Hydro Currents

B.C. government approves 1,100-MW Site C hydropower project

British Columbia Premier Christy Clark has approved BC Hydro’s plans for the 1,100-MW Site C plant, ending speculation that the provincial government might forego the US.7 billion project in lieu of other alternatives.

The controversial project, to be located on the north bank of the Peace River, was selected primarily over uncertainties due to the future of natural gas prices through the next 20 years. “Affordable, reliable, clean electricity is the backbone of British Columbia’s economy,” Clark said. “Site C will support our quality of life for decades to come and will enable continued investment and a growing economy.”

Site C, which is part of http://www.hydroworld.com/articles/2013/08/hydropower-project-operator-bc-hydro-seeks-feedback-on-draft-resource-plan.html British Columbia’s plan to meet what it anticipates will be a 40% increase in demand for power over the coming two decades, was http://www.hydroworld.com/articles/2014/10/canada-b-c-agencies-grant-environmental-approvals-to-1-100-mw-peace-river-site-c-hydro-project.html granted final environmental approvals in October. Since then, however, the proposal faced legal opposition from a number of groups, including the Treat 8 Tribal Association and Peace Valley Landowners Association — both of which have http://www.hydroworld.com/articles/2014/11/first-nations-groups-file-suit-to-halt-b-c-s-1-100-mw-site-c-hydropower-project.html filed motions against Site C.

BC Hydro said construction will begin in summer 2015 and will create about 10,000 jobs over eight years. Site C is designed to generate power for at least a century, the company said, and is expected to save ratepayers an average of $560 million to 73 million per year over the first half of its life, compared to alternatives.

Senate panel endorses Honorable’s FERC nomination

The Senate Energy and Natural Resources Committee voted Dec. 11 to endorse the nomination of Arkansas utility regulator Colette Honorable to the Federal Energy Regulatory Commission.

The ranking minority member, Sen. Lisa Murkowski, R-Alaska, said a majority of committee members met off the Senate floor to approve Honorable’s nomination by voice vote. The vote clears the nomination for a confirmation vote by the full Senate.

President Barack Obama http://www.hydroworld.com/articles/2014/09/obama-nominates-arkansas-regulator-honorable-to-ferc.html nominated Honorable, chairman of the Arkansas Public Service Commission, to FERC Aug. 28 to succeed Commissioner John Norris who announced his resignation Aug. 7. Norris, a Democrat whose term was to expire in 2017, said he was taking a post with the U.S. Agriculture Department in Italy. However, plans for her confirmation hearing http://www.hydroworld.com/articles/2014/09/report-ferc-nominee-s-confirmation-hearing-on-hold-due-to-spouse-s-death.html were delayed in September due to the death of the nominee’s husband, Rickey Earl Honorable.

Murkowski spoke favorably of the experience of Honorable, a Democrat, who also is president of the National Association of Regulatory Utility Commissioners. During the hearing, Murkowski and several other senators asked and received assurances from Honorable that the nominee would work to ensure that impending Environmental Protection Agency regulations aimed at restricting use of coal for power generation will not threaten power system reliability and boost energy prices.

U.S. House approves hydroelectric power tax provision

The U.S. House of Representatives passed legislation in late December to amend an Internal Revenue Code and retroactively extend certain expiring tax provisions for some forms of energy production through the end of 2014, including conventional hydroelectric power and marine and hydrokinetic.

The legislation — www.congress.gov/113/bills/hr5771/BILLS-113hr5771ih.pdf House Resolution 5571 — was supported with a bipartisan 378-46 vote in favor by the House and is expected to pass the Senate next week.

The National Hydropower Association was able to http://www.hydroworld.com/articles/hr/print/volume-32/issue-3/articles/special-section/national-hydropower-association–news-and-updates—part-1.html secure language during the provision’s most recent extension, modifying http://www.hydroworld.com/articles/2014/08/irs-clarifies-beginning-of-construction-to-qualify-for-ptc.html production tax credit (PTC) and investment tax credit (ITC) qualifications from a “placed-in-service” deadline to a “start construction” deadline.

The change not only allowed more hydropower projects to qualify in 2014, but also allows qualifying projects to receive PTC/ITC benefits in 2015.

FERC upholds Admiralty Inlet tidal project; developer might resume

The Federal Energy Regulatory Commission has rejected challenges to the pilot hydrokinetic license of the 600-kW Admiralty Inlet Pilot tidal project and said Snohomish County Public Utility District does not intend to surrender the license. http://www.hydroworld.com/articles/2014/10/increased-study-requirements-loss-of-doe-backing-end-admiralty-inlet-tidal-pilot-project.html Snohomish County PUD said it would no longer pursue Admiralty Inlet because U.S. Department of Energy funding dried up, materials costs have increased, and entities have mandated increasing studies and monitoring for what was to be a pilot project in Washington’s Puget Sound.

“The district notes that the license does not require it to begin constructing the project until March 20, 2016, and explains that while it is exploring the possibility of additional funding, it is also defending the project in state administrative appeals and complying with the license, which it does not intend to surrender,” FERC said in a Dec. 5 order.

FERC said Snohomish County PUD rebutted challenges to the project’s economic viability by noting its focus is testing hydrokinetic technology and not economic value for power generation. “The district is pursuing the possibility of additional research partner funds and its license remains in effect,” the commission said.

FERC rejected rehearing requests from the Tualip Tribes of Washington, which said tribal fishing rights were threatened, and by Pacific Crossing, owner of PC-1, a subsea telecommunications cable linking the U.S. and Japan.

FERC http://www.hydroworld.com/articles/2014/06/unintentional-state-waiver-lets-ferc-pre-empt-state-coastal-zone-rules.html issued a declaratory order in June that federal hydropower licensing of Admiralty Inlet pre-empted state regulation under the Coastal Zone Management Act in an instance in which the state of Washington unintentionally waived its CZMA permit authority. In response, PC Landing filed a Freedom of Information Act document request and was told FERC did not have documents to support the finding that Washington waived its CZMA authority. PC Landing contended FERC failed to consider “numerous irregularities in (Washington Department of) Ecology’s CZMA review process that culminated in Ecology’s decision” that it had waived its CZMA authority.

FERC disagreed. “…We do not find anything in these communications that would preclude us from relying on Ecology’s Jan. 30, 2014, letter,” FERC said. “NOAA (National Oceanic and Atmospheric Administration) informed Ecology that the extension of the review period did not comply with federal regulations and Ecology concluded that its CZMA authority was therefore waived.”

Issues have pushed back some hydro work for AMP

Editor’s Note: This content was originally featured on GenerationHub.com, a sister site of HydroWorld.com that covers power generation.

Fitch Ratings on Nov. 21 said it has affirmed the ‘A’ rating on bonds that support three http://www.hydroworld.com/articles/hr/print/volume-33/issue-3/articles/from-the-boardroom-marc-gerken-american-municipal-power.html American Municipal Power Inc. (AMP) projects on the Ohio River.

The Rating Outlook is Stable, Fitch noted. The bonds are secured by the trust estate, which will include all gross receipts (primarily payments made by the participants under power sales contracts), as well as other rights under the power sales contracts and transactional documents.

This project consists of three run-of-the-river facilities aggregating 208 MW, located at U.S. Army Corps of Engineers dams. Once complete, the Cannelton, Smithland and Willow Island plants are expected to provide power supply that is expensive ($114/MWh) over the near term but environmentally-friendly.

Take-or-pay power sales contracts obligate the 79 participating municipally-owned electric systems, members of AMP, to pay for their respective shares of all project costs, including debt service on the bonds, whether or not the project is completed, operating or operable.

Commercial operation has been pushed back to the 2015/2016 timeframe. The total budgeted cost of project construction remains about $2.04 billion.

AMP is a nonprofit wholesale power supplier and services provider with129 members in seven states.

FERC relicenses expanded Vermont project, receives filing for New York project

The Federal Energy Regulatory Commission relicensed in October an expanded project in Vermont and accepted a license application for a project to be built on the New York canal system, according to the Energy Infrastructure Update for October 2014, compiled by FERC’s Office of Energy Projects.

FERC issued a relicense to Green Mountain Power Corp. for 22.807-MW Otter Creek, allowing the Vermont utility to expand the three-dam project from 14.349 MW. The project includes the 3-MW Proctor, 5.849-MW Beldens and 5.5-MW Huntington Falls developments. Green Mountain acquired Otter Creek and 12 other projects upon its merger with Central Vermont Public Service Corp.

The relicense order granted Green Mountain permission to install a new runner for Unit 1 and install new Units 2 through 4 at the Proctor Development, increasing its installed capacity to 10.233 MW, and to install new Units 1 and 2 at the Huntington Falls development, increasing its installed capacity to 6.725 MW.

FERC said the project originally cost $37.44 per MWh more to operate than alternative power. Green Mountain’s proposed changes would increase that cost to $49.63/MWh more than alternative in its first year. As licensed, including FERC staff recommendations, the project would cost $49.69/MWh more.

FERC also received an application from Albany Engineering Corp. on behalf of Mohawk Hydro Corp. to license the 32-MW Middle Mohawk project at eight dams on the Mohawk River owned by New York State Canal Corp. Albany Engineering has http://www.hydroworld.com/articles/hr/print/volume-27/issue-5/feature-articles/adding-hydro-at-existing-dams-project-profiles.html been studying the project, which would be constructed at 8- to 15-foot-tall dams that were built in 1915 to improve navigation on the Erie Canal. The “moveable dams” include steel lift gates that are raised out of the water during the winter to allow ice passage.

The eight developments each would include two modular barges and powerhouses containing nine 220-kW turbine-generators each, making each development total 3.96 MW.

The October 2014 update is available at www.ferc.gov/legal/staff-reports/2014/oct-infrastructure.pdf.

NorthWestern Energy closes deal to purchase PPL Montana facilities

NorthWestern Energy has closed on its $900 million purchase of 11 hydro facilities with a total capacity of 633 MW, as well as one storage reservoir, from PPL Montana.

Included are the http://www.hydroworld.com/articles/hr/print/volume-31/issue-06/article/regulatory-issues-understanding-riverbed-issues-associated-with-dams.html Missouri-Madison project comprising the 19-MW Hauser, 48-MW Holter, 21-MW Black Eagle, 60-MW Rainbow, 69-MW Cochrane, 60-MW Ryan and 48-MW Morony plants on the Missouri River, and the 8-MW Madison plant and the unpowered http://www.hydroworld.com/articles/hr/print/volume-33/issue-7/cover-story/upgrade-bringing-hebgen-dam-up-to-modern-seismic-design-standards.html Hebgen Dam on the Madison River; http://www.hydroworld.com/articles/hr/print/volume-32/issue-7/departments/sticky-wickets-repairing-failed-stator-core-bolts-at-thompson-falls.html 94-MW Thompson Falls on Clark Fork; http://www.hydroworld.com/articles/2007/12/ferc-issues-first-license-using-integrated-licensing-process.html 12-MW Mystic Lake on West Rosebud Creek; and http://www.hydroworld.com/articles/2007/12/ferc-certifies-18825-mw-kerr-18-mw-phoenix-for-production-tax-credits.html 194-MW Kerr on the Flathead River.

As part of this transaction, 81 employees transferred from PPL Montana to NorthWestern Energy. In addition, a rate increase associated with the facility purchase has taken effect, amounting to about 5.12%. NorthWestern previously announced the issuance of equity and debt securities to finance the acquisition.

NorthWestern also expects that the Kerr project will be transferred to the Confederated Salish and Kootenai Tribes of the Flathead Reservation in September 2015, in accordance with the project’s Federal Energy Regulatory Commission operating license.

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