Washington Department of Ecology Asks FERC to Rescind Its First Hydrokinetic License
On November 30, 2007, FERC issued a Policy Statement providing that FERC would issue conditional licenses, in appropriate cases, for hydrokinetic projects before it received other authorizations required by federal law. On December 21, 2007, FERC issued a conditional license to Finavera Renewables Ocean Energy Ltd. ("Finavera") for its Makah Bay Offshore Wave Pilot Project ("Makah Bay Project"). FERC’s license provided: "No on-site project construction or installation shall begin until further order of the Commission after Finavera has submitted (1) written notification that it has obtained all other authorizations required under federal law, and (2) copies of the required authorizations."
Ecology alleges FERC violated section 401 of the Clean Water Act ("CWA") by issuing Finavera’s license before Finavera obtained a section 401 water quality certification issued by Ecology or Ecology waived its authority to issue such a certification. Section 401 provides that "[n]o license or permit shall be granted until the certification required by this section has been obtained or has been waived." Ecology also alleged FERC violated a similar limitation established by section 307 of the Coastal Zone Management Act ("CZMA") by issuing Finavera’s license before Finavera obtained a CZMA consistency concurrence from Ecology. Section 307 of the CZMA provides that "[n]o license or permit shall be granted by the Federal agency until the state or its designated agency has concurred with the applicant’s certification" that the project is consistent with a state’s approved coastal zone program or the state’s concurrence is deemed given by operation of law.
Ecology’s petition states that FERC’s "failure to adhere to the limitations of the CWA and CZMA renders its decision invalid." FERC’s Policy Statement does not address how its conditional licenses deal with statutory limitations on its licensing authority.
FERC has been criticized in the past for taking years to issue conventional hydroelectric project licenses. In many cases, FERC’s licenses have been delayed pending issuance of section 401 water quality certifications or other federal authorizations. Now FERC is being criticized for acting too quickly.
Until hydrokinetic projects are deployed and their effects are monitored, there will be little reliable data that state and federal agencies can rely on to determine effects of such projects on water quality and coastal zone resources. Requiring such information before state and federal agencies will issue authorizations required by federal law for a FERC license will severely constrain project development in this sector of the renewable energy industry.
There has been considerable discussion of whether, and if so which, hydrokinetic technologies involve discharges covered by section 401. Finavera resolved that question for its Makah Bay Project by applying for water quality certifications to Ecology and the Makah Indian Tribe. The Makah Tribe issued a water quality certification for project discharges to waters within its reservation.
License applicants and other parties to conventional hydroelectric license proceedings frequently enter settlement agreements setting forth terms and conditions the parties request FERC to include in its licenses. Many of these terms and conditions provide for monitoring and adaptive management.
Settlement agreements involving section 401 and CZMA agencies could include robust monitoring and adaptive management terms and conditions that FERC could incorporate into hydrokinetic project licenses. Section 401 and CZMA agencies could rely on these settlement agreement commitments to issue authorizations required by federal law so FERC can issue hydrokinetic licenses in a timely manner
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