(PNN) FERC DISMISSES PERMITS FOR TWO KAUA`I HYDRO PROJECTS IN FAVOR OF STATE REGULATION; CASTS DOUBT ON STATUS OF OTHERS

FERC DISMISSES PERMITS FOR TWO KAUA`I HYDRO PROJECTS IN FAVOR OF STATE REGULATION; CASTS DOUBT ON STATUS OF OTHERS

(PNN) -- The Federal Energy Regulatory Commission (FERC) has dismissed Free Flow Power's (FFP) and Kaua`i Island Utility Coop's (KIUC) preliminary permits for "Kahawai Power 4, LLC (Kahawai Power) and Kekaha Ditch Hydro, LLC (Kekaha Ditch Hydro)... to study the feasibility of a hydropower project on the Kekaha Ditch Irrigation System near the town of Waimea, Kauai County, Hawaii," according to an order issued today (Oct. 20).

The order is based on the fact that "another developer, Kekaha Ditch Hydro, was already pursuing (the project) through Hawaii’s state hydropower authorization process" calling KIUC's preliminary FERC permit "claim-jumping."

The order also casts doubt as to whether the rest of KIUC's preliminary permits will be allowed stand if the "potential for a preliminary permit issued by the Commission to interfere with existing development activities at the state level is significant."

"While we cannot let a state process interfere with our exclusive mandatory jurisdiction" the order states, "we do not want our preliminary permit program with respect to projects subject to permissive licensing to chill the development efforts of entities pursuing a legitimate state authorization process."

It is unclear what specific state process FERC is referring to. Previous reports and statements from KIUC, opponents of the FERC process and, in fact, state officials themselves have indicated there is no official written state process for developing and approving hydroelectric projects.

In an email today Adam Asquith who has led the opposition to using the FERC process for hydroelectric development on Kaua`i said

This ruling by FERC is significant and fully supports the arguments of the petitioners against the KIUC Board decision to use the FERC process on Kauai...KIUC should voluntarily withdraw all its preliminary permit applications and give up the ones that have been granted. This action would be consistent with the FERC ruling and KIUC's acknowledgment of its wrongful use of the FERC process.

The order indicated that all other FERC permits in Hawai`i- such as the one that, according to FFP's application, would dam the Wailua River- are in trouble too. In further explaining their decision FERC's order states that:

(FERC) has agreed, in a Memorandum of Understanding with the Department of the Interior, to not issue preliminary permits for hydrokinetic projects located on the Outer Continental Shelf. Such decisions are within our authority, so long as we provide adequate justification for them. Examining the facts in the cases before us leads us to conclude that, while the Commission cannot envision every set of facts that may be presented to it, as a general matter we will decline to issue preliminary permits for projects in Hawaii that would be subject to permissive section 4(e) licensing, unless the facts of the particular case present extenuating circumstances that would require the Commission to consider such an application.

The FERC order cited 13 other hydroelectric plants in Hawai`i that had undergone state permitting specifically referring to the example of the Wailuku River Hydroelectric Power Company plant which began producing electricity in May of 1993.

In allowing a state process to supersede the FERC permitting process- as opponents had demanded- the commission wrote that

(w)e note that filing a complete preliminary permit application with the Commission is significantly less demanding than the substantial efforts that appear to have taken place here under the state development process. Thus, the potential for a preliminary permit issued by the Commission to interfere with existing development activities at the state level is significant. While we cannot let a state process interfere with our exclusive mandatory jurisdiction, we do not want our preliminary permit program with respect to projects subject to permissive licensing to chill the development efforts of entities pursuing a legitimate state authorization process...

Nor do we want to force developers of projects not subject to mandatory licensing to engage in the federal authorization process when they have been successfully pursuing authorization from the state, simply because another entity has filed a preliminary permit application with the Commission for the same hydropower site.

The operative paragraph that indicates that KIUC's other hydroelectric projects that have received preliminary permits from FERC will be allowed to undergo state oversight without FERC involvement states that:

in order to avoid similar situations in the future, we will, as a general matter, decline to issue preliminary permits for projects in Hawaii that would be subject to permissive section 4(e) licensing. This proceeding demonstrates the potential for the Commission’s preliminary permitting process to interfere with hydropower development that is proceeding in accordance with a legitimate state authorization process.