Innovation in Global Power - Parsons Brinckerhoff

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Hydropower – New Technologies, New Considerations http://www.pbworld.com/news_events/publications/network/ Successful Relicensing of a Federally Regulated Hydropower Project By Kareem Bynoe, Boston, Massachusetts, 1-617-960-4977, bynoe@pbworld.com; Paul Shiers, 1-617-960-4990, shiers@pbworld.com; Shirley Williamson, 1-617-960-4995, williamsonSh@pbworld.com; and Tony Plizga, 1-617-960-4972, plizga@pbworld.com In this article the authors tell how they helped to manage the complex relicensing process of the Tapoco Project, a 380 MW hydropower facility in North Carolina and Tennessee. Their focus is on meeting statutory requirements that did not exist at the time the first license was issued, particularly those regarding stakeholders’ concerns about natural resources and the need to reach consensus among all parties involved. This article is the first of three about Tapoco. The next one is about water allocation modeling for the relicensing and the third is about dam safety. Acronyms ALP: Alternative Licensing Process FERC: Federal Energy Regulatory Commission 1 You can read about the Integrated Licensing Process in a preceding article, “Developing, Engineering, and Licensing a New Hydropower Dam” by Matthew Chan and Stefan Schadinger. Also, see Related Web Sites for links to more information about FERC’s three licensing procedures. The Federal Energy Regulatory Commission (FERC) regulates non-federal hydropower projects on waterways within the USA by issuing operating licenses and then monitoring their compliance. Many licenses, which extend for 30 to 50 years, were issued in the 1950s and 1960s, so a large number of hydro projects are currently undergoing relicensing. The multistage relicensing process can take as long as a decade to complete. It is expensive and difficult to manage, and “unsuccessful” outcomes can result from either schedule or cost overruns during relicensing, or from settlement agreements that sacrifice too much project value during stakeholder negotiations. New Licensing Requirements Public expectations for hydropower projects and their effects on the environment have changed during the last 30 to 50 years. Consequently, FERC now has statutory requirements to give equal consideration to: • Developmental values, including energy generation, irrigation, flood control and water supply • Non-developmental values, such as fish and wildlife resources, visual resources, cultural resources, recreational opportunities and other aspects of environmental quality. With these new requirements comes a more significant role for public input in the relicensing process. A large number of participants can be involved now, including federal and state agencies, local governments, non-governmental organizations and other interested parties. Further, FERC’s current license conditions can place new requirements on project owners that have long term-cost implications. These are in addition to the cost of the relicensing process itself. It is critical, therefore, that owners build broad-based stakeholder support for the new license terms in order to: • Relicense a project with reasonable license terms • Complete the relicense procedure on schedule and within budget • Avoid the prescription of costly license conditions by FERC. The Tapoco Project In March 1955, FERC issued a 50-year license to the Tapoco Division of Alcoa Power Generating Inc. for the Tapoco Project, which includes four hydroelectric dams in North Carolina and Tennessee and has an installed capacity of 380 MW. Environmental features abutting the project include the Great Smoky Mountains National Park, the Cherokee National Forest, and the Nantahala National Forest. The project’s license extended through February 2005. Tapoco hired PB in 2000 to serve as owner’s engineer responsible for providing regulatory, environmental science, engineering and economic consulting services. We teamed with Long View Associates, a regulatory, environmental consultant. Of FERC’s three licensing processes— alternative, traditional and integrated—our team recommended and Tapoco accepted the alternative licensing process (ALP) because it lends itself to settlement agreements. 1 Under the ALP, the project owner, stakeholders, and agencies are encouraged to develop study plans and license applications in a collaborative fashion. The ultimate goal is to increase efficiency and avoid the later-stage disputes that can be common in the other license processes. Managing Large Amounts of New Information The major technical challenge in relicensing has two parts: • Quantify the effects of new license conditions on the developmental and non-developmental PB Network #68 / August 2008 32
Hydropower – New Technologies, New Considerations costs and benefits (again, with developmental meaning the hydro project’s future energy generation capacity and revenues, and non-developmental meaning the environmental and social resources) • Make these costs and benefits understandable and credible to a stakeholder group comprised of technical agency staff and laypersons. Two critical aspects of this challenge presented challenges of their own, which were to: • Manage the evolving body of knowledge about the project that develops during relicensing • Understand the interrelated effects of new information on the environmental resource requirements and the economic viability of the project. New information generated during the relicensing process includes studies required to address information gaps on environmental issues. This new information then generates a new understanding of project impacts on the environment for all stakeholders and on the economics of the project, which change because of the costs associated with steps needed to protect those resources. The results of these studies also drive the costs of relicensing and of implementing the license conditions that, depending on the results, may require mid-process corrections in engineering design, proposed operations or relicensing strategy. We continually scrutinized these new studies to ensure that they did, in fact, address the information gaps and that the new information could be fed back into the relicensing process to help stakeholders assess potential impacts and then make informed decisions. Ensuring Stakeholder, Owner and Agency Collaboration The ALP requires that study plans and license applications be developed in a collaborative fashion. Collaboration can be time-consuming and labor-intensive, however, and consensus can be difficult to reach. Some of the challenges we faced and the steps we took to meet them are as follows. Consultation. We made continuous efforts to identify, involve, and communicate with resource agencies, municipalities, tribes, non-government organizations, and the interested public. At the outset of the process we established: • A formal stakeholder communications protocol, which was an agreement with the stakeholders on how the group would interact over the multiyear process, including topics such as a standard of courtesy, what behavior constituted the basis for participation, and how the group defined consensus. • Technical workgroups by resource area, which were subgroups of stakeholders who were recognized by the larger group as technical specialists in each area and were authorized to review and recommend acceptance of the technical study scopes and results to the larger group. http://www.pbworld.com/news_events/publications/network/ • A master stakeholder meeting schedule, which included full stakeholder meetings and smaller technical workgroup meetings to help ensure that key stakeholders were available. Natural Resource Concerns. It was important that we consider the broadly stated public “concerns” about natural resources, but in doing so that we identify those that were relevant in conjunction with stakeholders who focused on the core issue. The critical steps we took here were to: • Sort out those concerns that had project relevance from those that did not • Translate the relevant concerns into study goals • Develop study plans to meet the goals • Define the appropriate metrics by which project effects would be measured • Define a scale describing the magnitude of the environmental or social effects (e.g., very adverse, adverse, neutral, beneficial, very beneficial). Open Study Approach. We conducted studies in an open and cooperative manner with key public agencies and their technical experts to ensure that we provided highly credible resource information in a way that was cost-effective. We met this goal over time by using the following techniques: • Meeting with the stakeholders early and often to establish a professional rapport, and then maintaining it by keeping the key people involved over the multi-year life of the process • Addressing all stakeholders’ questions and taking every opportunity to inform them of new information • Enlisting regionally experienced specialty subconsultants to perform the environmental and social resource studies • Using the same study protocols and methodologies that the stakeholders would have used where possible • Inviting stakeholders into the field to observe the studies. Stakeholder Expectations. It was important that the stakeholders recognized that not all resource values and uses could be optimized simultaneously, and that they acknowledged resource constraints and balance trade-offs among various project aspects and among other stakeholders. The best example of this was our use of OASIS, a water allocation model, to illustrate during meetings how the lake recreational users’ desires to keep the lakes at full-pond level all year long was in direct conflict with the fisheries biologists, who wanted increased flows released downstream of the project to support aquatic life. Operating Policy. Most natural resource protection, mitigation, and enhancement measures reduce the owner’s flexibility to generate electricity when power, and its value, are at a premium. Our challenge was to craft an operating policy that addressed the stakeholders’ interests without causing excessive revenue loss. To accomplish this goal, we used OASIS to develop a 33 PB Network #68 / August 2008
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