[Federal Register Volume 60, Number 182 (Wednesday, September 20, 1995)]
[Notices]
[Pages 48704-48709]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-23314]
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DEPARTMENT OF ENERGY
[Docket No. EL95-35-000]
Order Establishing Hearing
Issued September 14, 1995.
In the matter of Kootenai Electric Cooperative, Inc., Clearwater
Power Company, Idaho County Light & Power Cooperative Association,
Inc., and Northern Lights, Inc. v. Public Utility District No. 2 of
Grant County, Washington
On March 2, 1995, Kootenai Electric Cooperative, Inc., Clearwater
Power Company, Idaho County Light & Power Cooperative Association,
Inc., and Northern Lights, Inc. (collectively referred to as the Idaho
Cooperatives or Complainants) tendered for filing a complaint against
Public Utility District No. 2 of Grant County (Grant County). In their
complaint, the Idaho Cooperatives request the Commission to determine
and fix the applicable portion of capacity and output to be made
available to the Idaho Cooperatives from the Priest Rapids Project upon
relicensing and expiration of existing power sales contracts. Grant
County and the Purchasers1 oppose this request.
\1\The Purchasers are: City of Tacoma, Washington Water Power
Company, Puget Sound Power & Light Company, Seattle City Light,
Eugene Water & Electric Board, PacifiCorp, Portland General Electric
Company, and Cowlitz County PUD No. 1.
They provide retail electric service in the States of Oregon,
Washington, Idaho and Montana, and also engage in wholesale
purchases and sales of electricity and transmission services,
including transactions with Grant County. The Purchasers each
entered into similar contracts with Grant County for the purchase
and sale of output of the Priests Rapids Development. The contracts
terminate on October 31, 2005. Certain of the Purchasers also
entered into contracts with Grant County for the purchase and sale
of output of the Wanapum Development. These contracts terminate on
October 31, 2009. Both of these forms of contract contain rights of
first refusal entitling the Purchasers to further output of the
Priest Rapids Project upon contract termination.
[[Page 48705]]
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As explained below, we set this matter for trial-type, evidentiary
hearing.
I. Background
Grant County is a municipal corporation organized under the laws of
the State of Washington, and is the licensee of the Priest Rapids
Project No. 2114. The license for the Priest Rapids Project No. 2114
was issued on November 4, 1955, effective November 1, 1955, and expires
by its terms on October 31, 2005.2 The Priest Rapids Project No.
2114 consists of two hydroelectric developments on the Columbia River,
the Priest Rapids Development with an installed capacity of 886 MW and
the upstream Wanapum Development with an installed capacity of 1017
MW.3
\2\Public Utility District No. 2 of Grant County, Washington, 14
FPC 1067 (1955).
\3\64 FERC para.62,056 (1993).
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The Priest Rapids Project No. 2114 had originally been authorized
for Federal development by the Flood Control Act of 1950.4 In 1954
Congress enacted Public Law No. 83-544, 68 Stat. 573 (1954), which
expressly modified the Flood Control Act to permit the development of
the Priest Rapids Project No. 2114 pursuant to a license issued under
Part I of the Federal Power Act. Section 6 of Public Law No. 83-
5445 provided in pertinent part that, if any disagreements arise
under the statute the Commission may be called on to ``determine and
fix the applicable portion of power capacity and power output to be
made available.''
\4\64 Stat. 170, 179 (1950).
\5\The full text of Section 6 is as follows:
The operation and maintenance of a project under license
pursuant to this Act shall be subject to reasonable rules and
regulations by the Secretary of the Army in the interest of flood
control and navigation. To assure that there shall be no
discrimination between States in the area served by the project,
such license shall provide that the licensee shall offer a
reasonable portion of the power capacity and a reasonable portion of
the power output of the project for sale within the economic market
area in neighboring States and shall cooperate with agencies in such
States to insure compliance with this requirement: Provided, That in
the event of disagreement between the licensee and the power
marketing agencies (public or private) in any of the other States
within the economic market area, the Federal Power Commission may
determine and fix the applicable portion of power capacity and power
output to be made available hereunder and the terms applicable
thereto. Power surplus to the requirements of the licensee and other
non-Federal marketing agencies (public or private) within the
economic marketing area, as may be economically usable to the
Federal system, may be made available to and may be purchased by the
Bonneville Power Administrator at rates not higher than the rates
charged such non-Federal marketing agencies, and under such terms
and conditions as shall be mutually agreeable to the licensee and
the Secretary of the Interior. Such power may be co-mingled with
power from Federal dams in the Columbia River system for which the
Bonneville Power Administrator has been designated marketing agent
and shall be sold by the Administrator in accordance with the
provisions of the Bonneville Project Act at established rate
schedules.
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II. The Complaint
On March 2, 1995, the Complainants filed a complaint claiming,
inter alia, that Grant County has violated section 6 of Public Law No.
83-544, and asking the Commission to determine and fix an amount of up
to 288 MW which Grant County should be required to make available from
its Priest Rapids Project No. 2114 to the Idaho Cooperatives when Grant
County receives a new license for the project.
Specifically, the Complainants argue that Grant County has violated
the terms of Public Law No. 83-544 and/or its existing license in the
following ways:6
\6\See Complaint at 11-13.
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1. Grant County has not offered to make any portion of the capacity
or output of the Priest Rapids Project No. 2114 available to the
Complainants upon expiration of the existing contracts, after more than
sixteen months of requests by the Complainants.
2. Grant County has not cooperated with the Complainants, which are
agencies in a neighboring state, to insure compliance with the
requirement of Public Law No. 83-544 after 2005. To the contrary, Grant
County has been unwilling to even consider the Complainants' request,
and instead has proceeded with negotiations with the Purchasers7
for the future sale of Priest Rapids Project No. 2114 power and energy
to the exclusion of the Complainants.
\7\See supra note 1.
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3. Grant County may have made sales of power and energy from the
Priest Rapids Project No. 2114 that are not surplus to the requirements
of the licensee and other non-Federal marketing agencies.8
\8\The question with regard to ``surplus power,'' according to
Complainants, is whether power which is, in effect, surplus from
Priest Rapids Project No. 2114 is being sold to other entities
without first being made available to Complainants or other agencies
within the economic marketing area of the neighboring states.
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4. Grant County has contracted for the sale of power and energy
from the Wanapum Development after expiration of the original license
without obtaining requisite approval; Grant County has already entered
into contracts for an allocation of power and energy from the Wanapum
Development through October 31, 2009, four years after the original
license expires.9
\9\Section 22 of the Federal Power Act (FPA), 16 U.S.C. Sec. 815
(1994), provides that contracts for the sale of power beyond the
expiration date of a license require ``the joint approval of the
[Federal Energy Regulatory Commission] and of the public-service
commission or other similar authority in the State in which the sale
or delivery of power is made. . . .''
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III. Notice and Responses to Complaint
Notice of the filing of the complaint was published in the Federal
Register,10 with responses due on or before April 21, 1995.
\10\60 FR 18094 (April 10, 1995).
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On April 21, 1995, Grant County filed in opposition to the
complaint. Grant County asks that the Commission dismiss the complaint.
Grant County states that it has fully complied with Public Law No. 83-
544 and, in any event, the complaint addresses matters not ripe for
consideration.
Specifically, Grant County states that Complainants themselves
concede that they have no problem with the offer of Priest Rapids
Project No. 2114 power to date under Grant County's existing
license.11 Grant County states that what the Complainants are
seeking from the Commission is that Grant County be ordered now to
offer Complainants some yet to be determined amount of power upon
relicensing.12 Grant County states that the Complainants' argument
assumes that section 6 of Public Law No. 83-544 applies on relicensing
and in any event there is no pending application for relicensing and,
therefore, the matter is not ripe for consideration.
\11\Grant County Response at 15, citing Complaint at 4 n. 3.
\12\Id.
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Finally, Grant County states that it is not required to offer to
the Bonneville Power Administration (BPA), and BPA is not required to
purchase, power from the Priest Rapids Project No. 2114 under the
statute in question. Grant County argues that the language of the
statute is permissive, giving local authorities the opportunity to sell
surplus power. Furthermore, according to Grant County, the clause was
added to facilitate project financing, not to dictate power
sales.13
\13\Id. at 17-18.
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On April 21, 1995, the Purchasers14 filed in opposition to the
complaint. The Purchasers state that the credit support provided by the
Purchasers' contracts was essential to the ability of Grant County to
construct the Priest
[[Page 48706]]
Rapids Project No. 2114.15 The Purchasers further note that at no
time prior to the March 2, 1995 filing by Complainants had any protest
been made to the methodology utilized by Grant County or to the
contracts negotiated to finance the Priest Rapids Project No. 2114 in
accordance with Public Law No. 83-544.16 The Purchasers, like
Grant County, state that in order for the Commission to be in a
position to uphold Complainants' request for power, Grant County must
first successfully relicense the Priest Rapids Project No. 2114. And
Grant County has not yet even submitted an application for relicense
and therefore the matter is not ripe for consideration.17 The
Purchasers also state that, when the existing power purchase agreements
expire, the Purchasers are entitled to renew their contracts under
terms similar to those contained in the existing contracts.18
Finally, the Purchasers are in agreement with Grant County on the
``surplus power'' question raised by Complainants.19
\14\On April 21, 1995, each of the Purchasers also filed
separate motions to intervene.
\15\Purchasers' April 21, 1995 Response at 4.
\16\Id. at 4-5.
\17\Id. at 9.
\18\Id. at 11.
\19\Id. at 13-14.
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IV. Complainants' Motion for Summary Disposition
On June 9, 1995, Complainants filed a motion for summary
disposition. Complainants move that the Commission issue an order
granting partial summary disposition of the complaint at this time
by:20
\20\Complainants' Motion at 24.
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1. Finding that the Idaho Cooperatives are agencies in neighboring
states entitled to a reasonable allocation of power and energy upon
expiration of the existing power sales contracts;
2. Directing Grant County to provide copies of the existing draft
power sales contracts for the Idaho Cooperatives' consideration without
further delay;
3. Directing Grant County to henceforth provide the Idaho
Cooperatives with all revised drafts of the power sales contracts on an
ongoing basis;
4. Directing Grant County to enter into good faith negotiations and
to otherwise cooperate with the Idaho Cooperatives as required by
Public Law No. 83-544 for the sale of the Priest Rapids Project No.
2114 power upon expiration of the existing contracts; and
5. Directing the parties to report to the Commission by December
31, 1996, regarding the progress of their negotiations and the status
of any contracts executed or contemplated between Grant County and any
prospective purchasers.
On June 30, 1995, Grant County and the Purchasers filed in
opposition to Complainants' motion for summary judgment, essentially
restating their arguments as to why the Idaho Cooperatives' complaint
should be dismissed.
V. Discussion
Under Rule 214 of the Commission's Rules of Practice and
Procedure,21 the timely, unopposed motions to intervene of Grant
County, City of Tacoma, Washington Water Power Company, Puget Sound
Power & Light Company, Seattle City Light, Eugene Water & Electric
Board, PacifiCorp, Portland General Electric Company, and Cowlitz
County PUD No. 1 serve to make them parties to this proceeding.22
\21\18 CFR 385.214.
\22\All of the above parties, except for Grant County, have also
filed jointly in this proceeding as the Purchasers. See supra note
1.
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At the outset, we will address two issues important to the
resolution of this complaint:
A. Does Public Law No. 83-544 apply on relicensing (or just to
initial licensing)?
B. Did Grant County violate section 22 of the FPA by contracting
for the sale and delivery of power beyond the date of termination of
the license for Priest Rapids Project No. 2114 without obtaining the
requisite approval of this Commission?
A. Public Law No. 83-544 (68 Stat. 573)
1. Background
Public Law No. 83-544, enacted in July 1954, provided for the
hydropower development of the Priest Rapids site on the Columbia River
in Washington State ``under and in accordance with the terms and
conditions of a license duly issued pursuant to the Federal Power Act
and in accordance with this Act.'' Section 6 of Public Law No. 83-544
states in relevant part:
The operation and maintenance of a project under license
pursuant to this Act shall be subject to reasonable rules and
regulations by the Secretary of the Army in the interest of flood
control and navigation. To assure that there shall be no
discrimination between States in the area served by the project,
such license shall provide that the licensee shall offer a
reasonable portion of the power capacity and a reasonable portion of
the power output of the project for sale within the economic market
area in neighboring States and shall cooperate with agencies in such
States to insure compliance with this requirement: Provided, That in
the event of disagreement between the licensee and the power
marketing agencies (public or private) in any of the other States
within the economic market area, the Federal Power Commission may
determine and fix the applicable portion of power capacity and power
output to be made available hereunder and the terms applicable
thereto.
As discussed above, Complainants argue that the licensee is
violating this provision by refusing to negotiate over the sale of
power after the existing license expires in 2005.
Grant County and the Purchasers respond that: (1) Public Law No.
83-544 only applies to the original license and does not apply in the
relicensing context; (2) Grant County's current allocation method
already shares small amounts of project power with Idaho utilities and
has already been approved as consistent with the law; (3) Complainants
missed their opportunity when they turned down the option to purchase
project power in 1955 (at the time of original licensing) because they
viewed Grant County's project power as too expensive; and (4)
Complainants' concerns are premature because an application for
relicensing for the project has not yet been filed.
2. Discussion
The first question to be addressed is whether section 6 of Public
Law No. 83-544 applies after the initial license term for this project
expires. We start with the language of the statute itself.23
Nothing therein indicates that the provision applies only to the
original license to be issued under Part I of the FPA, even though in
the FPA Congress made distinctions between original licenses and
``new'' licenses (i.e., relicenses). This would indicate that Public
Law No. 83-544 was intended to comprehend both original and new
licenses for the Priest Rapids Project.
\23\Consumer Product Safety Commission v. GTE Sylvania, Inc.,
447 U.S. 102, 108 (1980).
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We turn next to the legislative history of section 6.24 The
legislative history is bare of any reference to or discussion of the
applicability of section 6 after expiration of the initial license
term.25 In the main, the committee reports and the debate on the
floor of the House and Senate addressed the consistency of this
proposal with the then-existing comprehensive Federal plan for
development of the Columbia River, as set out in the Flood Control
Act,26 and the requirement to utilize the water
[[Page 48707]]
resources in the Columbia River Basin for the benefit of the people
generally by making a reasonable portion of the power generated
available for equitable distribution within the economic marketing area
in adjacent states. Although there was frequent mention of the fact
that the project would be issued a license under the FPA, the
consequences of that action were not fully articulated.
\24\INS v. Cardoza-Fonseca, 480 U.S. 421, 432 (1987); Mead Corp.
v. Tilley, et al., 490 U.S. 714, 722 (1989).
\25\See H.R. Rep. No. 1601, 83rd Cong., 2d Sess. (1954); S. Rep.
No. 1656, 83rd Cong., 2d Sess. (1954); 100 Cong. Rec. 6846-50,
10211-28, 10247-57 (1954).
\26\See supra note 4.
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We turn next to the order issuing the license for Project No.
2114.27 The order identifies Public Law No. 83-544 as applicable,
but there is no further discussion. The Commission found that Grant
County submitted satisfactory evidence of its financial ability to
construct and operate the project.28 The Commission also found
that a portion of the energy generated would be used to meet Grant
County's own requirements and the balance of the output and a
reasonable portion of the power capacity would be sold to other
electric utility systems in Washington and in neighboring states in
accordance with the provisions of section 6 of Public Law No. 83-544.
There is no discussion in the order regarding future relicensing or
future allocation of power from the project.
\27\See supra note 2.
\28\The power sales contracts which provided the economic
underpinnings for project financing took longer than anticipated to
negotiate and resulted in a delay in the commencement of
construction. See P.U.D. No. 1 of Grant County, Washington, 15 FPC
1487 (1956).
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We have also examined an analogous statute, the Niagara
Redevelopment Act (NRA),29 to see if its power allocation
provisions address future applicability or provide any other general
guidance on the issue before us. The NRA was being considered by
Congress at the same time the Senate was debating the Priest Rapids
legislation, and in fact the Senate debates on Priest Rapids referred
specifically to the NRA legislation.30
\29\Public Law No. 85-159, 71 Stat. 401 (1957).
\30\See 100 Cong. Rec. 10225-26 (1954).
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As in the Priest Rapids case, Congress passed the NRA directing the
Commission to issue a license for the Niagara Project to the Power
Authority of the State of New York upon certain conditions contained
therein. Two of those conditions, incorporated into the license,
provide that ``at least 50 per centum of the project power shall be
available for sale and distribution primarily for the benefit of the
people as consumers, particularly domestic and rural consumers, to whom
such power shall be made available at the lowest rates reasonably
possible and in such manner as to encourage the widest possible use,''
and that the licensee ``shall make a reasonable portion of the project
power subject to the preference provisions * * * available for use
within reasonable economic transmission distance in neighboring
States.'' In addition, those conditions also provide that ``[i]n any
case in which project power subject to the preference provisions * * *
is sold to utility companies organized and administered for profit, the
Licensee shall make flexible arrangements and contracts providing for
the withdrawal upon reasonable notice and fair terms of enough power to
meet the reasonably foreseeable needs of the preference
customers.''31
\31\Power Authority of the State of New York, 19 FPC 186, 193-94
(1958).
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There are some important similarities (and differences) between
these NRA provisions and the Priest Rapids provision in dispute here.
Although both intend project power to be sold over a wide geographic
area for the benefit of the people at low rates, the NRA provision is
more detailed and restrictive. The licensee is required to write its
contracts in such a way as to allow power to be withdrawn as the needs
of the preference customers grow. However, the NRA provisions, like the
provisions of Public Law No. 83-544, do not expressly address future
relicensing or power allocations after the initial license ends.
The Commission has interpreted the NRA allocation provisions in a
number of decisions during a decade or more of litigation.32 The
Commission has found, among other things, that this language requires
reallocation of the power at the end of each contract term, and that
these provisions could even justify rescission of a contract if the
licensee had not reasonably foreseen, and thus reserved sufficient
power to withdraw for, the needs of preference customers.33
However, it has not expressly addressed whether the provisions apply
after the initial license ends. Therefore, neither the NRA itself nor
the Commission's orders explicitly addresses the analogous issue before
us.
\32\See generally Municipal Electric Utilities Association of
the State of New York, et al. v. Power Authority of the State of New
York, Opinion No. 151, 21 FERC para.61,021 (1982), order on
rehearing, Opinion No. 151-A, 23 FERC para.61,031 (1983), affirmed,
PASNY v. FERC, 743 F.2d 93 (2d Cir. 1984); Massachusetts Municipal
Wholesale Electric Company, et al. v. Power Authority of the State
of New York, Opinion No. 229, 30 FERC para.61,323, order on
rehearing, Opinion No. 229-A, 32 FERC para.61,194 (1985), affirmed,
Metropolitan Transit Authority, et al. v. FERC, 796 F.2d 584 (2d
Cir. 1986), cert. denied, 479 U.S. 1085 (1987); Municipal Electric
Utilities Association of the State of New York, et al. v. Power
Authority of the State of New York, Opinion No. 329, 48 FERC
para.61,124, rehearing denied, 49 FERC para.61,068 (1989), affirmed,
Allegheny Electric Cooperative, Inc. v. FERC, 922 F.2d 73 (2d Cir.
1990), cert. denied, 112 S.Ct. 55 (1991); Villages of Andover, et
al., 64 FERC para.61,066, rehearing denied, 64 FERC para.61,358
(1993), affirmed, Village of Bergen, et al v. FERC, 33 F.3d 1385
(D.C. Cir. 1994).
\33\Municipal Electric Utility Association of New York, et al.,
9 FERC para.61,128 at 61,249 (1979); reh'g denied, 10 FERC
para.61,001 (1980); cf. Municipal Electric Utilities Association of
the State of New York, et al., Opinion No. 151, 21 FERC para.61,021
(1982), order on rehearing, Opinion No. 151-A, 23 FERC para.61,031
(1983), affirmed, PASNY v. FERC, 743 F.2d 93 (2d Cir. 1984).
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In these circumstances, we believe that the most reasonable
construction of Public Law No. 83-544 is that section 6 applies after
issuance of a new license as well as from the issuance of the original
license. First, as discussed above, there is no indication in the
statutory language or its legislative history that Congress intended
section 6 to apply only during the initial license term. In fact, had
Congress intended this policy to apply for only a limited period, it
would have expressly said so.34 Second, to interpret the statute
to be so limited would be inconsistent with Congress' intent to provide
for the most widespread distribution and use of the project's power--
both as reflected in the statute's language which prohibits
discrimination between states and expressly provides for power to be
sold in neighboring states, quoted supra, and also as reflected in the
legislative history which expressed a desire to utilize the water
resources in the Columbia River Basin for the benefit of the people
generally including the people of neighboring states.35 There is
no indication whatsoever on the face of the statute or in the
legislative history that this intent was to apply only during the
initial license term and that after the initial license term the water
resources of the Columbia River Basin were to be used differently.
Accordingly, we find that section 6 applies after relicensing of the
Priest Rapids Project No. 2114.
\34\See 33 F.3d at 1389.
\35\See H.R. Rep. No. 1601, 83rd Cong. 2d Sess. 3 (1954)
(``Safeguards have been included in the bill to assure development
of the Priest Rapids site for its optimum capabilities as a part of
the comprehensive plan for the development and utilization of water
resources in the Columbia Basin for the benefit of the people
generally,'' and ``[i]t is desirable that the public benefits to
accrue from power made available by this project be over as
extensive an area as practical''); S. Rep. No. 1656, 83rd Cong. 2d
Sess. 3-5 (1954) (Senate report contains similar language to House
report); cf. 33 F.3d at 1389-90 (noting Congress' general intent in
various statutes to use resources for benefit of people generally);
796 F.2d at 591-95 (noting Congress' intent as to NRA); 743 F.2d at
103-07 (noting Congress' intent as to NRA).
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B. Section 22 of the FPA (16 U.S.C. 815)
The Complainants charge that Grant County has violated section 22
of the Federal Power Act by contracting for the
[[Page 48708]]
sale and delivery of power from the Wanapum Development beyond the date
of termination of the project license, 2005, without obtaining the
approval of the Commission.
In response, Grant County argues that the language of section 22 is
permissive instead of restrictive toward entering into contracts beyond
the license term. Grant County reasons that the provision exists for
the protection of investors and purchasers, and thus if these entities
do not wish to seek that protection by obtaining Commission approval of
a contract that extends beyond the term of the license, that is their
prerogative. Grant County states that the willingness of its power
purchasers to accept measured business risk is not a proper cause for
concern by the complainants.36
\36\In their response to the complaint (at 12), the Purchasers
similarly state:
When the Purchasers entered into their long-term contracts to
purchase power, that power was more expensive than available
alternatives in the short term and involved substantial financial
risks. Therefore, the Purchasers insisted upon and received power
purchase contracts not only for the term of the initial license, but
rights of first refusal to purchase their proportionate part of the
project's output at the termination of their contracts. Those rights
of first refusal gave the purchasers enforceable contractual rights
under Washington law, which would be jeopardized by the relief
requested by the [Complainants].
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Section 22 of the FPA states: Whenever the public interest
requires or justifies the execution by the licensee of contracts for
the sale and delivery of power for periods extending beyond the date
of termination of the license, such contracts may be entered into
upon the joint approval of the commission and of the public-service
commission or other similar authority in the State in which the sale
or delivery of power is made, or if sold or delivered in a State
which has no such public-service commission, then upon the approval
of the commission, and thereafter, in the event of failure to issue
a new license to the original licensee at the termination of the
license, the United States or the new licensee, as the case may be,
shall assume and fulfill all such contracts.
The legislative history is not extensive, but it demonstrates that
the Commission was to use its sound discretion in approving contracts
beyond the license term.37 The Commission has received only a
small number of requests for approval of contracts under section
22.38 While we agree that the purpose of section 22 is to remove a
potential obstacle from a licensee's ability to finance the
project,39 the section states that a licensee may enter into power
sales contracts extending beyond the license term ``upon the joint
approval of'' the Commission and the relevant state authority. The
plain meaning of this text is that a licensee is not to enter into such
a contract without the approval of the Commission and state authority,
and there is no legislative history to the contrary.
\37\See 58 Cong. Rec. 2240-41 (1919) (debate on H.R. 3184, which
became the Federal Water Power Act of 1920).
\38\See Swift Creek Power Company, Inc., 61 FERC para.61,227
(1992), and the cases discussed therein; see also Department of
Water Resources of the State of California, 39 FPC 292 (1968).
\39\See, e.g., Susquehanna Power Company, et al., 32 FPC 826,
830 (1964).
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We therefore conclude that section 22 required that Grant County
obtain Commission approval of the approximately four-year period that
the power purchase contract for the Wanapum Development extended beyond
the license term. Accordingly, we direct Grant County to file an
application under section 22 in a separate docket for approval of any
power purchase agreements for periods extending beyond the termination
date of the license.40
\40\See New York Irrigation District, et al., 58 FERC
para.61,271 (1992) (when the Commission discovered, in the course of
examining a contract for the sale of project power, that the term of
the contract extended about eight years beyond the termination date
of the license, it ordered the licensee to file a request under
section 22 for approval of the power purchase agreement.)
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C. Setting the Matter for Hearing
We have found above that section 6 of Public Law No. 83-544 applies
to relicensing. We also have reaffirmed that power sales contracts that
extend beyond the term of a license require Commission approval under
section 22 of the FPA. All other questions raised in the pleadings in
this proceeding are set for trial-type, evidentiary hearing. All
entities who have an interest in this proceeding must participate in
this proceeding or they will be foreclosed later as to matters at issue
in this proceeding.
Finally, we recognize that the license for Project No. 2114 does
not expire until 2005, and under the Commission's regulations a
relicense application is not due until at least 24 months before the
existing license expires.41 However, the parties have indicated
that a licensee must begin the process of consulting with the public
and the relevant resource agencies, as well as conducting the necessary
environmental and economic studies long before that date,42 and in
this case, there is some indication that Grant County has already begun
this process.43 Indeed, Grant County in its June 30, 1995 filing
states as follows: 44
\41\18 CFR 16.9(b).
\42\See 18 CFR Part 16.
\43\See Motion of Idaho Cooperatives for Summary Disposition at
Attachment 2.
\44\See Response of Grant County to Motion for Summary
Disposition at 3.
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Grant is in the early process of developing an application for a
new license for its Priest Rapids Project in accordance with Part 16
of the Commission's regulations. As part of that process, it
commenced in 1992 negotiations with its existing power purchasers to
determine, among other things, whether agreement could be reached on
mutually beneficial terms and conditions for the sale of project
power under any new license which might be issued for the Project.
Additionally, the complainants have indicated that prompt action is
important because BPA has begun renegotiating all of its regional power
sales contracts including those with the complainants.
Accordingly, we conclude that it is appropriate to take up the
instant dispute at this time, rather than later. Moreover, we encourage
the presiding judge and the parties to resolve the instant dispute
expeditiously so that the relicensing proceeding may commence and be
concluded in a timely manner.
The Commission Orders
(A) The Secretary is hereby directed to publish a copy of this
order in the Federal Register.
(B) The Secretary is hereby directed to serve a copy of this order
on all parties to this proceeding.
(C) Within 30 days from the date of issuance of this order, Grant
County shall file in a separate docket an application for approval of
its power sales agreements with the Purchasers under section 22 of the
Federal Power Act, as described in this order.
(D) Pursuant to the authority contained in the Department of Energy
Organization Act and in the Federal Power Act (particularly Sections
4(g), 10(h), 306, 307(a), 308, and 309), and the license for Project
No. 2114, a public hearing shall be held in conformance with the
Commission's Rules of Practice and Procedure to consider all matters of
fact and law, consistent with the provisions of this order, concerning
those issues in Docket No. EL95-35-000 not summarily decided in this
order.
(E) A presiding administrative law judge, to be designated by the
Chief Administrative Law Judge for that purpose, shall preside at the
hearing in this proceeding, and shall convene a prehearing conference
within 30 days of the date of this order in a hearing room of the
Federal Energy Regulatory Commission, 810 First Street, N.E.,
Washington, D.C. 20426. The conference shall be held for the purposes
of clarification of the positions of the
[[Page 48709]]
parties, delineation of the specific issues to be litigated, discussion
of procedures for expediting the hearing, and establishment by the
presiding judge of any procedural dates necessary for this hearing.
By the Commission.
Lois D. Cashell,
Secretary.
[FR Doc. 95-23314 Filed 9-19-95; 8:45 am]
BILLING CODE 6717-01-P
