
[Federal Register Volume 80, Number 99 (Friday, May 22, 2015)]
[Proposed Rules]
[Pages 29562-29565]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-12432]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 11

[Docket No. RM15-18-000]


Commencement of Assessment of Annual Charges

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) proposes 
to revise its regulations regarding when the Commission will commence 
assessing annual charges to hydropower licensees and exemptees, other 
than state or municipal entities, with respect to licenses and 
exemptions authorizing unconstructed projects and new capacity. 
Specifically, the Commission proposes to commence assessing annual 
charges two years from the effective date of the project license, 
exemption, or amendment authorizing new capacity, rather than on the 
date that project construction starts. The proposed revisions will 
provide administrative efficiency and promote certainty among 
licensees, exemptees, and Commission staff as to when annual charges 
will commence.

DATES: Comments are due July 21, 2015.

ADDRESSES: Comments, identified by docket number, may be filed in the 
following ways:
     Electronic filing through http://www.ferc.gov. Documents 
created electronically using word processing software should be filed 
in native applications or print-to-PDF format, rather than in a scanned 
format.
     Mail/Hand Delivery. Those unable to file electronically 
may mail or hand-deliver comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
    Instructions: For detailed instructions for submitting comments and 
additional information on the rulemaking process, see the Comment 
Procedures section of this document.

FOR FURTHER INFORMATION CONTACT: 
Tara DiJohn (Legal Information), Office of the General Counsel, Federal 
Energy Regulatory Commission, 888 First Street NE., Washington, DC 
20426, (202) 502-8671, tara.dijohn@ferc.gov.
Norman Richardson (Technical Information), Office of the Executive 
Director, Federal Energy Regulatory Commission, 888 First Street NE., 
Washington, DC 20426, (202) 502-6219, norman.richardson@ferc.gov.

SUPPLEMENTARY INFORMATION: 

 
                            TABLE OF CONTENTS
 
                                                              Paragraph
                                                                Number
 
I. Background..............................................           1.
II. Proposed Revisions.....................................           8.
III. Regulatory Requirements...............................          13.
    A. Information Collection Statement....................          13.
    B. Environmental Analysis..............................          14.
    C. Regulatory Flexibility Act..........................          15.
    D. Comment Procedures..................................          20.
    E. Document Availability...............................          24.
 

I. Background

    1. Section 10(e)(1) of the Federal Power Act (FPA),\1\ and section 
3401 of the Omnibus Budget Reconciliation Act of 1986,\2\ require the 
Federal Energy Regulatory Commission (Commission) to, among other 
things, collect annual charges from licensees in order to reimburse the 
United States for the costs of administering Part I of the FPA. The 
Commission assesses these annual charges against licensees and 
exemptees of projects with more than 1.5 megawatts (MW) of installed 
capacity under section 11.1 of its regulations.\3\
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    \1\ 16 U.S.C. 803(e)(1) (2012).
    \2\ 42 U.S.C. 7178 (2012).
    \3\ 18 CFR 11.1 (2014).
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    2. Currently, the Commission begins assessing these annual charges 
against licensees and exemptees with original licenses or exemptions 
authorizing unconstructed projects on the date project construction 
starts.\4\ The Commission also begins assessing annual charges for new 
capacity, authorized by a relicense \5\ or an amendment of a license or 
exemption, on the date that the construction to enable such capacity 
starts.\6\ Because this proposed rule affects only projects with 
respect to which annual charges are assessed when project construction 
starts, we will not further discuss state or municipal projects, 
projects that do not have installed capacity that exceeds 1.5 MW, or 
constructed projects without newly authorized capacity.\7\
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    \4\ Id. (c)(5).
    \5\ We use the term ``relicense'' to refer to any new or 
subsequent license.
    \6\ 18 CFR 11.1(c)(5) (2014). We refer to the addition of 
capacity and a reduction of capacity (on occasion, capacity is 
reduced as a result of construction, in which case annual charges 
are lowered) as ``new capacity.''
    \7\ Licensees or exemptees that are state or municipal entities 
are already not assessed annual charges until project operation 
commences. 18 CFR 11.1(d)(6) (2014). As noted above, the Commission 
does not assess annual charges with respect to projects with 
installed capacity of less than or equal to 1.5 MW. Licensees or 
exemptees of constructed projects without new capacity are assessed 
annual charges immediately, because their entire capacity is already 
in place. See 18 CFR 11.1(c)(5) (2014).

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[[Page 29563]]

    3. Recently, to determine when project construction starts for 
annual charges purposes, the Commission has included language in its 
orders requiring the licensee or exemptee to notify the Commission when 
project construction begins.\8\ Otherwise, the Commission has to 
contact the licensee or exemptee to determine that date.
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    \8\ See, e.g., Eagle Crest Energy Company, 147 FERC ] 61,220, at 
Article 207 (2014) (requiring the licensee to notify the Commission 
of the date when it starts construction of the unconstructed 
project); Wisconsin Electric Power Co., 144 FERC ] 62,268, at 
ordering para. (G) (2013) (requiring the licensee to notify the 
Commission of the date when it starts construction of the newly 
authorized capacity).
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    4. Annual charges assessment should typically commence within two 
years of the effective date of the order issuing a license, exemption, 
or amendment adding capacity.\9\ Original licenses and relicenses 
require a licensee to start construction no later than two years from 
the effective license date pursuant to section 13 of the FPA.\10\ 
Similarly, exemptions of unconstructed projects include standard 
exemption Article 3, which allows the Commission to revoke an exemption 
if actual construction of the proposed generating facilities has not 
begun within two years.\11\ Amendments adding new capacity include an 
ordering paragraph that typically requires the licensee or exemptee to 
start construction within two years of the amendment's issuance 
date.\12\
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    \9\ Unless otherwise specified, orders are effective on the date 
of issuance. 18 CFR 385.2007(c)(1) (2014). On occasion, a relicense 
is issued before the expiration of the prior license. In that 
circumstance, the effective date would not be the date of issuance 
and would instead be established in the order to coincide with the 
expiration of the prior license.
    \10\ See 16 U.S.C. 806 (2012).
    \11\ 18 CFR 4.94(c) (2014).
    \12\ See, e.g., Northern States Power Co., 138 FERC ] 62,022, at 
ordering para. (E) (2012).
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    5. In some cases, construction may not begin by the two-year 
deadline and therefore annual charges assessment may begin more than 
two years after the effective date (e.g., when a license's start of 
construction deadline is extended by the Commission for an additional 
period of no more than two years as permitted by section 13 of the 
FPA).\13\ In rare cases, the Commission has granted requests for stay 
of a license's start of construction deadline, or of an entire license, 
in certain narrowly circumscribed circumstances.\14\ On average, the 
Commission grants extensions and stays of a license's start of 
construction deadline 3.4 and zero \15\ times per year, respectively.
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    \13\ 16 U.S.C. 806 (2012).
    \14\ Such circumstances may exist where there are preconditions 
to construction that are beyond a licensee's control but will likely 
be resolved within a definitive period of time. See City of Broken 
Bow, Oklahoma, 142 FERC ] 61,118, at PP 8-9 (2013) (staying the 
start of construction deadline where City presented sufficient proof 
it would not be able to timely start project construction for 
reasons outside of its control).
    \15\ From 2010 through 2014, the Commission granted three 
requests for stays of construction deadlines to municipal licensees 
with projects at U.S. Army Corps of Engineers' dams.
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    6. Similarly, exemptees may not begin construction by the deadline, 
and may request that the Commission extend the deadline to start 
construction. The Commission expects the prompt development of 
exemption projects and that exemption applicants will anticipate and 
solve problems that affect construction either before or during the 
time that they seek their exemptions.\16\ From 2010 through 2014, the 
Commission granted two extensions of start of construction deadlines, 
or on average 0.4 times per year, to exemptees.
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    \16\ Ralph and Raleigh Coppedge, 28 FERC ] 61,363, at 61,654 & 
n.11 (1984) (citing, FERC Stats. & Regs., Regulations Preambles 
1977-1981 ] 30,204, at 31,368 (1980). Exemption from All or Part of 
Part I of the Federal Power Act of Small Hydroelectric Power 
Projects With an Installed Capacity of Five Megawatts or Less, Order 
No. 106.
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    7. Licensees and exemptees can experience delays and may request an 
extension of an amendment order's start of construction deadline as 
well. From 2010 through 2014, the Commission granted six initial 
extensions of a start of construction deadline, or an average of 1.2 
extensions per year, to licensees granted amendments authorizing new 
capacity.

II. Proposed Revisions

    8. The Commission proposes to revise section 11.1(c)(5) of its 
regulations regarding when it will commence assessing annual charges 
with respect to hydropower licenses and exemptions authorizing 
unconstructed projects and new capacity. Specifically, the Commission 
proposes to commence assessing annual charges two years from the 
effective date of an order issuing a license, exemption, or an 
amendment authorizing additional capacity, rather than on the date 
project construction starts.
    9. The Commission anticipates the proposed rule will provide 
administrative efficiency and foster certainty among licensees, 
exemptees, and Commission staff as to when annual charges will 
commence. Licensees and exemptees will no longer need to notify the 
Commission when project construction starts for the purpose of 
assessing annual charges and, in turn, the Commission will not have to 
contact the licensee or exemptee for this purpose.
    10. This proposed change, however, will affect those licensees and 
exemptees that do not start construction within two years. Annual 
charges will be assessed two years from the effective date of an order 
issuing a license, exemption, or an amendment authorizing additional 
capacity, regardless of whether the Commission has granted an extension 
of time for construction or a stay of the construction deadline.\17\ As 
noted above, on average, 5 (3.4 licenses + 0.4 exemptions + 1.2 license 
amendments) affected projects each year receive extensions of the start 
of construction deadline, and zero receive a stay of the start of 
construction deadline.\18\
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    \17\ Additionally, this proposed change may affect any licensees 
and exemptees that utilize a phase-in approach for adding capacity.
    \18\ Stays of entire licenses, however, will continue to stay 
the assessment of annual charges.
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    11. In addition, licensees and exemptees that do not start 
construction by the deadline established in their license or exemption, 
or as extended by the Commission, will be affected. If a licensee fails 
to start construction within two years of its license's effective date 
or as extended by the Commission, the Commission must terminate the 
license pursuant to section 13 of the FPA.\19\ Similarly, as noted 
above, standard exemption Article 3 states that the Commission may 
revoke an exemption if the exemptee fails to start construction within 
the time prescribed by the Commission. From 2010 through 2014, the 
Commission terminated one license, or an average of 0.2 licenses per 
year, and no exemptions. Therefore, we estimate that annually 0.2 
licenses would have been assessed annual charges after the two-year 
deadline until their termination for failure to construct.
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    \19\ 16 U.S.C. 806 (2012).
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    12. In sum, we anticipate that, on average, 5.2 (5 extensions + 0.2 
terminations) licensees and/or exemptees per year will begin paying 
annual charges before starting construction or before the Commission 
terminates its license or revokes its exemption under the proposed 
rule.

[[Page 29564]]

III. Regulatory Requirements

A. Information Collection Statement

    13. The Paperwork Reduction Act \20\ requires each federal agency 
to seek and obtain Office of Management and Budget (OMB) approval 
before undertaking a collection of information directed to ten or more 
persons or contained in a rule of general applicability. OMB 
regulations require approval of certain information collection 
requirements contemplated by proposed rules.\21\ The proposed revisions 
discussed above do not impose or alter existing reporting or 
recordkeeping requirements on applicable entities as defined by the 
Paperwork Reduction Act.\22\ Therefore, the Commission will submit this 
proposed rule to OMB for informational purposes only.
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    \20\ 44 U.S.C. 3501-3521 (2012).
    \21\ See 5 CFR 1320.11 (2014).
    \22\ 44 U.S.C. 3502(2)-(3) (2012).
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B. Environmental Analysis

    14. The Commission is required to prepare an Environmental 
Assessment or an Environmental Impact Statement for any action that may 
have a significant adverse effect on the human environment.\23\ 
Commission actions concerning annual charges are categorically exempt 
from this requirement.\24\
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    \23\ Regulations Implementing the National Environmental Policy 
Act of 1969, Order No. 486, 52 FR 47,897 (Dec. 17, 1987), FERC 
Stats. & Regs., Regulations Preambles 1986-1990 ] 30,783 (1987).
    \24\ See 18 CFR 380.4 (a)(11) (2014).
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C. Regulatory Flexibility Act

    15. The Regulatory Flexibility Act of 1980 (RFA) \25\ generally 
requires a description and analysis of proposed and final rules that 
will have significant economic impact on a substantial number of small 
entities. The RFA mandates consideration of regulatory alternatives 
that accomplish the stated objectives of a proposed rule and minimize 
any significant economic impact on a substantial number of small 
entities.\26\
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    \25\ 5 U.S.C. 601-612 (2012).
    \26\ 5 U.S.C. 603(c) (2012).
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    16. The Small Business Administration's (SBA) Office of Size 
Standards develops the numerical definition of a small business.\27\ 
The SBA revised its size standard for electric utilities (effective 
January 22, 2014) from a standard based on megawatt hours to a standard 
based on the number of employees, including affiliates.\28\ Under SBA's 
current size standards, a hydroelectric generator is small if, 
including its affiliates, it employs 500 or fewer people.\29\ The 
Commission, however, currently does not require information regarding 
the number of individuals employed by hydroelectric generators to 
administer Part I of the FPA, and therefore, is unable to estimate the 
number of small entities using the new SBA definitions. Regardless, the 
Commission anticipates that the proposed rule will affect few small 
hydroelectric generators.
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    \27\ 13 CFR 121.101 (2014).
    \28\ SBA Final Rule on ``Small Business Size Standards: 
Utilities,'' 78 FR 77,343 (Dec. 23, 2013).
    \29\ 13 CFR 121.201, Sector 22, Utilities (2014).
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    17. As noted earlier, the proposed rule will only affect non-state 
or municipal licensed projects with an installed capacity exceeding 1.5 
MW that are unconstructed or have newly authorized capacity. From 2010 
through 2014, the Commission issued on average 3.6 original licenses 
and 0.4 exemptions per year authorizing unconstructed projects to 
affected licensees and exemptees, and 1.6 relicenses and 5 license 
amendments per year authorizing new capacity. In sum, on average a 
total of 10.6 licensees and exemptees may be affected by the proposed 
rule annually.
    18. Of the 10.6 total entities, only those that do not start 
construction within two years, or receive a stay of their license, will 
be negatively affected by the acceleration of annual charges. As noted 
above, on average, 5.2 affected licensees and/or exemptees per year do 
not start construction within two years. Conversely, small entities 
that would otherwise start construction before the two year mark after 
their effective date will benefit from the proposed rule as it delays 
the commencement of their annual charges.
    19. Accordingly, pursuant to section 605(b) of the RFA, the 
Commission certifies that this proposed rule will not have a 
significant economic impact on a substantial number of small entities.

D. Comment Procedures

    20. The Commission invites interested persons to submit comments on 
the matters and issues proposed in this notice to be adopted, including 
any related matters or alternative proposals that commenters may wish 
to discuss. Comments are due July 21, 2015. Comments must refer to 
Docket No. RM15-18-000, and must include the commenter's name, the 
organization they represent, if applicable, and their address.
    21. The Commission encourages comments to be filed electronically 
via the eFiling link on the Commission's Web site at http://www.ferc.gov. The Commission accepts most standard word processing 
formats. Documents created electronically using word processing 
software should be filed in native applications or print-to-PDF format 
and not in a scanned format. Commenters filing electronically do not 
need to make a paper filing.
    22. Commenters that are not able to file comments electronically 
must send an original of their comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
    23. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters on this proposal are 
not required to serve copies of their comments on other commenters.

E. Document Availability

    24. In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and print the contents of this document via the 
Internet through the Commission's Home Page (http://www.ferc.gov) and 
in the Commission's Public Reference Room during normal business hours 
(8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street NE., Room 2A, 
Washington, DC 20426.
    25. From the Commission's Home Page on the Internet, this 
information is available on eLibrary. The full text of this document is 
available on eLibrary in PDF and Microsoft Word format for viewing, 
printing, and downloading. To access this document in eLibrary, type 
the docket number excluding the last three digits of this document in 
the docket number field.
    26. User assistance is available for eLibrary and the Commission's 
Web site during normal business hours from the Commission's Online 
Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at 
ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at 
public.referenceroom@ferc.gov.

List of Subjects in 18 CFR Part 11

    Electric power, Reporting and recordkeeping requirements.

    By direction of the Commission.

    Issued: May 14, 2015
Nathaniel J. Davis, Sr.,
Deputy Secretary.

    In consideration of the foregoing, the Commission proposes to amend 
Part 11, Chapter I, Title 18, Code of Federal Regulations, as follows:

[[Page 29565]]

PART 11--ANNUAL CHARGES UNDER PART I OF THE FEDERAL POWER ACT

0
1. The authority citation for Part 11 continues to read as follows:

    Authority:  16 U.S.C. 792-828c; 42 U.S.C. 7101-7352.

0
2. Revise Sec.  11.1(c)(5) to read as follows:


Sec.  11.1  Costs of administration.

* * * * *
    (c) * * *
    (5) For unconstructed projects, the assessments start two years 
after the effective date of the license or exemption. For constructed 
projects, the assessments start on the effective date of the license or 
exemption, except for any new capacity authorized therein. The 
assessments for new authorized capacity start two years after the 
effective date of the license, exemption, or amendment, authorizing 
such new capacity. In the event that assessment commences during a 
fiscal year, the charges will be prorated based on the date of 
commencement.
* * * * *
[FR Doc. 2015-12432 Filed 5-21-15; 8:45 am]
 BILLING CODE 6717-01-P


