On May 14, 2015, FERC issued a Notice of Proposed Rulemaking ("NOPR") proposing to change the date on which FERC begins to assess annual charges for hydropower licenses and exemptions that authorize unconstructed projects and unconstructed new capacity. The Federal Power Act and the Omnibus Budget Reconciliation Act of 1986 require that FERC collect annual charges from such licensees and exemptees in order to cover the costs of administering the hydropower portion of the Federal Power Act.
Currently FERC commences assessment of the annual charges on the date that project construction starts. However, the date that project construction starts is not always the date anticipated by the parties when FERC issues an order issuing a license or exemption, or authorizing additional capacity. In the NOPR, FERC explains that this approach can be problematic, because when construction is delayed, the collection of charges is also delayed. Additionally, the delay in construction commencement can cause FERC to have to independently follow-up with licensees and exemptees in order to ascertain the construction date information. FERC now proposes in the NOPR to instead commence assessing annual charges for such projects two years from the effective date of its order granting a hydropower license or exemption, or new capacity of an existing project. FERC states that the change to the rule will both provide greater administrative efficiency and will create certainty for hydropower licensees and exemptees.
Comments are due 60 days after publication in the Federal Register. A copy of the NOPR is available here.
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