts by sending comments below.

OREC Urges FERC to Further Facilitate License Waivers

As we last noted in this post, the Federal Energy Regulatory Commission continues to maintain jurisdiction over ocean energy projects, though it is willing to consider limited waivers to the license requirements.  Currently, FERC will allow developers to site a project and interconnect with a customer so long as the purpose of the demonstration is to gather data for use in the license application.  In addition, FERC will only grant a waiver in these circumstances for a short period of time. 

OREC supports FERC’s efforts to ease regulatory burdens on developers.  At the same time, we are concerned that even the process to obtain these waivers may become overly cumbersome.  FERC’s recent letter to a developer seeking a waiver suggests that developers may have to submit lengthy explanations to qualify for a short term waiver.  Thus, OREC has filed a letter with FERC proposing to allow developers to obtain the waiver simply upon a certification that the project will utilize new wave or hydrokinetic technology.   Our full letter is available here (PDF form).

FERC Continues to Keep Hold on Ocean Projects

On October 11, 2005, FERC asserted jurisdiction over Energetech America’s proposed Port Judith, Rhode Island Project.  FERC’s order is available as a PDF file here.  Energetech may have a chance to qualify for a short term waiver from licensing requirements if it can submit the information that FERC has requested in this letter.  OREC will keep you posted on this matter as it unfolds at our website.

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FERC Signs MOU With Corps - Why Not Other Agencies?

According to this Press Release, the Federal Energy Regulatory Commission (FERC) has entered into a Memorandum of Understanding (MOU) with the Corps of Engineers "to streamline regulatory processes through early coordination to
identify project purposes, needs and alternatives that each agency can
use in carrying out its respective regulatory responsibilities."  The MOU will apply to FERC’s  licensing of  interstate natural gas pipelines, storage facilities and liquified natural gas terminals (LNG’s), processes which also impinge on the Corps’ jurisdiction under the Rivers and Harbors Act and Clean Water Act. 

The FERC-Corps MOU does not affect the licensing process for ocean projects directly (in fact, the Corps does not typically require a Section 10 permit when FERC issues a license).  But the whole concept of  "streamlining" is very relevant to licensing kinetic hydro, wave and tidal/current projects because it can expedite an already lengthy process.  One of our goals at OREC for the upcoming year will be to encourage FERC and other agencies to enter into MOUs to speed up the permitting process.

OREC Member Gains Relief at FERC

Last week, one of OREC’s members, Verdant Power obtained temporary relief from FERC’s licensing requirements as reported in our press release,  FERC OK’s Testing New Kinetic Hydropower Plant in New York City’s East River.   The FERC’s order can be viewed here (PDF) and we’ve reprinted our press release (which also appeared in Renewable Energy Access on July 29, 2005):

The Federal Energy Regulatory Commission (FERC), granted Verdant Power, LLC’s request to clarify that they do not require a license to deploy, on a short term (18 months), experimental basis, six 36 kW tidal power turbine units that will temporarily supply power to two customers on New York City’s Roosevelt Island, at no cost. Verdant had argued that it needed to install projects and connect them to actual customers to study and evaluate how they would operate in real world conditions. Verdant will use the results of its second 18- month study to enable them to complete its application for a FERC license. 

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