Loxbridge seeks rehearing of FERC rejection of permit for 700-MW hydro project

Loxbridge Partners LLC on Sept. 27 asked the Federal Energy Regulatory Commission for a rehearing of the commission’s Sept. 2 rejection of a preliminary permit application for the 700-MW McNary Second Powerhouse Project.

The project was to be located at the U.S. Army Corps of Engineers’ McNary Lock and Dam facility on the Columbia River near the City of Umatilla in Umatilla County, Oregon.

On May 16, commission staff sent the U.S. Corps of Engineers a letter requesting its opinion on whether non-federal development is authorized at McNary Dam, and if so, whether Loxbridge’s proposal would interfere with existing dam operations or improvement plans. The Corps responded on Aug. 2, stating that it believes the commission does not have jurisdiction to issue a preliminary permit or license for a project at the site. In addition the Corps opposes Loxbridge’s proposed project on the ground that it would interfere with the Corps’ operation of McNary Dam. FERC rejected the application on that basis.

Said the rehearing request: “Given that the Commission was denying the permit application because of the Corps’ opposition to the project, they did not address the issue of jurisdiction over non-federal hydropower development at McNary Lock and Dam. In making the Order, the Commission states that in recent decisions it has denied preliminary permits for projects at federal facilities after the federal entities indicated that no purpose would be served in issuing a permit because the federal entity would not approve modifications to its federal facilities.

“Loxbridge respectfully disagrees and submits this Request for Rehearing to clarify the factual and legal basis for addressing these issues and to assist in the Commission’s affirmation that the aforementioned referenced rulings are not controlling and that the Corps objections are an abuse of process and meant to circumvent the Commissions jurisdiction to issue a preliminary permit or license for the MSP, and that the Commission should issue a preliminary permit to Loxbridge for the MSP project.”

The proposed project would utilize the McNary Dam and would consist of these new facilities: a powerhouse built in place of the existing McNary Dam south abutment; seven 100-MW Kaplan turbine-generators; two or three step-up transformers; and two 1,300-yard-long transmission lines interconnecting with the existing McNary Dam substation. The estimated annual generation of the McNary Second Powerhouse Project would be 3,700 gigawatt-hours. The proposed project would be located entirely on federal land under the jurisdiction of the Corps.

In determining whether the language of an authorizing statute unambiguously withdraws the commission’s jurisdiction at U.S. Bureau of Reclamation dams, the commission applies the principles and presumptions found in its 1992 memorandum of understanding (“1992 MOU”) with Reclamation, the company noted. The commission previously found that this guidance is “eminently transferrable to legislation authorizing Corps dams, inasmuch as it is grounded in established principles of statutory construction.”

Construction of the McNary Lock and Dam was authorized by the Rivers and Harbors Act of 1945, as recommended in House Document 75-704. Section 2 of the Act authorized the Corps to construct the McNary Dam “for the purposes of navigation, power development, and irrigation….” The Rivers and Harbors Act of 1950, which references House Document 81-531, provides further plans and recommendations for the Corps’ projects in the Columbia River Basin. According to House Document 81-531, the Corps was authorized to install fourteen 70-MW turbines at McNary Dam, for a total installed capacity of 980 MW. The Corps is currently operating the full amount of its authorized capacity, the company argued.

Presumption 5 of the 1992 MOU states that if the authorizing statute or any documents incorporated by reference in the statute specify the number, capacity, or location of powerplants authorized for federal development, the commission is presumed to have jurisdiction beyond the specified development. For McNary Dam, the incorporated documents specify the capacity authorized for federal development.”Loxbridge is not aware of any evidence to rebut the presumption that the Commission retains jurisdiction to authorize the non-federal development of incremental hydropower capacity (i.e., in addition to the specified federal development) at McNary Dam,” it said. “For the reasons discussed above, the Commission has the authority to issue a permit or a license for the development of hydropower at the McNary Dam.”

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.