On September 30, 2019, FERC accepted in part and rejected in part, the California Independent System Operator’s (“CAISO”) July 2, 2019 proposed revisions (“July 2 Filing”)  to its open access transmission tariff (“Tariff”) to include three unrelated mitigation measures designed to facilitate the participation of fast-ramping hydroelectric resources in the western energy imbalance market (“EIM”). FERC accepted two aspects of CAISO’s proposal related to the mitigation timing (the “Mitigation Timing” proposal and a hydro default energy bid (“DEB”) proposal, referred to as the “Hydro DEB” proposal), but rejected CAISO’s proposal to allow an EIM entity balancing authority area (“BAA”) in the real-time market to limit dispatch of incremental net exports under certain conditions (the “Net Export Limit” proposal).
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On September 20, 2019, FERC issued an original license to McMahan Hydroelectric, LLC (“McMahan”) for the 600-kilowatt Bynum Hydroelectric Project, located on the Haw River in Chatham County, North Carolina. In its licensing order, FERC held that North Carolina waived authority under section 401 of the Clean Water Act (“CWA”) by failing to act within one year of receiving McMahan’s request for water quality certification under section 401. In a separate statement, Commissioner Glick—while agreeing with the conclusion that North Carolina had waived section 401 authority—dissented in the Commission’s rationale for finding waiver.
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On August 9, 2019, the Federal Energy Regulatory Commission (“FERC”) ruled that hundreds of millions of dollars of ongoing and future investments by Chelan County Public Utility District (“Chelan PUD”) in the Rock Island Hydroelectric Project qualified as early-action investments under the new section 36(c) of the Federal Power Act (“FPA”).  Accordingly, FERC will consider these significant investments when the Rock Island Project undergoes relicensing of its FERC license prior to the 2028 expiration of the license.

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On May 23, 2019, FERC issued a 10-year pilot license to the Igiugig Village Council (“Igiugig Village”) to construct, operate, and maintain its 70-kilowatt hydrokinetic project located on the Kvichak River near the town of Igiugig, Alaska (“Igiugig Project”).  The Igiugig Project will enable to Igiugig Village to test new hydrokinetic technology to power the Igiugig Village.
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On May 21, 2019, the U.S. Department of Energy (“DOE”) announced that its Hydroelectric Production Incentive Program is offering $6.6 million in new funding for projects that would add hydropower generating capabilities to existing dams throughout the U.S.  Qualified facilities will be selected for funding based on the number of kilowatt hours generated in calendar year 2018.
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In the April 27, 2019 edition of the Energy Bar Association’s Energy Law Journal, FERC Commissioner Richard Glick and legal advisor Matthew Christiansen published an article titled “FERC and Climate Change,” describing that the actions of the Commission, as well as the family of federal and state agencies, have “substantial consequences” for climate change.  The authors argue that the threat of climate change does not necessitate “a wholesale reinterpretation of the Commission’s jurisdiction or a novel regulatory paradigm,” but rather a consistent application of FERC’s existing mandate.  In addition to discussing the Commission’s role in wholesale electric markets in enabling competition for zero-and-low carbon-emitting technologies (such as solar, wind, batteries and even distributed energy resources), the authors place emphasis on hydroelectric generation as an effective resource for grid decarbonization and that such benefits should be considered in FERC’s existing “public interest” analysis.
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Last week, the U.S. Department of Energy (“DOE”) released an update (“2018 Update”) to its 2017 U.S. Hydropower Market Report (“2017 Report”).  The 2018 Update provides a status report on the U.S. hydropower industry as of the end of 2018, and includes publicly available data and information on existing U.S. hydropower facilities, including trends on capacity, generation, and new investment.
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On April 18, 2019, FERC issued a unanimous order, supported by all FERC Commissioners, ruling that the California State Water Resources Control Board (“SWRCB”) waived authority to issue a water quality certification under Section 401 of the Clean Water Act (“CWA”), 33 U.S.C. § 1641, in the pending hydropower relicensing of the Middle Fork American River Project (“Project”).  Applying the U.S. Court of Appeals for the D.C. Circuit’s (“D.C. Circuit”) seminal opinion in Hoopa Valley Tribe v. FERC issued in early 2019 (see January 30, 2019 edition of the WER), FERC held that SWRCB’s “active[] participation” in the applicant’s annual withdrawal-and-resubmittal of the license applicant’s request for Section 401 certification since 2012, “on occasion directly requesting the withdrawal and refiling,” constituted an agreement between the applicant and SWRCB that does not re-start the maximum one-year time period for states to act on a request for water quality certification under Section 401.
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On April 18, 2019, FERC issued Order No. 858, revising its regulations to conform with the America’s Water Infrastructure Act (“AWIA”), which added sections 34 and 35 to the Federal Power Act (“FPA”) authorizing FERC to issue or amend licenses for: (1) qualifying facilities at an existing nonpowered dams (section 34); and (2) closed-loop pumped storage projects (section 35).  In conformance with AWIA, Order No. 858 establishes an expedited hydropower licensing process for projects covered by newly-added FPA sections 34 and 35. 
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