FERC grants break to New York City on delayed hydroelectric project

The members of the Federal Energy Regulatory Commission on April 21 granted a Feb. 11 request from New York City, licensee for the Cannonsville Hydroelectric Project, for a two-year extension of the deadline to commence construction of the project.

On March 2, the city filed a second motion to stay the deadline to commence construction for 10 years. FERC granted the two-year extension but denied the 10-year stay.

In May 2014, the commission issued an original license to the city to construct, own, and operate the 14.08-MW Cannonsville Hydroelectric Project, located at the city’s existing Cannonsville Dam on the West Branch of the Delaware River, near the Town of Deposit in Delaware County, New York. The Cannonsville Dam impounds the Cannonsville Reservoir for purposes of supplying the city with water.

Article 301 of the license requires the city to commence construction of the project within two years of the issuance date of the license (by May 13, 2016), and to complete construction within five years of the issuance date (by May 13, 2019).

In July 2015, as a part of the final design phase of the project, boreholes were drilled in and around the area of the project works in order to test subsurface conditions. At that point, the city noticed a “flow of turbid water in the tailrace,” which it came to realize was due to a “far greater” than previously thought artesian zone beneath the tailrace, that had become depressurized due to the drilling of the boreholes. By telephone on July 12, 2015, the city notified the commission of the discovery of the turbid water, and filed an incident report shortly thereafter.

In September 2015, the city’s independent Board of Consultants recommended the city perform a feasibility study to determine if the original powerhouse design would adequately address the city’s dam safety concerns, and whether or not a redesign of the project would be necessary. On Feb. 11 of this year, the city, citing the need to perform the feasibility study before project construction could commence, requested the two-year extension of the commencement of construction deadline. On March 31, the city clarified that it was also requesting an extension of the deadline to complete construction.

On March 2, the city submitted the motion to stay the commencement of construction deadline for 10 years, citing the lengthy process the city must undertake in order to procure a design consultant and construction manager to reanalyze and, if necessary, redesign the project.

Section 13 of the Federal Power Act (FPA) requires a licensee to commence project construction no later than two years after issuance of the license; otherwise, the commission is required to terminate the license. The commission may extend this deadline once, for a maximum of two years. The commission has granted stays of the commencement of construction deadline for reasons including that a license is being challenged in court, or where a required post-license authorization to commence construction, from an agency other than FERC, has not yet been obtained.

Said the April 21 FERC order: “It would be premature at this stage to issue the City a 10-year stay of the commencement of construction deadline. The timeframe laid out by the City in justifying its stay is premised on the completion of the feasibility study; however, until progress has been made in completing the study, the extent of any further delay is speculative, and without a “’definitive time frame’ for the resolution of the issues at the dam.”

FERC added: “Based on the foregoing, the Commission determines that two-year extensions of the commencement and completion of construction deadlines outlined in Article 301 of the City’s license are justified.  At this time, however, approving a 10-year stay is not. This finding is without prejudice to the City seeking further relief at the end of the two-year extension.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.