Brief Summary of Substitute Bill

Extends a fee paid by water power development facilities that are licensed by the Federal Energy Regulatory Commission from the year 2017 to the year 2027.
Establishes certain administrative requirements related to the hydropower project licensing activities of the Department of Ecology (ECY) and the Department of Fish and Wildlife, including requiring the departments to hold an annual meeting and develop an annual work plan.
Requires the ECY to include detailed information regarding hydropower licensing program expenditures in the ECY's biennial report to the Legislature.

Background:

The Department of Ecology (ECY) issues Clean Water Act water quality certifications to hydroelectric dam operators licensed by the Federal Energy Regulatory Commission (FERC). The ECY's water quality certification process is typically conducted in conjunction with the FERC licensing or relicensing process for the hydropower project. The FERC licenses to hydropower operators under the Federal Power Act are issued for 30 to 50 years. After the FERC license and water quality certificate have been issued for a project, the water quality protection criteria are monitored and permit condition compliance is overseen by the ECY and the Washington Department of Fish and Wildlife (WDFW).

Most claimants to water intended to be used for power development are required to pay an annual fee to the ECY. The fee is assessed on approximately 93 different power generation facilities and is based on the theoretical amount of water claimed by the entity developing power. All revenues are deposited into the Reclamation Account.

The fees for water power development are based on a two-step model that considers theoretical horsepower claimed. The first step is the base fee paid by all water power claimants. Base fees are calculated using the following formula:

Facilities that generate between 51 and 1,000 horsepower pay 18 cents per horsepower.
Facilities that generate between 1,001 and 10,000 horsepower pay 3.6 cents per horsepower.
Facilities that generate more than 10,001 horsepower pay 1.8 cents per horsepower.

In addition to the base fee, all water power generation facilities that are required by the FERC must, until June 30, 2017, pay an additional fee. Only power generation facilities above a certain power generating threshold are required to be licensed by the FERC. The additional fees are calculated using the following formula:

Facilities that generate between 51 and 1,000 horsepower pay 32 cents per horsepower.
Facilities that generate between 1,001 and 10,000 horsepower pay 6.4 cents per horsepower.
Facilities that generate more than 10,001 horsepower pay 3.2 cents per horsepower.

The base fee and the second fee paid by facilities licensed by the FERC are additive until June 30, 2017, when the additional fee expires and all facilities are only required to pay the base fee.

According to the ECY, the base fees generated $583,000 in the 2012-2013 biennium and the additional fee generated $1,017,000. These funds are used by the ECY and the WDFW to assist power generation facilities in meeting environmental regulatory requirements and other requirements associated with the FERC licensing process.

The ECY submits a biennial report to the Legislature describing how license fees were spent on the ECY and the WDFW's water quality certification work for the FERC-licensed hydropower projects.

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Summary of Substitute Bill:

The expiration date for the additional fee charged to water power generating facilities that are licensed by the FERC is extended 10 years, from the year 2017 until the year 2027. The rates and collection methods of the additional fee is not changed.

After June 30, 2027, all claimants to water used for power generation will only pay the base fee.

In the biennial report to the Legislature, the ECY must detail how much licensing fees and other program funds were spent on work for each hydropower project. The detailed program expenditure information in the report must include project-specific costs associated with work under taken by the agencies during pre-licensing, licensing or relicensing, and license implementation phases of a hydropower project.

Certain administrative requirements are established related to the implementation of the hydropower project licensing program by the ECY and the WDFW:

The ECY and the WDFW must designate program managers for hydropower licensing activity work, and must assign individual staff members as project leads for each hydropower project.
The ECY and the WDFW must develop an annual work plan for their hydropower licensing programs.
The ECY and the WDFW must circulate an annual survey to licensees regarding their interactions with the program staff of the departments, and this summary must be analyzed and summarized prior to an annual meeting that the ECY and the WDFW must host for hydropower project licensees and other interested parties.

Substitute Bill Compared to Original Bill:

The ECY must include details in their biennial report to the Legislature regarding water power fee licensing activities regarding:

the amount of license fees and other program funds spent on each hydropower project; and
the stage in the licensing and license implementation process during which expenses are incurred for each project.

The ECY and the WDFW are required to designate licensing and license implementation program managers, and to assign individual staff members as project leads for each hydropower project.

The ECY and the WDFW are directed to hold an annual meeting with hydropower license fee stakeholders, to conduct an annual survey of licensees regarding the administration of the licensing program by the departments, and to establish an annual work plan for the licensing and license implementation program.