In a ruling handed down last week, the U.S. Court of Appeals for the District of Columbia Circuit upheld the 2015 Federal Energy Regulatory Commission decision to issue a 40-year operating license for the Catawba-Wateree Project.
Previously the project had a 50-year operating license, and owner Duke Energy Carolinas LLC filed an application for new license, also with a 50-year duration. However, FERC granted a 40-year license. Duke Energy petitioned for review, saying FERC “failed to treat it like similarly-situated applicants that received fifty-year licenses.” Duke also contended that FERC “announced a new qualitative approach to determining license terms without prior notice or reasoned analysis, leaving applicants and courts without objective standards.”
The Catawba-Wateree Project includes 11 developments along hundreds of miles of the Catawba and Wateree rivers in North Carolina and South Carolina. The original license was set to expire on Aug. 31, 2008. In 2006, Duke entered into a Comprehensive Relicensing Agreement with 70 entities that specified measures to be undertaken upon relicensing. Duke then filed the agreement with its application for a new license.
In December 2015, FERC determined that the appropriate license term was 40 years, concluding the license authorizes “a moderate amount of new construction and new environmental mitigation and enhancement measures,” among other things.
FERC may issue a new license for a term not less than 30 years nor more than 50 years. A 30-year license is generally issued for projects with “little or no” redevelopment, new construction, new capacity, or environmental mitigation and enhancement measures; 40 years for projects involving “moderate” measures; and 50 years for projects involving “extensive” measures.
Duke requested a rehearing, claiming FERC had failed to consider all of the license measures and their costs. Duke said it had spent about $54 million on new construction to implement measures proposed in its 2006 application and had incurred $111 million in costs pursuing relicensing. Duke pointed to instances in which FERC had granted a 50-year license based on a project’s annual cost and the impact of costs on the total annual benefit of the project, and argued the Catawba-Wateree Project was entitled to the same.
FERC denied rehearing and affirmed the 40-year license, and Duke petitioned for review.
On March 6, the District Court said the issue is whether FERC reasonably found that the measured required by the hydroelectric license it issued to Duke Energy were “moderate” and warranted a 40-year license term under FERC precedents.
In essence, the court determine FERC was within its rights to rely on long-standing policy and that Duke Energy has not shown its policies are unlawful on their faces nor unreasonable. In addition, Duke Energy “cannot prevail by shifting the burden of clarification to the Commission. Nor could overreading of the signatories’ agreement support a fifty-year term.”
From Hydro World