Michael P. O'Connell of Stoel Rives LLP Speaker 11: 1 Siting Ocean and Tidal Energy Projects Michael P. O Connell STOEL RIVES LLP moconnell@stoel.com May 22, 2008 New Hydropower Technologies Wave Tidal Current Ocean Current In-Stream FERC estimates these technologies could add, if fully developed, approximately 10% to national electric supply. (FERC, White Paper, Licensing Hydrokinetic Pilot Projects, at 2, April 14, 2008)
Michael P. O'Connell of Stoel Rives LLP Speaker 11: 2 Issues Raised by Ocean and Tidal Project Siting Installation impacts Shipping and navigation Water quality Fish and Wildlife, including Endangered species Marine mammals Migratory birds Fish and crab industry and community impacts Electromagnetic fields Recreation Public safety Sea bed and onshore ecology Federal and Washington State Laws and Programs Federal Power Act Federal Power Act Clean Water Act Endangered Species Act Magnuson-Stevens Fishery Conservation and Management Act Marine Mammal Protection Act Coastal Zone Management Act National Historic Preservation Act Migratory Bird Treaty Act National Environmental Policy Act National Marine Sanctuary Act Shoreline Management Act State Environmental Policy Act Washington Water Pollution Control Act Washington Energy Facility Siting Act (optional) Washington Ocean Resources Management Act Washington Coastal Zone Management Program
Michael P. O'Connell of Stoel Rives LLP Speaker 11: 3 Federal Energy Regulatory Commission ( FERC ) Federal Power Act ( FPA ) FPA) License required for projects: in navigable waters using water power to create energy connected to the national electrical grid License not required: experimental technology power not transmitted into, or does not displace power from, national electrical grid. Must obtain other necessary federal and state approvals FERC Licensing Process Comprehensive licensing process Provides coordination framework for obtaining all other environmental approvals Pre-application studies and consultations 3+ years Must perform reasonable studies requested by federal and state agencies, other stakeholders Post-application, 2+ years to license for commercial projects Up to 50-year licenses Pilot Project process for demonstration projects Up to 5 MW Short term, 5-year license; can apply to relicense project for 30-50 years Project works must be easily removable 6 month FERC licensing process does not account for other agency processes section water quality 401 certification, CZMA consistency concurrence, ESA section 7 consultation, state land lease or easement, section 4(e) conditions One Pilot Project license issued for Finavera s Makah Bay Wave Project
Michael P. O'Connell of Stoel Rives LLP Speaker 11: 4 FERC s Hydrokinetic Pilot Project Licensing Process For Demonstration Projects Small: Up to 5 MW Short term: 5-year original license; can apply for new for 30-50 years Project works must be easily removable Not located in sensitive waters FERC license in as few as 6 months Other agencies not bound by FERC schedule Must still obtain other required authorizations: Section 401 water quality certification, CZMA consistency concurrence, ESA section 7 consultation, state land lease or easement, section 4(e) conditions One Pilot Project license issued for Finavera s Makah Bay Project FERC Preliminary Permits Optional Three-year permits Maintains permittee s priority for a site license application Permittee must use time to determine project feasibility, consult with stakeholders, perform baseline studies, develop license application Hydrokinetic projects 113 preliminary permits issued for hydrokinetic projects: 7 wave; 8 ocean current; 35 tidal current; 63 in-river 77 applications pending cannot use permit to bank sites FERC requires permittees to provide periodic reports to guard against site-banking
Michael P. O'Connell of Stoel Rives LLP Speaker 11: 5 Minerals Management Service ( MMS ), Dep t of the Interior MMS issues leases on Outer Continental Shelf ( OCS) - beyond 3 nm off of coastal shorelines; 9 nm off Texas, Florida gulf coasts Under EPAct 2005, MMS claims jurisdiction over OCS alternative energy Wind, wave, solar, underwater current, generation of hydrogen MMS s Alternative Energy and Alternative Use Program EPAct 2005 granted MMS authority to issue OCS leases for AEAU Program, but didn t change other federal law (i.e., FPA) MMS AEAU Notice of Proposed Rulemaking ( NOPR ) NOPR) due soon MMS hopes to complete rulemaking by late 2008
Michael P. O'Connell of Stoel Rives LLP Speaker 11: 6 FERC v. MMS FERC has asserted jurisdiction over OCS MMS claims FERC lacks jurisdiction on OCS Attempt at FERC-MMS jurisdictional MOU not successful MMS may address FERC jurisdictional issue in its Alternative Energy and Alternate Use rulemaking OCS Hydrokinetic projects may need MMS lease and FERC license FERC preliminary permit or license does not guarantee MMS OCS lease Other Relevant Federal/Tribal Stakeholders U.S. Army Corps of Engineers U.S. Coast Guard National Marine Fisheries Service U.S. Fish and Wildlife Service Federal land-owner agencies with section 4(e) conditioning authority: Forest Service, National Park Service, Bureau of Indian Affairs on Indian reservations; NOAA asserts such authority regarding National Marine Sanctuaries on or over state-owned aquatic lands Affected Indian Tribes May have treaty t rights affected by project May own land affected by project May have section 401 certification authority for discharges to tribal waters FERC must consider federal/tribal recommendations
Michael P. O'Connell of Stoel Rives LLP Speaker 11: 7 State Agency Stakeholders Department of Ecology Coastal Zone Management Act ( CZMA ) program Clean Water Act ( CWA ) section 401 program Water rights Department of Natural Resources manages state aquatic lands to 3 nm limit Department of Fish and Wildlife fish and wildlife Department of Archaeology and Historic Preservation historic properties Energy Facility Site Evaluation Council ( EFSEC ) optional for renewable energy projects Preemption of State and Local Laws FPA preempts state and local laws concerning hydroelectric licensing Exceptions water rights state approvals required by federal law (e.g., 401 Certification, CZMA Concurrence) FERC may require a licensee to comply with state and local requirements that do not make compliance with FERC s license impossible or unduly difficult Despite preemption, FERC must consider state and local concerns
Michael P. O'Connell of Stoel Rives LLP Speaker 11: 8 FERC State MOUs FERC-Oregon MOU effective March 26, 2008 Covers ocean energy development in Oregon s Territorial Sea Parties agree to coordinate federal and state processes to expedite licensing FERC will consider whether projects are consistent with Oregon s CZMA Territorial Sea Plan Oregon intends to revise Territorial Sea Plan to designate (limit) it) areas for ocean energy development FERC and Washington are negotiating a MOU FERC is interested in MOUs with other states Local Government and Non-governmental Organization Stakeholders County governments Local governments Ports Non-governmental interest groups (environmental, fishing, recreational) Public utility districts and investor-owned utilities Private landowners With many federal, state, tribal, local, and NGO stakeholders or categories of stakeholders: Begin consultation early!
Michael P. O'Connell of Stoel Rives LLP Speaker 11: 9 Settlement Agreements: Resolving Uncertainties Initial projects will require robust studies and adaptive management FERC encourages settlement agreements to resolve issues affecting licensing Settlement agreements should resolve all known issues agree on appropriate studies create committees or technical teams to adaptively manage impacts have sufficient analysis and description of known or potential impacts and rationale for studies to pass muster under FPA, NEPA, ESA, CWA 401, CZMA, etc rely on best available data, best professional judgment, adaptive management to address uncertainties FERC generally incorporates settlement agreement terms into the terms and conditions of a project license But FERC reserves authority over adequacy of protection, mitigation and enhancement measures, including adaptive management measures Looking Forward All components of the ocean and tidal energy regulatory framework are still developing Well intended policies may complicate rather than streamline Project proponents can help shape regulatory policies, ensure they fit industry capacity and needs Goal is to move toward commercially viable (long term) projects
Michael P. O'Connell of Stoel Rives LLP Speaker 11: 10 Michael P. O Connell (206) 386-7692 moconnell@stoel.com