LOCE Wind and Wave Energy Weblog

The web's first ocean and offshore wind energy weblog. Continuously renewed, like the ocean itself.

Monday, April 18, 2005

FERC Eases Up On Licensing for East River Hydrokinetic Project


FERC has now issued a ruling on the declaration of intent filed by Verdant Power that we reported on here. Verdant had asked FERC to allow it to deploy a six turbine prototype of its project at its East River site for testing without first obtaining a license. The good news is that FERC granted Verdant's request , though FERC made clear that Verdant still must comply with other applicable federal and state requirements.

As I said, it's great that FERC granted Verdant this needed relief. And other wave energy developers can use the Verdant order as precedent for seeking relief from licensing in the future. But FERC rejected the request that I had filed (in my capacity as an expert on ocean energy and FERC law and not on behalf of any client) to implement a program for exempting all types of demo wave and tidal projects from FERC regulation. FERC found that this request raised all kinds of legal and policy considerations that it was not yet ready to address. (Of course, if that was the case, why did FERC jump in and assert control over wave energy projects to begin with?)

The FERC order also does not fully grant Verdant's requested relief. Verdant had asked to feed power to the grid while testing its projects but FERC says that it cannot do that if it wants to proceed without a license. By way of background, under Section 23(b) the FPA, just a little bit of power into the grid is deemed to affect the interest of interstate commerce and trigger FERC jurisdiction. That's because, as FERC has held in previous cases, that small hydro projects are part of a broader class of projects that affect interstate commerce. FERC could have reasoned its way around this, by finding that experimental projects, by their nature do not impact interstate commerce because the intent of the projects is to generate power for experimental purposes and not for sale into commerce. But FERC would not take this step though it has the discretion to do so.

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