The History of Water Rights, Part II:
The Licensing (and Relicensing) Process
When a company applies for a license from the Federal Energy Regulatory Commission, or FERC, to use water for hydroelectric generation from a river, stream or other body of navigable water covered by the United States, it is asking for more than just that power. A licensee has rights to use the water of the river, as well as owns the dams, equipment and the land up to the high water mark.
The review process for a license includes a series of meetings involving stakeholders. Significantly, however, the applying company controls this process, sets the agenda, directs the discussions and performs other related activities during the review period. This setup obviously can be frustrating for those public interests that want to bring up concerns involving the private company and its plans for using the water, as it can limit the scope of their arguments.
Yet when the government created the FERC in 1920 under the Federal Power Act (see The History of Water Rights, Part I), the act included several sections that qualified what conditions apply to the licensing process and require the applicant to fulfill them. One is that a final proposal for a new license will be judged by the FERC as to whether it is best adapted to serve the public interest. Another states that a federal department or agency may file a recommendation that the United States exercise its right to take over a non-publicly owned hydroelectric power project with a license that is subject to the Federal Power Act. Also, the federal government has the right to take over a non-publicly owned project upon expiration of its license, albeit with reimbursement to the licensee for its “net investment”, not to exceed “fair value,” plus any “severance damages” suffered.
Given these standards, every time a license is considered for issuance or for renewal, the FERC should weigh the best circumstances for the public interest and either issue a license to that preferred applicant or take over the project from a current licensee and issue it to the one that is best adapted to serve the public interest.
We on the North Carolina Water Rights Coalition want to make sure that the FERC meets its obligations so that our water rights are protected. We believe that some of the standards set by the Federal Power Act are not being met for the Yadkin Project, and thus the license should not be granted to a company. For more information on how that applies, read our next installment, The History of Water Rights, Part III.
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