[Title 18 CFR ]
[Code of Federal Regulations (annual edition) - April 1, 2003 Edition]
[From the U.S. Government Printing Office]



[[Page i]]



                    18


          Parts 1 to 399

                         Revised as of April 1, 2003

Conservation of Power and Water Resources





          Containing a codification of documents of general 
          applicability and future effect
          As of April 1, 2003
          With Ancillaries
          Published by
          Office of the Federal Register
          National Archives and Records
          Administration

A Special Edition of the Federal Register



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                     U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2003



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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 18:
          Chapter I--Federal Energy Regulatory Commission, 
          Department of Energy                                       3
  Finding Aids:
      Material Approved for Incorporation by Reference........     977
      Table of CFR Titles and Chapters........................     979
      Alphabetical List of Agencies Appearing in the CFR......     997
      List of CFR Sections Affected...........................    1007



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                     ----------------------------

                     Cite this Code:  CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus,  18 CFR 1.101 refers 
                       to title 18, part 1, 
                       section 101.

                     ----------------------------

[[Page v]]



                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, April 1, 2003), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
number of the Federal Register and date of publication. Publication 
dates and effective dates are usually not the same and care must be 
exercised by the user in determining the actual effective date. In 
instances where the effective date is beyond the cut-off date for the 
Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
states a date certain for expiration, an appropriate note will be 
inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
requirements.

OBSOLETE PROVISIONS

    Provisions that become obsolete before the revision date stated on 
the cover of each volume are not carried. Code users may find the text 
of provisions in effect on a given date in the past by using the 
appropriate numerical list of sections affected. For the period before 
January 1, 2001, consult either the List of CFR Sections Affected, 1949-
1963, 1964-1972, 1973-1985, or 1986-2000, published in 11 separate 
volumes. For the period beginning January 1, 2001, a ``List of CFR 
Sections Affected'' is published at the end of each CFR volume.

INCORPORATION BY REFERENCE

    What is incorporation by reference? Incorporation by reference was 
established by statute and allows Federal agencies to meet the 
requirement to publish regulations in the Federal Register by referring 
to materials already published elsewhere. For an incorporation to be 
valid, the Director of the Federal Register must approve it. The legal 
effect of incorporation by reference is that the material is treated as 
if it were published in full in the Federal Register (5 U.S.C. 552(a)). 
This material, like any other properly issued regulation, has the force 
of law.
    What is a proper incorporation by reference? The Director of the 
Federal Register will approve an incorporation by reference only when 
the requirements of 1 CFR part 51 are met. Some of the elements on which 
approval is based are:
    (a) The incorporation will substantially reduce the volume of 
material published in the Federal Register.
    (b) The matter incorporated is in fact available to the extent 
necessary to afford fairness and uniformity in the administrative 
process.
    (c) The incorporating document is drafted and submitted for 
publication in accordance with 1 CFR part 51.
    Properly approved incorporations by reference in this volume are 
listed in the Finding Aids at the end of this volume.
    What if the material incorporated by reference cannot be found? If 
you have any problem locating or obtaining a copy of material listed in 
the Finding Aids of this volume as an approved incorporation by 
reference, please contact the agency that issued the regulation 
containing that incorporation. If, after contacting the agency, you find 
the material is not available, please notify the Director of the Federal 
Register, National Archives and Records Administration, Washington DC 
20408, or call (202) 741-6010.

CFR INDEXES AND TABULAR GUIDES

    A subject index to the Code of Federal Regulations is contained in a 
separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Statutory 
Authorities and Agency Rules (Table I). A list of CFR titles, chapters, 
and parts and an alphabetical list of agencies publishing in the CFR are 
also included in this volume.
    An index to the text of ``Title 3--The President'' is carried within 
that volume.
    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

[[Page vii]]


REPUBLICATION OF MATERIAL

    There are no restrictions on the republication of material appearing 
in the Code of Federal Regulations.

INQUIRIES

    For a legal interpretation or explanation of any regulation in this 
volume, contact the issuing agency. The issuing agency's name appears at 
the top of odd-numbered pages.
    For inquiries concerning CFR reference assistance, call 202-741-6000 
or write to the Director, Office of the Federal Register, National 
Archives and Records Administration, Washington, DC 20408 or e-mail 
info@fedreg.nara.gov.

SALES

    The Government Printing Office (GPO) processes all sales and 
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ELECTRONIC SERVICES

    The full text of the Code of Federal Regulations, The United States 
Government Manual, the Federal Register, Public Laws, Public Papers, 
Weekly Compilation of Presidential Documents and the Privacy Act 
Compilation are available in electronic format at www.access.gpo.gov/
nara (``GPO Access''). For more information, contact Electronic 
Information Dissemination Services, U.S. Government Printing Office. 
Phone 202-512-1530, or 888-293-6498 (toll-free). E-mail, 
gpoaccess@gpo.gov.
    The Office of the Federal Register also offers a free service on the 
National Archives and Records Administration's (NARA) World Wide Web 
site for public law numbers, Federal Register finding aids, and related 
information. Connect to NARA's web site at www.archives.gov/federal--
register. The NARA site also contains links to GPO Access.

                              Raymond A. Mosley,
                                    Director,
                          Office of the Federal Register.

April 1, 2003.



[[Page ix]]



                               THIS TITLE

    Title 18--Conservation of Power and Water Resources is composed of 
two volumes. The first volume, containing parts 1 to 399, includes all 
current regulations of the Federal Energy Regulatory Commission, 
Department of Energy. The second volume, containing part 400 to end, 
includes all current regulations issued by the Delaware River Basin 
Commission, the Water Resources Council, the Susquehanna River Basin 
Commission, and the Tennessee Valley Authority as of April 1, 2003.

    The OMB control numbers for the Federal Energy Regulatory 
Commission, Department of Energy, appear in Sec. 389.101 of chapter I.

[[Page x]]





[[Page 1]]



           TITLE 18--CONSERVATION OF POWER AND WATER RESOURCES




                   (This book contains parts 1 to 399)

  --------------------------------------------------------------------
                                                                    Part

chapter i--Federal Energy Regulatory Commission, Department 
  of Energy.................................................           1

Cross References: Applications and entries conflicting with lands 
  reserved or classified as power sites, or covered by power 
  applications: See Public Lands, Interior, 43 CFR subpart 2320.

  Interstate Commerce Commission: See Transportation, 49 CFR chapter X.

  Irrigation projects; electrification, Bureau of Indian Affairs, 
Department of the Interior: See Indians, 25 CFR part 175

  Regulations of the Bureau of Land Management relating to rights-of-way 
for power, telephone, and telegraph purposes: See Public Lands, 
Interior, 43 CFR Group 2800.

  Rights-of-way over Indian lands: See Indians, 25 CFR parts 169, 170, 
and 265.

  Securities and Exchange Commission: See Commodity and Securities 
Exchanges, 17 CFR chapter II.

  Withdrawal of public lands: See Public Lands, Interior, 43 CFR Group 
2300.

[[Page 3]]



  CHAPTER I--FEDERAL ENERGY REGULATORY COMMISSION, DEPARTMENT OF ENERGY




  --------------------------------------------------------------------

                       SUBCHAPTER A--GENERAL RULES
Part                                                                Page
1               Rules of general applicability..............           9
1b              Rules relating to investigations............           9
2               General policy and interpretations..........          14
3               [Reserved]
3a              National security information...............          41
3b              Collection, maintenance, use, and 
                    dissemination of records of identifiable 
                    personal information....................          54
3c              Standards of conduct........................          65
          SUBCHAPTER B--REGULATIONS UNDER THE FEDERAL POWER ACT
4               Licenses, permits, exemptions, and 
                    determination of project costs..........          67
6               Surrender or termination of license.........         139
8               Recreational opportunities and development 
                    at licensed projects....................         140
9               Transfer of license or lease of project 
                    property................................         141
11              Annual charges under Part I of the Federal 
                    Power Act...............................         142
12              Safety of water power projects and project 
                    works...................................         159
16              Procedures relating to takeover and 
                    relicensing of licensed projects........         172
20              Authorization of the issuance of securities 
                    by licensees and companies subject to 
                    sections 19 and 20 of the Federal Power 
                    Act.....................................         194
24              Declaration of intention....................         195
25              Application for vacation of withdrawal and 
                    for determination permitting restoration 
                    to entry................................         195
32              Interconnection of facilities...............         197
33              Application for acquisition, sale, lease, or 
                    other disposition, merger or 
                    consolidation of facilities, or for 
                    purchase or acquisition of securities of 
                    a public utility........................         198

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34              Application for authorization of the 
                    issuance of securities or the assumption 
                    of liabilities..........................         207
35              Filing of rate schedules and tariffs........         211
36              Rules concerning applications for 
                    transmission services under section 211 
                    of the Federal Power Act................         267
37              Open access same-time information systems 
                    and standards of conduct for public 
                    utilities...............................         268
41              Accounts, records, and memoranda............         275
45              Application for authority to hold 
                    interlocking positions..................         278
46              Public utility filing requirements and 
                    filing requirements for persons holding 
                    interlocking positions..................         283
                SUBCHAPTER C--ACCOUNTS, FEDERAL POWER ACT
101             Uniform system of accounts prescribed for 
                    public utilities and licensees subject 
                    to the provisions of the Federal Power 
                    Act.....................................         287
104             Note [Reserved]
125             Preservation of records of public utilities 
                    and licensees...........................         409
   SUBCHAPTER D--APPROVED FORMS, FEDERAL POWER ACT AND PUBLIC UTILITY 
                     REGULATORY POLICIES ACT OF 1978
131             Forms.......................................         417
141             Statements and reports (schedules)..........         426
142-149         [Reserved]

             SUBCHAPTER E--REGULATIONS UNDER NATURAL GAS ACT
152             Application for exemption from the 
                    provisions of the Natural Gas Act 
                    pursuant to section 1(c) thereof and 
                    issuance of blanket certificates 
                    authorizing certain sales for resale....         431
153             Applications for authorization to construct, 
                    operate, or modify facilities used for 
                    the export or import of natural gas.....         432
154             Rate schedules and tariffs..................         437
156             Applications for orders under section 7(a) 
                    of the Natural Gas Act..................         467
157             Applications for certificates of public 
                    convenience and necessity and for orders 
                    permitting and approving abandonment 
                    under section 7 of the Natural Gas Act..         474
158             Accounts, records, and memoranda............         507

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161             Standards of conduct for interstate 
                    pipelines with marketing affiliates.....         509
                 SUBCHAPTER F--ACCOUNTS, NATURAL GAS ACT
201             Uniform system of accounts prescribed for 
                    natural gas companies subject to the 
                    provisions of the Natural Gas Act.......         512
204             Note [Reserved] 
225             Preservation of records of natural gas 
                    companies...............................         655
              SUBCHAPTER G--APPROVED FORMS, NATURAL GAS ACT
250             Forms.......................................         663
260             Statements and reports (schedules)..........         666
    SUBCHAPTER H--PROCEDURES GOVERNING DETERMINATIONS FOR TAX CREDIT 
                                PURPOSES
270             Determination procedures....................         671
SUBCHAPTER I--OTHER REGULATIONS UNDER THE NATURAL GAS POLICY ACT OF 1978 
                         AND RELATED AUTHORITIES
280             General provisions applicable to Subchapter 
                    I.......................................         683
281             Natural gas curtailment under the Natural 
                    Gas Policy Act of 1978..................         683
284             Certain sales and transportation of natural 
                    gas under the Natural Gas Policy Act of 
                    1978 and related authorities............         697
286             Administrative procedures...................         722
 SUBCHAPTER J--REGULATIONS UNDER THE POWERPLANT AND INDUSTRIAL FUEL USE 
                               ACT OF 1978
287             Rules generally applicable to powerplant and 
                    industrial fuel use.....................         724
 SUBCHAPTER K--REGULATIONS UNDER THE PUBLIC UTILITY REGULATORY POLICIES 
                               ACT OF 1978
290             Collection of cost of service information 
                    under section 133 of the Public Utility 
                    Regulatory Policies Act of 1978.........         725
292             Regulations under sections 201 and 210 of 
                    the Public Utility Regulatory Policies 
                    Act of 1978 with regard to small power 
                    production and cogeneration.............         726

[[Page 6]]

294             Procedures for shortages of electric energy 
                    and capacity under section 206 of the 
                    Public Utility Regulatory Policies Act 
                    of 1978.................................         744
  SUBCHAPTER L--REGULATIONS FOR FEDERAL POWER MARKETING ADMINISTRATIONS
300             Confirmation and approval of the rates of 
                    Federal power marketing administrations.         746
301             Average system cost methodology for sales 
                    from utilities to Bonneville Power 
                    Administration under Northwest Power Act         752
 SUBCHAPTER O--REGULATIONS UNDER THE OUTER CONTINENTAL SHELF LANDS ACT 
                                 (OCSLA)
330             Conditions of service reporting requirements         761
       SUBCHAPTER P--REGULATIONS UNDER THE INTERSTATE COMMERCE ACT
340             Rate schedules and tariffs..................         763
341             Oil pipeline tariffs: Oil pipeline companies 
                    subject to section 6 of the Interstate 
                    Commerce Act............................         764
342             Oil pipeline rate methodologies and 
                    procedures..............................         772
343             Procedural rules applicable to oil pipeline 
                    proceedings.............................         774
344             Filing quotations for U.S. Government 
                    shipments at reduced rates..............         775
346             Oil pipeline cost-of-service filing 
                    requirements............................         776
347             Oil pipeline depreciation studies...........         778
348             Oil pipeline applications for market power 
                    determinations..........................         779
        SUBCHAPTER Q--ACCOUNTS UNDER THE INTERSTATE COMMERCE ACT
351             Financial statements released by carriers...         782
352             Uniform systems of accounts prescribed for 
                    oil pipeline companies subject to the 
                    provisions of the Interstate Commerce 
                    Act.....................................         782
          SUBCHAPTER R--APPROVED FORMS, INTERSTATE COMMERCE ACT
356             Preservation of records for oil pipeline 
                    companies...............................         819

[[Page 7]]

357             Annual special or periodic reports: Carriers 
                    subject to part I of the Interstate 
                    Commerce Act............................         823
                         SUBCHAPTER S [RESERVED]
SUBCHAPTER T--REGULATIONS UNDER SECTION 32 OF THE PUBLIC UTILITY HOLDING 
                           COMPANY ACT OF 1935
365             Filing requirements and ministerial 
                    procedures for persons seeking exempt 
                    wholesale generator status..............         825
                   SUBCHAPTER W--REVISED GENERAL RULES
375             The Commission..............................         828
376             Organization, mission, and functions; 
                    operations during emergency conditions..         847
380             Regulations implementing the National 
                    Environmental Policy Act................         850
381             Fees........................................         873
382             Annual charges..............................         879
                     SUBCHAPTER X--PROCEDURAL RULES
385             Rules of practice and procedure.............         884
388             Information and requests....................         957
389             OMB control numbers for Commission 
                    information collection requirements.....         971
390             Electronic registration.....................         973
391-399         [Reserved]


Abbreviations: The following abbreviations are used in this chapter:
    M.c.f.=Thousand cubic feet. B.t.u.=British thermal units. 
  ICC=Interstate Commerce Commission.

[[Page 9]]



                       SUBCHAPTER A--GENERAL RULES





PART 1--RULES OF GENERAL APPLICABILITY--Table of Contents




            Subpart A--Definitions and Rules of Construction

Sec.
1.101  Definitions.
1.102  Words denoting number, gender and so forth.

    Authority: Dept. of Energy Organization Act, 42 U.S.C. 7101-7352; 
E.O. 12009, 3 CFR 142 (1978); Administrative Procedure Act, 5 U.S.C. Ch. 
5.



            Subpart A--Definitions and Rules of Construction



Sec. 1.101  Definitions.

    The definitions set forth in this section apply for purposes of this 
chapter, except as otherwise provided in this chapter:
    (a) Commission means the Federal Energy Regulatory Commission.
    (b) Chairman means the Chairman of the Commission.
    (c) Commissioner and Member mean a member of the Commission.
    (d) Secretary means the Secretary of the Commission.
    (e) Executive Director means the Executive Director of the 
Commission.
    (f) General Counsel means the General Counsel of the Commission.
    (g) DOE Act means the Department of Energy Organization Act.
    (h) DOE means the Department of Energy.
    (i) Administrative law judge means an officer appointed under 
section 3105 of title 5 of the United States Code.
    (j) Attorney means an attorney admitted to practice before the 
Supreme Court of the United States or the highest court of any State, 
territory of the United States, or the District of Columbia, or any 
other person with the requisite qualifications to represent others, who 
acts in a representative capacity for any participant before the 
Commission.
    (k) State Commission means the regulatory body of any State or 
municipality having jurisdiction to regulate rates or charges for the 
sale of electric energy or natural gas to consumers or for the 
transportation of oil by pipeline within the State or municipality.
    (l) Oath includes affirmation and sworn includes affirmed.

[Order 225, 47 FR 19022, May 3, 1982; 48 FR 786, Jan. 7, 1983]



Sec. 1.102  Words denoting number, gender and so forth.

    In determining the meaning of any provision of this chapter, unless 
the context indicates otherwise:
    (a) The singular includes the plural;
    (b) The plural includes the singular;
    (c) The present tense includes the future tense; and
    (d) Words of one gender include the other gender.

[Order 225, 47 FR 19022, May 3, 1982]



PART 1b--RULES RELATING TO INVESTIGATIONS--Table of Contents




Sec.
1b.1  Definitions.
1b.2  Scope.
1b.3  Scope of investigations.
1b.4  Types of investigations.
1b.5  Formal investigations.
1b.6  Preliminary investigations.
1b.7  Procedure after investigation.
1b.8  Requests for Commission investigations.
1b.9  Confidentiality of investigations.
1b.10  By whom conducted.
1b.11  Limitation on participation.
1b.12  Transcripts.
1b.13  Powers of persons conducting formal investigations.
1b.14  Subpoenas.
1b.15  Non-compliance with compulsory processes.
1b.16  Rights of witnesses.
1b.17  Appearance and practice before the Commission.
1b.18  Right to submit statements.
1b.19  Submissions.
1b.20  Request for confidential treatment.
1b.21  Enforcement hotline.

    Authority: 15 U.S.C. 717 et seq.; 16 U.S.C. 792 et seq.; 49 U.S.C. 
60502; 49 A.P. U.S.C. 1-85; 42 U.S.C. 7101-7352; E.O. 12009, 42 FR 
46267.

    Source: 43 FR 27174, June 23, 1978, unless otherwise noted.

[[Page 10]]



Sec. 1b.1  Definitions.

    For purposes of this part--
    (a) Formal investigation means an investigation instituted by a 
Commission Order of Investigation.
    (b) Preliminary Investigation means an inquiry conducted by the 
Commission or its staff, other than a formal investigation.
    (c) Investigating officer means the individual(s) designated by the 
Commission in an Order of Investigation as Officer(s) of the Commission.
    (d) Enforcement Hotline is a forum in which to address quickly and 
informally any matter within the Commission's jurisdiction concerning 
natural gas pipelines, oil pipelines, electric utilities and 
hydroelectric projects.

[43 FR 27174, June 23, 1978, as amended by Order 602, 64 FR 17097, Apr. 
8, 1999]



Sec. 1b.2  Scope.

    This part applies to investigations conducted by the Commission but 
does not apply to adjudicative proceedings.



Sec. 1b.3  Scope of investigations.

    The Commission may conduct investigations relating to any matter 
subject to its jurisdiction.



Sec. 1b.4  Types of investigations.

    Investigations may be formal or preliminary, and public or private.



Sec. 1b.5  Formal investigations.

    The Commission may, in its discretion, initiate a formal 
investigation by issuing an Order of Investigation. Orders of 
Investigation will outline the basis for the investigation, the matters 
to be investigated, the officer(s) designated to conduct the 
investigation and their authority. The director of the office 
responsible for the investigation may add or delete Investigating 
Officers in the Order of Investigation.



Sec. 1b.6  Preliminary investigations.

    The Commission or its staff may, in its discretion, initiate a 
preliminary investigation. In such investigations, no process is issued 
or testimony compelled. Where it appears from the preliminary 
investigation that a formal investigation is appropriate, the staff will 
so recommend to the Commission.



Sec. 1b.7  Procedure after investigation.

    Where it appears that there has been or may be a violation of any of 
the provisions of the acts administered by the Commission or the rules, 
opinions or orders thereunder, the Commission may institute 
administrative proceedings, initiate injunctive proceedings in the 
courts, refer matters, where appropriate, to the other governmental 
authorities, or take other appropriate action.



Sec. 1b.8  Requests for Commission investigations.

    (a) Any individual, partnership, corporation, association, 
organization, or other Federal or State governmental entity, may request 
the Commission to institute an investigation.
    (b) Requests for investigations should set forth the alleged 
violation of law with supporting documentation and information as 
completely as possible. No particular forms or formal procedures are 
requested.
    (c) It is the Commission's policy not to disclose the name of the 
person or entity requesting an investigation except as required by law, 
or where such disclosure will aid the investigation.



Sec. 1b.9  Confidentiality of investigations.

    All information and documents obtained during the course of an 
investigation, whether or not obained pursuant to subpoena, and all 
investigative proceedings shall be treated as nonpublic by the 
Commission and its staff except to the extent that (a) the Commission 
directs or authorizes the public disclosure of the investigation; (b) 
the information or documents are made a matter of public record during 
the course of an adjudicatory proceeding; or (c) disclosure is required 
by the Freedom of Information Act, 5 U.S.C. 552. Procedures by which 
persons submitting information to the Commission during the course of an 
investigation may specifically seek confidential treatment of 
information for purposes of Freedom of Information Act disclosure are 
set forth in 18 CFR part 3b and Sec. 1b.20. A request for confidential 
treatment of information for purposes of Freedom of Information Act 
disclosure shall not, however, prevent disclosure for law enforcement 
purposes or when

[[Page 11]]


disclosure is otherwise found appropriate in the public interest and 
permitted by law.



Sec. 1b.10  By whom conducted.

    Formal Commission investigations are conducted by the Commission or 
by an individual(s) designated and authorized in the Order of 
Investigation. Investigating Officers are officers within the meaning of 
the statutes administered by the Commission and are authorized to 
perform the duties of their office in accordance with the laws of the 
United States and the regulations of the Commission. Investigating 
Officers shall have such duties as the Commission may specify in an 
Order of Investigation.



Sec. 1b.11  Limitation on participation.

    There are no parties, as that term is used in adjudicative 
proceedings, in an investigation under this part and no person may 
intervene or participate as a matter of right in any investigation under 
this part. Section 2.72 of the rules is specifically not applicable to 
private investigations conducted by the Commission or its staff.



Sec. 1b.12  Transcripts.

    Transcripts, if any, of investigative testimony shall be recorded 
solely by the official reporter, or by any other person or means 
designated by the investigating officer. A witness who has given 
testimony in an investigation shall be entitled, upon written request, 
to procure a transcript of the witness' own testimony on payment of the 
appropriate fees, except that in a non-public formal investigation, the 
office responsible for the investigation may for good cause deny such 
request. In any event, any witness or his counsel, upon proper 
identification, shall have the right to inspect the official transcript 
of the witness' own testimony. This provision supersedes 
Sec. 385.1904(b) of this chapter.

[43 FR 27174, June 23, 1978, as amended by Order 225, 47 FR 19054, May 
3, 1982]



Sec. 1b.13  Powers of persons conducting formal investigations.

    Any member of the Commission or the Investigating Officer, in 
connection with any formal investigation ordered by the Commission, may 
administer oaths and affirmations, subpoena witnesses, compel their 
attendance, take evidence, and require the production of any books, 
papers, correspondence, memoranda, contracts, agreements or other 
records relevant or material to the investigation.



Sec. 1b.14  Subpoenas.

    (a) Service of a subpoena upon a person named therein shall be made 
be the investigating officer (1) by personal delivery, (2) by certified 
mail, (3) by leaving a copy thereof at the principle office or place of 
business of the person to be served, (4) or by delivery to any person 
designated as agent for service or the person's attorney.
    (b) At the time for producing documents subpoenaed in an 
investigation, the subpoenaed party shall submit a statement stating 
that, if true, such person has made a diligent search for the subpoenaed 
documents and is producing all the documents called for by the subpoena. 
If any subpoenaed document(s) are not produced for any reason, the 
subpoenaed party shall state the reason therefor.
    (c) If any subpoenaed documents in an investigation are withheld 
because of a claim of the attorney-client privilege, the subpoenaed 
party shall submit a list of such documents which shall, for each 
document, identify the attorney involved, the client involved, the date 
of the document, the person(s) shown on the document to have prepared 
and/or sent the document, and the person(s) shown on the document to 
have received copies of the document.



Sec. 1b.15  Non-compliance with compulsory processes.

    In cases of failure to comply with Commission compulsory processes, 
appropriate action may be initiated by the Commission or the Attorney 
General, including but not limited to actions for enforcement or the 
imposition of penalties.



Sec. 1b.16  Rights of witnesses.

    (a) Any person who is compelled or requested to furnish documentary 
evidence or testimony in a formal investigation shall, upon request, be 
shown

[[Page 12]]

the Commission's Order of Investigation. Copies of Orders of 
Investigation shall not be furnished, for their retention, to such 
persons requesting the same except with the express approval of the 
director of the office responsible for the investigation. Such approval 
shall not be given unless the director of the office responsible for the 
investigation, in the director's discretion is satisfied that there 
exist reasons consistent with the protection of privacy of persons 
involved in the investigation and with the unimpeded conduct of the 
investigation.
    (b) Any person compelled to appear, or who appears in person at a 
formal investigation by request or permission of the Investigating 
Officer may be accompanied, represented and advised by counsel, as 
provided by Sec. 385.2101 of this chapter and these rules, except that 
all witnesses shall be sequestered and, unless permitted in the 
discretion of the Investigating Officer, no witness or the counsel 
accompanying any such witness shall be permitted to be present during 
the examination of any other witness called in such proceeding. When 
counsel does represent more than one person in an investigation, for 
example, where the counsel is counsel to the witness and his employer, 
said counsel shall inform the Investigating Officer and each client of 
said counsel's possible conflict of interest in representing that client 
and, if said counsel appears with a witness giving testimony on the 
record in an investigation, counsel shall state on the record all 
persons said counsel represents in the investigation.
    (c) Any witness may be accompanied, represented, and advised by 
counsel as follows:
    (1) Counsel for a witness may advise the witness, in confidence, 
upon his initiative or the witness' with respect to any question, and if 
the witness refuses to answer a question, then the witness or counsel 
may briefly state on the record the legal grounds for such refusal.
    (2) Where it is claimed that the witness has a privilege to refuse 
to answer a question on the grounds of self-incrimination, the witness 
must assert the privilege personally.
    (3) Following completion of the examination of a witness, such 
witness may make a statement on the record and his counsel may on the 
record question the witness to enable the witness to clarify any of the 
witness' answers or to offer other evidence.
    (4) The Investigating Officer shall take all necessary action to 
regulate the course of the proceeding to avoid delay and prevent or 
restrain obstructionist or contumacious conduct or contemptuous 
language. Such officer may report to the Commission any instances where 
an attorney or representative has refused to comply with his directions, 
or has engaged in obstructionist or contumacious conduct or has used 
contemptuous language in the course of the proceeding. The Commission 
may thereupon take such further action as the circumstances may warrant, 
including suspension or disbarment of counsel from further appearance or 
practice before it, in accordance with Sec. 385.2101 of this chapter, or 
exclusion from further participation in the particular investigation.
    (d) Unless otherwise ordered by the Commission, in any public formal 
investigation, if the record shall contain implications of wrongdoing by 
any person, such person shall have the right to appear on the record; 
and in addition to the rights afforded other witnesses hereby, he shall 
have a reasonable opportunity of cross-examination and production of 
rebuttal testimony or documentary evidence. Reasonable shall mean 
permitting persons as full an opportunity to assert their position as 
may be granted consistent with administrative efficiency and with 
avoidance of undue delay. The determinations of reasonableness in each 
instance shall be made in the discretion of the investigating officer.

[43 FR 27174, June 23, 1978, as amended by Order 225, 47 FR 19054, May 
3, 1982]



Sec. 1b.17  Appearance and practice before the Commission.

    The provisions of subpart U of part 385 of this chapters are 
specifically applicable to all investigations.

[43 FR 27174, June 23, 1978, as amended by Order 225, 47 FR 19054, May 
3, 1982]

[[Page 13]]



Sec. 1b.18  Right to submit statements.

    Any person may, at any time during the course of an investigation, 
submit documents, statements of facts or memoranda of law for the 
purpose of explaining said person's position or furnishing evidence 
which said person considers relevant regarding the matters under 
investigation.



Sec. 1b.19  Submissions.

    When the Investigating Officer determines it is appropriate in the 
interest of the proper administration of the law, he may inform any 
person that a recommendation may be made to the Commission that said 
person be a defendant in a civil action to be brought by the Commission. 
In such case, said person may submit a statement of fact, argument, and/
or memorandum of law, with such supporting documentation as said person 
chooses showing why said person should not be a defendant in any civil 
action brought by the Commission. The investigating officer shall inform 
said potential defendant of the date by which such statement may be 
submitted to said officer, and if such statement is submitted by such 
date, it shall be presented to the Commission together with any 
recommendation for enforcement action by the office responsible for the 
investigation.



Sec. 1b.20  Request for confidential treatment.

    Any person compelled to produce documents in an investigation may 
claim that some or all of the information contained in a particular 
document(s) is exempt from the mandatory public disclosure requirements 
of the Freedom of Information Act (5 U.S.C. 552), is information 
referred to in 18 U.S.C. 1905, or is otherwise exempt by law from public 
disclosure. In such case, the person making such claim shall, at the 
time said person produces the document to the officer conducting the 
investigation shall also produce a second copy of the document from 
which has been deleted the information for which the person wishes to 
claim confidential treatment. The person shall indicate on the original 
document that a request for confidential treatment is being made for 
some or all of the information in the document and shall file a 
statement specifying the specific statutory justification for non-
disclosure of the information for which confidential treatment is 
claimed. General claims of confidentiality are not sufficient. 
Sufficient information must be furnished for the officer conducting the 
investigation, or other appropriate official, to make an informed 
decision on the request for confidential treatment. If the person states 
that the information comes within the exception in 5 U.S.C. 552(b)(4) 
for trade secrets and commercial or financial information, the person 
shall include a statement specifying why the information is privileged 
or confidential. If the person filing a document does not submit a 
second copy of the document with the confidential information deleted, 
the Officer conducting the investigation may assume that there is no 
objection to public disclosure of the document in its entirety. The 
Commission retains the right to make the determination with regard to 
any claim of confidentiality. Notice of the decision by the 
investigating Officer or other appropriate official to deny a claim, in 
whole or in part, and an opportunity to respond shall be given to a 
person claiming confidentiality no less than 5 days before its public 
disclosure.



Sec. 1b.21  Enforcement hotline.

    (a) The Hotline Staff may provide information to the public and give 
informal staff opinions. The opinions given are not binding on the 
General Counsel or the Commission.
    (b) Any person may seek information or the informal resolution of a 
dispute by calling or writing to the Hotline at the telephone number and 
address in paragraph (f) of this section. The Hotline Staff will 
informally seek information from the caller and any respondent, as 
appropriate. The Hotline Staff will attempt to resolve disputes without 
litigation or other formal proceedings. The Hotline Staff may not 
resolve matters that are before the Commission in docketed proceedings.
    (c) All information and documents obtained through the Hotline Staff 
shall be treated as non-public by the Commission and its staff, 
consistent with the provisions of section 1b.9 of this part.

[[Page 14]]

    (d) Calls to the Hotline may be made anonymously.
    (e) Any person who contacts the Hotline is not precluded from filing 
a formal action with the Commission if discussions assisted by Hotline 
Staff are unsuccessful at resolving the matter. A caller may terminate 
use of the Hotline procedure at any time.
    (f) The Hotline may be reached by calling (202) 208-1390 or toll 
free (877) 303-4340, by e-mail at hotline@ferc.fed.us, or writing to: 
Enforcement Hotline, Federal Energy Regulatory Commission, 888 First 
Street, NE. Washington, DC 20426.

[Order 602, 64 FR 17097, Apr. 8, 1999]



PART 2--GENERAL POLICY AND INTERPRETATIONS--Table of Contents




   Statements of General Policy and Interpretations of the Commission

Sec.
2.1  Initial notice; service; and information copies of formal 
          documents.
2.1a  Public suggestions, comments, proposals on substantial prospective 
          regulatory issues and problems.
2.1b  Availability in contested cases of information acquired by staff 
          investigation.

Statements of General Policy and Interpretations Under the Federal Power 
                                   Act

2.2  Transmission lines.
2.4  Suspension of rate schedules.
2.7  Recreational development at licensed projects.
2.8  [Reserved]
2.9  Conditions in preliminary permits and licenses--list of and 
          citations to ``P--'' and ``L--'' forms.
2.12  Calculation of taxes for property of public utilities and 
          licensees constructed or acquired after January 1, 1970.
2.13  Design and construction.
2.15  Specified reasonable rate of return.
2.17  Price discrimination and anticompetitive effect (price squeeze 
          issue).
2.18  Phased electric rate increase filings.
2.19  State and Federal comprehensive plans.
2.20  Good faith requests for transmission services and good faith 
          responses by transmitting utilities.
2.21  Regional Transmission Groups.
2.22  Pricing policy for transmission services provided under the 
          Federal Power Act.
2.23  Use of reserved authority in hydropower licenses to ameliorate 
          cumulative impacts.
2.24  Project decommissioning at relicensing.
2.25  Ratemaking treatment of the cost of emissions allowances in 
          coordination transactions.
2.26  Policies concerning review of applications under section 203.

 Statements of General Policy and Interpretations Under the Natural Gas 
                                   Act

2.51  [Reserved]
2.52  Suspension of rate schedules.
2.55  Definition of terms used in section 7(c).
2.57  Temporary certificates--pipeline companies.
2.60  Facilities and activities during an emergency--accounting 
          treatment of defense-related expenditures.
2.67  Calculation of taxes for property of pipeline companies 
          constructed or acquired after January 1, 1970.
2.69  [Reserved]
2.76  Regulatory treatment of payments made in lieu of take-or-pay 
          obligations.
2.78  Utilization and conservation of natural resources--natural gas.

Statement of General Policy To Implement Procedures for Compliance With 
              the National Environmental Policy Act of 1969

2.80  Detailed environmental statement.

Statement of General Policy To Implement the Economic Stabilization Act 
        of 1970, as Amended, and Executive Orders 11615 and 11627

2.100--2.102  [Reserved]
2.103  Statement of policy respecting take or pay provisions in gas 
          purchase contracts.
2.104  Mechanisms for passthrough of pipeline take-or-pay buyout and 
          buydown costs.
2.105  Gas supply charges.

                     Rules of General Applicability

2.201  [Reserved]

 Statements of General Policy and Interpretations under the Natural Gas 
                           Policy Act of 1978

2.300  Statement of policy concerning allegations of fraud, abuse, or 
          similar grounds under section 601(c) of the NGPA.

Statement of Interpretation Under the Public Utility Regulatory Policies 
                               Act of 1978

2.400  Statement of interpretation of waste concerning natural gas as 
          the primary energy source for qualifying small power 
          production facilities.

[[Page 15]]

 Statement of Penalty Reduction/Waiver Policy to Comply With the Small 
          Business Regulatory Enforcement Fairness Act of 1996

2.500  Penalty reduction/waiver policy for small entities.

Appendix A to Part 2--Guidance for Determining the Acceptable 
          Construction Area for Replacements
Appendix B to Part 2 [Reserved]
Appendix C to Part 2--Nationwide Proceeding Computation of Federal 
          Income Tax Allowance Independent Producers, Pipeline 
          Affiliates and Pipeline Producers Continental U.S.

    Authority: 5 U.S.C. 601; 15 U.S.C. 717-717w, 3301-3432; 16 U.S.C. 
792-825y, 2601-2645; 42 U.S.C. 4321-4361, 7101-7352.

   Statements of General Policy and Interpretations of the Commission



Sec. 2.1  Initial notice; service; and information copies of formal documents.

    (a) Whenever appropriate, publication of an initial notice or order 
in the Federal Register shall be the primary means of informing 
interested persons and the general public that the proceeding to which 
the notice or order relates has been instituted before the Commission. 
The mailing of individual copies shall be confined to that which is 
required by law, by the Commission's rules and regulations, or by other 
considerations deemed valid by the Secretary in specific instances.
    (1) It is the policy of the Commission to publish notice in the 
Federal Register upon the institution of the following proceedings 
before the Commission:
    (i) Natural gas pipeline companies and public utility rate schedules 
and tariffs. (A) Initial rate schedule filings and changes in rates 
schedules proposed by public utilities and changes in rate schedules or 
tariffs proposed by natural gas pipeline companies, including purchased 
gas adjustment clauses.
    (B) Changes in rates proposed by natural gas pipeline companies for 
field sales.
    (C)-(D) [Reserved]
    (E) Tracking rate schedule or tariff filings made pursuant to 
settlement agreements.
    (F) Rate schedule or tariff filings made by natural gas pipeline 
companies or public utilities in compliance with Commission orders.
    (G) Reports of refunds by natural gas pipeline companies and public 
utilities.
    (H) [Reserved]
    (I) Complaints against natural gas pipeline companies and public 
utilities, unless otherwise directed.
    (ii) Interconnections, service and exportation pursuant to the 
Federal Power Act. (A) Applications for interconnection and service 
under section 202(b).
    (B)-(C) [Reserved]
    (D) Applications pursuant to section 207.
    (E) [Reserved]
    (iii) Hydroelectric, Federal Power Act. (A) Applications for 
preliminary permits pursuant to section 4(f).
    (B) Applications for licenses for constructed or unconstructed 
projects, or notice of declaration of intention, sections 4(e), 
23(a)(b).
    (C) Applications for amendment of license, unless otherwise 
directed.
    (D) Application for relicenses or nonpower licenses, or a 
recommendation for takeover, sections 14 and 15.
    (E) Applications for transfer of license, section 8.
    (F) Applications for surrender of license, section 6.
    (G) Proceeding for revocation or termination of license, sections 6, 
13, 26.
    (H) Issuance of annual licenses, section 15.
    (I) Lands withdrawn pursuant to an application for preliminary 
permit or license, and the vacation of such land withdrawals, section 
24.
    (J) Complaints against licensees, unless otherwise directed.
    (iv) Corporate electric. (A) Applications pursuant to sections 203, 
204, of the Federal Power Act, and applications or complaints pursuant 
to section 305 of the Federal Power Act.
    (v) Accounting, gas and electric. (A) Applications pursuant to 
sections 4, 23, 301, and 302 of the Federal Power Act.
    (B) Applications pursuant to sections 8 and 9 of the Natural Gas 
Act.
    (vi) Federal rates. (A) Application for confirmation and approval of 
rate schedules for Federal hydroelectric projects.
    (vii) Natural gas pipeline certificates, exportations, and 
importations, Natural

[[Page 16]]

Gas Act. (A) Applications for exemption under section 1(c).
    (B) Applications for authorization to import and export gas under 
section 3.
    (C) Applications for orders directing physical connection of 
facilities and sale of natural gas under section 7(a).
    (D) Applications for permission and approval to abandon under 
section 7(b).
    (E) Applications for permanent certificates under section 7(c).
    (F) [Reserved]
    (G) Complaints against natural gas pipeline companies, filed by 
individuals and companies, unless otherwise directed.
    (viii)-(ix) [Reserved]
    (x) Environmental statements. (A) Notice to be published pursuant to 
Order series 415.
    (xi) Miscellaneous, gas and electric. (A) Order instituting an 
investigation in which hearings are fixed or in which an opportunity is 
given for filing comments or petitions to intervene.
    (B) Show cause order, in which hearings are fixed or in which an 
opportunity is given for filing comments or petitions to intervene.
    (C) Order or notice consolidating proceedings for hearing purposes 
or severing a proceeding formerly consolidated for hearing purposes.
    (D) Applications for declaratory order, disclaimers of jurisdiction, 
or waiver of Commission regulations, unless otherwise directed.
    (E) Requests for redesignation pursuant to Sec. 3.5(a)(26) of this 
subchapter, unless otherwise directed.
    (F) Requests for extension of time pursuant to Sec. 3.75.302(j) of 
this chapter, unless otherwise directed.
    (G) Consolidations and severance pursuant to Sec. 375.302(f) of this 
chapter, unless otherwise directed.
    (H) Notice of correction of a document in any of the above 
categories.
    (I) Notice of meetings of advisory committees established by the 
Commission.
    (J) Notices of conferences in docketed rulemaking proceedings.
    (K) Such other notices or orders as may be submitted by the 
Secretary for publication.
    (2) Otherwise directed, as referred to above, shall be interpreted 
to mean notice given by the discretion of the Secretary.
    (b) After notice has been given, the service of formal documents 
issued in a proceeding shall be confined to the parties of record or 
their attorneys, and the mailing of information copies shall be confined 
to that which is required by the Commission's rules and regulations, by 
courtesy in response to written requests for copies, or by other 
considerations deemed valid by the Secretary in specific instances.

(Secs. 308, 309; 49 Stat. 858; 16 U.S.C. 825g, 825h; secs. 15, 16; 52 
Stat. 829, 830; 15 U.S.C. 717n, 717o)

[Order 211, 24 FR 1345, Feb. 21, 1959, as amended by Order 463, 37 FR 
28054, Dec. 20, 1972; 38 FR 3192, Feb. 2, 1973; 44 FR 34941, June 18, 
1979; 45 FR 21224, Apr. 1, 1980; Order 541, 57 FR 21733, May 22, 1992; 
Order 603, 64 FR 26603, May 14, 1999]



Sec. 2.1a  Public suggestions, comments, proposals on substantial prospective regulatory issues and problems.

    (a) The Commission by this policy statement explicitly encourages 
the public, including those persons subject to regulation by the 
Commission, to submit suggestions, comments, or proposals concerning 
substantial prospective regulatory policy issues and problems, the 
resolution of which will have a substantial impact upon those regulated 
by the Commission or others affected by the Commission's activities. 
This policy is intended to serve as a means of advising the Commission 
on a timely basis of potential significant issues and problems which may 
come before it in the course of its activities and to permit the 
Commission an early opportunity to consider argument regarding policy 
questions and administrative reforms in a general context rather than in 
the course of individual proceedings.
    (b) Upon receipt of suggestions, comments, or proposals pursuant to 
paragraph (a) of this section, the Commission shall review the matters 
raised and take whatever action is deemed necessary with respect to the 
filing, including, but not limited to, requesting further information 
from the filing party, the public, or the staff, or prescribing an 
informal public conference

[[Page 17]]

for initial discussion and consultation with the Commission, a 
Commissioner, or the Staff, concerning the matter(s) raised. In the 
absence of a notice of proposed rulemaking, any conferences or 
procedures undertaken pursuant to this section shall not be deemed by 
the Commission as meeting the requirements of the Administrative 
Procedure Act with respect to notice of rulemakings, but are to be 
utilized by the Commission as initial discussions for advice as a means 
of determining the need for Commission action, investigation or study 
prior to the issuance of a notice of proposed rulemaking to the extent 
required by the Administrative Procedure Act, 5 U.S.C. 553.
    (c) [Reserved]
    (d) A person may not invoke this policy as a means of advocating ex 
parte before the Commission a position in a proceeding pending at the 
Commission and any such filing will be rejected. Comments must relate to 
general conditions in industry or the public or policies or practices of 
the Commission which may need reform, review, or initial consideration 
by the Commission.

[Order No. 547, 41 FR 15004, Apr. 9, 1976, as amended by Order 225, 47 
FR 19054, May 3, 1982]



Sec. 2.1b  Availability in contested cases of information acquired by staff investigation.

    Pursuant to the Commission's authority under the Natural Gas Act, 
particularly subsection (b) of section 8 thereof, and under the Federal 
Power Act, particularly subsection (b) of section 301 thereof, upon 
request by a party to the proceedings, or as required in conjunction 
with the presentation of a Commission staff case of staff's cross-
examination of any other presentation therein, all relevant information 
acquired by Commission staff, including workpapers pursuant to any staff 
investigation conducted under sections 8, 10, or 14 of the Natural Gas 
Act, and sections 301, 304 or 307 of the Federal Power Act, shall, 
without further order of the Commission, be free from the restraints of 
said subsection (b) of section 8 of the Natural Gas Act, and subsection 
(b) of section 301 of the Federal Power Act, regarding the divulgence of 
information, with respect to any matter hereafter set for formal 
hearing.

[58 FR 38292, July 16, 1993]

Statements of General Policy and Interpretations Under the Federal Power 
                                   Act

    Authority: Sections 2.2 through 2.13, issued under sec. 309, 49 
Stat. 858; 16 U.S.C. 825h, unless otherwise noted.



Sec. 2.2  Transmission lines.

    In a public statement dated March 7, 1941, the Commission announced 
its determination that transmission lines which are not primary lines 
transmitting power from the power house or appurtenant works of a 
project to the point of junction with the distribution system or with 
the interconnected primary transmission system as set forth in section 
3(11) of the Act are not within the licensing authority of the 
Commission, and directed that future applications filed with it for such 
licenses be referred for appropriate action to the Federal department 
having supervision over the lands or waterways involved.

[Order 141, 12 FR 8471, Dec. 19, 1947. Redesignated by Order 147, 13 FR 
8259, Dec. 23, 1948]



Sec. 2.4  Suspension of rate schedules.

    The Commission approved and adopted on May 29, 1945, the following 
conclusions as to its powers of suspension of rate schedules under 
section 205 of the act:
    (a) The Commission cannot suspend a rate schedule after its 
effective date.
    (b) The Commission can suspend any new schedule making any change in 
an existing filed rate schedule, including any rate, charge, 
classification, or service, or in any rule, regulation, or contract 
relating thereto, contained in the filed schedule.
    (c) Included in such changes which may be suspended are:
    (1) Increases.
    (2) Reductions.
    (3) Discriminatory changes.
    (4) Cancellation or notice of termination.
    (5) Changes in classification, service, rule, regulation or 
contract.
    (d) Immaterial, unimportant or routine changes will not be 
suspended.

[[Page 18]]

    (e) During suspension, the prior existing rate schedule continues in 
effect and should not be changed during suspension.
    (f) Changes under escalator clauses may be suspended as changes in 
existing filed schedules.
    (g) Suspension of a rate schedule, within the ambit of the 
Commission's statutory authority is a matter within the discretion of 
the Commission.

(Natural Gas Act, 15 U.S.C. 717-717w (1976 & Supp. IV 1980); Federal 
Power Act, 16 U.S.C. 791a-828c (1976 & Supp. IV 1980); Dept. of Energy 
Organization Act, 42 U.S.C. 7101-7352 (Supp. IV 1980); E.O. 12009, 3 CFR 
part 142 (1978); 5 U.S.C. 553 (1976))

[Order 141, 12 FR 8471, Dec. 19, 1947. Redesignated by Order 147, 13 FR 
8259, Dec. 23, 1948, and amended by Order 303, 48 FR 24361, June 1, 
1983; Order 575, 60 FR 4852, Jan. 25, 1995]



Sec. 2.7  Recreational development at licensed projects.

    The Commission will evaluate the recreational resources of all 
projects under Federal license or applications therefor and seek, within 
its authority, the ultimate development of these resources, consistent 
with the needs of the area to the extent that such development is not 
inconsistent with the primary purpose of the project. Reasonable 
expenditures by a licensee for public recreational development pursuant 
to an approved plan, including the purchase of land, will be included as 
part of the project cost. The Commission will not object to licensees 
and operators of recreational facilities within the boundaries of a 
project charging reasonable fees to users of such facilities in order to 
help defray the cost of constructing, operating, and maintaining such 
facilities. The Commission expects the licensee to assume the following 
responsibilities:
    (a) To acquire in fee and include within the project boundary enough 
land to assure optimum development of the recreational resources 
afforded by the project. To the extent consistent with the other 
objectives of the license, such lands to be acquired in fee for 
recreational purposes shall include the lands adjacent to the exterior 
margin of any project reservoir plus all other project lands specified 
in any approved recreational use plan for the project.
    (b) To develop suitable public recreational facilities upon project 
lands and waters and to make provisions for adequate public access to 
such project facilities and waters and to include therein consideration 
of the needs of physically handicapped individuals in the design and 
construction of such project facilities and access.
    (c) To encourage and cooperate with appropriate local, State, and 
Federal agencies and other interested entities in the determination of 
public recreation needs and to cooperate in the preparation of plans to 
meet these needs, including those for sport fishing and hunting.
    (d) To encourage governmental agencies and private interests, such 
as operators of user-fee facilities, to assist in carrying out plans for 
recreation, including operation and adequate maintenance of recreational 
areas and facilities.
    (e) To cooperate with local, State, and Federal Government agencies 
in planning, providing, operating, and maintaining facilities for 
recreational use of public lands administered by those agencies adjacent 
to the project area.
    (f)(1) To comply with Federal, State and local regulations for 
health, sanitation, and public safety, and to cooperate with law 
enforcement authorities in the development of additional necessary 
regulations for such purposes.
    (2) To provide either by itself or through arrangement with others 
for facilities to process adequately sewage, litter, and other wastes 
from recreation facilities including wastes from watercraft, at 
recreation facilities maintained and operated by the licensee or its 
concessionaires.
    (g) To ensure public access and recreational use of project lands 
and waters without regard to race, color, sex, religious creed or 
national origin.
    (h) To inform the public of the opportunities for recreation at 
licensed projects, as well as of rules governing the accessibility and 
use of recreational facilities.

[Order 313, 30 FR 16198, Dec. 29, 1965, as amended by Order 375-B, 35 FR 
6315, Apr. 18, 1970; Order 508, 39 FR 16338, May 8, 1974]

[[Page 19]]



Sec. 2.8  [Reserved]



Sec. 2.9  Conditions in preliminary permits and licenses--list of and citations to ``P--'' and ``L--'' forms.

    (a) The Commission has approved several sets of standard conditions 
for normal inclusion in preliminary permits or licenses for 
hydroelectric developments. In a special situation, of course, the 
Commission in issuing a permit or license for a project will modify or 
eliminate a particular article (condition). For reference purposes the 
sets of conditions are designated as ``Forms''--those for preliminary 
permits are published in Form P-1, and those for licenses are published 
in Form L's. There are different Form L's for different types of 
licenses, and the forms have been revised from time to time. Thus at any 
given time there will be several series of standard forms applicable to 
the various vintages of different types of licenses. The forms and their 
revisions are published in the Federal Power Commission reports and 
citations thereto are listed below.
    (b) New or revised forms may be approved after preparation of this 
list (which is current as of October, 1975) and consequently do not 
appear herein. Forms currently in use, including those forms which have 
not yet appeared in the FPC reports, may be obtained from the Federal 
Power Commission, Office of Public Information, Washington, DC 20426.
    (c) Within each of the categories, unless retired, the last-listed 
form is the one in use at the date of preparation of the list. The dates 
in the list represent issuance dates of the orders with which the 
particular forms were first published, or subsequently revised, in the 
FPC reports.

P-1: Preliminary Permit, 11 F.P.C. 699 (December 2, 1952), 16 F.P.C. 
1303 (December 4, 1956), 54 F.P.C. ------ (October --, 1975).
L-1: Constructed Major Project Affecting Lands of the United States, 12 
F.P.C. 1262 (September 25, 1953), 32 F.P.C. 71 (July 8, 1964), 54 F.P.C. 
------ (October --, 1975).
L-2: Unconstructed Major Project Affecting Lands of the United States, 
12 F.P.C. 1137 (August 7, 1953), 17 F.P.C. 62 (January 18, 1957), 31 
F.P.C. 528 (March 10, 1964), 54 F.P.C. ------ (October --, 1975).
L-3: Constructed Major Project Affecting Navigable Waters of the United 
States, 12 F.P.C. 836 (February 6, 1953), 17 F.P.C. 385 (March 4, 1957), 
30 F.P.C. 1658 (November 21, 1963), 32 F.P.C. 1114 (October 15, 1964), 
36 F.P.C. 971 (December 6, 1966), 40 F.P.C. 1136 (October 29, 1968), 54 
F.P.C. ------ (October --, 1975).
L-4: Unconstructed Major Project Affecting Navigable Waters of the 
United States, 16 F.P.C. 1284 (November 29, 1956), 32 F.P.C. 839 
(September 21, 1964), 42 F.P.C. 280 (July 30, 1969), 54 F.P.C. ------ 
(October --, 1975).
L-5: Constructed Major Project Affecting Navigable Waters and Lands of 
the United States, 12 F.P.C. 1329 (October 23, 1953), 17 F.P.C. 110 
(January 13, 1957), 38 F.P.C. 203 (July 26, 1967), 54 F.P.C. ------ 
(October --, 1975).
L-6: Unconstructed Major Project Affecting Navigable Waters and Lands of 
the United States, 12 F.P.C. 1271 (September 29, 1953), 16 F.P.C. 1127 
(October 29, 1956), 31 F.P.C. 284 (February 5, 1964), 34 F.P.C. 1114 
(October 7, 1965), 54 F.P.C. ------ (October --, 1975).
L-7 (retired): Minor Project Affecting Lands of the United States, 12 
F.P.C. 911 (March 30, 1953), 17 F.P.C. 486 (April 2, 1957).
L-8 (retired): Minor-Part Project (Transmission Line), 12 F.P.C. 1017 
(June 12, 1953), 41 F.P.C. 217 (March 5, 1969).
L-9: Constructed Minor Project Affecting Navigable Waters of the United 
States, 32 F.P.C. 577 (August 10, 1964), 54 F.P.C. ------ (October --, 
1975).
L-10: Constructed Major Project Affecting the Interests of Interstate or 
Foreign Commerce, 37 F.P.C. 860 (May 9, 1967), 40 F.P.C. 1489 (December 
20, 1968), 54 F.P.C. ------ (October --, 1975).
L-11: Unconstructed Major Project Affecting the Interests of Interstate 
or Foreign Commerce, 34 F.P.C. 602 (August 26, 1965), 36 F.P.C. 687 
(September 26, 1966), 41 F.P.C. 719 (June 6, 1969), 54 F.P.C. ------ 
(October --, 1975).
L-12: Constructed Minor Project Affecting the Interests of Interstate or 
Foreign Commerce, 35 F.P.C. 875 (June 3, 1966), 40 F.P.C. 1447 (December 
10, 1968), 54 F.P.C. ------ (October --, 1975).
L-13: (retired): Unconstructed Major Project Affecting the Interests of 
Interstate or Foreign Commerce and Affecting Lands of the United States, 
42 F.P.C. 367 (August 6, 1969).
L-14: Unconstructed Minor Project Affecting Navigable Waters of the 
United States, 54 F.P.C. ------ (October --, 1975).
L-15: Unconstructed Minor Project Affecting the Interests of Interstate 
or Foreign Commerce, 54 F.P.C. ------ (October --, 1975).
L-16: Constructed Minor Project Affecting Lands of the United States, 54 
F.P.C. ------ (October --, 1975).
L-17: Unconstructed Minor Project Affecting Lands of the United States, 
54 F.P.C. ------ (October --, 1975).

[[Page 20]]

L-18: Constructed Minor Project Affecting Navigable Waters and Lands of 
the United States, 54 F.P.C. ------ (October --, 1975).
L-19: Unconstructed Minor Project Affecting Navigable Waters and Lands 
of the United States, 54 F.P.C. ------ (October --, 1975).
L-20: Constructed Transmission Line Project, 54 F.P.C. ------ (October -
-, 1975).
L-21: Unconstructed Transmission Line Project, 54 F.P.C. ------ (October 
--, 1975).


(Secs. 3, 4, 15, 16, 301, 304, 308, and 309 (41 Stat. 1063-1066, 1068, 
1072, 1075; 49 Stat. 838, 839, 840, 841, 854-856, 858-859; 82 Stat. 617; 
16 U.S.C. 796, 797, 803, 808, 809, 816, 825, 825b, 825c, 825g, 825h, 
826i), as amended, secs. 8, 10, and 16 (52 Stat. 825-826, 830; 15 U.S.C. 
717g, 717i, 717o))

[Order 348, 32 FR 8521, June 14, 1967, as amended by Order 540, 40 FR 
51998, Nov. 7, 1975; Order 567, 42 FR 30612, June 16, 1977]



Sec. 2.12  Calculation of taxes for property of public utilities and licensees constructed or acquired after January 1, 1970.

    Pursuant to the provisions of section 441(a)(4)(A) of the Tax Reform 
Act of 1969, 83 Stat. 487, 625, public utilities and licensees regulated 
by the Commission under the Federal Power Act which have exercised the 
option provided by that section to change from flow through accounting 
will be permitted by the Commission, with respect to liberalized 
depreciation, to employ a normalization method for computing federal 
income taxes in their accounts and annual reports with respect to 
property constructed or acquired after January 1, 1970, to the extent 
with which such property increases the productive or operational 
capacity of the utility and is not a replacement of existing capacity. 
Such normalization will also be permitted for ratemaking purposes to the 
extent such rates are subject to the Commission's ratemaking authority. 
As to balances in Account 282 of the Uniform System of Accounts, 
``Accumulated deferred income taxes--Other property,'' it will remain 
the Commission's policy to deduct such balances from rate base in rate 
proceedings.

(Secs. 3, 4, 15, 16, 301, 304, 308, and 309 (41 Stat. 1063-1066, 1068, 
1072, 1075; 49 Stat. 838, 839, 840, 841, 854-856, 858-859; 82 Stat. 617; 
16 U.S.C. 796, 797, 803, 808, 809, 816, 825, 825b, 825c, 825g, 825h, 
826i), as amended, Secs. 8, 10, and 16 (52 Stat. 825-826, 830; 15 U.S.C. 
717g, 717i, 717o))

[Order 404, 35 FR 7964, May 23, 1970, as amended by Order 567, 42 FR 
30612, June 16, 1977]



Sec. 2.13  Design and construction.

    (a) The Commission recognizes the importance of protecting and 
enhancing natural, historic, scenic, and recreational values at projects 
licensed or proposed to be licensed under the Federal Power Act.
    (b) The Commission has adopted ``Guidelines for the Protection of 
Natural, Historic, Scenic, and Recreational Values in the Design and 
Location of Rights-of-Way and Transmission Facilities'' \1\ as set forth 
in Order No. 414 issued November 27, 1970. The Commission will consider 
these guidelines inter alia, in the determination of whether 
applications for any licenses under the Federal Power Act are best 
adapted to a comprehensive plan for developing a waterway. The 
guidelines may be obtained from the Office of Public Information, 
Federal Power Commission, Washington, DC 20426.
---------------------------------------------------------------------------

    \1\ Filed as part of the original document.
---------------------------------------------------------------------------

    (c) In furtherance of these polices, the Commission will not (1) 
permit the amendment of any license for the purpose of construction of 
additional facilities or (2) authorize the disposition of any interest 
in project lands for construction of any type, unless a showing is made 
that the construction will be designed to avoid or minimize conflict 
with the natural, historic, and scenic values and resources of the 
project area, including compliance with the Commission's ``Guidelines 
for the Protection of Natural, Historic, Scenic, and Recreational Values 
in the Design

[[Page 21]]

---------------------------------------------------------------------------
and Location of Rights-of-Way and Transmission Facilities''.

(Secs. 3, 4, 15, 16, 301, 304, 308, and 309 (41 Stat. 1063-1066, 1068, 
1072, 1075; 49 Stat. 838, 839, 840, 841, 854-856, 858-859; 82 Stat. 617; 
16 U.S.C. 796, 797, 803, 808, 809, 816, 825, 825b, 825c, 825g, 825h, 
826i), as amended, Secs. 8, 10, and 16 (52 Stat. 825-826, 830; 15 U.S.C. 
717g, 717i, 717o))

[Order 414, 35 FR 18586, Dec. 8, 1970, as amended by Order 567, 42 FR 
30612, June 16, 1977]



Sec. 2.15  Specified reasonable rate of return.

    (a) Pursuant to section 10(d) of the Federal Power Act, the 
Commission has determined that the specified reasonable rate of return 
used in computing amortization reserves for hydroelectric project 
licenses shall be calculated annually based on current capital ratios 
developed from an average of 13 monthly balances of amounts properly 
includible in the licensee's long-term debt and proprietary capital 
accounts, as listed in the Commission's Uniform System of Accounts. The 
cost rate for such ratios shall be the weighted average cost of long-
term debt and preferred stock for the year, and the cost of common 
equity shall be the interest rate on 10-year government bonds (reported 
as the Treasury Department's 10-year constant maturity series) computed 
on the monthly average for the year in question, plus four percentage 
points (400 basis points).
    (b) The Statement of Policy adopted herein shall be effective upon 
issuance of this order.
    (c) The Secretary shall cause prompt publication of this order to be 
made in the Federal Register.
    (d) All requests and suggestions not specifically dealt with herein 
are hereby denied.
    (e) The Secretary is hereby authorized to change the appropriate 
license article upon application by the licensees to reflect the 
specified reasonable rate of return as adopted herein.

[Order 550, 41 FR 27032, July 1, 1976]



Sec. 2.17  Price discrimination and anticompetitive effect (price squeeze issue).

    To implement compliance with the Supreme Court decision in F.P.C. v. 
Con-Way Corp., 426 U.S. 271 (1976), aff'g 510 F. 2d 1264 (D.C. Cir. 
1975) and to expedite the consideration of price squeeze issues in 
wholesale electric rate proceedings, the Commission adopts the following 
procedures for raising price squeeze issues which are to be followed 
unless they are demonstrated in an individual case to be inadequate:
    (a) Any wholesale customer, state commission or other interested 
person may file petitions to intervene alleging price discrimination and 
anticompetitive effects of the wholesale rates. In order to have the 
issue of price discrimination considered in the rate proceeding, the 
intervening customer or other interested person must support its 
allegation by a prima facie case. The elements of the prima facie case 
shall include at a minimum:
    (1) Specification of the filing utility's retail rate schedules with 
which the intervening wholesale customer is unable to compete due to 
purchased power costs;
    (2) A showing that a competitive situation exists in that the 
wholesale customer competes in the same market as the filing utility;
    (3) A showing that the retail rates are lower than the proposed 
wholesale rates for comparable service;
    (4) The wholesale customer's prospective rate for comparable retail 
service, i.e. the rate necessary to recover bulk power costs (at the 
proposed wholesale rate) and distribution costs;
    (5) An indication of the reduction in the wholesale rate necessary 
to eliminate the price squeeze alleged.
    (b) Where price squeeze is alleged, the Commission shall, in the 
order granting intervention, direct the Administrative Law Judge to 
convene a prehearing conference within 15 days from the date of the 
order for the purpose of hearing intervenors' request for data required 
to present their case, including prima facie showing, on price squeeze 
issues.
    (c) Within 30 days from the date of the conference the filing 
utility shall respond to the data requests authorized by the 
Administrative Law Judge.
    (d) Within 30 days from the filing utility's response, the 
intervenors shall file their case-in-chief on price squeeze

[[Page 22]]

issues, which shall include their prima facie case, unless filed 
previously.
    (e) The burden of proof (i.e. the risk of nonpersuasion) to rebut 
the allegations of price squeeze and to justify the proposed rates are 
on the utility proposing the rates under section 205(e) of the Federal 
Power Act.
    (f) In proceedings where price squeeze is an issue, the Secretary 
shall include the state commission, agency or body which is responsible 
for regulation of retail rates in the state affected in the service list 
maintained under Sec. 385.2010(c) of this chapter.

[Order 563, 42 FR 16132, Mar. 25, 1977, as amended by Order 225, 47 FR 
19054, May 3, 1982]



Sec. 2.18  Phased electric rate increase filings.

    (a) In general, when a public utility files a phased rate increase, 
the Commission will determine the appropriate suspension period based on 
the total increase requested in all phases. If a utility files a rate 
increase within sixty days after filing another rate increase, the 
Commission will consider the filings together to be a phased rate 
increase request.
    (b) This policy will not be applied if the increase is phased:
    (1) To coordinate with new facilities coming on line;
    (2) To implement a rate moderation plan;
    (3) To avoid price squeeze;
    (4) To comply with a settlement approved by the Commission; or
    (5) If the utility makes a convincing showing that application of 
the policy would be harsh and inequitable and that, therefore, good 
cause has been shown not to apply the policy in the case.

[52 FR 11, Jan. 11, 1987]



Sec. 2.19  State and Federal comprehensive plans.

    (a) In determining whether the proposed hydroelectric project is 
best adapted to a comprehensive plan under section (10)(a)(1) of the 
Federal Power Act for improving or developing a waterway, the Commission 
will consider the extent to which the project is consistent with a 
comprehensive plan (where one exists) for improving, developing, or 
conserving a waterway or waterways affected by the project that is 
prepared by:
    (1) An agency established pursuant to Federal law that has the 
authority to prepare such a plan, or
    (2) A state agency, of the state in which the facility is or will be 
located, authorized to conduct such planning pursuant to state law.
    (b) The Commission will treat as a state or Federal comprehensive 
plan a plan that:
    (1) Is a comprehensive study of one or more of the beneficial uses 
of a waterway or waterways;
    (2) Includes a description of the standards applied, the data relied 
upon, and the methodology used in preparing the plan; and
    (3) Is filed with the Secretary of the Commission.

[Order 481-A, 53 FR 15804, May 4, 1988]



Sec. 2.20  Good faith requests for transmission services and good faith responses by transmitting utilities.

    (a) General Policy. (1) This Statement of Policy is adopted in 
furtherance of the goals of sections 211(a) and 213(a) of the Federal 
Power Act, as amended and added by the Energy Policy Act of 1992.
    (2) Under section 211(a), the Commission may issue an order 
requiring a transmitting utility to provide transmission services 
(including any enlargement of transmission capacity necessary to provide 
such services) only if an applicant has made a request for transmission 
services to the transmitting utility that would be the subject of such 
order at least 60 days prior to its filing of an application for such 
order. The requirement in section 211(a) that an applicant make such a 
request will be met if such an applicant has, pursuant to section 213(a) 
of the FPA, made a good faith request to a transmitting utility to 
provide wholesale transmission services and requests specific rates and 
charges, and other terms and conditions.
    (3) It is the Commission's intention to apply the standards of this 
Statement of Policy when determining whether and when a valid ``good 
faith'' request for service was made.

[[Page 23]]

    (4) It is the Commission's intention to encourage an open exchange 
of information that exhibits a reasonable degree of specificity and 
completeness between the party requesting transmission services and the 
transmitting utility.
    (5) The Commission intends to apply this Statement of Policy so as 
to carry out Congress' objective that, subject to appropriate terms and 
conditions and just and reasonable rates, in conformance with section 
212 of the FPA, access to the electric transmission system for the 
purposes of wholesale transactions be more widely available.
    (b) The Components of a good faith request. The Commission generally 
considers the following to constitute the minimum components of a good 
faith request for transmission services:
    (1) The identity, address, telephone number, and facsimile number of 
the party requesting transmission services, and the same information, if 
different, for the party's contact person or persons.
    (2) A statement that the party requesting transmission services is, 
or will be upon commencement of service, an entity eligible to request 
transmission under sections 211(a) and 213(a) of the FPA.
    (3) A statement that the request for transmission services is 
intended to satisfy the ``request for transmission services'' 
requirement under sections 211(a) and 213(a) of the FPA, and that the 
request is not a request for mandatory retail wheeling prohibited under 
section 212(h) of the FPA.
    (4) The party requesting transmission services should specify the 
character and nature of the services requested. Some types of service 
may require more detailed information than others. Where point-to-point 
service is requested, the party requesting transmission services should 
specify the anticipated point(s) of receipt to the transmitting 
utility's grid and the anticipated point(s) of delivery from the 
transmitting utility's grid. Where a party requesting transmission 
services requests additional flexibility to schedule multiple resources 
to meet its needs (e.g., network service), the request for services 
should contain a description of the requested services in sufficient 
detail to permit the transmitting utility to model the additional 
services on its transmission system.
    (5) The names of any other parties likely to provide transmission 
service to deliver electric energy to, and receive electric energy from, 
the transmitting utility's grid in connection with the requested 
transmission services.
    (6) The proposed dates for initiating and terminating the requested 
transmission services.
    (7) The total amount of transmission capacity being requested.
    (8) To the extent it is known or can be estimated, a description of 
the ``expected transaction profile'' including load factor data 
describing the hourly quantities of power and energy the party 
requesting transmission services would expect to deliver to the 
transmitting utility's grid at relevant points of interconnection. In 
the event delivery is to multiple points within the transmitting 
utility's electric control area, the requestor should describe, to the 
extent it is known or can be estimated, the expected load (over a given 
duration of time) at each such delivery point.
    (9) Whether firm or non-firm service is being requested. Where a 
party requests non-firm service, it should specify the priority of 
service it is willing to accept, or the conditions under which it is 
willing to accept interruption or curtailment, if known.
    (10) A statement as to whether the request is being made in response 
to a solicitation and a copy of the solicitation if publicly available. 
This will help the transmitting utility determine whether requests for 
transmission service are duplicative or mutually exclusive of requests 
filed by other parties.
    (11) The proposed rates, terms and conditions for the requested 
transmission services as required by section 213(a). It is not necessary 
for the requestor to propose a specific numerical rate. Rather, a party 
requesting transmission services can fulfill the rates, terms and 
conditions requirement by specifying a rate methodology (e.g., embedded 
or incremental cost) or by referencing an existing formula rate, 
transmission tariff, or transmission

[[Page 24]]

contract. The validity of the good faith request will not depend on the 
rates proposed by the party requesting transmission services. This 
requirement is not intended to allow utilities to delay responses to 
requests for transmission services, or to deny requests for transmission 
services on the basis of an overly rigid or technical approach to the 
``rates, terms and conditions'' element of the request.
    (12) Any other information to facilitate the expeditious processing 
of its request. Such information will improve the negotiation process, 
reduce costs, and will improve chances to arrange the requested 
transmission without resorting to section 211 application procedures 
before the Commission.
    (c) Components of a Reply to a Good Faith Request. The Commission 
generally considers the following to constitute the minimum components 
of a reply to a good faith request for transmission services under 
section 213(a):
    (1) Unless the parties agree to a different time frame, the 
transmitting utility must acknowledge the request within 10 days of 
receipt. The acknowledgement must include a date by which a response 
will be sent to the party requesting transmission services and a 
statement of any fees associated with responding to the request (e.g., 
initial studies).
    (2) The transmitting utility may ask the applicant to provide 
clarification of only the information needed to evaluate and process a 
``good faith'' request. If the person requesting transmission services 
believes the transmitting utility is attempting to frustrate the process 
by making excessive requests for clarification, it may raise this issue 
if, and when, it files a request for a section 211 order with the 
Commission.
    (3) The transmitting utility must respond to a request within 60 
days of receipt or some other mutually agreed upon response date. If 
both parties agree to an alternative schedule, the agreement must be in 
writing and signed by both parties.
    (4) If the transmitting utility determines that it can provide all 
the requested services from existing capacity, it should respond by 
offering the party requesting transmission services an executable 
service agreement that at a minimum contains the following information:
    (i) A description of the proposed transmission rate and any other 
costs. It is not necessary for the proposed service agreement to contain 
a fully developed cost-of-service. However, the agreement should explain 
the basis for the charges for each component of service, including the 
unbundled components of any transmission rate as well as any other 
charges.
    (ii) The proposed service agreement should explicitly describe all 
of the applicable terms and conditions of the transmission services 
provided under the agreement.
    (iii) The transmitting utility should accompany the proposed service 
agreement with a clear statement of the time during which the offer to 
provide the transmission services will remain open. An open agreement 
offer may obligate the seller while imposing no countervailing 
obligation on the purchaser, and an unexecuted contract potentially ties 
up transmission facilities, thus jeopardizing the availability and price 
for subsequent requests that would use the same facilities. However, at 
a minimum, a transmitting utility should permit the party requesting 
transmission services sufficient time to review service agreements and 
coordinate multiple stages of joint transactions.
    (5) If the transmitting utility determines that it must construct 
additional facilities or modify existing facilities to provide all or 
part of the requested services, it must:
    (i) Identify the specific constraints and their duration that 
prevent it from providing all the requested services and explain how 
these constraints prevent it from providing all the requested services 
or the desired level of firmness.
    (ii) Provide to the applicant all studies, computer input and output 
data, planning, operating and other documents, work papers, assumptions 
and any other material that forms the basis for determining the 
constraints.
    (iii) Offer to the applicant an executable agreement under which the 
applicant agrees to reimburse the transmitting utility for all costs of 
performing

[[Page 25]]

any studies necessary to determine what changes to the transmitting 
utility's grid are needed to overcome the constraint and provide the 
requested services, their cost, and the estimated time to complete them. 
At a minimum, the proposed agreement should contain the following:
    (A) An estimate of the cost of the study and the time required to 
complete it, and
    (B) A commitment to supply to the party requesting transmission 
services all computer input and output data, planning, operating and 
other documents, work papers, assumptions and any other material used to 
perform the study.
    (iv) If a transmitting utility determines that it can provide part 
but not all of the requested services without building new facilities, 
it should inform the applicant of any portion of the requested services 
that can be performed without constructing additional facilities or 
modifying existing facilities. In effect, the transmitting utility may 
be able to treat such a request as two separate transactions--one for 
service on existing facilities and the other as a request involving 
expansion decisions. Furthermore, where there are alternative, less 
expensive means of satisfying all or a portion of a transmission 
request, the Commission expects the transmitting utility to explore such 
alternatives (e.g., redispatching certain generating units to alleviate 
a constraint).

[58 FR 38969, July 21, 1993]



Sec. 2.21  Regional Transmission Groups.

    (a) General policy. The Commission encourages Regional Transmission 
Groups (RTGs) as a means of enabling the market for electric power to 
operate in a more competitive and efficient way. The Commission believes 
that RTGs can provide a means of coordinating regional planning of the 
transmission system and assuring that system capabilities are always 
adequate to meet system demands. RTG agreements that contain components 
that satisfy paragraphs (b) and (c) of this section generally will be 
considered to be just, reasonable, and not unduly discriminatory or 
preferential under the Federal Power Act (FPA). The Commission 
encourages RTG agreements that contain as much detail as possible in all 
of the components listed, particularly if the RTG participants will be 
seeking Commission deference to decisions reached under an RTG 
agreement.
    (b) Organizational components. (1) An RTG agreement should provide 
for broad membership and, at a minimum, allow any entity that is subject 
to, or eligible to apply for, an order under section 211 of the FPA to 
be a member. An RTG agreement should encompass an area of sufficient 
size and contiguity to enable members to provide transmission services 
in a reliable, efficient, and competitive manner.
    (2) An RTG agreement should provide a means of adequate consultation 
and coordination with relevant state regulatory, siting, and other 
authorities.
    (3) An RTG agreement should include fair and nondiscriminatory 
governance and decisionmaking procedures, including voting procedures.
    (c) Other components. (1) An RTG agreement should impose on member 
transmitting utilities an obligation to provide transmission services 
for other members, including the obligation to enlarge facilities, on a 
basis that is consistent with sections 205, 206, 211, 212 and 213 of the 
FPA. To the extent practicable and known, the RTG agreement should 
specify the terms and conditions under which transmission services will 
be offered.
    (2) An RTG agreement should require, at a minimum, the development 
of a coordinated transmission plan on a regional basis and the sharing 
of transmission planning information, with the goal of efficient use, 
expansion, and coordination of the interconnected electric system on a 
grid-wide basis. An RTG agreement should provide mechanisms to 
incorporate the transmission needs of non-members into regional plans. 
An RTG agreement should include as much detail as possible with regard 
to operational and planning procedures.
    (3) An RTG agreement should include voluntary dispute resolution 
procedures that provide a fair alternative to resorting in the first 
instance to section 206 complaints or section 211 proceedings.

[[Page 26]]

    (4) An RTG agreement should include an exit provision for RTG 
members that leave the RTG, specifying the obligations of a departing 
member.
    (d) Filing procedures. Any proposed RTG agreement that in any manner 
affects or relates to the transmission of electric energy in interstate 
commerce by a public utility, or rates or charges for such transmission, 
must be filed with the Commission. Any public utility member of a 
proposed RTG may file the RTG agreement with the Commission on behalf of 
the other public utility members under section 205 of the FPA.

[58 FR 41632, Aug. 5, 1993]



Sec. 2.22  Pricing policy for transmission services provided under the Federal Power Act.

    (a) The Commission has adopted a Policy Statement on its pricing 
policy for transmission services provided under the Federal Power Act. 
That Policy Statement can be found at 69 FERC 61,086. The Policy 
Statement constitutes a complete description of the Commission's 
guidelines for assessing the pricing proposals. Paragraph (b) of this 
section is only a brief summary of the Policy Statement.
    (b) The Commission endorses transmission pricing flexibility, 
consistent with the principles and procedures set forth in the Policy 
Statement. It will entertain transmission pricing proposals that do not 
conform to the traditional revenue requirement as well as proposals that 
conform to the traditional revenue requirement. The Commission will 
evaluate ``conforming'' transmission pricing proposals using the 
following five principles, described more fully in the Policy Statement.
    (1) Transmission pricing must meet the traditional revenue 
requirement.
    (2) Transmission pricing must reflect comparability.
    (3) Transmission pricing should promote economic efficiency.
    (4) Transmission pricing should promote fairness.
    (5) Transmission pricing should be practical.
    (c) Under these principles, the Commission will also evaluate ``non-
conforming'' proposals which do not meet the traditional revenue 
requirement, and will require such proposals to conform to the 
comparability principle. Non-conforming proposals must include an open 
access comparability tariff and will not be allowed to go into effect 
prior to review and approval by the Commission under procedures 
described in the Policy Statement.

[59 FR 55039, Nov. 3, 1994]



Sec. 2.23  Use of reserved authority in hydropower licenses to ameliorate cumulative impacts.

    The Commission will address and consider cumulative impact issues at 
original licensing and relicensing to the fullest extent possible 
consistent with the Commission's statutory responsibility to avoid undue 
delay in the relicensing process and to avoid undue delay in the 
amelioration of individual project impacts at relicensing. To the 
extent, if any, that it is not possible to explore and address all 
cumulative impacts at relicensing, the Commission will reserve authority 
to examine and address such impacts after the new license has been 
issued, but will define that reserved authority as narrowly and with as 
much specificity as possible, particularly with respect to the purpose 
of reserving that authority. The Commission intends that such articles 
will describe, to the maximum extent possible, reasonably foreseeable 
future resource concerns that may warrant modifications of the licensed 
project. Before taking any action pursuant to such reserved authority, 
the Commission will publish notice of its proposed action and will 
provide an opportunity for hearing by the licensee and all interested 
parties. Hydropower licenses also contain standard ``reopener'' articles 
(see Sec. 2.9 of this part) which reserve authority to the Commission to 
require, among other things, licensees of projects located in the same 
river basin to mitigate the cumulative impacts of those projects on the 
river basin. In light of the policy described above, the Commission will 
use the standard ``reopener'' articles to explore and address cumulative 
impacts only (except in extraordinary circumstances) where such impacts

[[Page 27]]

were not known at the time of licensing or are the result of changed 
circumstances. The Commission has authority under the Federal Power Act 
to require licensees, during the term of the license, to develop and 
provide data to the Commission on the cumulative impacts of licensed 
projects located in the same river basin. In issuing both new and 
original licenses, the Commission will coordinate the expiration dates 
of the licenses to the maximum extent possible, to maximize future 
consideration of cumulative impacts at the same time in contemporaneous 
proceedings at relicensing. The Commission's intention is to consider to 
the extent practicable cumulative impacts at the time of licensing and 
relicensing, and to eliminate the need to resort to the use of reserved 
authority.

[59 FR 66718, Dec. 28, 1994]



Sec. 2.24  Project decommissioning at relicensing.

    The Commission issued a statement of policy on project 
decommissioning at relicensing in Docket No. RM93-23-000 on December 14, 
1994.

[60 FR 347, Jan. 4, 1995]



Sec. 2.25  Ratemaking treatment of the cost of emissions allowances in coordination transactions.

    (a) General Policy. This Statement of Policy is adopted in 
furtherance of the goals of Title IV of the Clean Air Act Amendments of 
1990, Pub. L. 101-549, Title IV, 104 Stat. 2399, 2584 (1990).
    (b) Costing Emissions Allowances in Coordination Sales. If a public 
utility's coordination rate on file with the Commission provides for 
recovery of variable costs on an incremental basis, the Commission will 
allow recovery of the incremental costs of emissions allowances 
associated with a coordination sale. If a coordination rate does not 
reflect incremental costs, the public utility should propose alternative 
allowance costing methods or demonstrate that the coordination rate does 
not produce unreasonable results. The Commission finds that the cost to 
replace an allowance is an appropriate basis to establish the 
incremental cost.
    (c) Use of Indices. The Commission will allow public utilities to 
determine emissions allowance costs on the basis of an index or 
combination of indices of the current price of emissions allowances, 
provided that the public utility affords purchasing utilities the option 
of providing emissions allowances. Public utilities should explain and 
justify any use of different incremental cost indices for pricing 
coordination sales and making dispatch decisions.
    (d) Calculation of Amount of Emissions Allowances Associated With 
Coordination Transactions. Public utilities should explain the methods 
used to compute the amount of emissions allowances included in 
coordination transactions.
    (e) Timing. (1) Public utilities should provide information to 
purchasing utilities regarding the timing of opportunities for 
purchasers to stipulate whether they will purchase or return emissions 
allowances. A public utility may require a purchasing utility to 
declare, no later than the beginning of the coordination transaction:
    (i) Whether it will purchase or return emissions allowances; and
    (ii) If it will return emissions allowances, the date on which those 
allowances will be returned.
    (2) Public utilities may include in agreements with purchasing 
utilities non-discriminatory provisions for indemnification if the 
purchasing utility fails to provide emissions allowances by the date on 
which it declares that the allowances will be returned.
    (f) Other Costing Methods Not Precluded. The ratemaking treatment of 
emissions allowance costs endorsed in this Policy Statement does not 
preclude other approaches proposed by individual utilities on a case-by-
case basis.

[59 FR 65938, Dec. 22, 1994, as amended by Order 579, 60 FR 22261, May 
5, 1995]



Sec. 2.26  Policies concerning review of applications under section 203.

    (a) The Commission has adopted a Policy Statement on its policies 
for reviewing transactions subject to section 203. That Policy Statement 
can be found at 77 FERC [para] 61,263 (1996). The Policy Statement is a 
complete description of the relevant guidelines. Paragraphs (b)-(e) of 
this section are only a brief summary of the Policy Statement.

[[Page 28]]

    (b) Factors Commission will generally consider. In determining 
whether a proposed transaction subject to section 203 is consistent with 
the public interest, the Commission will generally consider the 
following factors; it may also consider other factors:
    (1) The effect on competition;
    (2) The effect on rates; and
    (3) The effect on regulation.
    (c) Effect on competition. Applicants should provide data adequate 
to allow analysis under the Department of Justice/Federal Trade 
Commission Merger Guidelines, as described in the Policy Statement and 
Appendix A to the Policy Statement.
    (d) Effect on rates. Applicants should propose mechanisms to protect 
customers from costs due to the merger. If the proposal raises 
substantial issues of relevant fact, the Commission may set this issue 
for hearing.
    (e) Effect on regulation. (1) Where the merged entity would be part 
of a registered public utility holding company, if applicants do not 
commit in their application to abide by this Commission's policies with 
regard to affiliate transactions, the Commission will set the issue for 
a trial-type hearing.
    (2) Where the affected state commissions have authority to act on 
the transaction, the Commission will not set for hearing whether the 
transaction would impair effective regulation by the state commission. 
The application should state whether the state commissions have this 
authority.
    (3) Where the affected state commissions do not have authority to 
act on the transaction, the Commission may set for hearing the issue of 
whether the transaction would impair effective state regulation.

[Order 592, 61 FR 68606, Dec. 30, 1996]

 Statements of General Policy and Interpretations Under the Natural Gas 
                                   Act



Sec. 2.51  [Reserved]



Sec. 2.52  Suspension of rate schedules.

    The interpretation stated in Sec. 2.4 applies as well to the 
suspension of rate schedules under section 4 of the Natural Gas Act.

(Natural Gas Act, 15 U.S.C. 717-717w (1976 & Supp. IV 1980); Federal 
Power Act, 16 U.S.C. 791a-828c (1976 & Supp. IV 1980); Dept. of Energy 
Organization Act, 42 U.S.C. 7101-7352 (Supp. IV 1980); E.O. 12009, 3 CFR 
part 142 (1978); 5 U.S.C. 553 (1976))

[Order 303, 48 FR 24361, June 1, 1983]



Sec. 2.55  Definition of terms used in section 7(c).

    For the purposes of section 7(c) of the Natural Gas Act, as amended, 
the word facilities as used therein shall be interpreted to exclude:
    (a) Auxiliary installations. (1) Installations (excluding gas 
compressors) which are merely auxiliary or appurtenant to an authorized 
or proposed transmission pipeline system and which are installations 
only for the purpose of obtaining more efficient or more economical 
operation of the authorized or proposed transmission facilities, such 
as: Valves; drips; pig launchers/receivers; yard and station piping; 
cathodic protection equipment; gas cleaning, cooling and dehydration 
equipment; residual refining equipment; water pumping, treatment and 
cooling equipment; electrical and communication equipment; and 
buildings.
    (2) Advance notification. One of the following requirements will 
apply to any specified auxiliary installation. If auxiliary facilities 
are to be installed:
    (i) On existing transmission facilities, then no notification is 
required;
    (ii) On, or at the same time as, certificated facilities which are 
not yet in service (except those authorized under the automatic 
procedures of part 157 of subpart F of this chapter), then a description 
of the auxiliary facilities and their locations must be provided to the 
Commission at least 30 days in advance of their installation; or
    (iii) On and at the same time as facilities that are proposed, then 
the auxiliary facilities must be described in the environmental report 
specified in Sec. 380.12 or in a supplemental filing while the 
application is pending.
    (b) Replacement of facilities. (1) Facilities which constitute the 
replacement of existing facilities that have or will soon become 
physically deteriorated or

[[Page 29]]

obsolete, to the extent that replacement is deemed advisable, if:
    (i) The replacement will not result in a reduction or abandonment of 
service through the facilities;
    (ii) The replacement facilities will have a substantially equivalent 
designed delivery capacity, will be located in the same right-of-way or 
on the same site as the facilities being replaced, and will be 
constructed using the temporary work space used to construct the 
original facility (See appendix A to this part 2 for guidelines on what 
is considered to be the appropriate work area in this context);
    (iii) Except as described in paragraph (b)(2) of this section, the 
company files notification of such activity with the Commission at least 
30 days prior to commencing construction.
    (2) Advance notification not required. The advance notification 
described in paragraph (b)(1)(iii) of this section is not required if:
    (i) The cost of the replacement project does not exceed the cost 
limit specified in Column 1 of Table I of Sec. 157.208(d) of this 
chapter; or
    (ii) U.S. Department of Transportation safety regulations require 
that the replacement activity be performed immediately;
    (3) Contents of the advance notification. The advance notification 
described in paragraph (b)(1)(iii) of this section must include the 
following information:
    (i) A brief description of the facilities to be replaced (including 
pipeline size and length, compression horsepower, design capacity, and 
cost of construction);
    (ii) Current U.S. Geological Survey 7.5-minute series topographic 
maps showing the location of the facilities to be replaced; and
    (iii) A description of the procedures to be used for erosion 
control, revegetation and maintenance, and stream and wetland crossings.
    (4) Annual report. On or before May 1 of each year, a company must 
file (on electronic media pursuant to Sec. 385.2011 of this chapter, 
accompanied by 7 paper copies) an annual report that lists for the 
previous calendar year each replacement project that was completed 
pursuant to paragraph (b)(1) of this section and that was exempt from 
the advance notification requirement pursuant to paragraph (b)(2) of 
this section. For each such replacement project, the company must 
include all of the information described in paragraph (b)(3) of this 
section. Exception. A company does not have to include in this annual 
report any above-ground replacement project that did not involve 
compression facilities or the use of earthmoving equipment.
    (c)-(d) [Reserved]

(Sec. 7, 52 Stat. 824; 15 U.S.C. 717f)

[Order 148, 14 FR 681, Feb. 16, 1949, as amended by Order 220, 25 FR 
2363, Mar. 19, 1960; Order 241, 27 FR 510, Jan. 18, 1962; Order 148-A, 
38 FR 11450, May 8, 1973; 55 FR 33015, Aug. 13, 1990; Order 544, 57 FR 
46495, Oct. 9, 1992; Order 544-A, 58 FR 57735, Oct. 27, 1993; Order 603, 
64 FR 26603, May 14, 1999; Order 603-A, 64 FR 54535, Oct. 7, 1999; 65 FR 
18221, Apr. 7, 2000]



Sec. 2.57  Temporary certificates--pipeline companies.

    The Federal Power Commission will exercise the emergency powers set 
forth in the second proviso of section 7(c) of the Natural Gas Act to 
authorize in appropriate cases, by issuance of temporary certificates, 
comparatively minor enlargements or extensions of an existing pipeline 
system. It will not be the policy of the Commission, however, to proceed 
summarily, i.e., without notice or hearing, in cases where the proposed 
construction is of major proportions. Pipeline companies are accordingly 
urged to conduct their planning and to submit their applications for 
authority sufficiently early so that compliance with the requirements 
relating to issuance of permanent certificates of public convenience and 
necessity (when those requirements are deemed applicable by the 
Commission) will not cause undue delay in the commencement of necessary 
construction.

(52 Stat. 824; 56 Stat. 83; 15 U.S.C. 717f)

[Gen. Policy 62-1, 26 FR 10098, Oct. 27, 1961]



Sec. 2.60  Facilities and activities during an emergency--accounting treatment of defense-related expenditures.

    The Commission, cognizant of the need of the natural gas industry 
for advice with respect to the applicability of

[[Page 30]]

the Natural Gas Act and the Commission's regulations thereunder 
regarding activities and operations of natural gas companies taking 
security measures in preparation for a possible national emergency, sets 
forth the following interpretation and statement of policy:
    (a) Facilities. The definition of auxiliary installations in 
Sec. 2.55(a) for which no certificate authority is necessary includes 
such defense-related facilities as (1) fallout shelters at compressor 
stations and other operating and maintenance camps; (2) emergency 
company headquarters or other similar installations; and (3) emergency 
communication equipment.
    (b) The Commission will consider reasonable investment in defense-
related facilities, such as those described in paragraph (a) of this 
section, to be prudent investment for ratemaking purposes.
    (c) When a person, not otherwise subject to the jurisdiction of the 
Commission, files an application for a certificate of public convenience 
and necessity authorizing the construction of facilities to be used 
solely for operation in a national emergency for the delivery of gas to, 
or receipt of gas from, a person subject to the Commission's 
jurisdiction, the Commission will consider a request by such applicant 
for waiver of the requirement to keep and maintain its accounts in 
accordance with the Uniform System of Accounts for Natural Gas Companies 
(parts 201 and 204 of this chapter) or to file the annual reports to the 
Commission required by Secs. 260.1 and 260.2 of this chapter.

(Secs. 3, 4, 15, 16, 301, 304, 308, and 309 (41 Stat. 1063-1066, 1068, 
1072, 1075; 49 Stat. 838, 839, 840, 841, 854-856, 858-859; 82 Stat. 617; 
16 U.S.C. 796, 797, 803, 808, 809, 816, 825, 825b, 825c, 825g, 825h, 
826i), as amended, secs. 8, 10, and 16 (52 Stat. 825-826, 830; 15 U.S.C. 
717g, 717i, 717o))

[Order 274, 28 FR 12866, Dec. 4, 1963, as amended by Order 567, 42 FR 
30612, June 16, 1977]



Sec. 2.67  Calculation of taxes for property of pipeline companies constructed or acquired after January 1, 1970.

    Pursuant to the provisions of section 441(a)(4)(A) of the Tax Reform 
Act of 1969, 83 Stat. 487, 625, natural gas pipeline companies which 
have exercised the option provided by that section to change from flow 
through accounting will be permitted by the Commission, with respect to 
liberalized depreciation, to employ a normalization method for computing 
Federal income taxes in their accounts and annual reports with respect 
to property constructed or acquired after January 1, 1970, to the extent 
to which such property increases the productive or operational capacity 
of the utility and is not a replacement of existing capacity. Such 
normalization will also be permitted for ratemaking purposes. As to 
balances in Account No. 282 of the Uniform System of Accounts, 
``Accumulated deferred income taxes--Other property,'' it will remain 
the Commission's policy to deduct such balances from the rate base of 
natural gas pipeline companies in rate proceedings.

(Secs. 3, 4, 5, 8, 9, 10, 15, 16, 301, 304, 308, and 309 (41 Stat. 1063-
1066, 1068, 1072, 1075; 49 Stat. 838, 839, 840, 841, 854-856, 858-859; 
52 Stat. 822, 823, 825, 826; 76 Stat. 72; 82 Stat. 617; 16 U.S.C. 796, 
797, 803, 808, 809, 816, 825, 825b, 825c, 825g, 825h, 826i); as amended, 
secs. 8, 10, and 16 (52 Stat. 825-826, 830; 15 U.S.C. 717c, 717d, 717g, 
717h, 717i, 717o))

[Order 404, 35 FR 7964, May 23, 1970, as amended by Order 567, 42 FR 
30612, June 16, 1977]



Sec. 2.69  [Reserved]



Sec. 2.76  Regulatory treatment of payments made in lieu of take-or-pay obligations.

    With respect to payments made to a first seller of natural gas as 
consideration for waiving or revising any agreement for the first sale 
of natural gas, as defined by section (2)(21) of the Natural Gas Policy 
Act (NGPA), the Commission sets forth the following statement of general 
policy and interpretation of law.
    (a) Payments in consideration. A first seller of natural gas that 
receives payments as consideration for amending or waiving the take-or-
pay or similar minimum payment provisions of a contract for the first 
sale of natural gas is not in violation of section 504(a) of the NGPA.
    (b) Recovery in rates. A pipeline that makes any payments referred 
to under paragraph (a) of this section, to first sellers may file to 
recover such costs in

[[Page 31]]

any section 4(e) rate filing other than a filing to recover purchased 
gas costs.
    (c) Case-specific review. A pipeline's method of recovering these 
costs and how it should apportion them among customers will be addressed 
on a case-by-case basis in the context of individual rate case filings.
    (d) Customers' rights. When a pipeline seeks to recover payments 
referred to under paragraph (a) of this section, its customers will have 
the full opportunity contemplated by section 4 of the Natural Gas Act to 
raise questions as to the prudence of such payments, the apportionment 
of costs among customers proposed by the filing pipeline, and any other 
reasonably related matters.
    (e) Certificate amendments and abandonment. With regard to natural 
gas the sale of which is subject to the Commission's jurisdiction under 
the Natural Gas Act, if any payments referred to under paragraph (a) of 
this section are accompanied by a change in or a termination of, the 
first seller's contractual obligation to provide natural gas service, 
the Commission will, as a general policy under sections 7(c) and 7(b) of 
the Natural Gas Act, expeditiously grant any certificate amendments or 
abandonment authorizations, required to effectuate such contractual or 
service modifications.
    In cases where a producer abandonment application is based on 
payments made pursuant to this policy statement, the interstate pipeline 
making the payments will be deemed to have waived any right to oppose 
the abandonment.

[50 FR 16080, Apr. 24, 1985, as amended by Order 436, 50 FR 42487, Oct. 
18, 1985]



Sec. 2.78  Utilization and conservation of natural resources--natural gas.

    (a)(1) The national interests in the development and utilization of 
natural gas resources throughout the United States will be served by 
recognition and implementation of the following priority-of-service 
categories for use during periods of curtailed deliveries by 
jurisdictional pipeline companies:
    (i) Residential, small commercial (less than 50 Mcf on a peak day).
    (ii) Large commercial requirements (50 Mcf or more on a peak day), 
firm industrial requirements for plant protection, feedstock and process 
needs, and pipeline customer storage injection requirements.
    (iii) All industrial requirements not specified in paragraph 
(a)(1)(ii), (iv), (v), (vi), (vii), (viii), or (ix) of this section.
    (iv) Firm industrial requirements for boiler fuel use at less than 
3,000 Mcf per day, but more than 1,500 Mcf per day, where alternate fuel 
capabilities can meet such requirements.
    (v) Firm industrial requirements for large volume (3,000 Mcf or more 
per day) boiler fuel use where alternate fuel capabilities can meet such 
requirements.
    (vi) Interruptible requirements of more than 300 Mcf per day, but 
less than 1,500 Mcf per day, where alternate fuel capabilities can meet 
such requirements.
    (vii) Interruptible requirements of intermediate volumes (from 1,500 
Mcf per day through 3,000 Mcf per day), where alternate fuel 
capabilities can meet such requirements.
    (viii) Interruptible requirements of more than 3,000 Mcf per day, 
but less than 10,000 Mcf per day, where alternate fuel capabilities can 
meet such requirements.
    (ix) Interruptible requirements of more than 10,000 Mcf per day, 
where alternate fuel capabilities can meet such requirements.
    (2) The priorities-of-deliveries set forth above will be applied to 
the deliveries of all jurisdictional pipeline companies during periods 
of curtailment on each company's system; except, however, that, upon a 
finding of extraordinary circumstances after hearing initiated by a 
petition filed under Sec. 385.207 of this chapter, exceptions to those 
priorities may be permitted.
    (3) The above list of priorities requires the full curtailment of 
the lower priority category volumes to be accomplished before 
curtailment of any higher priority volumes is commenced. Additionally, 
the above list requires both the direct and indirect customers of the 
pipeline that use gas for similar purposes to be placed in the same 
category of priority.
    (4) The tariffs filed with this Commission should contain provisions 
that

[[Page 32]]

will reflect sufficient flexibility to permit pipeline companies to 
respond to emergency situations (including environmental emergencies) 
during periods of curtailment where supplemental deliveries are required 
to forestall irreparable injury to life or property.
    (b) Request for relief from curtailment shall be filed under 
Sec. 385.1501 of this chapter. Those petitions shall use the priorities 
set forth in (paragraph (a)(1) of this section) above, the definitions 
contained in paragraph (b)(3) of this section and shall contain the 
following minimal information:
    (1) The specific amount of natural gas deliveries requested on peak 
day and monthly basis, and the type of contract under which the 
deliveries would be made.
    (2) The estimated duration of the relief requested.
    (3) A breakdown of all natural gas requirements on peak day and 
monthly bases at the plantsite by specific end-uses.
    (4) The specific end-uses to which the natural gas requested will be 
utilized and should also reflect the scheduling within each particular 
end-use with and without the relief requested.
    (5) The estimated peak day and monthly volumes of natural gas which 
would be available with and without the relief requested from all 
sources of supply for the period specified in the request.
    (6) A description of existing alternate fuel capabilities on peak 
day and monthly bases broken down by end-uses as shown in paragraph 
(b)(3) of this section.
    (7) For the alternate fuels shown in paragraph (b)(5) of this 
section, provide a description of the existing storage facilities and 
the amount of present fuel inventory, names and addresses of existing 
alternate fuel suppliers, and anticipated delivery schedules for the 
period for which relief is sought.
    (8) The current price per million Btu for natural gas supplies and 
alternate fuels supplies.
    (9) A description of efforts to secure natural gas and alternate 
fuels, including documentation of contacts with the Federal Energy 
Office and any state or local fuel allocation agencies or public utility 
commission.
    (10) A description of all fuel conservation activities undertaken in 
the facility for which relief is sought.
    (11) If petitioner is a local natural gas distributor, a description 
of the currently effective curtailment program and details regarding any 
flexibility which may be available by effectuating additional 
curtailment to its existing industrial customers. The distributor should 
also provide a breakdown of the estimated disposition of its natural gas 
estimated to be available by end-use priorities established in paragraph 
(a)(1) of this section for the period for which relief is sought.
    (c) When used in paragraphs (a) and (b) of this section, the 
following terms will be defined as follows:
    (1) Residential. Service to customers which consists of direct 
natural gas usage in a residential dwelling for space heating, air 
conditioning, cooking, water heating, and other residential uses.
    (2) Commercial. Service to customers engaged primarily in the sale 
of goods or services including institutions and local, state, and 
federal government agencies for uses other than those involving 
manufacturing or electric power generation.
    (3) Industrial. Service to customers engaged primarily in a process 
which creates or changes raw or unfinished materials into another form 
or product including the generation of electric power.
    (4) Firm service. Service from schedules or contracts under which 
seller is expressly obligated to deliver specific volumes within a given 
time period and which anticipates no interruptions, but which may permit 
unexpected interruption in case the supply to higher priority customers 
is threatened.
    (5) Interruptible service. Service from schedules or contracts under 
which seller is not expressly obligated to deliver specific volumes 
within a given time period, and which anticipates and permits 
interruption on short notice, or service under schedules or contracts 
which expressly or impliedly require installation of alternate fuel 
capability.
    (6) Plant protection gas. Is defined as minimum volumes required to 
prevent physical harm to the plant facilities or

[[Page 33]]

danger to plant personnel when such protection cannot be afforded 
through the use of an alternate fuel. This includes the protection of 
such material in process as would otherwise be destroyed, but shall not 
include deliveries required to maintain plant production. For the 
purposes of this definition propane and other gaseous fuels shall not be 
considered alternate fuels.
    (7) Feedstock gas. Is defined as natural gas used as raw material 
for its chemical properties in creating an end product.
    (8) Process gas. Is defined as gas use for which alternate fuels are 
not technically feasible such as in applications requiring precise 
temperature controls and precise flame characteristics. For the purposes 
of this definition propane and other gaseous fuels shall not be 
considered alternate fuels.
    (9) Boiler fuel. Is considered to be natural gas used as a fuel for 
the generation of steam or electricity, including the utilization of gas 
turbines for the generation of electricity.
    (10) Alternate fuel capabilities. Is defined as a situation where an 
alternate fuel could have been utilized whether or not the facilities 
for such use have actually been installed; Provided, however, Where the 
use of natural gas is for plant protection, feedstock, or process uses 
and the only alternate fuel is propane or other gaseous fuel then the 
consumer will be treated as if he had no alternate fuel capability.

(Sec. 4, 52 Stat. 822, 76 Stat. 72 (15 U.S.C. 717c); Sec. 5, 52 Stat. 
823 (15 U.S.C. 717d); Sec. 7, 52 Stat. 824, 825, 56 Stat. 83, 84, 61 
Stat. 459 (15 U.S.C. 717f); Sec. 10, 52 Stat. 826 (15 U.S.C. 717i); Sec. 
14, 52 Stat. 820 (15 U.S.C. 717m); Sec. 15, 52 Stat. 829 (15 U.S.C. 
717n); Sec. 16, 52 Stat. 930 (15 U.S.C. 717o); Pub. L. 96-511, 94 Stat. 
2812 (44 U.S.C. 3501 et seq.))

[Order 467A, 38 FR 2171, Jan. 22, 1973, as amended by Order 467B, 38 FR 
6386, Mar. 9, 1973; Order 493-A, 38 FR 30433, Nov. 5, 1973; Order 467-C, 
39 FR 12984, Apr. 10, 1974; Order 225, 47 FR 19055, May 3, 1982]

Statement of General Policy To Implement Procedures for Compliance With 
              the National Environmental Policy Act of 1969

    Authority: Sections 2.80-2.82 issued under secs. 4, 10, 15, 307, 
309, 311 and 312 (41 Stat. 1065, 1066, 1068, 1070; 46 Stat. 798, 49 
Stat. 839, 840, 841, 942, 843, 844, 856, 857, 858, 859, 860, Stat. 501, 
82 Stat. 617; 16 U.S.C. 797, 803, 808, 825f, 825h, 825j, 825k), and the 
Natural Gas Act, particularly secs. 7 and 16 (52 Stat. 824, 825, 830, 56 
Stat. 83, 84; 61 Stat. 459; 15 U.S.C. 717f, 717o), and the National 
Environmental Policy Act of 1969, Pub. L. 91-190, approved January 1, 
1970, particularly secs. 102 and 103 (83 Stat. 853, 854), unless 
otherwise noted.



Sec. 2.80  Detailed environmental statement.

    (a) It will be the general policy of the Federal Energy Regulatory 
Commission to adopt and to adhere to the objectives and aims of the 
National Environmental Policy Act of 1969 (NEPA) in its regulations 
promulgated for statutes under the jurisdiction of the Commission, 
including the Federal Power Act, the Natural Gas Act and the Natural Gas 
Policy Act. The National Environmental Policy Act of 1969 requires, 
among other things, all Federal agencies to include a detailed 
environmental statement in every recommendation or report on proposals 
for legislation and other major Federal actions significantly affecting 
the quality of the human environment.
    (b) Therefore, in compliance with the National Environmental Policy 
Act of 1969, the Commission staff will make a detailed environmental 
statement when the regulatory action taken by the Commission under the 
statutes under the jurisdiction of the Commission will have a 
significant environmental impact. The specific regulations implementing 
NEPA are contained in part 380 of the Commission's regulations.

[Order 486, 52 FR 47910, Dec. 17, 1987]

Statement of General Policy To Implement the Economic Stabilization Act 
        of 1970, as Amended, and Executive Orders 11615 and 11627

    Authority: Sections 2.90 through 2.102 issued under 84 Stat. 799, as 
amended, 85 Stat. 38, unless otherwise noted.



Secs. 2.100-2.102  [Reserved]



Sec. 2.103  Statement of policy respecting take or pay provisions in gas purchase contracts.

    (a) Recognizing that take or pay contract obligations may be 
shielding the prices of deregulated and other higher

[[Page 34]]

cost gas from market constraints, the Commission sets forth its general 
policy regarding prepayments for natural gas pursuant to take or pay 
provisions in gas contracts and amendments thereto between producers and 
interstate pipelines which become effective December 23, 1982. The 
provisions of this policy statement do not establish a binding norm but 
instead provide general guidance. In particular cases, both the 
underlying validity of the policy and its application to particular 
facts may be challenged and are subject to further consideration.
    (b) With respect to gas purchase contracts entered into on or after 
December 23, 1982, the Commission intends to apply a rebuttable 
presumption in general rate cases that prepayments to producers will not 
be given rate base treatment if the prepayments are made pursuant to 
take or pay requirements in such gas purchase contracts or amendments 
which exceed 75 percent of annual deliverability.

(Natural Gas Act, 15 U.S.C. 717-717w; Natural Gas Policy Act of 1978, 
Pub. L. No. 95-621, 92 Stat. 3350, 15 U.S.C. 3301-3432)

[47 FR 57269, Dec. 23, 1982]



Sec. 2.104  Mechanisms for passthrough of pipeline take-or-pay buyout and buydown costs.

    (a) General Policy. The Commission as a matter of policy will 
provide two distinct mechanisms for passthrough of take-or-pay buyout 
and buydown costs of interstate natural gas pipelines. The first is 
pursuant to existing Commission policy and practice. Under this method, 
pipelines may pass through prudently incurred take-or-pay buyout and 
buydown costs in their sales commodity rates. The second method is 
available to pipelines which agree to an equitable sharing of take-or-
pay costs and which transport under part 284 of this chapter. Qualifying 
pipelines may utilize the alternative passthrough mechanisms described 
in this section. Where a pipeline agrees to absorb from 25 to 50 percent 
of take-or-pay buyout and buydown costs, the Commission will permit the 
pipeline to recover through a fixed charge an amount equal to (but not 
greater than) the amount absorbed. Any remaining costs up to 50 percent 
of total buyout and buydown costs may be recovered either through a 
commodity rate surcharge or a volumetric surcharge on total throughput.
    (b) Cost allocation procedures. A pipeline's volume-based surcharges 
must be based on the volumes which underlie its most recent Commission-
approved rates. Fixed charges must be based on each customer's 
cumulative deficiency in purchases in recent years (during which the 
current take-or-pay liabilities of the pipelines were incurred) measured 
in relation to that customer's purchases during a representative period 
during which take-or-pay liabilities were not incurred. The allocation 
formula employed must incorporate the following guidelines:
    (1) A representative base period must be selected. The base period 
must reflect a representative level of purchases by the pipeline's firm 
customers during a period preceding the onset of changed conditions 
which resulted in reduced purchases and growth of the take-or-pay 
problem.
    (2) Firm purchases by each customer during the base year under firm 
rate schedules or contracts for firm service must be determined.
    (3) Firm sales purchase deficiency volumes for each subsequent year 
must be determined.
    (4) A fixed charge based on each customer's cumulative deficiencies 
as compared to total cumulative deficiencies must be derived. The filing 
pipeline will be free to select for rate calculation and filing purposes 
a reasonable amortization period for buyout and buydown costs being 
recovered through fixed charges or volumetric surcharges. The pipeline 
will be entitled to interest at the rate set forth in part 154 of this 
chapter on unamortized amounts.
    (c) Implementing procedures. (1) Pipelines acting pursuant to this 
section may submit on or before December 31, 1990, a non-PGA rate filing 
under section 4(e) of the Natural Gas Act. Pipelines may include in 
their filings a fixed charge and a volumetric surcharge to recover 
buyout and buydown costs actually paid as of the date of filing plus 
similar costs which are known and measurable within the following nine 
months. Detailed support for the

[[Page 35]]

amounts claimed and for the calculation of customer surcharges must be 
provided. In addition, the pipeline must disclose and describe all 
consideration, both cash and noncash, given to producers in exchange for 
take-or-pay relief.
    (2) In any filings made under this section, pipelines must include 
proposals for periodic (preferably annual) adjustments to customer 
surcharges, together with any necessary accounting procedures, designed 
to assure that revenues recovered by the pipeline remain in balance with 
buyout and buydown costs covered by the filing and actually incurred by 
the pipeline.
    (d) Prudence. (1) The Commission will examine the issue of prudence 
if it is raised by a party in an individual proceeding. If it is raised, 
the pipeline will be required to demonstrate the prudence of take-or-pay 
buyout and buydown costs which it seeks to recover from its customers 
through both fixed and volume-based charges.
    (2) The Commission intends to exercise its authority to the full 
extent permitted by the Natural Gas Act to approve take-or-pay 
settlements. The Commission intends to approve uncontested take-or-pay 
settlements which are consistent with this section and found to be in 
the public interest. The Commission will also, if it appears reasonable 
and permissible to do so, approve contested settlements as to all 
consenting parties and initiate separate hearings to establish the rates 
for opposing parties. Alternatively, the Commission will approve 
contested settlements on the merits if supported by substantial evidence 
in the record. In any case where hearings are held as to the prudence of 
take-or-pay buyout and buydown costs, the Commission will permit the 
pipeline the opportunity to recover all take-or-pay costs found to be 
prudent from the contesting parties on a proportional basis, even if the 
amount allowed is greater than the amounts initially sought to be 
recovered by the pipeline.
    (e) Flowthrough by downstream pipelines. Downstream pipelines must 
flow through approved take-or-pay fixed charges based on the cumulative 
purchase deficiencies of their customers. Volumetrically-based 
surcharges must be flowed through on a volumetric basis. Customers of 
downstream pipelines have the right in connection with either PGA or 
general rate filings to challenge the purchasing practices of such 
pipelines. Remedies for purchasing practices found by the Commission to 
be imprudent will be determined on a case-by-case basis.
    (f) Ongoing proceedings. Pipeline rate proceedings pending September 
15, 1987 may be utilized as a forum for implementing the approved cost 
recovery mechanisms set forth in this section. Permission will be 
granted in cases where implementation of this policy in pending 
proceedings appears feasible, will not result in inordinate delay, or 
can be expected to result in unnecessary or cumulative rate filings with 
the Commission. In the event permission is granted, the presiding 
judge(s) will allow pipelines to supplement their filings to the extent 
necessary to assure compliance with the filing and data requirements set 
forth herein. The presiding judges shall also establish any procedures 
necessary to protect the rights of all parties. Any rates established 
pursuant to this section will be permitted to become effective only 
prospectively upon Commission approval.
    (g) Scope. This section does not go beyond the Commission's 
determination in the April 10, 1985, policy statement (Docket No. PL85-
1-000) that take-or-pay buyout and buydown costs do not violate the 
pricing provision of the Natural Gas Policy Act of 1978 (NGPA). It is 
not intended to affect take-or-pay prepayments made by pipelines and 
included in account 165 and in their rate bases. Nor does it address the 
issue of whether take-or-pay prepayments to a producer for gas not taken 
and which cannot be made up violate the Title I pricing provisions of 
the NGPA. This policy statement applies only to buyout and buydown costs 
paid by pipelines that are transporting under part 284 of this chapter, 
under existing

[[Page 36]]

contracts, and is not intended to disturb in any way take-or-pay 
settlements previously entered into between pipelines and their producer 
suppliers.

[Order 500, 52 FR 30351, Aug. 14, 1987, as amended at 52 FR 35539, Sept. 
22, 1987; Order 500-F, 53 FR 50924, Dec. 19, 1988; 54 FR 52394, Dec. 21, 
1989; Order 581, 60 FR 53064, Oct. 11, 1995]



Sec. 2.105  Gas supply charges.

    An interstate natural gas pipeline that transports under part 284 of 
this chapter may include in its tariff a charge, not related to 
facilities, for standing ready to supply gas to sales customers in 
accordance with the following principles:
    (a) The pipeline may not recover take-or-pay or similar charges from 
suppliers by any other means.
    (b) The pipeline must allow its sales customers to nominate levels 
of service freely within their firm sales entitlements or otherwise 
employ a mechanism for the renegotiation of levels of service at regular 
intervals.
    (c) The pipeline must announce prior to nominations by the customers 
a firm price or pricing formula for the service, and hold that price or 
pricing formula firm during the interval arranged in paragraph (b) of 
this section.
    (d) By nominating a new level of service lower than its current 
level, a customer has consented to any abandonment sought by the 
pipeline commensurate with the difference between the current level of 
service and the nominated level.

[Order 500, 52 FR 30352, Aug. 14, 1987; 52 FR 35539, Sept. 22, 1987, and 
54 FR 52394, Dec. 21, 1989]

                     Rules of General Applicability



Sec. 2.201  [Reserved]

 Statement of General Policy and Interpretations Under the Natural Gas 
                           Policy Act of 1978



Sec. 2.300  Statement of policy concerning allegations of fraud, abuse, or similar grounds under section 601(c) of the NGPA.

    Recognizing the potential for an increasing number of intervenor 
complaints predicated on the fraud, abuse, or similar grounds exception 
to guaranteed passthrough, the Commission sets forth the elements of a 
cognizable claim under section 601(c)(2) which it expects to apply in 
cases in which fraud, abuse, or similar grounds is raised. The 
provisions of this policy statement do not establish a binding norm but 
instead provide general guidance. In particular cases, both the 
underlying validity of the policy and its application to particular 
facts may be challenged and are subject to further consideration. The 
procedure prescribed conforms with the NGPA's general guarantee of 
passthrough by placing the burden of pleading the elements and proving 
the elements of a case on intervenors who would allege fraud, abuse, or 
similar grounds as a basis for denying passthrough of gas prices 
incurred by an interstate pipeline.
    (a) In order for the issue of fraud, as that term is used in section 
601(c) of the NGPA, to be considered in a proceeding, an intervenor or 
intervenors must file a complaint alleging that:
    (1) The interstate pipeline, any first seller who sells natural gas 
to the interstate pipeline, or both acting together, have made a 
fraudulent misrepresentation or concealment; and
    (2) Because of that fraudulent misrepresentation or concealment, the 
amount paid by the interstate pipeline to any first seller of natural 
gas was higher than it would have been absent the fraudulent conduct.
    (b) In order for the issue of abuse, as that term is used in section 
601(c) of the NGPA, to be considered in a proceeding, an intervenor or 
intervenors must file a complaint alleging that:
    (1) The interstate pipeline, a first seller who sells to the 
interstate pipeline, or both acting together, have made a negligent 
misrepresentation or concealment, or other misrepresentation or 
concealment in disregard of a duty; and
    (2) Because of that negligent misrepresentation or concealment, or 
other misrepresentation or concealment in disregard of a duty, the 
amount paid by the interstate pipeline to any first seller of natural 
gas was higher than it would have been absent the negligent 
misrepresentation or

[[Page 37]]

concealment, or other misrepresentation or concealment made in disregard 
of a duty.
    (c) In order for the issue of similar grounds, as that term is used 
in section 601(c) of the NGPA, to be considered in a proceeding, an 
intervenor or intervenors must file a complaint alleging that:
    (1) The interstate pipeline, any first seller who sells natural gas 
to the interstate pipeline, or both acting together, have made an 
innocent misrepresentation of fact; and
    (2) Because of that innocent misrepresentation of facts, the amount 
paid by the interstate pipeline to any first seller of natural gas was 
higher than it would have been absent the innocent misrepresentation of 
fact.

(Natural Gas Policy Act of 1978, Pub. L. 95-621, 92 Stat. 3350, (15 
U.S.C. 3301-3432))

[47 FR 6262, Feb. 11, 1982]

Statement of Interpretation Under the Public Utility Regulatory Policies 
                               Act of 1978



Sec. 2.400  Statement of interpretation of waste concerning natural gas as the primary energy source for qualifying small power production facilities.

    For purposes of deciding whether natural gas may be considered as 
waste as the primary energy source pursuant to Sec. 292.204(b)(1)(i) of 
this chapter, the Commission will use the criteria described in 
paragraphs (a), (b) and (c) of this section.
    (a) Category 1. Except as provided in paragraph (b) of this section, 
natural gas with a heating value of 300 Btu per standard cubic foot 
(scf) or below will be considered unmarketable.
    (b) Category 2. In determining whether natural gas with a heating 
value above 300 Btu but not more than 800 Btu per scf and natural gas 
produced in the Moxa Arch area is unmarketable, the Commission will 
consider the following information:
    (1) The percentages of the chemical components of the gas, the 
wellhead pressure, and the flow rate;
    (2) Whether the applicant offered the gas to all potential buyers 
located within 20 miles of the wellhead under terms and conditions 
commensurate with those prevailing in the region and that such potential 
buyers refused to buy the gas; and
    (3) A study, which may be submitted by an applicant, that evaluates 
the economics of upgrading the gas for sale and transporting the gas to 
a pipeline. The study should include estimates of the revenues which 
could be derived from the sale of the gas and the fixed and variable 
costs of upgrading.
    (c) Category 3. In determining whether natural gas with a heating 
value above 800 Btu per scf is marketable, the Commission will consider 
the information included in paragraph (b) of this section and whether:
    (1) The gas has actually been flared, vented to the atmosphere, or 
continously injected into a non-producing zone for a period of one year, 
pursuant to legal authority; or
    (2) The gas has been certified as waste, i.e., suitable for 
disposal, by an appropriate state authority.

[Order 471, 52 FR 19310, May 22, 1987]

 Statement of Penalty Reduction/Waiver Policy to Comply With the Small 
          Business Regulatory Enforcement Fairness Act of 1996



Sec. 2.500  Penalty reduction/waiver policy for small entities.

    (a) It is the policy of the Commission that any small entity is 
eligible to be considered for a reduction or waiver of a civil penalty 
if it has no history of previous violations, and the violations at issue 
are not the product of willful or criminal conduct, have not caused loss 
of life or injury to persons, damage to property or the environment or 
endangered persons, property or the environment. An eligible small 
entity will be granted a waiver if it can also demonstrate that it 
performed timely remedial efforts, made a good faith effort to comply 
with the law and did not obtain an economic benefit from the violations. 
An eligible small entity that cannot meet the criteria for waiver of a 
civil penalty may be eligible for consideration of a reduced penalty. 
Upon the request of a small entity, the Commission will consider the 
entity's ability to pay before assessing a civil penalty.

[[Page 38]]

    (b) Notwithstanding paragraph (a) of this section, the Commission 
reserves the right to waive or reduce civil penalties in appropriate 
individual circumstances where it determines that a waiver or reduction 
is warranted by the public interest.

[Order 594, 62 FR 15830, Apr. 3, 1997]

     Appendix A to Part 2--Guidance for Determining the Acceptable 
                   Construction Area for Replacements

    These guidelines shall be followed to determine what area may be 
used to construct the replacement facility. Specifically, they address 
what areas, in addition to the permanent right-of-way, may be used.
    Pipeline replacement must be within the existing right-of-way as 
specified by Sec. 2.55(b)(1)(ii). Construction activities for the 
replacement can extend outside the current permanent right-of-way if 
they are within the temporary and permanent right-of-way and associated 
work spaces used in the original installation.
    If documentation is not available on the location and width of the 
temporary and permanent rights-of-way and associated work space that was 
used to construct the original facility, the company may use the 
following guidance in replacing its facility, provided the appropriate 
easements have been obtained:
    a. Construction should be limited to no more than a 75-foot-wide 
right-of-way including the existing permanent right-of-way for large 
diameter pipeline (pipe greater than 12 inches in diameter) to carry out 
routine construction. Pipeline 12 inches in diameter and smaller should 
use no more than a 50-foot-wide right-of-way.
    b. The temporary right-of-way (working side) should be on the same 
side that was used in constructing the original pipeline.
    c. A reasonable amount of additional temporary work space on both 
sides of roads and interstate highways, railroads, and significant 
stream crossings and in side-slope areas is allowed. The size should be 
dependent upon site-specific conditions. Typical work spaces are:

------------------------------------------------------------------------
                Item                   Typical extra area (width/length)
------------------------------------------------------------------------
Two lane road (bored)...............  25-50 by 100 feet.
Four lane road (bored)..............  50 by 100 feet.
Major river (wet cut)...............  100 by 200 feet.
Intermediate stream (wet cut).......  50 by 100 feet.
Single railroad track...............  25-50 by 100 feet.
------------------------------------------------------------------------

    d. The replacement facility must be located within the permanent 
right-of-way or, in the case of nonlinear facilities, the cleared 
building site. In the case of pipelines this is assumed to be 50-feet-
wide and centered over the pipeline unless otherwise legally specified.
    However, use of the above guidelines for work space size is 
constrained by the physical evidence in the area. Areas obviously not 
cleared during the original construction, as evidenced by stands of 
mature trees, structures, or other features that exceed the age of the 
facility being replaced, should not be used for construction of the 
replacement facility.
    If these guidelines cannot be met, the company should consult with 
the Commission's staff to determine if the exemption afforded by 
Sec. 2.55 may be used. If the exemption may not be used, construction 
authorization must be obtained pursuant to another regulation under the 
Natural Gas Act.

[Order 603, 64 FR 26603, May 14, 1999]

                     Appendix B to Part 2 [Reserved]

[[Page 39]]

   Appendix C to Part 2--Nationwide Proceeding Computation of Federal 
  Income Tax Allowance Independent Producers, Pipeline Affiliates and 
    Pipeline Producers Continental U.S.--1972 Data (Docket No. R-478)

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                         (7)--
                                                                                            (2)--Total                                                                Percentage
      Line No.                  Particulars           Schedule   Line   (1)--Total \1\       excluding       (3)--Gas     (4)--Lease     (5)--No lease   (6)--Total      lease    (8)--Allocated
                                                         No.     No.                     production taxes    only \3\   separation \3\  separation \3\       \4\      separation  amount gas \6\
                                                                                                \2\                                                                     gas \5\
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     production, exploration and development costs
 
2                     Direct and indirect lease            1-A     01     1,694,893,558     1,694,893,558   57,287,938   $144,679,567     $19,763,791   $221,731,296       90.33     207,740,782
                       costs and expenses.
2                     Taxes (except income and             A-1     02       210,335,720       210,335,720   16,507,630     20,431,444       4,360,024     41,299,098        9.33      39,323,337
                       production).
4                     Production taxes..............       1-A     03       479,424,297  ................   27,124,210     96,699,673      10,005,599    133,829,482       90.33     124,478,624
5                     Other lease expenses..........       1-A     04        61,102,433        61,102,433   17,527,077     24,988,900         336,427     42,852,404       90.33      40,435,977
6                     Depletion, depreciation and          1-A     05     1,716,823,070     1,716,823,070  105,999,777    297,881,312      25,502,048    429,383,137       90.33     400,578,014
                       amortization.
7                     Corporate general expense.....       1-A     06       278,845,909       278,845,909   13,611,337     25,077,796       3,579,728     42,268,861       90.33      39,843,838
8                     Area, district, division and         1-A     07       261,718,417        26,178,417    7,207,320     21,758,604       2,778,944     31,744,868       90.33      29,640,811
                       field expense.
9                     Miscellaneous lease revenues..       1-A     09      (12,203,136)      (12,203,136)  (1,348,729)    (2,768,788)       (314,067)    (4,431,584)       90.33     (4,163,842)
10                    Return on production rate base       1-A     13     2,505,272,672     2,505,272,672  186,055,524    427,939,601      69,857,212    663,852,337       90.33     622,470,578
                       at 15 percent.
11                    Exploration and development          1-A     15     1,673,945,853     1,673,945,853  ...........  ..............  ..............  ............  ..........     594,971,262
                       costs and expenses.
12                    Return on exploration rate           1-A     16       588,558,894       588,558,894  ...........  ..............  ..............  ............  ..........     234,604,103
                       base at 15 percent.
13                    Regulatory commission expense        1-A     17         6,514,279         6,514,279  ...........  ..............  ..............  ............  ..........       6,514,852
                       including return.
                                                                      ==========================================================================================================================
14
15                          Total computed revenue..  ........  .....     9,465,231,966     8,985,807,669  ...........  ..............  ..............  ............  ..........   2,336,439,376
16        (gross income)
                                                                      --------------------------------------------------------------------------------------------------------------------------
17
18           revenue deductions
 
19                    Direct and indirect lease            1-A     01     1,694,893,558     1,694,893,558  ...........  ..............  ..............  ............  ..........     207,740,872
                       costs and expenses.
20                    Taxes (except income and             1-A     02       210,335,720       210,335,720  ...........  ..............  ..............  ............  ..........      39,323,377
                       production).
21                    Production taxes..............       1-A     03       479,424,297  ................  ...........  ..............  ..............  ............  ..........     124,478,624
22                    Other lease expenses..........       1-A     04        61,102,433        61,102,433  ...........  ..............  ..............  ............  ..........      40,435,977
23                    Book depletion................  ........  .....  \7\ (283,121,142       283,121,242   24,287,986     61,675,828       6,177,596     92,141,410       90.33      86,177,357
                                                                                      )
24                    Depreciation expense..........       1-A     05  \7\ (654,604,447       654,604,447   30,223,586     94,010,520       7,007,662    131,241,768       90.33     122,150,951
                                                                                      )
25                    Amortization of capitalized     ........  .....  \7\ (779,097,382       779,097,382   51,488,205    142,194,964      12,316,790    205,999,959       90.33     192,249,706
                       IDC.                                                           )
26                    Corporate general expense.....       1-A     06       278,845,909       278,845,909  ...........  ..............  ..............  ............  ..........      39,843,838

[[Page 40]]

 
27                    Area, district, division and         1-A     07       261,718,417       261,718,417  ...........  ..............  ..............  ............  ..........      29,640,811
                       field expense.
28                    Miscellaneous lease revenues..       1-A     09      (12,203,136)      (12,203,136)  ...........  ..............  ..............  ............  ..........     (4,163,842)
29                    Exploration and development     ........  .....     1,673,945,853     1,673,945,853  ...........  ..............  ..............  ............  ..........     594,971,262
                       costs and expenses.
30                    Regulatory commission expense.       4-A     01         6,384,384         6,394,384  ...........  ..............  ..............  ............  ..........       6,394,384
                                                               ---------------------------------------------------------------------------------------------------------------------------------
31
32                          Total book expenses.....  ........  .....     6,371,380,505     5,891,856,209  ...........  ..............  ..............  ............  ..........   1,479,243,227
                                                               ---------------------------------------------------------------------------------------------------------------------------------
33
34                    Production net income (line 15  ........  .....     3,093,951,461     3,093,951,460  ...........  ..............  ..............  ............  ..........     857,190,149
                       less line 32).
                                                               ---------------------------------------------------------------------------------------------------------------------------------
35
36      tax adjustment--add (deduct)
 
37                    Amortization of capitalized     ........  .....       779,097,282       779,097,382  ...........  ..............  ..............  ............  ..........     192,249,706
                       IDC.
38                    Estimated IDC capitalized in    ........  .....  \8\ (1,470,935,8   (1,470,935,857)  ...........  ..............  ..............  ............  ..........   (362,967,445)
                       1972.                                                        57)
39                    Interest expense (calculated).  ........  .....  \9\ (243,846,540     (243,846,540)  ...........  ..............  ..............  ............  ..........    (60,587,136)
                                                                                      )
                                                               ---------------------------------------------------------------------------------------------------------------------------------
40
41                          Taxable income..........  ........  .....     2,158,266,445     2,158,266,445  ...........  ..............  ..............  ............  ..........     625,891,274
                                                               ---------------------------------------------------------------------------------------------------------------------------------
42
43                          Federal income tax at 48  ........  .....     1,992,245,949     1,992,245,949  ...........  ..............  ..............  ............  ..........  \10\ 577,745,7
                       percent.                                                                                                                                                               91
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Lines 1 thru 15, col. (1). From Notice issued Sept. 12, 1974, app. A, p. 12, col. (d).
\2\ Production taxes have been deleted from col. (1).
\3\ From notice issued Sept. 12, 1974, app. A, p. 12, cols. (g), (h), and (i).
\4\ Col. (3) plus col. (4) plus col. (5).
\5\ Calculated on a modified British thermal unit basis (1.5 to 1).
\6\ Col. (7) times col. (4), plus cols. (3) and (5).
\7\ See composites mailed to all parties on Feb. 13, 1974.
\8\ Calculated, 188.8 percent (A R64-1-2) times $779,097,382 equals $1,470,935,857.
\9\ Calculated 0.0146 (interest rate) times $16,701,817,818 (app. A, schedule 2-A, (d), line 11, p. 13) equals $243,846,540.
\10\ $577,745,791 divided by 9,508,369,001 equals 6.08 cents per thousand cubic feet.


[Opinion 749, 41 FR 3092, Jan. 21, 1976]

[[Page 41]]

                            PART 3 [RESERVED]



PART 3a--NATIONAL SECURITY INFORMATION--Table of Contents




                                 General

Sec.
3a.1  Purpose.
3a.2  Authority.

                             Classification

3a.11  Classification of official information.
3a.12  Authority to classify official information.
3a.13  Classification responsibility and procedure.

                    Declassification and Downgrading

3a.21  Authority to downgrade and declassify.
3a.22  Declassification and downgrading.
3a.23  Review of classified material for declassification purposes.

              Classification Markings and Special Notations

3a.31  Classification markings and special notations.

                     Access to Classified Materials

3a.41  Access requirements.

                            Security Officers

3a.51  Designation of security officers.

              Storage and Custody of Classified Information

3a.61  Storage and custody of classified information.

                 Accountability for Classified Material

3a.71  Accountability for classified material.

                   Transmittal of Classified Material

3a.81  Transmittal of classified material.

                            Data Index System

3a.91  Data index system.

    Authority: E.O. 11652 (37 FR 5209, March 10, 1972), National 
Security Council Directive of May 17, 1972 (37 FR 10053, May 19, 1972), 
sec. 309 of the Federal Power Act (49 Stat. 858, 859; 16 U.S.C. 825h) 
and sec. 16 of the Natural Gas Act (52 Stat. 830; 15 U.S.C. 717o).

    Source: Order 470, 38 FR 5161, Feb. 26, 1973, unless otherwise 
noted.

                                 General



Sec. 3a.1  Purpose.

    This part 3a describes the Federal Power Commission program to 
govern the classification, downgrading, declassification, and 
safeguarding of national security information. The provisions and 
requirements cited herein are applicable to the entire agency except 
that material pertaining to personnel security shall be safeguarded by 
the Personnel Security Officer and shall not be considered classified 
material for the purpose of this part.



Sec. 3a.2  Authority.

    Official information or material referred to as classified in this 
part is expressly exempted from public disclosure by 5 U.S.C. 552(b)(1). 
Wrongful disclosure thereof is recognized in the Federal Criminal Code 
as providing a basis for prosecution. E.O. 11652, March 8, 1972 (37 FR 
5209, March 10, 1972), identifies the information to be protected, 
prescribes classification, downgrading, declassification, and 
safeguarding procedures to be followed and establishes a monitoring 
system to insure its effectiveness. National Security Council Directive 
Governing the Classification, Downgrading, Declassification and 
Safeguarding of National Security Information, May 17, 1972 (37 FR 
10053, May 19, 1972), implements E.O. 11652.

                             Classification



Sec. 3a.11  Classification of official information.

    (a) Security Classification Categories. Information or material 
which requires protection against unauthorized disclosure in the 
interest of the national defense or foreign relations of the United 
States (hereinafter collectively termed national security) is classified 
Top Secret, Secret or Confidential, depending upon the degree of its 
significance to national security. No other categories are to be used to 
identify official information or material requiring protection in the 
interest of national security, except as otherwise expressly provided by 
statute. These classification categories are defined as follows:

[[Page 42]]

    (1) Top Secret. Top Secret refers to national security information 
or material which requires the highest degree of protection. The test 
for assigning Top Secret classification is whether its unauthorized 
disclosure could reasonably be expected to cause exceptionally grave 
damage to the national security. Examples of exceptionally grave damage 
include armed hostilities against the United States or its allies; 
disruption of foreign relations vitally affecting the national security; 
the compromise of vital national defense plans or complex cryptologic 
and communications intelligence systems; the revelation of sensitive 
intelligence operations; and the disclosure of scientific or 
technological developments vital to national security. This 
classification is to be used with the utmost restraint.
    (2) Secret. Secret refers to national security information or 
material which requires a substantial degree of protection. The test for 
assigning Secret classification shall be whether its unauthorized 
disclosure could reasonably be expected to cause serious damage to the 
national security. Examples of serious damage include disruption of 
foreign relations significantly affecting the national security; 
significant impairment of a program or policy directly related to the 
national security; revelation of significant military plans or 
intelligence operations; and compromise of significant scientific or 
technological developments relating to national security. The 
classification Secret shall be sparingly used.
    (3) Confidential. Confidential refers to national security 
information or material which requires protection, but not to the degree 
described in paragraphs (a) (1) and (2) of this section. The test for 
assigning Confidential classification shall be whether its unauthorized 
disclosure could reasonably be expected to cause damage to the national 
security.
    (b) Classified information will be assigned the lowest 
classification consistent with its proper protection. Documents will be 
classified according to their own content and not necessarily according 
to their relationship to other documents.
    (c) The overall classification of a file or group of physically 
connected documents will be at least as high as that of the most highly 
classified document therein. When put together as a unit or complete 
file, the classification of the highest classified document contained 
therein will be marked on a cover sheet, file folder (front and back), 
or other similar covering, and on any transmittal letters, comments, or 
endorsements.
    (d) Administrative Control Designations. These designations are not 
security classification designations, but are used to indicate a 
requirement to protect material from unauthorized disclosure. Material 
identified under the provisions of this subparagraph will be handled and 
protected in the same manner as material classified Confidential except 
that it will not be subject to the central control system described in 
Sec. 3a.71. Administrative Control designations are:
    (1) For Official Use Only. This designation is used to identify 
information which does not require protection in the interest of 
national security, but requires protection in accordance with statutory 
requirements or in the public interest and which is exempt from public 
disclosure under 5 U.S.C. 552(b) and Sec. 388.105(n) of this chapter.
    (2) Limited Official Use. This administrative control designation is 
used by the Department of State to identify nondefense information 
requiring protection from unauthorized access. Material identified with 
this notation must be limited to persons having a definite need to know 
in order to fulfill their official responsibilities.
    (e) A letter or other correspondence which transmits classified 
material will be classified at a level at least as high as that of the 
highest classified attachment or enclosure. This is necessary to 
indicate immediately to persons who receive or handle a group of 
documents the highest classification involved. If the transmittal 
document does not contain classified information, or if the information 
in it is classified lower than in an enclosure, the originator will 
include a notation to that effect. (See Sec. 3a.31(e).)

[Order 470, 38 FR 5161, Feb. 26, 1973, as amended by Order 225, 47 FR 
19055, May 3, 1982]

[[Page 43]]



Sec. 3a.12  Authority to classify official information.

    (a) The authority to classify information or material originally 
under E.O. 11652 is restricted to those offices within the executive 
branch which are concerned with matters of national security, and is 
limited to the minimum number absolutely required for efficient 
administration.
    (b) The authority to classify information or material originally as 
Top Secret is to be exercised only by such officials as the President 
may designate in writing and by the heads of the following departments 
and agencies and such of their principal staff officials as the heads of 
these departments and agencies may designate in writing;

Such offices in the Executive Office of the President as the President 
may designate in writing.
Central Intelligence Agency.
Atomic Energy Commission.
Department of State.
Department of the Treasury.
Department of Defense.
Department of the Army.
Department of the Navy.
Department of the Air Force.
U.S. Arms Control and Disarmament Agency
Department of Justice.
National Aeronautics and Space Administration.
Agency for International Development.

    (c) The authority to classify information or material originally as 
Secret is exercised only by:
    (1) Officials who have Top Secret classification authority under 
Sec. 3a.11(b); and
    (2) The heads of the following departments and agencies and such 
principal staff officials as they may designate in writing:

Department of Transportation.
Federal Communications Commission.
Export-Import Bank of the United States.
Department of Commerce.
U.S. Civil Service Commission.
U.S. Information Agency.
General Services Administration.
Department of Health, Education, and Welfare.
Civil Aeronautics Board.
Federal Maritime Commission.
Federal Power Commission.
National Science Foundation.
Overseas Private Investment Corporation.

    (d) The authority to classify information or material originally as 
Confidential is exercised by officials who have Top Secret or Secret 
classification authority.
    (e) Pursuant to E.O. 11652, the authority to classify information or 
material originally as Secret or Confidential in the FPC shall be 
exercised only by the Chairman, the Vice Chairman, and the Executive 
Director. When an incumbent change occurs in these positions, the name 
of the new incumbent will be reported to the Interagency Classification 
Review Committee NSC.



Sec. 3a.13  Classification responsibility and procedure.

    (a) Each FPC official who has classifying authority (Sec. 3a.12) 
shall be held accountable for the propriety of the classifications 
attributed to him. Unnecessary classification and overclassification 
shall be avoided. Classification shall be solely on the basis of 
national security considerations. In no case shall information be 
classified in order to conceal inefficiency or administrative error, to 
prevent embarrassment to the FPC or any of its officials or employees, 
or to prevent for any other reason the release of information which does 
not require protection in the interest of national security.
    (b) Each classified document shall show on its face its 
classification and whether it is subject to or exempt from the General 
Declassification Schedule (Sec. 3a.22(b)). It also shall show the office 
of origin, the date of preparation and classification and, to the extent 
practicable, be so marked as to indicate which portions are classified, 
at what level, and which portions are not classified in order to 
facilitate excerpting and other use. Material which merely contains 
references to classified materials, which references do not reveal 
classified information, shall not be classified.
    (c) Material classified under this part shall indicate on its face 
the identity of the highest authority authorizing the classification. 
Where the individual who signs or otherwise authenticates a document or 
item has also authorized the classification, no further annotation as to 
his identity is required.

[[Page 44]]

    (d) Classified information or material furnished to the United 
States by a foreign government or international organization shall 
either retain its original classification or be assigned a U.S. 
classification. In either case, the classification shall assure a degree 
of protection equivalent to that required by the government or 
international organization which furnished the information or material.
    (e) Whenever information or material classified by an authorized 
official is incorporated in another document or other material by any 
person other than the classifier, the previously assigned security 
classification category shall be reflected thereon together with the 
identity of the classifier.
    (f) As a holder of classified information or material, the FPC shall 
observe and respect the classification assigned by the originator. If it 
is believed that there is unnecessary classification; that the assigned 
classification is improper, or that the document is subject to 
declassification under E.O. 11652, the FPC will so inform the originator 
who is then required by the Executive order to reexamine the 
classification.

                    Declassification and Downgrading



Sec. 3a.21  Authority to downgrade and declassify.

    (a) The authority to downgrade and declassify information or 
material shall be exercised as follows:
    (1) Information or material may be downgraded or declassified by the 
official authorizing the original classification, by a successor or by a 
supervisory official of either.
    (2) Downgrading and declassification authority may also be exercised 
by an official specifically authorized under regulations issued by the 
head of the Department listed in sections 2 A and B of E.O. 11652, March 
10, 1972.
    (3) In the case of classified information or material transferred 
pursuant to statute or Executive order in conjunction with a transfer of 
function and not merely for storage purposes, the receiving department 
or agency shall be deemed to be the originating department or agency for 
all purposes under E.O. 11652, including downgrading and 
declassification.
    (4) In the case of classified information or material not officially 
transferred under paragraph (a)(3) of this section, but originated in a 
department or agency which has since ceased to exist, each department or 
agency in possession shall be deemed to be the originating department or 
agency for all purposes. Such information or material may be downgraded 
and declassified after consulting with any other departments or agencies 
having an interest in the subject matter.
    (5) Classified information or material transferred to the General 
Services Administration for accession to the Archives of the United 
States shall be downgraded and declassified by the Archivist of the 
United States in accordance with E.O. 11652, directives of the President 
issued through the National Security Council, and pertinent regulations 
of the departments and agencies.



Sec. 3a.22  Declassification and downgrading.

    (a) When classified information of material no longer requires the 
level of protection assigned to it, it shall be downgraded or 
declassified in order to preserve the effectiveness and integrity of the 
classification system. The Chairman, Vice Chairman, and Executive 
Director exercise downgrading and declassification authority in the FPC.
    (b) Information and material classified prior to June 1, 1972, and 
assigned to Group 4 under E.O. 10501, as amended by E.O. 10964, unless 
declassified earlier by the original classifying authority, shall be 
declassified and downgraded in accordance with the following General 
Declassification Schedule.
    (1) Top Secret. Information or material originally classified TOP 
SECRET becomes automatically downgraded to Secret at the end of the 
second full calendar year following the year in which it was originated, 
downgraded to Confidential at the end of the fourth full calendar year 
following the year in which it was originated, and declassified at the 
end of the 10th full calendar year following the year in which it was 
originated.
    (2) Secret. Information and material originally classified Secret 
becomes

[[Page 45]]

automatically downgraded to Confidential at the end of the second full 
calendar year following the year in which it was originated, and 
declassified at the end of the eighth full calendar year following the 
year in which it was originated.
    (3) Confidential. Information and material originally classified 
Confidential becomes automatically declassified at the end of the sixth 
full calendar year following the year in which it was originated.
    (c) To the fullest extent applicable, there shall be indicated on 
each such FPC originated classified document whether it can be 
downgraded or declassified at a date earlier than under the above 
schedule, or after a specified event, or upon the removal of classified 
attachments or enclosures. Classified information in the possession of 
the Federal Power Commission, but not bearing a marking for automatic 
downgrading or declassification, will be marked or designated by the 
Chairman or the Security Officer designated by Sec. 3a.51 hereof for 
automatic downgrading or declassification in accordance with the rules 
and regulations of the department or agency which originally classified 
the information or material.
    (d) When the FPC official having classification authority downgrades 
or cancels the classification of a document before its classification 
status changes automatically, each addressee to whom the document was 
transmitted shall be notified of the change unless the addressee has 
previously advised that the document was destroyed. Addressees must be 
notified similarly when it has been determined that a document must be 
upgraded.
    (e) When classified information from more than one source is 
incorporated into a new document or other material, the document or 
other material shall be classified, downgraded, or declassified in 
accordance with the provisions of E.O. 11652 and NSC directives 
thereunder applicable to the information requiring the greatest 
protection.
    (f) All information or material classified prior to June 1, 1972, 
other than that described in paragraph (b) of this section, is excluded 
from the General Classification Schedule. However, at any time after the 
expiration of 10 years from the date of origin it shall be subject to 
classification review and disposition by FPC provided:
    (1) A department or agency or member of the public requests review;
    (2) The request describes the record with sufficient particularity 
to enable FPC to identify it; and
    (3) The record can be obtained with a reasonable amount of effort.
    (g) All classified information or material which is 30 years old or 
more will be declassified under the following conditions:
    (1) All information and material classified after June 1, 1972, 
will, whether or not declassification has been requested, become 
automatically declassified at the end of 30 full calendar years after 
the date of its original classification except for such specifically 
identified information or material which the Chairman personally 
determines in writing to require continued protection because such 
continued protection is essential to the national security, or 
disclosure would place a person in immediate jeopardy. In such case, the 
Chairman also will specify the period of continued classification.
    (2) All information and material classified before June 1, 1972 and 
more than 30 years old will be systematically reviewed for 
declassification by the Archivist of the United States by the end of the 
30th full calendar year following the year in which it was originated. 
In his review, the Archivist will separate and keep protected only such 
information or material as is specifically identified by the Chairman in 
accordance with paragraph (g) (1) of this section. In such case, the 
Chairman also will specify the period of continued classification.
    (3) The Executive Director, acting for the Chairman, is assigned to 
assist the Archivist of the United States in the exercise of his 
responsibilities indicated in paragraph (g)(2) of this section. He will:
    (i) Provide guidance and assistance to archival employees in 
identifying and separating those materials originated in FPC which are 
deemed to require continued classification; and

[[Page 46]]

    (ii) Develop a list for submission to the Chairman which identifies 
the materials so separated, with recommendations concerning continued 
classification. The Chairman will then make the determination required 
under paragraphs (g) (1) and (2) of this section and cause a list to be 
created which identifies the documents included in the determination, 
indicates the reason for continued classification, and specifies the 
date on which such material shall be declassified.



Sec. 3a.23  Review of classified material for declassification purposes.

    (a) All information and material classified after June 1, 1972, and 
determined in accordance with Chapter 21, title 44, United States Code, 
to be of sufficient historical or other value to warrant preservation 
shall be systematically reviewed on a timely basis for the purpose of 
making such information and material publicly available according to the 
declassification determination at the time of classification. During 
each calendar year the FPC shall segregate to the maximum extent 
possible all such information and material warranting preservation and 
becoming declassified at or prior to the end of such year. Promptly 
after the end of such year the FPC, or the Archives of the United States 
if transferred thereto, shall make the declassified information and 
material available to the public to the extent permitted by law.
    (b) Departments and agencies and members of the public may direct 
requests for review for declassification, as described in Sec. 3a.22(f), 
to:

Office of the Secretary, Federal Power Commission,\1\ Washington, DC 
20426.

    \1\ Now known as the Federal Energy Regulatory Commission.

The Office of the Secretary will assign the request to the appropriate 
Bureau or Office for action and will acknowledge in writing the receipt 
of the request. If the request requires the rendering of services for 
which fair and equitable fees should be charged pursuant to Title 5 of 
the Independent Offices Appropriations Act, 1952, 31 U.S.C. 483a, the 
requester shall be so notified. The Bureau or Office which is assigned 
action will make a determination within 30 days of receipt or explain 
why further time is necessary. If at the end of 60 days from receipt of 
the request for review no determination has been made, the requester may 
apply to the FPC Review Committee (paragraph (g) of this section) for a 
determination. Should the Bureau or Office assigned the action on a 
request for review determine that under the criteria set forth in 
section 5(B) of E.O. 11652 continued classification is required, the 
requester will be notified promptly and, whenever possible, provided 
with a brief statement as to why the requested information or material 
cannot be declassified. The requester may appeal any such determination 
to the FPC Review Committee and the notice of determination will advise 
him of this right.
    (c) The FPC Review Committee will establish procedures to review and 
act within 30 days upon all applications and appeals regarding requests 
for declassification. The chairman, acting through the committee, is 
authorized to overrule previous determinations in whole or in part when, 
in its judgment, continued protection is no longer required. If the 
committee determines that continued classification is required under the 
criteria of section 5(B) of E.O. 11652, it will promptly so notify the 
requester and advise him that he may appeal the denial to the 
Interagency Classification Review Committee.
    (d) A request by a department or agency or a member of the public to 
review for declassification documents more than 30 years old shall be 
referred directly to the Archivist of the United States, and he shall 
have the requested documents reviewed for declassification. If the 
information or material requested has been transferred to the General 
Services Administration for accession into the Archives, the Archivist 
shall, together with the chairman, have the requested documents reviewed 
for declassification. Classification shall be continued in either case 
only when the chairman makes the personal determination indicated in 
Sec. 3a.22(g)(1).

[[Page 47]]

The Archivist shall notify the requester promptly of such determination 
and of his right to appeal the denial to the Interagency Classification 
Review Committee.
    (e) For purposes of administrative determinations under paragraph 
(b), (c), or (d) of this section, the burden is on the FPC to show that 
continued classification is warranted. Upon a determination that the 
classified material no longer warrants classification, it will be 
declassified and made available to the requester if not otherwise exempt 
from disclosure under section 552(b) of Title 5, U.S.C. (Freedom of 
Information Act) or other provisions of law.
    (f) A request for classification review must describe the document 
with sufficient particularity to enable the FPC to identify it and 
obtain it with a reasonable amount of effort. Whenever a request is 
deficient in its description of the record sought, the requester will be 
asked to provide additional identifying information whenever possible. 
Before denying a request on the ground that it is unduly burdensome, the 
requester will be asked to limit his request to records that are 
reasonably obtainable. If the requester then does not describe the 
records sought with sufficient particularity, or the record requested 
cannot be obtained with a reasonable amount of effort, the requester 
will be notified of the reasons why no action will be taken and of his 
right to appeal such decision.
    (g) The FPC Review Committee will consist of the Executive Director, 
as Committee Chairman, the Secretary, and the Director, Office of Public 
Information, as members. In addition to the activities described in this 
paragraph, the Review Committee has authority to act on all suggestions 
and complaints with respect to administration of E.O. 11652 and this 
part 3a.
    (h) The FPC Review Committee is also responsible for recommending to 
the chairman appropriate administrative action to correct abuse or 
violation of any provision of E.O. 11652 or NSC directives thereunder, 
including notifications by warning letter, formal reprimand, and to the 
extent permitted by law, suspension without pay and removal.
    (i) The Chairman of the Review Committee will submit through the 
chairman, FPC, a report quarterly to the Interagency Classification 
Review Committee, NSC, of actions on classification review requests, 
classification abuses, and unauthorized disclosures.

              Classification Markings and Special Notations



Sec. 3a.31  Classification markings and special notations.

    (a) After the chairman, the vice chairman, or the executive director 
determines that classified information is contained in an original 
document or other item, the appropriate marking, i.e., Secret or 
Confidential, will be applied as indicated herein. In addition, each 
classified document will reflect its date of origin and the Bureau, 
Office, or Regional Office responsible for its preparation and issuance, 
and the identity of the highest authority authorizing the 
classification. Where the individual who signs or otherwise 
authenticates the document or other item has also authorized the 
classification, no further annotation as to his identity is required. 
Each classified document will also show on its face whether it is 
subject to or exempt from the General Declassification Schedule 
described in Sec. 3a.22(b).
    (1) For marking documents which are subject to the General 
Declassification Schedule, the following stamp will be used:

    (Top Secret, Secret, or Confidential) Classified by ------------. 
Subject to General Declassification Schedule of E.O. 11652, 
automatically downgraded at 2-year intervals and declassified on 
December 31, ------------ (insert year).

    (2) For marking documents which are to be automatically declassified 
on a given event or date earlier than the General Declassification 
Schedule the following stamp will be used:

    (Top Secret, Secret, or Confidential) Classified by ------------. 
Automatically declassified on -------------------- (effective date or 
event).

    (3) For marking documents which are exempt from the General 
Declassification Schedule the following stamp will be used:


[[Page 48]]


    (Top Secret, Secret, or Confidential) Classified by ------------. 
Exempt from General Declassification Schedule of E.O. 11652, Exemption 
Category (section 5B (1), (2), (3), or (4). Automatically declassified 
on -------------------- (effective date or event, if any).

    (b) Should the classifier fail to mark such document with one of the 
foregoing stamps, the document shall be deemed to be subject to the 
General Declassification Schedule. The person who signs or finally 
approves a document or other material containing classified information 
shall be deemed to be the classifier. If the classifier is other than 
such person he shall be identified on the stamp as indicated.
    (c) On documents, the classification markings Secret and 
Confidential will be stamped in red ink, printed, or written in letters 
considerably larger than those used in the text of the document. On 
documents which are typewritten in elite, pica or executive size type, 
the above markings should be in letters not less than three-sixteenths 
inch in height. No markings, other than those indicated above, are 
authorized to designate that a document or material requires protection 
in the interests of national security. The overall classification 
assigned to a document will be conspicuously marked on the top and 
bottom of each page and on the outside of the front and back covers, if 
any. Letters of transmittal, endorsements, routing slips, or any other 
papers of any size which conceal or partially conceal the cover, the 
title page, or first page, will bear the marking of the overall 
classification.
    (d) Whenever a classified document contains either more than one 
security classification category or unclassified information, each 
section, part or paragraph should be marked to the extent practicable to 
show its classification category or that it is unclassified.
    (e) Letters of transmittal or other covering documents which are 
classified solely because of classified enclosures or attachments, or 
which are classified in a lower category than such enclosures or 
attachments, will bear either of the following markings, as appropriate.
    (1) If the covering document is classified on its own, but has 
enclosures or attachments of a higher classification, or is a component 
(i.e., an endorsement or comment) or a file in which other components 
bear a higher classification:

Regarded________________________________________________________________
                                            (appropriate classification)
When separated from_____________________________________________________
                                 (identify higher classified components)

    (2) If unclassified when separated from its classified enclosures or 
attachments:

When the Attachments Are Removed, This Transmittal Letter Becomes 
Unclassified.

    (f) In addition to the classification category markings prescribed 
above, the first or title page of each classified document will contain 
instructions as appropriate, in accordance with the following:
    (1) Regarding instructions. The declassification and downgrading 
notation, as described in Sec. 3a.31(g) will be applied to classified 
documents only. The notation will not be carried forward to unclassified 
letters of transmittals or other cover documents. When such cover 
documents are classified by their own content, they will be annotated 
with the notwithstanding instructions which pertain to the enclosures.
    (2) ``Special Handling'' notation. Classified information will not 
be released or disclosed to any foreign national without proper specific 
authorization. This applies even when the classified material does not 
bear the special handling notice described below. The special handling 
notice indicated only that the material has been reviewed and a specific 
determination made that the information is not releasable to foreign 
nationals. If it is anticipated that the handling or distribution of a 
classified document will make it liable to inadvertent disclosure to 
foreign nationals it will be marked with a separate special handling 
notation, which will be carried forward to letters of transmittals or 
other cover documents. The notation reads:

      Special Handling Required Not Releasable to Foreign Nationals

    (g) Whenever classified material is upgraded, downgraded, or 
declassified, the material will be marked to reflect:
    (1) The change in classification.

[[Page 49]]

    (2) The authority for the action.
    (3) The effective date.
    (4) The person or unit taking the action.

When classification changes are made, the classification markings 
themselves will be changed or canceled, and each copy or item of the 
material will be marked with the citation of authority. The notation 
below will be used for this purpose:

Classification__________________________________________________________
                                                               (changed)
________________________________________________________________________
                                                              (canceled)
To______________________________________________________________________
Effective on____________________________________________________________
                                                                  (date)
Under authority of______________________________________________________
                                        (authorizing official or office)
By______________________________________________________________________
                                        (person or office taking action)

    (h) In addition to the foregoing marking requirements, warning 
notices shall be displayed prominently on classified documents or 
materials as prescribed below. When display of these warning notices on 
the documents or other materials is not feasible, the warnings shall be 
included in the written notification of the assigned classification.
    (1) Restricted data. For classified information or material 
containing restricted data as defined in the Atomic Energy Act of 1954, 
as amended:

                             Restricted Data

    This document contains restricted data as defined in the Atomic 
Energy Act of 1954. Its dissemination or disclosure to any unauthorized 
person is prohibited.

    (2) Formerly restricted data. For classified information or material 
containing solely Formerly Restricted Data, as defined in section 142.d, 
Atomic Energy Act of 1954, as amended:

                        Formerly Restricted Data

    Unauthorized disclosure subject to administrative and criminal 
sanctions. Handle as restricted data in foreign dissemination, section 
114.b., Atomic Energy Act, 1954.

    (3) Information other than restricted data or formerly restricted 
data. For classified information or material furnished to persons 
outside the Executive Branch of Government other than as described in 
paragraphs (h)(1) and (2) of this section.

                      National Security Information

    Unauthorized disclosure subject to criminal sanctions.

    (4) Sensitive intelligence information. For classified information 
or material relating to sensitive intelligence sources and methods, the 
following warning notice shall be used, in addition to and in 
conjunction with those prescribed in paragraph (h)(1), (2), or (3), of 
this section, as appropriate:

   Warning Notice--Sensitive Intelligence Sources and Methods Involved

                     Access to Classified Materials



Sec. 3a.41  Access requirements.

    (a) The Personnel Security Officer, on a continuing current basis, 
will certify to the Security Officer, the head of each bureau and office 
and each regional engineer, the names of officers and employees who have 
been granted a security clearance for access to classified material and 
the level of such clearance (Top Secret, Secret, Confidential). The 
Personnel Security Officer will maintain accurate and current listings 
of personnel who have been granted security clearances in accordance 
with the standards and criteria of Executive Orders 10450 and 10865 and 
as prescribed by this part.
    (b) In addition to a security clearance, staff members must have a 
need for access to classified information or material in connection with 
the performance of duties. The determination for the need-to-know will 
be made by the official having responsibility for the classified 
information or material.
    (c) When a staff member no longer requires access to classified 
information or material in connection with performance of official 
duties, the Personnel Security Officer will administratively withdraw 
the security clearance. Additionally, when a staff member no longer 
needs access to a particular security classification category, the 
security clearance will be adjusted to the classification category 
required. In both cases, this action will

[[Page 50]]

be without prejudice to the staff member's eligibility for a security 
clearance or upgrading of category should the need again arise.
    (d) Access to classified information or material originated by the 
FPC may be authorized to persons outside the Executive Branch of the 
Government engaged in historical research and to former Presidential 
appointees as provided in paragraphs VI B and C of the NSC directive 
dated May 17, 1972. The determination of access authorization will be 
made by the Chairman.
    (e) Except as otherwise provided in section 102 of the National 
Security Act of 1947, 61 Stat. 495, 50 U.S.C. 403, classified 
information or material originating in one department or agency shall 
not be disseminated outside any other department or agency to which it 
has been made available without the consent of the originating 
organization.

                            Security Officers



Sec. 3a.51  Designation of security officers.

    (a) The Director, Office of Administrative Operations (OAO) is 
designated as Top Secret Control Officer and Security Officer for 
classified material for the Federal Power Commission. The Director, OAO, 
will designate alternate Top Secret Control Officers and alternated 
Security Officers, who will be authorized, subject to such limitations 
as may be imposed by the Director, to perform the duties for which the 
Top Secret Control Officer and Security Officer is responsible. As used 
hereinafter, the terms Top Secret Control Officer and Security Officer 
shall be interpreted as including the alternate Top Secret Control 
Officers and Security Officers. The FPC Security Officer is authorized 
and directed to insure the proper application of the provisions of 
Executive Order 11652 and of this part.
    (b) Regional Engineers are designated as Regional Security Officers 
for the purpose of carrying out the functions assigned herein.
    (c) The Director, OAO, will appoint in writing appropriately cleared 
staff members to act as couriers for transmittal, as necessary, for 
classified information or material.

              Storage and Custody of Classified Information



Sec. 3a.61  Storage and custody of classified information.

    (a) Unless specifically authorized by the Chairman or Executive 
Director, classified information and materials within the Washington 
office will be stored only in GSA-approved security containers in the 
Office of Administrative Operations. Such containers will be of steel 
construction with built-in, three-position, dial-type, manipulation-
proof, changeable combination locks.
    (b) A custodian and one or more alternate custodians will be 
assigned responsibility for the security of each container under his 
jurisdiction in which classified information is stored. Such assignment 
will be made a matter of record by executing GSA Optional Form 63, 
Classified Container Registration, and affixing it to the container 
concerned. Custodians will be responsible for assuring that combinations 
are changed as required and that locking and checking functions are 
accomplished daily in compliance with paragraphs (g) and (h) of this 
section.
    (c) GSA Optional Form 63 is a 3-sheet form, each sheet having a 
specific purpose and disposition, as follows:
    (1) Sheet 1 records the names, addresses, and home telephone numbers 
of the custodian and alternate custodians. Sheet 1 is affixed to the 
outside of the container.
    (2) Sheet 2 records the combination of the container and is placed 
inside Sheet 3, which is an envelope.
    (3) Sheet 3, an envelope, is a carbon copy of Sheet 1. When the 
container combination is recorded on Sheet 2, it is sealed inside Sheet 
3 which is then forwarded to the FPC Top Secret Control Officer.
    (d) GSA Optional Form 62, Safe or Cabinet Security Record, will be 
attached conspicuously to the outside of each container used to store 
classified information. The form is used to certify the opening and 
locking of a container, and the checking of a container at the end of 
each working day or whenever it is opened and locked during the day.

[[Page 51]]

    (e) Combinations of containers used to store classified materials 
will be assigned classifications equal to the highest category of 
classified information stored therein. Active combinations are subject 
to the safeguarding and receipting requirements of this instruction. 
Superseded combinations become declassified automatically and 
certificates of destruction therefore are unnecessary.
    (f) Knowledge of or access to the combination of a container used 
for the storage of classified material will be given only to those 
appropriately cleared individuals who are authorized access to the 
information stored therein.
    (g) Combinations of containers used to store classified material 
will be changed at least once a year. A combination will be changed also 
whenever anyone knowing or having access to it is transferred; when the 
combination has been subjected to compromise; when the security 
classification of the container is upgraded; and at any other time as 
may be deemed necessary. Combinations to locks on security containers 
will be changed only by individuals having a security clearance equal to 
the highest category of classified material stored therein. Changing 
lock combinations is a responsibility of OAO. (See FPC Special 
Instruction No. AM 2162.2, Periodic Change of Combination on Locks.)
    (h) The individual who unlocks a container will indicate the date 
and time and initial entry on GSA Optional Form 62. At the close of each 
workday, or when the container is locked at earlier time, the individual 
locking the container will make the appropriate entry on GSA Optional 
Form 62. An individual other than the one who locked the container will 
check to insure that it is properly closed and locked and will make the 
appropriate entry on GSA Optional Form 62. When a container has not been 
opened during the day, the checker will enter the date and the notation 
``Not Opened'' and make appropriate entry in the ``Checked By'' column.
    (i) The red and white reversible ``Closed-Open'' cardboard sign will 
be used on all classified containers to indicate whether the container 
is open or locked.
    (j) Typewriter ribbons used in the preparation of classified 
information will be safeguarded in the manner appropriate for the degree 
of classification involved. Cloth ribbons are considered insecure until 
both upper and lower lines have been cycled through the typewriter at 
least twice. Carbon paper or film ribbons are insecure at all times 
since the imprint thereon cannot be obliterated and such ribbon must be 
destroyed as classified waste. Insecure ribbons will not be left in 
typewriters overnight but will be stored in appropriate classified 
container.

                 Accountability For Classified Material



Sec. 3a.71  Accountability for classified material.

    (a) The Office of Administrative Operations is the central control 
registry for the receipt and dispatch of classified material in the 
Washington office and maintains the accountability register of all 
classified material. In addition, each Regional Engineer will maintain 
an accountability register for classified material of which he has 
custody.
    (b) With the exception of the Chairman, Vice Chairman, and Executive 
Director, no individual, bureau, or office is authorized to receive, 
open, or dispatch classified material other than the authorized 
personnel in OAO or the Regional Engineers. Classified material received 
by other than the OAO or Regional Engineers will be delivered promptly 
and unopened to the Security Officer or Regional Engineer in order that 
it may be brought under accountable control.
    (c) Each classified document received by or originating in the FPC 
will be assigned an individual control number by the central control 
registry, OAO. Control numbers will be assigned serially within a 
calendar year. The first digit of the four-digit control number will 
indicate the calendar year in which the document was originated or 
received in the FPC. Control numbers assigned to top secret material 
will be separate from the sequence for other classified

[[Page 52]]

material and will be prefixed by the letters ``TS''. Examples:

9006--Sixth classified document controlled by the central control 
registry in calendar year 1969.
TS 1006--Sixth Top Secret document controlled by the central control 
registry in calendar year 1971.

    (d) The accounting system for control of classified documents will 
be effected through the use of FPC Form 55, Classified Document Control 
Record and Receipt. This form will be used to:
    (1) Register an accurate, unclassified description of the document; 
its assigned control number; and the date it is placed under 
accountability.
    (2) Serve as the accountability register for classified material.
    (3) Record all changes in status or custody of the document during 
its classification life or the period it is retained under 
accountability in the FPC.
    (4) Serve as the principal basis for all classified document 
inventory and tracer actions.
    (5) Serve as a receipt for the central control registry when the 
document is transferred.
    (e) For Top Secret documents only, an access register, FPC Form 
1286, Top Secret Access Record, for recording the names of all 
individuals having access to the document, will be prepared in addition 
to FPC Form 55. In addition, a physical inventory of all Top Secret 
documents will be conducted during June of each year by the Top Secret 
Control Officer and witnessed by a staff member holding a Top Secret 
clearance.
    (f) When classified documents are regraded, declassified, or 
destroyed, the change in status will be recorded in the file copy of FPC 
Form 55 in the central control registry.
    (g) Classified documents will not be reproduced by any means except 
on the specific written authority of the FPC Security Officer.
    (h) In the Washington Office, classified material will be destroyed 
by OAO and will be accomplished by burning in the presence of a 
destroying official and a witnessing official. Destroying and witnessing 
officials will be alternate Security Officers from OAO. A record of 
destruction of each classified document will be maintained on FPC Form 
1285. Classified Document Destruction Certificate. In addition, the date 
of destruction and the destruction certificate number will be recorded 
on the file copy of FPC Form 55 in the central control registry. The 
original signed copy of the destruction certificate will be retained in 
the central control registry. The duplicate copy will be retained by the 
destroying official. Regional Engineers will follow these instructions 
for destruction of classified material in their possession, except that 
the destroying official shall be the Regional Engineer and the 
witnessing official shall be any other individual having appropriate 
security clearance.
    (i) It is the responsibility of any staff member who has knowledge 
of the loss or possible compromise of classified information immediately 
to report the circumstances to the Director, OAO. The Director, OAO, 
will notify the originating Department and any other interested 
Department of the loss or possible compromise in order that a damage 
assessment can be conducted. An immediate inquiry will be initiated by 
the Director, OAO, for the purpose of taking corrective action and for 
recommendations to the chairman, through the Review Committee, for 
appropriate administrative, disciplinary, or legal action.

                   Transmittal of Classified Material



Sec. 3a.81  Transmittal of classified material.

    (a) A continuous receipting system, using copies of FPC Form 55, 
will record all transfers of classified items between elements or 
officials within the FPC. Receipts for transmittal of classified items 
from the central registry to the first recipient will be acknowledged on 
copy number one (original) of FPC Form 55. This copy will be returned to 
and become part of the central register, where it will remain as an 
active record until the item is either destroyed or transmitted outside 
the FPC control registry system. Receipts for subsequent transmittals 
through the FPC will be recorded on the remaining copies of FPC Form 55.
    (b) A recipient will acknowledge receipt and assumption of custody 
of

[[Page 53]]

classified material exactly as it is described on FPC Form 55. If it is 
determined that parts are missing, it is incorrectly numbered, or 
otherwise recorded in error on FPC Form 55. The recipient will not sign 
for the material but will return it promptly to the transmitting 
element, notifying them accordingly.
    (c) Whenever a classified or protected document is being internally 
transmitted, or is in use, it will be covered by either FPC Label 19, 
Top Secret Cover Sheet (yellow); FPC Label 20, Secret Cover Sheet (red); 
FPC Label 21, Confidential Cover Sheet (blue), or FPC Label 22, Official 
Use Only (Limited Official Use) green. In addition, the red back sheet, 
FPC Label 23, will be used. With the exception of the FPC Form 55, no 
transmittal paper or other material will be placed over the label, and 
no writing will be applied thereon.
    (d) The transmission or transfer of custody of classified material 
outside of the FPC Washington offices or the Regional Offices will be 
covered by FPC Form 1284, Classified Document Receipt and/or Tracer, 
prepared in duplicate (one post card and one paper copy). The post card 
will be enclosed, along with the material being transferred, in the 
inner envelope, wrapping or container, and the paper copy retained in 
the central registry pending return of the signed post card.
    (e) Classified material transmitted outside of the FPC Washington 
offices or the Regional Offices will be dispatched in two opaque 
envelopes or double wrapped in opaque wrapping paper. The outgoing 
material will be prepared for transmission by:
    (1) Preparing and enclosing an appropriate receipt (see paragraph 
(d) of this section) in the inner envelope or wrapping.
    (2) Addressing, return addressing, and sealing or taping the inner 
envelope or wrapping.
    (3) Marking the security classification and other required notations 
on the front and back of the inner cover. If the nature of the contents 
deem it necessary or advisable, the inner cover may be marked with the 
following or a similar notation ``To Be Opened By Addressee Only.'' When 
this notation is used, an appropriate ``Attention'' line must be 
contained in the address on the outer envelope to insure delivery to the 
intended recipient.
    (4) Enclosing the inner envelope or wrapping in an opaque outer 
envelope wrapper containing the appropriate address information. These 
outer covers will not contain any of the markings contained on the inner 
cover. If the outer cover does not fully conceal the markings on the 
inner envelope or wrapper, a sheet of plain paper should be folded 
around the inner wrapper to conceal the markings.
    (f) Transmittal of Top Secret information and material shall be 
effected preferably by oral discussion in person between the officials 
concerned. Otherwise the transmission of Top Secret information and 
material shall be by specifically designated personnel, by State 
Department diplomatic pouch, by a messenger-courier system especially 
created for that purpose, over authorized communications circuits in 
encrypted form or by other means authorized by the National Security 
Council.
    (g) Transmittal of material classified Secret or Confidential to any 
addressee in the 48 contiguous States and the District of Columbia, the 
State of Hawaii, the State of Alaska, the Commonwealth of Puerto Rico, 
and Canadian Government installations by the FPC Washington offices or 
the Regional offices will be by registered mail only. Transmittal 
outside these specified areas will be as stated in paragraph C(2), 
Appendix B, of the NSC Directive of May 17, 1972.

                            Data Index System



Sec. 3a.91  Data index system.

    A data index system shall be established for Top Secret, Secret, and 
Confidential information in selected categories prescribed by the 
Interagency Classification Review Committee, in accordance with section 
VII of the National Security Council Directive Governing the 
Classification, Downgrading, Declassification, and Safeguarding of 
National Security Information, May 17, 1972.

[[Page 54]]



PART 3b--COLLECTION, MAINTENANCE, USE, AND DISSEMINATION OF RECORDS OF IDENTIFIABLE PERSONAL INFORMATION--Table of Contents




                           Subpart A--General

Sec.
3b.1  Purpose.
3b.2  Definitions.
3b.3  Notice requirements.
3b.4  Government contractors.
3b.5  Legal guardians.

     Subpart B--Standards for Maintenance and Collection of Records

3b.201  Content of records.
3b.202  Collection of information from individuals concerned.
3b.203  Rules of conduct.
3b.204  Safeguarding information in manual and computer-based record 
          systems.

               Subpart C--Rules for Disclosure of Records

3b.220  Notification of maintenance of records to individuals concerned.
3b.221  Access of records to individuals concerned.
3b.222  Identification requirements.
3b.223  Fees.
3b.224  Requests to amend records and disputes thereon.
3b.225  Written consent for disclosure.
3b.226  Accounting of disclosures.
3b.227  Mailing lists.

                     Subpart D--Rules for Exemptions

3b.250  Specific exemptions.

    Authority: Federal Power Act, as amended, sec. 309, 49 Stat. 858-859 
(16 U.S.C. 825h); Natural Gas Act, as amended, sec. 16, 52 Stat. 830 (15 
U.S.C. 717o); and Pub. L. 93-579 (88 Stat. 1896).

    Source: Order 536, 40 FR 44288, Sept. 25, 1975, unless otherwise 
noted.



                           Subpart A--General



Sec. 3b.1  Purpose.

    Part 3b describes the Federal Power Commission's program to 
implement the provisions of the Privacy Act of 1974 (Pub. L. No. 93-579, 
88 Stat. 1896) to allow individuals to have a say in the collection and 
use of information which may be used in determinations affecting them. 
The program is structured to permit an individual to determine what 
records pertaining to him and filed under his individual name, or some 
other identifying particular, are collected, maintained, used or 
disseminated by the Commission, to permit him access to such records, 
and to correct or amend them, and to provide that the Commission 
collect, use, maintain and disseminate such information in a lawful 
manner for a necessary purpose.



Sec. 3b.2  Definitions.

    In this part:
    (a) Agency, as defined in 5 U.S.C. 551(1) as ``* * * each authority 
of the Government of the United States, whether or not it is within or 
subject to review by another agency, * * *'', includes any executive 
department, military department, Government corporation, Government 
controlled corporation, or other establishment in the executive branch 
of the Government (including the Executive Office of the President), or 
any independent regulatory agency [5 U.S.C. 552(e)];
    (b) Individual means a citizen of the United States or an alien 
lawfully admitted for permanent residence;
    (c) Maintain includes, maintain, collect, use, or disseminate;
    (d) Record means any item, collection or grouping of information 
about an individual that is maintained by an agency, including, but not 
limited to, his education, financial transactions, medical history, and 
criminal or employment history and that contains his name, or the 
identifying number, symbol, or other identifying particular assigned to 
the individual, such as a finger or voice print or a photograph;
    (e) System of records means a group of any records under the control 
of any agency from which information is retrieved by the name of the 
individual or by some identifying number, symbol, or other identifying 
particular assigned to the individual;
    (f) Statistical record means a record in a system of records 
maintained for statistical research or reporting purposes only and not 
used in whole or in part in making any determination about an 
identifiable individual, except as provided by section 8 of title 13 of 
the United States Code;
    (g) Routine use means, with respect to the disclosure of a record, 
the use of

[[Page 55]]

such record for a purpose which is compatible with the purpose for which 
it was collected; and
    (h) Disclosure means either the transmittal of a copy of a record or 
the granting of access to a record, by oral, written, electronic or 
mechanical communication.



Sec. 3b.3  Notice requirements.

    (a) The Commission will publish at least annually in the Federal 
Register a notice identifying the systems of records currently 
maintained by the Commission. For each system of records, the notice 
will include the following information:
    (1) The name and location of the system;
    (2) The categories of individuals on whom records are maintained in 
the system;
    (3) The categories of records maintained in the system;
    (4) The specific statutory provision or executive order, or rule or 
regulation issued pursuant thereto, authorizing the maintenance of the 
information contained in the system;
    (5) Each routine use of the records contained in the system, 
including the categories of users and the purposes of such use;
    (6) The policies and practices regarding the storage, 
retrievability, access controls, and retention and disposal of the 
records;
    (7) The title and business address of the Commission official who is 
responsible for the system of records;
    (8) The procedures whereby an individual can be notified at his 
request if the system of records contains a record pertaining to him;
    (9) The procedures whereby an individual can be notified at his 
request how he can gain access to any record pertaining to him contained 
in the system of records, and how he can contest its contents; and
    (10) The categories of sources of records in the system.
    (b) At least thirty days prior to its operation, the Commission will 
publish in the Federal Register a notice of its intention to establish a 
new system of records reciting the information required pursuant to 
paragraphs (a) (1) through (10) of this section and notice of any major 
change to an existing system.
    (c) The Commission will publish in the Federal Register a notice of 
its intention to establish any new or intended routine use of the 
information in an existing system of records at least thirty days prior 
to the disclosure of the record for that routine use. A new routine use 
is one which involves disclosure of records for a new purpose compatible 
with the purpose for which the record is maintained or which involves 
disclosure to a new recipient or category of recipients. At a minimum, 
the notice will contain the following information:
    (1) The name of the system of records for which the routine use is 
to be established;
    (2) The authority authorizing the maintenance of the information 
contained in the system;
    (3) The categories of records maintained in the system;
    (4) The proposed routine use(s);
    (5) The categories of recipients for each proposed routine use; and
    (6) Reference to the public notice in the Federal Register under 
which the existing system had already been published.



Sec. 3b.4  Government contractors.

    Systems of records operated by a contractor, pursuant to a contract, 
on behalf of the Commission, which are designed to accomplish a 
Commission function, are considered, for the purposes of this part, to 
be maintained by the Commission. A contract covers any contract, written 
or oral, subject to the Federal Procurement Regulations. The contractual 
instrument will specify, to the extent consistent with the Commission's 
authority to require it, that the systems of records be maintained in 
accordance with the requirements of this part.



Sec. 3b.5  Legal guardians.

    For the purposes of this part, the parent of any minor, or the legal 
guardian of any individual who has been declared to be incompetent due 
to physical or mental incapacity or age by a court of competent 
jurisdiction, may act on behalf of the individual.

[[Page 56]]



     Subpart B--Standards for Maintenance and Collection of Records



Sec. 3b.201  Content of records.

    (a) All records which are maintained by the Commission in a system 
of records will contain only such information about an individual that 
is relevant and necessary to accomplish a purpose of the Commission as 
required to be accomplished by statute or by executive order of the 
President. Pursuant to Sec. 3b.3(a)(4) of this part, the Commission will 
identify in the Federal Register the specific provisions in law which 
authorize it to maintain information in a system of records. In 
determining the relevance and necessity of records, the following 
considerations will govern:
    (1) Whether each item of information relates to the purposes, in 
law, for which the system is maintained;
    (2) The adverse consequences, if any, of not collecting the 
information;
    (3) Whether the need for the information could be met through the 
maintenance of the information in a non-individually identifiable form;
    (4) Whether the information in the record is required to be 
collected on every individual who is the subject of a record in the 
system or whether a sampling procedure would suffice;
    (5) The length of time it is necessary to retain the information;
    (6) The financial cost of maintaining the record as compared to the 
adverse consequences of not maintaining it; and
    (7) Whether the information, while generally relevant and necessary 
to accomplish a statutory purpose, is specifically relevant and 
necessary only in certain cases.
    (b) All records which the Commission maintains in a system of 
records and which are used to make a determination about an individual 
will be maintained with such accuracy, relevance, timeliness, and 
completeness as is reasonably necessary to assure fairness to the 
individual in the determination. Where practicable, in questionable 
instances, reverification of pertinent information with the individual 
to whom the record pertains may be appropriate. In pursuit of 
completeness in the collection of information, the Commission will limit 
its records to those elements of information which clearly bear on the 
determination for which the records are intended to be used, assuring 
that all elements necessary to the determination are present before the 
determination is made.
    (c) Prior to disseminating any records in a system of records, the 
Commission will make reasonable efforts to assure that such records are 
as accurate, relevant, timely, and complete as appropriate for the 
purposes for which they are collected and/or maintained, except when 
they are disclosed to a member of the public under the Freedom of 
Information Act, 5 U.S.C. 552, as amended, or to another agency.
    (d) No records of the Commission in a system of records shall 
describe how any individual exercises his First Amendment rights unless 
expressly authorized by statute or by the individual about whom the 
record is maintained or unless pertinent to and within the scope of an 
authorized law enforcement activity. The exercise of these rights 
includes, but is not limited to, religious and political beliefs, 
freedom of speech and of the press, and freedom of assembly and 
petition. In determining whether or not a particular activity 
constitutes the exercise of a right guaranteed by the First Amendment, 
the Commission will apply the broadest reasonable interpretation.



Sec. 3b.202  Collection of information from individuals concerned.

    (a) Any information collected by the Commission for inclusion in a 
system of records which may result in adverse determinations about an 
individual's rights, benefits, and privileges under Federal programs, 
will, to the greatest extent practicable, be collected directly from the 
subject individual (see paragraph (d) of this section).
    (b) The Commission will inform each individual whom it asks to 
supply information about himself, on the form which it uses to collect 
the information, or on a separate sheet that can be easily retained by 
the individual, in language which is explicit, informative, and easily 
understood, and not

[[Page 57]]

so lengthy as to deter an individual from reading it, of:
    (1) The specific provision of the statute or executive order of the 
President, including the brief title or subject of that statute or order 
which authorizes the solicitation of the information; whether disclosure 
of such information is mandatory or voluntary; and whether the 
Commission is authorized or required to impose penalties for failing to 
respond;
    (2) The principal purpose or purposes for which the information is 
intended to be used;
    (3) The routine uses which may be made of the information, as 
described in the Federal Register in the notice of the system of records 
in which the information is maintained, and which are relatable and 
necessary to a purpose described pursuant to paragraph (b)(2) of this 
section; and
    (4) The effects (beneficial and adverse) on the individual if any, 
of not providing all or any part of the requested information.
    (c) Social security numbers will not be required from individuals 
whom the Commission asks to supply information unless the disclosure of 
the number is required by Federal statute or unless disclosure is to the 
Commission maintaining a system of records in existence and operating 
before January 1, 1975, if such disclosure was required pursuant to a 
statute or regulation adopted prior to such date to verify the identity 
of an individual. When an individual is requested to disclose his social 
security number to the Commission, he will be informed under what 
statutory or other authority such number is solicited, what uses will be 
made of it, whether disclosure is mandatory or voluntary, and if it is 
mandatory, under what provisions of law or regulation.
    (d) The use of third-party sources to collect information about an 
individual may be appropriate in certain circumstances. In determining 
when the use of third-party sources would be appropriate, the following 
considerations will govern:
    (1) When the information needed can only be obtained from a third 
party;
    (2) When the cost of collecting the information directly from the 
individual concerned far exceeds the cost of collecting it from a third 
party;
    (3) When there is little risk that the information proposed to be 
collected from the third party, if inaccurate, could result in an 
adverse determination about the individual concerned.
    (4) When there is a need to insure the accuracy of information 
supplied by an individual by verifying it with a third party, or there 
is a need to obtain a qualitative assessment of the individual's 
capabilities or character; or
    (5) When there are provisions for verifying any third-party 
information with the individual concerned before making a determination 
based on that information.

Third party sources, where feasible, will be informed of the purposes 
for which information which they are asked to provide will be used. In 
appropriate circumstances, pursuant to 5 U.S.C. 552a(k) (2), (5), and 
(7), the Commission may assure a third party that his identity will not 
be revealed to the subject of the collected information.



Sec. 3b.203  Rules of conduct.

    (a) The Executive Director of the Commission has the overall 
administrative responsibility for implementing the provisions of the 
Privacy Act of 1974 and overseeing the conduct of all Commission 
employees with respect to the act.
    (b) It is the responsibility of the Comptroller of the Commission, 
under the guidance of the Executive Director, to prepare the appropriate 
internal administrative procedures to assure that all persons involved 
in the design, development, or operation of any system of records, or in 
collecting, using, or disseminating any individual record, and who have 
access to any system of records, are informed of all rules and 
requirements of the Commission to protect the privacy of the individuals 
who are the subjects of the records, including the applicable provisions 
of the FPC Standards of Conduct for Employees, Special Government 
Employees and Commissioners, specifically 18 CFR 3.207(e) and 3.228(d).
    (c) The Director, Office of Personnel Programs, is responsible for 
establishing and conducting an adequate training program for such 
persons

[[Page 58]]

whose official duties require access to and collection, maintenance, 
use, and dissemination of such records.
    (d) The General Counsel of the Commission is responsible for 
providing legal interpretation of the Privacy Act of 1974, and for 
preparing all agency rules and notices for official publication in 
compliance with the act.
    (e) Commission employees will be informed of all the implications of 
their actions in this area, including especially:
    (1) That there are criminal penalties for knowing and willful 
unauthorized disclosure of material within a system of records; for 
willful failure to publish a public notice of the existence of a system 
of records; and for knowingly and willfully requesting or obtaining 
records under false pretenses;
    (2) That the Commission may be subject to civil suit due to failure 
to amend an individual's record in accordance with his request or 
failure to review his request in conformity with Sec. 3b.224; refusal to 
comply with an individual's request of access to a record under 
Sec. 3b.221; willful or intentional failure to maintain a record 
accurately pursuant to Sec. 3b.201(b) and consequently a determination 
is made which is adverse to the individual; or willful or intentional 
failure to comply with any other provision of the Privacy Act of 1974, 
or any rule promulgated thereunder, in such a way as to have an adverse 
effect upon an individual.



Sec. 3b.204  Safeguarding information in manual and computer-based record systems.

    (a) The administrative and physical controls to protect the 
information in the manual and computer-based record systems from 
unauthorized access or disclosure will be specified for each system in 
the Federal Register. The system managers, who are responsible for 
providing protection and accountability of such records at all times and 
for insuring that the records are secured in proper containers whenever 
they are not in use or under direct control of authorized persons, will 
be identified for each system of records in the Federal Register.
    (b) Whenever records in the manual or computer-based record systems, 
including input and output documents, punched cards, and magnetic tapes 
or disks, are not under the personal control of an authorized person, 
they will be stored in lockable containers and/or in a secured room, or 
in alternative storage systems which furnish an equivalent or greater 
degree of physical security. In this regard, the Commission may refer to 
security guidelines prepared by the General Services Administration, the 
Department of Commerce (National Bureau of Standards), or other agencies 
with appropriate knowledge and expertise.
    (c) Access to and use of records will only be permitted to persons 
pursuant to Secs. 3b.221, 3b.224, and 3b.225. Access to areas where 
records are stored will be limited to those persons whose official 
duties require work in such areas. Proper control of data, in any form, 
associated with the manual and computer-based record systems will be 
maintained at all times, including maintenance of an accounting of 
removal of the records from the storage area.



               Subpart C--Rules for Disclosure of Records



Sec. 3b.220  Notification of maintenance of records to individuals concerned.

    (a) Upon written request, either in person or by mail, to the 
appropriate system manager specified for each system of records, an 
individual will be notified whether a system of records maintained by 
the Commission and named by the individual contains a record or records 
pertaining to him and filed under his individual name, or some other 
identifying particular.
    (b) The system manager may require appropriate identification 
pursuant to Sec. 3b.222, and if necessary, may request from the 
individual additional information needed to locate the record which the 
individual should reasonably be expected to know, such as, but not 
limited to, date of birth, place of birth, and a parent's first name.
    (c) When practicable, the system manager will provide a written 
acknowledgement of the inquiry within ten days of receipt of the inquiry 
(excluding Saturdays, Sundays and legal public holidays) and 
notification of

[[Page 59]]

whether or not a system of records maintained by the Commission and 
named by the individual contains a record pertaining to him and filed 
under his individual name or some other identifying particular. If the 
system manager is unable to provide an answer within the ten-day period, 
he will so inform the individual in writing, stating the reasons 
therefor (for good cause shown), and when it is anticipated that 
notification will be made. Such an extension will not exceed fifteen 
days from receipt of the inquiry (excluding Saturdays, Sundays, and 
legal public holidays).
    (d) For good cause shown, as used in all sections of this part, 
includes circumstances such as the following: Where a search for and/or 
collection of requested records from inactive storage, field offices, or 
other establishments is required; where a voluminous amount of data is 
involved; where information on other individuals must be separated or 
expunged from the record; or where consultations are required with other 
agencies or with others having a substantial interest in the 
determination of the request.



Sec. 3b.221  Access of records to individuals concerned.

    (a) Upon written request, either in person or by mail, to the 
appropriate system manager specified for each system of records, any 
individual may gain access to records or information in a system of 
records pertaining to him and filed under his individual name, or some 
other identifying particular, to review and to have a copy made of all 
or any portion thereof in a form comprehensible to him.
    (b) A person of his own choosing may accompany the individual to 
whom the record pertains when the record is disclosed [see 
Sec. 3b.222(e)].
    (c) Before disclosure, the following procedure may apply:

    Medical or psychological records will be disclosed directly to the 
individual to whom they pertain unless, in the judgment of the system 
manager, in consultation with a medical doctor or a psychologist, access 
to such records could have an adverse effect upon the individual. When 
the system manager and a doctor determine that the disclosure of such 
information could have an adverse effect upon the individual to whom it 
pertains, the system manager may transmit such information to a medical 
doctor named by the requesting individual.

    (d) The system manager will provide a written acknowledgement of the 
receipt of a request for access within ten days of receipt (excluding 
Saturdays, Sundays, and legal public holidays). Such acknowledgement 
may, if necessary, request any additional information needed to locate 
the record which the individual may reasonably be expected to know, and 
may require appropriate identification pursuant to Sec. 3b.222 of this 
part. No acknowledgment is required if access can be granted within the 
ten-day period.
    (1) If access can be granted, the system manager will notify the 
individual, in writing, as to when, and whether access will be granted 
in person or by mail, so that access will be provided within twenty days 
of the receipt of the request (excluding Saturdays, Sundays, and legal 
public holidays). If the system manager is unable to provide access 
within twenty days of receipt of the request, he will inform the 
individual in writing as to the reasons therefor (for good cause shown), 
and when it is anticipated that access will be granted. If the expected 
date of access indicated in the written notification to the individual 
cannot be met, the system manager will advise the individual in writing 
of the delay, the reasons therefor (for good cause shown), and of a 
revised date when access will be granted. Such extensions will not 
exceed thirty days from receipt of the request (excluding Saturdays, 
Sundays, and legal public holidays).
    (2) If access cannot be granted, the system manager will inform the 
individual, in writing, within twenty days of receipt of the request 
(excluding Saturdays, Sundays, and legal public holidays) of the refusal 
of his request; the reasons for the refusal; the right of the 
individual, within thirty days of receipt of the refusal, to request in 
writing a review of the refusal by the Chairman of the Federal Power 
Commission, 825 North Capitol Street, NE., Washington, DC 20426, or by 
an officer designated by the Chairman pursuant to Sec. 3b.224(f); and 
the right of the individual to seek advice or assistance

[[Page 60]]

from the system manager in obtaining such a review.
    (e) The Chairman, or officer designated pursuant to Sec. 3b.224(f), 
not later than thirty days (excluding Saturdays, Sundays, and legal 
public holidays) from the date of receipt of the individual's request 
for review will complete such review, unless, for good cause shown, the 
Chairman, or designated officer, extends the thirty-day period in 
writing to the individual with reasons for the delay and the approximate 
date on which the review is expected to be completed. Such an extension 
will not exceed thirty-five days from receipt of the request for review 
(excluding Saturdays, Sundays and legal public holidays). The Chairman, 
or designated officer, will make one of the following determinations:
    (1) Grant the individual access to the requested record and notify 
the individual, in writing, as to when, and whether access will be 
granted in person or by mail; or
    (2) Inform the individual in writing of the refusal, the reasons 
therefor, and the right of the individual to seek judicial review of the 
refusal of his request for access.
    (f)(1) The Commission will deny an individual access to the 
following records pertaining to him:
    (i) Information compiled in reasonable anticipation of a civil 
action or proceeding;
    (ii) Records listed in the Federal Register as exempt from certain 
provisions of the Privacy Act of 1974, pursuant to subpart D of this 
part; and
    (iii) Records which may be required to be withheld under other 
statutory provisions.
    (2) The Commission will not deny an individual access to a record 
pertaining to him because that record is permitted to be withheld from 
members of the public under the Freedom of Information Act, 5 U.S.C. 
552, as amended.
    (g) Disclosure of an original record will take place in the presence 
of the Commission representative having physical custody of the record.



Sec. 3b.222  Identification requirements.

    The appropriate system manager specified for each system of records 
will require reasonable identification from individuals to assure that 
records in a system of records are disclosed to the proper person. 
Identification requirements will be consistent with the nature of the 
records being disclosed.
    (a) Disclosure of records to the individual to whom the record 
pertains, or under whose name or some other identifying particular the 
record is filed, in person, requires that the individual show an 
identification card. Employee identification, a Medicare card, or a 
driver's license are examples of acceptable identification. Documents 
incorporating a picture and signature of the individual are preferred.
    (b) For records disclosed by mail, the system manager will require 
certain minimum identifying information: name, date of birth, or the 
system's personal identifier if known to the individual. A comparison of 
the signatures of the requester and those in the record will be used to 
determine identity.
    (c) If the system manager determines that the data in the record is 
so sensitive that unauthorized access could cause harm or embarrassment 
to the individual involved, a signed notarized statement asserting 
identity or some other reasonable means to verify identity will be 
required.
    (d) If an individual can provide no suitable information or 
documents for identification, the system manager will require a signed 
statement from the individual asserting his identity and stipulating 
that the individual understands that knowingly or willfully seeking or 
obtaining access to records about an individual under false pretenses is 
a misdemeanor punishable by a fine of up to $5,000.
    (e) The system manager will require an individual who wishes to be 
accompanied by another person when reviewing his records to furnish a 
signed written statement authorizing discussion of his records in the 
presence of the accompanying person.
    (f) The appropriate identification requirements of this section may 
be required by a system manager from an individual to whom a record does 
not pertain who seeks access to the record pursuant to Sec. 3b.225 of 
this part.
    (g) No individual will be denied notification of maintenance of a 
record

[[Page 61]]

pursuant to Sec. 3b.220 or access to a record pursuant to Secs. 3b.221 
and 3b.224 for refusing to disclose a social security number.
    (h) No verification of identity will be required of individuals 
seeking notification of or access to records which are otherwise 
available to a member of the public under the Freedom of Information 
Act, 5 U.S.C. 552, as amended.



Sec. 3b.223  Fees.

    (a) Fees will be charged for the direct cost of duplication of 
records in a system of records when copies are requested by the 
individual seeking access to the records. Any person may obtain a copy 
of the Commission's schedule of fees by telephone, by mail or by coming 
in person to the office of the appropriate system manager who is 
responsible for the protection and accountability of the desired record. 
Requests for copies of requested records and payment therefor must be 
made to the system manager. Fees will only be charged for costs of $2 or 
more.
    (b) Where practicable, self-service duplication of requested 
documents may also be made on duplicating machines by the person 
requesting the records, on a reimbursable basis to the system manager, 
in the presence of the Commission representative having physical custody 
of the record. Where data has been extracted from one of the 
Commission's systems of records on magnetic tape or disks, or computer 
files, copies of the records of these files may be secured on a 
reimbursable basis upon written request to the appropriate system 
manager. The fee will vary for each requirement, depending on size and 
complexity.
    (c) No fee will be charged in the following instances:
    (1) When the system manager determines that he can grant access to 
records only by providing a copy of the record through the mail because 
he cannot provide reasonable means for the individual to have access in 
person;
    (2) For search and review of requested records to determine if they 
fall within the disclosure requirements of this part; and
    (3) When the system manager makes a copy of the record as a 
necessary part of the process of making it available for review.
    (d) Except for requests made by Government agencies, certification 
of copies of any official Commission record shall be accompanied by a 
fee of $2 per document.



Sec. 3b.224  Requests to amend records and disputes thereon.

    (a) Upon written request, either in person or by mail, to the 
appropriate system manager specified for each system of records, any 
individual may amend records in a system of records pertaining to him 
and filed under his individual name or some other identifying 
particular. Such requests should contain identifying information needed 
to locate the record, a brief description of the item or items of 
information to be amended, and information in support of the request for 
amendment. The individual may obtain assistance in preparing his request 
to amend a record from the appropriate system manager.
    (b) The system manager will provide a written acknowledgement of the 
receipt of a request to amend within ten days of receipt (excluding 
Saturdays, Sundays, and legal public holidays). Such an acknowledgement 
may, if necessary, request any additional information needed to make a 
determination which the individual may reasonably be expected to know, 
and verification of identity consistent with Sec. 3b.222. The 
acknowledgement will clearly describe the request and advise the 
individual requesting the amendment when he may expect to be notified of 
action taken on the request. No acknowledgement is required if the 
request can be reviewed, processed, and the individual notified of 
compliance or denial within the ten-day period.
    (c) The system manager will complete the review and advise the 
individual in writing of the results within twenty days of the receipt 
of the request (excluding Saturdays, Sundays, and legal public 
holidays). If the system manager is unable to complete the review within 
twenty days of the receipt of the request, he will inform the individual 
in writing as to the reasons therefor (for good cause shown) and when it 
is anticipated that the review

[[Page 62]]

will be completed. If the completion date for the review indicated in 
the acknowledgement cannot be met, the system manager will advise the 
individual in writing of the delay, the reasons therefor (for good cause 
shown), and of a revised date when the review may be expected to be 
completed. Such extensions will not exceed thirty days from receipt of 
the request (excluding Saturdays, Sundays, and legal public holidays). 
The system manager will take one of the following actions:
    (1) Make the requested correction or amendment; so advise the 
individual in writing; and, where an accounting of the disclosure of the 
record was made pursuant to Sec. 3b.226, advise all previous recipients 
of the record in writing of the fact that the amendment was made and the 
substance of the amendment [see Sec. 3b.225(d)]; or
    (2) Inform the individual in writing of the refusal to amend the 
record in accordance with the request; the reasons for the refusal 
including any of the standards which were employed pursuant to paragraph 
(d) of this section in conducting the review; the right of the 
individual, within thirty days of receipt of the refusal, to request in 
writing a review of the refusal by the Chairman of the Federal Power 
Commission, 825 North Capitol Street, NE., Washington, DC 20426, or by 
an officer designated by the Chairman pursuant to paragraph (f) of this 
section; and the right of the individual to seek advice or assistance 
from the system manager in obtaining such a review.
    (d) In reviewing a record in response to a request to amend, the 
system manager and the Chairman, or the officer he designates pursuant 
to paragraph (f) of this section, shall assess the accuracy, relevance, 
timeliness and completeness of the record. They shall consider the 
record in terms of the criteria established in Sec. 3b.201 of this part.
    (e) The Chairman, or officer designated pursuant to paragraph (f) of 
this section, not later than thirty days (excluding Saturdays, Sundays, 
and legal public holidays) from the date of receipt of the individual's 
request for review, will complete such review, unless, for good cause 
shown, the Chairman, or designated officer, extends the thirty-day 
period in a writing to the individual with reasons for the delay and the 
approximate date on which the review is expected to be completed. Such 
an extension will not exceed thirty-five days from receipt of the 
request for review (excluding Saturdays, Sundays, and legal public 
holidays). The Chairman, or designated officer, will make one of the 
following determinations:
    (1) Make the correction in accordance with the individual's request 
and proceed as in paragraph (c)(1) of this section; or
    (2) Inform the individual in writing of:
    (i) The refusal to amend the record in accordance with the request,
    (ii) The reasons therefor, including any of the standards which were 
employed pursuant to paragraph (d) of this section in conducting the 
review;
    (iii) The right of the individual to file with the Chairman, or 
designated officer, a concise written statement setting forth the 
reasons for his disagreement with the decision;
    (iv) The fact that the statement of disagreement will be made 
available to anyone to whom the record is subsequently disclosed, 
together with the portion of the record which is disputed clearly noted, 
and, with, at the discretion of the Chairman, or designated officer, a 
brief statement by the Chairman, or designated officer, summarizing the 
reasons for refusing to amend the record;
    (v) Where an accounting of the disclosure of the record was made 
pursuant to Sec. 3b.226 of this part, the fact that prior recipients of 
the disputed record will be provided a copy of the individual's 
statement of disagreement, with the portion of the record which is 
disputed clearly noted, and, at the Chairman's or designated officer's 
discretion, the statement summarizing the refusal to amend [see 
Sec. 3b.225(d)]; and
    (vi) The individual's right to seek judicial review of the refusal 
to amend.
    (f) The Chairman may designate, in writing, another officer of the 
Commission to act in his capacity for the purposes of this part. The 
officer will be organizationally independent of or senior to the system 
manager who made

[[Page 63]]

the initial determination and will conduct a review independent of the 
initial determination.



Sec. 3b.225  Written consent for disclosure.

    (a) The Commission will not disclose any record which is contained 
in a system of records by any means of communication to any person, or 
to any other agency, unless it has the written request by, or the prior 
written consent of, the individual to whom the record pertains and under 
whose individual name, or some other identifying particular, the record 
is filed. The written request or consent should include, at a minimum, 
the general purposes for or the types of recipients to whom disclosure 
may be made. The fact that an individual is informed of the purposes for 
which information will be used when information is collected pursuant to 
Sec. 3b.202(b)(2) will not constitute consent.
    (b) A written request or consent is not required if the disclosure 
is:
    (1) To those officers and employees of the Commission who have a 
need for the record in the performance of their duties;
    (2) Required under the provisions of the Freedom of Information Act, 
5 U.S.C. 552, as amended;
    (3) For a routine use as defined in Sec. 3b.2(g) of this part and as 
described in the public notice for each system of records;
    (4) To the Bureau of the Census for purposes of planning or carrying 
out a census or survey or related activity pursuant to the provisions of 
title 13 of the United States Code;
    (5) To a recipient who has provided the appropriate system manager 
specified for each system of records with advance adequate written 
assurance that the record will be used solely as a statistical research 
or reporting record, and the record is to be transferred in a form that 
is not individually identifiable. The written statement of assurance 
should include at a minimum:
    (i) A statement of the purpose for requesting the record; and
    (ii) Certification that the record will only be used for statistical 
purposes.

In addition to stripping personally identifying information from records 
released for statistical purposes, the system manager will ensure that 
the identity of the individual cannot reasonably be deduced or 
determined by combining various statistical records, or by reference to 
public records or other available sources of information;
    (6) To the National Archives of the United States, pursuant to 44 
U.S.C. 2103, as a record which has sufficient historical or other value 
to warrant its continued preservation by the United States Government, 
or for the evaluation by the Administrator of General Services or his 
designee to determine whether the record has such value;
    (7) To another agency or to an instrumentality of any governmental 
jurisdiction within or under the control of the United States for a 
civil or criminal law enforcement activity if the activity is authorized 
by law, and if the head of the agency or instrumentality, or his 
delegated official, has made a written request to the appropriate system 
manager specifying the particular portion of the record desired and the 
law enforcement activity for which the record is being sought;
    (8) To a person pursuant to a showing of compelling circumstances 
affecting the health or safety of an individual (not necessarily the 
individual to whom the record pertains), if, upon disclosure, 
notification of such is sent to the last known address of the individual 
to whom the record pertains;
    (9) To either House of Congress, or to any committee or subcommittee 
thereof, on a matter within its jurisdiction;
    (10) To the Comptroller General, or any of his authorized 
representatives, in the course of the performance of the duties of the 
General Accounting Office; or
    (11) Pursuant to the order of a court of competent jurisdiction.
    (c) When a record is disclosed under compulsory legal process and 
such process becomes a matter of public record, the system manager will 
make reasonable efforts to notify the individual to whom the record 
pertains. A notice will be sent to the individual's last known address 
noted in the Commission's files.
    (d) The appropriate system manager shall notify all prior recipients 
of

[[Page 64]]

records, disclosure to whom an accounting was made pursuant to 
Sec. 3b.226, of any amendments made to the records, including 
corrections, amendments and notations of dispute made pursuant to 
Secs. 3b.224(c)(1) and 3b.224(e)(1) and (2)(v), within ten days of 
receipt of the corrected information or notation of dispute (excluding 
Saturdays, Sundays, and legal public holidays), except under unusual 
circumstances [see circumstances described in Sec. 3b.220(d)].
    (e) The content of the records disclosed under this section shall be 
maintained pursuant to the standards established in Sec. 3b.201(c).



Sec. 3b.226  Accounting of disclosures.

    (a) The appropriate system manager specified for each system of 
records will keep an accurate written account of all disclosures of 
records made to any person or to any other agency with the written 
consent or at the written request of the individual to whom the record 
pertains and pursuant to Sec. 3b.225(b)(3) through (11). The account 
will include the following information:
    (1) The date, nature, and purpose of each disclosure;
    (2) The name and address of the person or agency to whom the 
disclosure is made; and
    (3) A reference to the justification or basis upon which the release 
was made, including reference to any written document required as when 
records are released for statistical or law enforcement purposes 
pursuant to Sec. 3b.225(b) (5) and (7).
    (b) Each system manager will retain the accounting made under 
paragraph (a) of this section for at least five years from the date of 
disclosure for which the accounting is made, or the life of the record, 
which ever is longer.
    (c) Except for disclosures made for law enforcement purposes 
pursuant to Sec. 3b.225(b)(7), and unless the system of records has been 
exempted from this provision pursuant to subpart D of this part, each 
system manager will make the accounting made under paragraph (a) of this 
section available to the individual named in the record at his written 
request.
    (d) The accounting of disclosures is not a system of records under 
the definition in Sec. 3b.2(e) and no accounting will be maintained for 
disclosure of the accounting of disclosures.



Sec. 3b.227  Mailing lists.

    An individual's name and address maintained by the Commission will 
not be sold or rented for commercial or other solicitation purposes not 
related to the purposes for which the information was collected, unless 
such sale or rental is specifically authorized by law. This provision 
shall not be construed to require the withholding of names or addresses 
otherwise permitted to be made public, as pursuant to the Freedom of 
Information Act, 5 U.S.C. 552, as amended.



                     Subpart D--Rules for Exemptions



Sec. 3b.250  Specific exemptions.

    Any system of records maintained by the Commission may be exempt 
from certain provisions of the Privacy Act of 1974, and the appropriate 
sections of this part promulgated pursuant thereto, if the following 
requirements are met:
    (a) The system of records falls within one or more of the following 
categories:
    (1) Records subject to the provisions of 5 U.S.C. 552(b)(1) as 
classified material;
    (2) Investigatory material compiled for law enforcement purposes 
[except to the extent that the system is more broadly exempt under 5 
U.S.C. 552a(j)(2) covering records maintained by an agency whose 
principal function pertains to the enforcement of criminal laws] 
provided, however, that is such record is used as a basis for denying an 
individual any right, privilege, or benefit to which the individual 
would be entitled in the absence of that record, the individual must be 
granted access to that record except to the extent that access would 
reveal the identity of a confidential source who furnished the 
information to the Government under an express promise that his identity 
would be held in confidence, or, prior to September 27, 1975, under an 
implied promise that his identity would be held in confidence;
    (3) Records maintained to provide protective services to the 
President of

[[Page 65]]

the United States or other individuals pursuant to 18 U.S.C. 3056;
    (4) Records required by statute to be maintained and used solely as 
statistical records;
    (5) Investigatory material compiled solely for determining 
suitability, eligibility, or qualifications for Federal civilian 
employment, military service, Federal contracts, or access to classified 
information, but only to the extent that disclosure of such material 
would reveal the identity of a source who furnished information to the 
Government under an express promise that his identity would be held in 
confidence, or, prior to September 27, 1975, under an implied promise 
that his identity would be held in confidence;
    (6) Testing or examination material used solely to determine 
individual qualifications for appointment or promotion in the Federal 
service the disclosure of which would compromise the objectivity or 
fairness of the testing or examination process; or
    (7) Material used to evaluate potential for promotion in the armed 
services, but only to the extent that the disclosure of such material 
would reveal the identity of a source who furnished the information to 
the Government under an express promise that his identity would be held 
in confidence, or, prior to September 27, 1975, under an implied promise 
that his identity would be held in confidence;
    (b) Publication in the Federal Register is made in accordance with 
the requirements (including general public notice) of the Administrative 
Procedure Act, 5 U.S.C. 553, to include, at a minimum:
    (1) The name of the system of records;
    (2) The specific provision or provisions of the Privacy Act of 1974, 
and the appropriate sections of this part promulgated pursuant thereto, 
from which the system is to be exempted; and
    (3) The reasons for the exemption; and
    (c) The system of records is exempted from one or more of the 
following provisions of the Privacy Act and the appropriate sections of 
this part promulgated pursuant thereto:
    (1) 5 U.S.C. 552a(c)(3); 18 CFR 3b.226(c)--Making the accounting of 
disclosures available to the individual named in the record at his 
request;
    (2) 5 U.S.C. 552a(d); 18 CFR 3b.221, 3b.224--Granting an individual 
the right of access to his records and permitting him to request 
amendment of such;
    (3) 5 U.S.C. 552a(e)(1); 18 CFR 3b.201(a)--Requiring maintenance of 
relevant and necessary information in a system of records as required by 
statute or Executive order of the President;
    (4) 5 U.S.C. 552a(e)(4)(G); 18 CFR 3b.3(a)(8)--Requiring a 
description of procedures for determining if a system contains a record 
on an individual in the public notice of the system of records;
    (5) 5 U.S.C. 552a(e)(4)(H); 18 CFR 3b.3(a)(9)--Requiring a 
description of procedures for gaining access to and contesting the 
contents of a record in the public notice of the system of records;
    (6) 5 U.S.C. 552a(e)(4)(I); 18 CFR 3b.3(a)(10)--Requiring a 
description of the categories of the sources of records in the public 
notice of the system of records; and
    (7) 5 U.S.C. 552a(f); 18 CFR 3b.220-3b.224--Requiring agency rules 
for determining if an individual is the subject of a record, for 
handling requests for access, for granting requests for access, for 
amending records, and for fees.



PART 3c--STANDARDS OF CONDUCT--Table of Contents




Sec.
3c.1  Cross-reference to employee ethical conduct standards and 
          financial disclosure regulations.
3c.2  Nonpublic information.
3c.3  Reporting fraud, waste, abuse, and corruption and cooperation with 
          official inquiries.

    Authority: 15 U.S.C. 717g; 16 U.S.C. 825(b); 42 U.S.C. 7171, 7172.

    Source: Order 589, 61 FR 43415, Aug. 23, 1996, unless otherwise 
noted.

[[Page 66]]



Sec. 3c.1  Cross-reference to employee ethical conduct standards and financial disclosure regulations.

    Employees of the Federal Energy Regulatory Commission (Commission) 
are subject to the executive branch-wide financial disclosure 
regulations at 5 CFR part 2634, the Standards of Ethical Conduct for 
Employees of the Executive Branch at 5 CFR part 2635, the Commission 
regulations at 5 CFR part 3401 which supplement the Standards of Ethical 
Conduct, and the executive branch-wide employee responsibilities and 
conduct regulation at 5 CFR part 735.



Sec. 3c.2  Nonpublic information.

    (a) Section 301(b) (16 U.S.C. 825(b)) of the Federal Power Act and 
section 8(b) (15 U.S.C. 717g) of the Natural Gas Act prohibit any 
employee, in the absence of Commission or court direction, from 
divulging any fact or information which may come to his or her knowledge 
during the course of examination of books or other accounts.
    (b) The nature and time of any proposed action by the Commission are 
confidential and shall not be divulged to anyone outside the Commission. 
The Secretary of the Commission has the exclusive responsibility and 
authority for authorizing the initial public release of information 
concerning Commission proceedings.



Sec. 3c.3  Reporting fraud, waste, abuse, and corruption and cooperation with official inquiries.

    (a) Employees shall, in fulfilling the obligation of 5 CFR 
2635.101(b)(11), report fraud, waste, abuse, and corruption in 
Commission programs, including on the part of Commission employees, 
contractors, subcontractors, grantees, or other recipients of Commission 
financial assistance, to the Office of Inspector General or other 
appropriate Federal authority.
    (b) All alleged violations of the ethical restrictions described in 
Sec. 3c.1 that are reported in accordance with paragraph (a) of this 
section to an appropriate authority within the Commission shall in turn 
be referred by that authority to the Designated Agency Ethics Official 
or his or her designee, or the Inspector General.
    (c) Employees shall cooperate with official inquiries by the 
Inspector General; they shall respond to questions truthfully under oath 
when required, whether orally or in writing, and must provide documents 
and other materials concerning matters of official interest. An employee 
is not required to respond to such official inquiries if answers or 
testimony may subject the employee to criminal prosecution.

[[Page 67]]



          SUBCHAPTER B--REGULATIONS UNDER THE FEDERAL POWER ACT





PART 4--LICENSES, PERMITS, EXEMPTIONS, AND DETERMINATION OF PROJECT COSTS--Table of Contents




 Subpart A--Determination of Cost of Projects Constructed Under License

Sec.
4.1  Initial cost statement.
4.3  Report on project cost.
4.4  Service of report.
4.5  Time for filing protest.
4.6  Burden of proof.
4.7  Findings.

 Subpart B--Determination of Fair Value of Constructed Projects, Under 
                        Section 23(a) of the Act

4.10  Valuation data.
4.11  Reports.
4.12  Service of report.
4.13  Time for filing protest.
4.14  Hearing upon report.

Subpart C--Determination of Cost of Constructed Projects not Subject to 
                        Section 23(a) of the Act

4.20  Initial statement.
4.21  Reports.
4.22  Service of report.
4.23  Time for filing protest.
4.24  Determination of cost.
4.25  Findings.

  Subpart D--Application for Preliminary Permit, License or Exemption: 
                           General Provisions

4.30  Applicability and definitions.
4.31  Initial or competing application: who may file.
4.32  Acceptance for filing or rejection; information to be made 
          available to the public; requests for additional studies.
4.33  Limitations on submitting applications.
4.34  Hearings on applications; consultation on terms and conditions; 
          motions to intervene; alternative procedures.
4.35  Amendment of application; date of acceptance.
4.36  Competing applications: deadlines for filing; notices of intent; 
          comparisons of plans of development.
4.37  Rules of preference among competing applications.
4.38  Consultation requirements.
4.39  Specifications for maps and drawings.

 Subpart E--Application for License for Major Unconstructed Project and 
                         Major Modified Project

4.40  Applicability.
4.41  Contents of application.

   Subpart F--Application for License for Major Project--Existing Dam

4.50  Applicability.
4.51  Contents of application.

 Subpart G--Application for License for Minor Water Power Projects and 
             Major Water Power Projects 5 Megawatts or Less

4.60  Applicability and notice to agencies.
4.61  Contents of application.

      Subpart H--Application for License for Transmission Line Only

4.70  Applicability.
4.71  Contents of application.

      Subpart I--Application for Preliminary Permit; Amendment and 
                   Cancellation of Preliminary Permit

4.80  Applicability.
4.81  Contents of application.
4.82  Amendments.
4.83  Cancellation and loss of priority.
4.84  Surrender of permit.

     Subpart J--Exemption of Small Conduit Hydroelectric Facilities

4.90  Applicability and purpose.
4.91  [Reserved]
4.92  Contents of exemption application.
4.93  Action on exemption applications.
4.94  Standard terms and conditions of exemption.
4.95  Surrender of exemption.
4.96  Amendment of exemption.

    Subpart K--Exemption of Small Hydroelectric Power Projects of 5 
                            Megawatts or Less

4.101  Applicability.
4.102  Surrender of exemption.
4.103  General provisions for case-specific exemption.
4.104  Amendment of exemption.
4.105  Action on exemption applications.

[[Page 68]]

4.106  Standard terms and conditions of case-specific exemption from 
          licensing.
4.107  Contents of application for exemption from licensing.
4.108  Contents of application for exemption from provisions other than 
          licensing.

             Subpart L--Application for Amendment of License

4.200  Applicability.
4.201  Contents of application.
4.202  Alteration and extension of license.

             Subpart M--Fees Under Section 30(e) of the Act

4.300  Purpose, definitions, and applicability.
4.301  Notice to fish and wildlife agencies and estimation of fees prior 
          to filing.
4.302  Fees at filing.
4.303  Post-filing procedures.
4.304  Payment.
4.305  Enforcement.

    Authority: 16 U.S.C. 791a-825r, 2601-2645; 42 U.S.C. 7101-7352.

    Source: Order 141, 12 FR 8485, Dec. 19, 1947, unless otherwise 
noted.



 Subpart A--Determination of Cost of Projects Constructed Under License



Sec. 4.1  Initial cost statement.

    (a) Notification of Commission. When a project is constructed under 
a license issued under the Federal Power Act, the licensee shall, within 
one year after the original project is ready for service, file with the 
Commission a letter, in quadruplicate, declaring that the original costs 
have been booked in compliance with the Commission's Uniform System of 
Accounts and the books of accounts are ready for audit.
    (b) Licensee's books. The licensee's books of accounts for each 
project shall be maintained in such a fashion that each year's 
additions, betterments, and delections to the project may be readily 
ascertained.
    (c) Availability of information to the public. The information made 
available to the Commission in accordance with this section must be 
available to the public for inspection and copying when specifically 
requested.
    (d) Compliance with the Act. Compliance with the provisions of this 
section satisfies the filing requirements of section 4(b) of the Federal 
Power Act (16 U.S.C. 797(b)).

[Order 53, 44 FR 61948, Oct. 29, 1979]



Sec. 4.3  Report on project cost.

    (a) Scheduling an audit. When the original cost declaration letter, 
filed in accordance with Sec. 4.1 is received by the Commission, its 
representative will sechedule and conduct an audit of the books, cost 
records, engineering reports, and other records supporting the project's 
original cost. The audit may include an inspection of the project works.
    (b) Project records. The cost records shall be supported by 
memorandum accounts reflecting the indirect and overhead costs prior to 
their spread to primary accounts as well as all the details of 
allocations including formulas utilized to spread the indirect and 
overhead costs to primary accounts.
    (c) Report by Commission staff. Upon completion of the audit, a 
report will be prepared for the Commission setting forth the audit 
findings and recommendations with respect to the cost as claimed.

[Order 53, 44 FR 61948, Oct. 29, 1979]



Sec. 4.4  Service of report.

    Copies of such report will be served by certified mail upon said 
licensees, and copies will also be sent to the State public service 
commission, or if the States has not regulatory agency, to the Governor 
of the State where such project is located, and to such other parties as 
the Commission shall prescribe, and the report will be made available 
for public inspection at the time of service upon the licensee.

(Administrative Procedure Act, 5 U.S.C. 551-557 (1976); Federal Power 
Act, as amended, 16 U.S.C. 291-628 (1976 & Supp. V 1981), Dept. of 
Energy Organization Act 42 U.S.C. 7101-7352 (Supp. V 1981); E.O. 12009, 
3 CFR 142 (1978))

[Order 141, 12 FR 8485, Dec. 19, 1947, as amended by Order 344, 48 FR 
49010, Oct. 24, 1983]



Sec. 4.5  Time for filing protest.

    Thirty days after service thereof will be allowed to such licensee 
within which to file a protest to such reports. If no protest is filed 
within the time allowed, the Commission will issue such

[[Page 69]]

order as may be appropriate. If a protest is filed, a public hearing 
will be ordered in accordance with subpart E of part 385 of this 
chapter.

[Order 141, 12 FR 8485, Dec. 19, 1947, as amended by Order 225, 47 FR 
19056, May 3, 1982]



Sec. 4.6  Burden of proof.

    The burden of proof to sustain each item of claimed cost shall be 
upon the licensee and only such items as are in the opinion of the 
Commission supported by satisfactory proof may be entered in the 
electric plant accounts of the licensee.

[Order 53, 44 FR 61948, Oct. 29, 1979]



Sec. 4.7  Findings.

    (a) Commission determination. Final action by the Commission will be 
in the form of an order served upon all parties to the proceeding. One 
copy of the order will be furnished to the Secretary of Treasury by the 
Commission.
    (b) Adjustments to licensee's books. The licensee's books of account 
for the project shall be adjusted to conform to the actual legitimate 
cost as revised by the order of the Commission. These adjustments and 
the project may be audited by Commission representatives, as scheduled.

[Order 53, 44 FR 61948, Oct. 29, 1979]



 Subpart B--Determination of Fair Value of Constructed Projects, Under 
                        Section 23(a) of the Act



Sec. 4.10  Valuation data.

    (a) Notification of Commission. In every case arising under section 
23(a) of the Federal Power Act that requires the determination of the 
fair value of a project already constructed, the licensee shall, within 
six months after the date of issuance of a license, file with the 
Commission a letter, in quadruplicate.
    (b) Contents of letter. The letter referred to in paragraph (a) 
shall contain a statement to the effect that an inventory and appraisal 
in detail, as of the effective date of the license, of all property 
subject thereto and to be so valued has been completed. The letter shall 
also include a statement to the effect that the actual legitimate 
original cost, or if not known, the estimated original cost, and accrued 
depreciation of the property, classified by prime accounts as prescribed 
in the Commission's Uniform System of Accounts, have been established.
    (c) Licensee's books. The licensee's books of account for each 
project shall be maintained in such a fashion that each year's 
additions, betterments, and deletions to the projects may be readily 
ascertained.
    (d) Availability of information to the public. The information made 
available to the Commission in accordance with this section must be 
available for inspection and copying by the public when specifically 
requested.

[Order 53, 44 FR 61948, Oct. 29, 1979]



Sec. 4.11  Reports.

    Representatives of the Commission will inspect the project works, 
engineering reports, and other records of the project, check the 
inventory and make an appraisal of the property and an audit of the 
books, records, and accounts of the licensee relating to the property to 
be valued, and will prepare a report of their findings with respect to 
the inventory, appraisal, original cost, accrued depreciation, and fair 
value of the property.



Sec. 4.12  Service of report.

    A copy of such report will be served by certified mail upon said 
licensee, and copies will also be sent to the State public service 
commission, or if the State has no regulatory agency, to the Governor of 
the State where such project is located. The report will be made 
available for public inspection at the time of service upon the 
licensee.

(Administrative Procedure Act, 5 U.S.C. 551-557 (1976); Federal Power 
Act, as amended, 16 U.S.C. 291-628 (1976 & Supp. V 1981), Dept. of 
Energy Organization Act 42 U.S.C. 7101-7352 (Supp. V 1981); E.O. 12009, 
3 CFR 142 (1978))

[Order 141, 12 FR 8485, Dec. 19, 1947, as amended by Order 344, 48 FR 
49010, Oct. 24, 1983]



Sec. 4.13  Time for filing protest.

    Thirty days after service thereof will be allowed to the licensee 
within which to file a protest to such report.

[[Page 70]]



Sec. 4.14  Hearing upon report.

    (a) Public hearing. After the expiration of the time within which a 
protest may be filed, a public hearing will be ordered in accordance 
with subpart E of part 385 of this chapter.
    (b) Commission determination. After the conclusion of the hearing, 
the Commission will make a finding of fair value, accompanied by an 
order which will be served upon the licensee and all parties to the 
proceeding. One copy of the order shall be furnished to the Secretary of 
the Treasury by the Commission.
    (c) Adjustment to licensee's books. The licensee's books of account 
for the project shall be adjusted to conform to the fair value of the 
project as revised by the order of the Commission. These adjustments and 
the project may be audited by Commission representatives, as scheduled.

[Order 53, 44 FR 61949, Oct. 29, 1979, as amended by Order 225, 47 FR 
19056, May 3, 1982]



Subpart C--Determination of Cost of Constructed Projects not Subject to 
                        Section 23(a) of the Act



Sec. 4.20  Initial statement.

    (a) Notification of Commission. In all cases where licenses are 
issued for projects already constructed, but which are not subject to 
the provisions of section 23(a) of the Act (49 Stat. 846; 16 U.S.C. 
816), the licensee shall, within 6 months after the date of issuance of 
license, file with the Commission a letter, in quadruplicate.
    (b) Contents of letter. The letter referred to in paragraph (a) of 
this section shall contain a statement to the effect that an inventory 
in detail of all property included under the license, as of the 
effective date of such license, has been completed. The letter shall 
also include a statement to the effect that actual legitimate original 
cost, or if not known, the estimated original cost, and accrued 
depreciation of the property, classified by prime accounts as prescribed 
in the Commission's Uniform System of Accounts, have been established.
    (c) Licensee's books. The licensee's books of account for each 
project shall be maintained in such a fashion that each year's 
additions, betterments, and deletions to the project may be readily 
ascertained.
    (d) Availability of information to the public. The information made 
available to the Commission in accordance with this section must be 
available for inspection and copying by the public when specifically 
requested.
    (e) Compliance with the Act. Compliance with the provisions of this 
section satisfies the filing requirements of section 4(b) of the Federal 
Power Act (16 U.S.C. 797(b)).

[Order 53, 44 FR 61949, Oct. 29, 1979]



Sec. 4.21  Reports.

    Representatives of the Commission will inspect the project works, 
engineering reports, and other records of the project, check the 
inventory and estimated depreciation, make an audit of the books, 
records, and accounts of the licensee relating to the property under 
license, and prepare a report of their findings with respect to the 
inventory, the original cost of the property, and the estimated accrued 
depreciation thereon.



Sec. 4.22  Service of report.

    Copies of such report will be served by certified mail upon said 
licensees, and copies will also be sent to the State public service 
commission, or if the State has no regulatory agency, to the Governor of 
the State where such project is located, and to such other parties as 
the Commission shall prescribe, and the report will be made available 
for public inspection at the time of service upon the licensee.

(Administrative Procedure Act, 5 U.S.C. 551-557 (1976); Federal Power 
Act, as amended, 16 U.S.C. 291-628 (1976 & Supp. V 1981), Dept. of 
Energy Organization Act 42 U.S.C. 7101-7352 (Supp. V 1981); E.O. 12009, 
3 CFR 142 (1978))

[Order 141, 12 FR 8485, Dec. 19, 1947, as amended by Order 344, 48 FR 
49010, Oct. 24, 1983]



Sec. 4.23  Time for filing protest.

    Thirty days after service thereof will be allowed to such licensee 
within which to file a protest to such reports. If no protest is filed 
within the time allowed, the Commission will issue such

[[Page 71]]

order as may be appropriate. If a protest is filed, a public hearing 
will be ordered in accordance with subpart E of part 385 of this 
chapter.

[Order 141, 12 FR 8485, Dec. 19, 1947, as amended by Order 225, 47 FR 
19056, May 3, 1982]



Sec. 4.24  Determination of cost.

    The Commission, after receipt of the reports, or after the 
conclusion of the hearing if one is held, will determine the amounts to 
be included in the electric plant accounts of the licensee as the cost 
of the property and the accrued depreciation thereon.



Sec. 4.25  Findings.

    (a) Commission determination. Final action by the Commission will be 
in the form of an order served upon all parties to the proceeding. One 
copy of the order shall be furnished to the Secretary of Treasury by the 
Commission.
    (b) Adjustment to licensee's books. The licensee's books of account 
for the project shall be adjusted to conform to the actual legitimate 
cost as revised by the order of the Commission. These adjustments and 
the project may be audited by Commission representatives, as scheduled.

[Order 53, 44 FR 61949, Oct. 29, 1979]



  Subpart D--Application for Preliminary Permit, License or Exemption: 
                           General Provisions

    Authority: Federal Power Act, as amended, 16 U.S.C. 792-828c; 
Department of Energy Organization Act, 42 U.S.C. 7101-7352; E.O. 12009, 
42 FR 46267; Public Utility Regulatory Policies Act of 1978, 16 U.S.C. 
2601-2645; Pub. L. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.).



Sec. 4.30  Applicability and definitions.

    (a) This subpart applies to any application for preliminary permit, 
license, or exemption from licensing.
    (b) For the purposes of this part--
    (1)(i) Competing development application means any application for a 
license or exemption from licensing for a proposed water power project 
that would develop, conserve, and utilize, in whole or in part, the same 
or mutually exclusive water resources that would be developed, 
conserved, and utilized by a proposed water power project for which an 
initial preliminary permit or initial development application has been 
filed and is pending before the Commission.
    (ii) Competing preliminary permit application means any application 
for a preliminary permit for a proposed water power project that would 
develop, conserve, and utilize, in whole or in part, the same or 
mutually exclusive water resources that would be developed, conserved 
and utilized by a proposed water power project for which an initial 
preliminary permit or initial development application has been filed and 
is pending before the Commission.
    (2) Conduit means any tunnel, canal, pipeline, aqueduct, flume, 
ditch, or similar manmade water conveyance that is operated for the 
distribution of water for agricultural, municipal, or industrial 
consumption and not primarily for the generation of electricity. The 
term not primarily for the generation of electricity includes but is not 
limited to a conduit:
    (i) Which was built for the distribution of water for agricultural, 
municipal, or industrial consumption and is operated for such a purpose; 
and
    (ii) To which a hydroelectric facility has been or is proposed to be 
added.
    (3) Construction of a dam, for the purposes of provisions governing 
application for exemption of a small conduit hydroelectric facility, 
means any construction, repair, reconstruction, or modification of a dam 
that creates a new impoundment or increases the normal maximum surface 
elevation or the normal maximum surface area of an existing impoundment.
    (4)(i) Dam, for the purposes of provisions governing application for 
license of a major project--existing dam, means any structure for 
impounding or diverting water.
    (ii) Dam, for the purposes of provisions governing application for 
exemption of a small conduit hydroelectric facility, means any structure 
that impounds water.
    (iii) Dam, for the purposes of provisions governing application for 
exemption of a small hydroelectric power

[[Page 72]]

project, means any structure for impounding water, including any 
diversion structure that is designed to obstruct all or substantially 
all of the flow of a natural body of water.
    (5) Development application means any application for either a 
license or exemption from licensing for a proposed water power project.
    (6)(i) Existing dam, for the purposes of provisions governing 
application for license of a major project--existing dam, means any dam 
(as defined in paragraph (b)(4)(i) of this section) that has already 
been constructed and which does not require any construction or 
enlargement of impoundment structures other than repairs or 
reconstruction.
    (ii) Existing dam, for the purposes of provisions governing 
application for exemption of a small hydroelectric power project, means 
any dam, the construction of which was completed on or before April 20, 
1977, and which does not require any construction or enlargement of 
impoundment structures (other than repairs or reconstruction) in 
connection with the installation of any small hydroelectric power 
project.
    (7) Existing impoundment, for the purposes of provisions governing 
application for license of a major project--existing dam, means any body 
of water that an existing dam impounds.
    (8) Federal lands, for the purposes of provisions governing 
application for exemption of a small hydroelectric power project, means 
any lands to which the United States holds fee title.
    (9)(i) Fish and wildlife agencies means the United States Fish and 
Wildlife Service, the National Marine Fisheries Service, and the state 
agency in charge of administrative management over fish and wildlife 
resources of the state in which a proposed hydropower project is 
located.
    (ii) Fish and wildlife recommendation means any recommendation 
designed to protect, mitigate damages to, or enhance any wild member of 
the animal kingdom, including any migratory or nonmigratory mammal, 
fish, bird, amphibian, reptile, mollusk, crustacean, or other 
invertebrate, whether or not bred, hatched, or born in captivity, and 
includes any egg or offspring thereof, related breeding or spawning 
grounds, and habitat. A ``fish and wildlife recommendation'' includes a 
request for a study which cannot be completed prior to licensing, but 
does not include a request that the proposed project not be constructed 
or operated, a request for additional pre-licensing studies or analysis 
or, as the term is used in Secs. 4.34(e)(2) and 4.34(f)(3), a 
recommendation for facilities, programs, or other measures to benefit 
recreation or tourism.
    (10) Indian tribe means, in reference to a proposal to apply for a 
license or exemption for a hydropower project, an Indian tribe which is 
recognized by treaty with the United States, by federal statute, or by 
the U.S. Department of the Interior in its periodic listing of tribal 
governments in the Federal Register in accordance with 25 CFR 83.6(b), 
and whose legal rights as a tribe may be affected by the development and 
operation of the hydropower project proposed (as where the operation of 
the proposed project could interfere with the management and harvest of 
anadromous fish or where the project works would be located within the 
tribe's reservation).
    (11)(i) Initial development application means any acceptable 
application for either a license or exemption from licensing for a 
proposed water power project that would develop, conserve, and utilize, 
in whole or in part, water resources for which no other acceptable 
application for a license or exemption from licensing has been submitted 
for filing and is pending before the Commission.
    (ii) Initial preliminary permit application means any acceptable 
application for a preliminary permit for a proposed water power project 
that would develop, conserve, and utilize, in whole or in part, water 
resources for which no other acceptable preliminary permit application 
has been submitted for filing and is pending before the Commission.
    (12) Install or increase, for the purposes of provisions governing 
application for exemption of a small hydroelectric power project, means 
to add new generating capacity at a site that has no existing generating 
units, to replace or rehabilitate an abandoned or

[[Page 73]]

unused existing generating unit, or to increase the generating capacity 
of any existing power plant by installing an additional generating unit 
or by rehabilitating an operable generating unit in a way that increases 
its rated electric power output.
    (13) Licensed water power project means a project, as defined in 
section 3(11) of the Federal Power Act, that is licensed under Part I of 
the Federal Power Act.
    (14) Major modified project means any major project--existing dam, 
as defined in paragraph (b)(16) of this section, that would include:
    (i) Any repair, modification or reconstruction of an existing dam 
that would result in a significant change in the normal maximum surface 
area or the normal maximum surface elevation of an existing impoundment; 
or
    (ii) Any change in existing project works or operations that would 
result in a significant environmental impact.
    (15) Major unconstructed project means any unlicensed water power 
project that would:
    (i) Have a total installed generating capacity of more than 1.5 MW; 
and
    (ii) Use the water power potential of a dam and impoundment which, 
at the time application is filed, have not been constructed.
    (16) Major project--existing dam means a licensed or unlicensed, 
existing or proposed water power project that would:
    (i) Have a total installed generating capacity or more than 2,000 
horsepower (1.5 MW); and
    (ii) Not use the water power potential provided by any dam except an 
existing dam.
    (17) Minor water power project means any licensed or unlicensed, 
existing or proposed water power project that would have a total 
installed generation capacity of 2,000 horsepower (1.5 MW), or less.
    (18) New development, for the purposes of provisions governing 
application for license of a major project--existing dam, means any 
construction, installation, repair, reconstruction, or other change in 
the existing state of project works or appurtenant facilities, including 
any dredging and filling in project waters.
    (19) New license means any license, except an annual license issued 
under section 15 of the Federal Power Act, for a water power project 
that is issued under the Federal Power Act after the initial license for 
that project.
    (20)(i) Non-Federal lands, for the purposes of provisions governing 
application for exemption of a small conduit hydroelectric facility, 
means any lands except lands to which the United States holds fee title.
    (ii) Non-Federal lands, for the purposes of provisions governing 
application for exemption of a small hydroelectric power project, mean 
any lands other than Federal lands defined in paragraph (b)(8) of this 
section.
    (21) Person means any individual and, as defined in section 3 of the 
Federal Power Act, any corporation, municipality, or state.
    (22) Project, for the purposes of provisions governing application 
for exemption of a small hydroelectric power project, means:
    (i) The impoundment and any associated dam, intake, water conveyance 
facility, power plant, primary transmission line, and other appurtenant 
facility if a lake or similar natural impoundment or a manmade 
impoundment is used for power generation; or
    (ii) Any diversion structure other than a dam and any associated 
water conveyance facility, power plant, primary transmission line, and 
other appurtenant facility if a natural water feature other than a lake 
or similar natural impoundment is used for power generation.
    (23) Qualified exemption applicant means any person who meets the 
requirements specified in Sec. 4.31(c)(2) with respect to a small 
hydroelectric power project for which exemption from licensing is 
sought.
    (24) Qualified license applicant means any person to whom the 
Commission may issue a license, as specified in section 4(e) of the 
Federal Power Act.
    (25) Ready for environmental analysis means the point in the 
processing of an application for an original or new license or exemption 
from licensing which has been accepted for filing, where substantially 
all additional information requested by the Commission has been filed 
and found adequate.

[[Page 74]]

    (26) Real property interests, for the purposes of provisions 
governing application for exemption of a small conduit hydroelectric 
facility or a small hydroelectric power project, includes ownership in 
fee, rights-of-way, easements, or leaseholds.
    (27) Resource agency means a Federal, state, or interstate agency 
exercising administration over the areas of flood control, navigation, 
irrigation, recreation, fish and wildlife, water resource management 
(including water rights), or cultural or other relevant resources of the 
state or states in which a project is or will be located.
    (28) Small conduit hydroelectric facility means an existing or 
proposed hydroelectric facility that is constructed, operated, or 
maintained for the generation of electric power, and includes all 
structures, fixtures, equipment, and lands used and useful in the 
operation or maintenance of the hydroelectric facility, but excludes the 
conduit on which the hydroelectric facility is located or the 
transmission lines associated with the hydroelectric facility and which:
    (i) Utilizes for electric power generation the hydroelectric 
potential of a conduit;
    (ii) Is located entirely on non-Federal lands, as defined in 
paragraph (b)(20)(i) of this section;
    (iii) Has an installed generating capacity of 15 MW or less;
    (iv) Is not an integral part of a dam;
    (v) Discharges the water it uses for power generation either:
    (A) Into a conduit;
    (B) Directly to a point of agricultural, municipal, or industrial 
consumption; or
    (C) Into a natural water body if a quantity of water equal to or 
greater than the quantity discharged from the hydroelectric facility is 
withdrawn from that water body downstream into a conduit that is part of 
the same water supply system as the conduit on which the hydroelectric 
facility is located; and
    (vi) Does not rely upon construction of a dam, which construction 
will create any portion of the hydrostatic head that the facility uses 
for power generation unless that construction would occur for 
agricultural, municipal, or industrial consumptive purposes even if 
hydroelectric generating facilities were not installed.
    (29) Small hydroelectric power project means any project in which 
capacity will be installed or increased after the date of notice of 
exemption or application under subpart K of this chapter, which will 
have a total installed capacity of not more than 5 MW, and which:
    (i) Would utilize for electric power generation the water power 
potential of an existing dam that is not owned or operated by the United 
States or by an instrumentality of the Federal Government, including the 
Tennessee Valley Authority; or
    (ii)(A) Would utilize for the generation of electricity a natural 
water feature, such as a natural lake, waterfall, or the gradient of a 
natural stream, without the need for a dam or man-made impoundment; and
    (B) Would not retain water behind any structure for the purpose of a 
storage and release operation.
    (30) PURPA benefits means benefits under section 210 of the Public 
Utility Regulatory Policies Act of 1978 (PURPA). Section 210(a) of PURPA 
requires electric utilities to purchase electricity from, and to sell 
electricity to, qualifying facilities.

[Order 413, 50 FR 11676, Mar. 25, 1985, as amended by Order 487, 52 FR 
48404, Dec. 22, 1987; Order 499, 53 FR 27001, July 18, 1988; Order 503, 
53 FR 36567, Sept. 21, 1988; Order 533, 56 FR 23146, May 20, 1991; 56 FR 
61154, Dec. 2, 1991; Order 533-A, 57 FR 10809, Mar. 31, 1992; 59 FR 
10577, Mar. 7, 1994]



Sec. 4.31  Initial or competing application: who may file.

    (a) Application for a preliminary permit or a license. Any citizen, 
association of citizens, domestic corporation, municipality, or state 
may submit for filing an initial application or a competing application 
for a preliminary permit or a license for a water power project under 
Part I of the Federal Power Act.
    (b) Application for exemption of a small conduit hydroelectric 
facility--(1) Exemption from provisions other than licensing. Any 
citizen, association of citizens, domestic corporation, municipality, or 
state that has all of the real property interests in the lands necessary 
to develop and operate that project, or an

[[Page 75]]

option to obtain those interests, may apply for exemption of a small 
conduit hydroelectric facility from provisions of Part I of the Federal 
Power Act, other than licensing provisions.
    (2) Exemption from licensing. Any person having all the real 
property interests in the lands necessary to develop and operate the 
small conduit hydroelectric facility, or an option to obtain those 
interests, may apply for exemption of that facility from licensing under 
Part I of the Federal Power Act.
    (c) Application for case-specific exemption of a small hydroelectric 
power project--(1) Exemption from provisions other than licensing. Any 
qualified license applicant or licensee seeking amendment of its license 
may apply for exemption of the related project from provisions of Part I 
of the Federal Power Act other than licensing provisions.
    (2) Exemption from licensing--(i) Only Federal lands involved. If 
only rights to use or occupy Federal lands would be necessary to develop 
and operate the proposed small hydroelectric power project, any person 
may apply for exemption of that project from licensing.
    (ii) Some non-Federal lands involved. If real property interests in 
any non-Federal lands would be necessary to develop and operate the 
proposed small hydroelectric power project, any person who has all of 
the real property interests in non-Federal lands necessary to develop 
and operate that project, or an option to obtain those interests, may 
apply for exemption of that project from licensing.

[Order 413, 50 FR 11678, Mar. 25, 1985]



Sec. 4.32  Acceptance for filing or rejection; information to be made available to the public; requests for additional studies.

    (a) Each application must:
    (1) For a preliminary permit or license, identify every person, 
citizen, association of citizens, domestic corporation, municipality, or 
state that has or intends to obtain and will maintain any proprietary 
right necessary to construct, operate, or maintain the project;
    (2) For a preliminary permit or a license, identify (providing names 
and mailing addresses):
    (i) Every county in which any part of the project, and any Federal 
facilities that would be used by the project, would be located;
    (ii) Every city, town, or similar local political subdivision:
    (A) In which any part of the project, and any Federal facilities 
that would be used by the project, would be located; or
    (B) That has a population of 5,000 or more people and is located 
within 15 miles of the project dam;
    (iii) Every irrigation district, drainage district, or similar 
special purpose political subdivision:
    (A) In which any part of the project, and any Federal facilities 
that would be used by the project, would be located; or
    (B) That owns, operates, maintains, or uses any project facilities 
or any Federal facilities that would be used by the project;
    (iv) Every other political subdivision in the general area of the 
project that there is reason to believe would likely be interested in, 
or affected by, the application; and
    (v) All Indian tribes that may be affected by the project.
    (3)(i) For a license (other than a license under section 15 of the 
Federal Power Act) state that the applicant has made, either at the time 
of or before filing the application, a good faith effort to give 
notification by certified mail of the filing of the application to:
    (A) Every property owner of record of any interest in the property 
within the bounds of the project, or in the case of the project without 
a specific boundary, each such owner of property which would underlie or 
be adjacent to any project works including any impoundments; and
    (B) The entities identified in paragraph (a)(2) of this section, as 
well as any other Federal, state, municipal or other local government 
agencies that there is reason to believe would likely be interested in 
or affected by such application.
    (ii) Such notification must contain the name, business address, and 
telephone number of the applicant and a copy of the Exhibit G contained 
in the

[[Page 76]]

application, and must state that a license application is being filed 
with the Commission.
    (4)(i) As to any facts alleged in the application or other materials 
filed, be subscribed and verified under oath in the form set forth in 
paragraph (a) (3)(ii) of this section by the person filing, an officer 
thereof, or other person having knowledge of the matters sent forth. If 
the subscription and verification is by anyone other than the person 
filing or an officer thereof, it shall include a statement of the 
reasons therefor.
    (ii) This (application, etc.) is executed in the

State of________________________________________________________________

County of_______________________________________________________________

by:------------ --------

(Name)---------- ----------_____________________________________________

(Address)_______________________________________________________________

being duly sworn, depose(s) and say(s) that the contents of this 
(application, etc.) are true to the best of (his or her) knowledge or 
belief. The undersigned applicant(s) has (have) signed the (application, 
etc.) this -------- ------------ day of --------, 19-- --.

________________________________________________________________________

(Applicant(s))

By:_____________________________________________________________________

    Subscribed and sworn to before me, a [Notary Public, or title of 
other official authorized by the state to notarize documents, as 
appropriate] of the State of ------------this day of ----------, 19----.

/SEAL/ [if any]


________________________________________________________________________


(Notary Public, or other authorized official)

    (5) Contain the information and documents prescribed in the 
following sections of this chapter, according to the type of 
application:
    (i) Preliminary permit: Sec. 4.81;
    (ii) License for a minor water power project and a major water power 
project 5 MW or less: Sec. 4.61;
    (iii) License for a major unconstructed project and a major modified 
project: Sec. 4.41;
    (iv) License for a major project--existing dam: Sec. 4.51;
    (v) License for a transmission line only: Sec. 4.71;
    (vi) Nonpower license for a licensed project: Sec. 16.7;
    (vii) Exemption of a small conduit hydroelectric facility: 
Sec. 4.92;
    (viii) Case-specific exemption of a small hydroelectric power 
project: Sec. 4.107; or
    (ix) License or exemption for a project located at a new dam or 
diversion where the applicant seeks PURPA benefits: Sec. 292.208.
    (b) (1) Each applicant for a preliminary permit, license, and 
transfer or surrender of license and each petitioner for surrender of an 
exemption must submit to the Commission's Secretary for filing an 
original and eight copies of the application or petition. The applicant 
or petitioner must serve one copy of the application or petition on the 
Director of the Commission's Regional Office for the appropriate region 
and on each resource agency consulted pursuant to Sec. 4.38 or Sec. 16.8 
of this chapter. In the case of an application for a preliminary permit, 
the applicant must, if the Commission so directs, serve copies of the 
application on the U.S. Department of the Interior and the U.S. Army 
Corps of Engineers. The application may include reduced prints of maps 
and drawings conforming to Sec. 4.39(d). The originals (microfilm) of 
maps and drawings are not to be filed initially, but will be required 
pursuant to paragraph (d) of this section. The Commission may also ask 
for the filing of full-sized prints in appropriate cases.
    (2) Each applicant for exemption must submit to the Commission's 
Secretary for filing an original and eight copies of the application. An 
applicant must serve one copy of the application on the Director of the 
Commission's Regional Office for the appropriate region and on each 
resource agency consulted pursuant to Sec. 4.38. Maps and drawings need 
not conform to the requirements of Sec. 4.39, but must be of sufficient 
size, scale, and quality to permit each reading and understanding. The 
originals (microfilm) of maps and drawings are not to be filed 
initially, but will be requested pursuant to paragraph (d) of this 
section.
    (3)(i) An applicant must make information regarding its proposed 
project reasonably available to the public for inspection and 
reproduction, from the date on which the applicant files its application 
for a license or exemption

[[Page 77]]

until the licensing or exemption proceeding for the project is 
terminated by the Commission. This information includes a copy of the 
complete application for license or exemption, together with all 
exhibits, appendices and any amendments, and any comments, pleadings, 
supplementary or additional information, or correspondence filed by the 
applicant with the Commission in connection with the application.
    (ii) An applicant must delete from any information made available to 
the public under this section, specific site or property locations the 
disclosure of which would create a risk of harm, theft, or destruction 
of archeological or Native American cultural resources or to the site at 
which the sources are located, or would violate any federal law, 
including the Archaeological Resources Protection Act of l979, 16 U.S.C. 
470w-3, and the National Historic Preservation Act of 1966, 16 U.S.C. 
470hh.
    (4)(i) An applicant must make available the information specified in 
paragraph (b)(3) of this section in a form that is readily accessible, 
reviewable, and reproducible, at the same time as the information is 
filed with the Commission or required by regulation to be made 
available.
    (ii) An applicant must make the information specified in paragraph 
(b)(3) of this section available to the public for inspection:
    (A) At its principal place of business or at any other location that 
is more accessible to the public, provided that all the information is 
available in at least one location;
    (B) During regular business hours; and
    (C) In a form that is readily accessible, reviewable and 
reproducible.
    (iii) The applicant must provide a copy of the complete application 
(as amended) to a public library or other convenient public office 
located in each county in which the proposed project is located.
    (iv) An applicant must make requested copies of the information 
specified in paragraph (b)(3) of this section available either:
    (A) At its principal place of business or at any other location that 
is more accessible to the public, after obtaining reimbursement for 
reasonable costs of reproduction; or
    (B) Through the mail, after obtaining reimbursement for postage fees 
and reasonable costs of reproduction.
    (5) Anyone may file a petition with the Commission requesting access 
to the information specified in paragraph (b)(3) of this section if it 
believes that an applicant is not making the information reasonably 
available for public inspection or reproduction. The petition must 
describe in detail the basis for the petitioner's belief.
    (6) An applicant must publish notice twice of the filing of its 
application, no later than 14 days after the filing date, in a daily or 
weekly newspaper of general circulation in each county in which the 
project is located. The notice must disclose the filing date of the 
application and briefly summarize it, including the applicant's name and 
address, the type of facility applied for, its proposed location, the 
places where the information specified in paragraph (b)(3) of this 
section is available for inspection and reproduction, and the date by 
which any requests for additional scientific studies are due under 
paragraph (b)(7) of this section, and must state that the Commission 
will publish subsequent notices soliciting public participation if the 
application is found acceptable for filing. The applicant must promptly 
provide the Commission with proof of the publications of this notice.
    (7) If any resource agency, Indian tribe, or person believes that an 
additional scientific study should be conducted in order to form an 
adequate factual basis for a complete analysis of the application on its 
merits, the resource agency, Indian tribe, or person must file a request 
for the study with the Commission not later than 60 days after the 
application is filed and serve a copy of the request on the applicant. 
The Commission will issue public notice of the tendering for filing of 
each application for hydropower license or exemption; each such 
applicant must submit a draft of this notice to the Commission with its 
application. For any such additional study request, the requester must 
describe the recommended study and the basis for the

[[Page 78]]

request in detail, including who should conduct and participate in the 
study, its methodology and objectives, whether the recommended study 
methods are generally accepted in the Scientific community, how the 
study and information sought will be useful in furthering the resource 
goals that are affected by the proposed facilities, and approximately 
how long the study will take to complete, and must explain why the study 
objectives cannot be achieved using the data already available. In 
addition, in the case of a study request by a resource agency or Indian 
tribe that had failed to request the study during the pre-filing 
consultation process under Sec. 4.38 of this part or Sec. 16.8 of this 
chapter, the agency or Indian tribe must explain why this request was 
not made during the pre-filing consultation process and show good cause 
why its request for the study should be considered by the Commission.
    (8) An applicant may file a response to any such study request 
within 30 days of its filing, serving a copy of the response on the 
requester.
    (9) The requirements of paragraphs (b)(3) to (b)(8) of this section 
only apply to an application for license or exemption filed on or after 
May 20, 1991. Paragraphs (b)(3) and (b)(4) of this section do not apply 
to applications subject to the requirements of Sec. 16.7 of this 
chapter.
    (c)(1) Every application for a licensee or exemption for a project 
with a capacity of 80 megawatts or less must include in its application 
copies of the statements made under Sec. 4.38(b)(1)(vi).
    (2) If an applicant reverses a statement of intent not to seek PURPA 
benefits:
    (i) Prior to the Commission issuing a license or exemption, the 
reversal of intent will be treated as an amendment of the application 
under Sec. 4.35 and the applicant must:
    (A) Repeat the pre-filing consultation process under Sec. 4.38; and
    (B) Satisfy all the requirements in Sec. 292.208 of this chapter; or
    (ii) After the Commission issues a license or exemption for the 
project, the applicant is prohibited from obtaining PURPA benefits.
    (d) When any application is found to conform to the requirements of 
paragraphs (a), (b) and (c) of this section, the Commission or its 
delegate will:
    (1) Notify the applicant that the application has been accepted for 
filing, specifying the project number assigned and the date upon which 
the application was accepted for filing, and, for a license or exemption 
application, direct the filing of the originals (microfilm) of required 
maps and drawings;
    (2)(i) For an application for a preliminary permit or a license, 
issue public notice of the application as required in the Federal Power 
Act;
    (ii) For an application for exemption from licensing, publish notice 
once in a daily or weekly newspaper of general circulation in each 
county in which the project is or will be located; and
    (3) If the project affects lands of the United States, notify the 
appropriate Federal office of the application and the specific lands 
affected, pursuant to section 24 of the Federal Power Act.
    (4) For an application for a license seeking benefits under section 
210 of the Public Utility Regulatory Policies Act of 1978, as amended, 
for a project that would be located at a new dam or diversion, serve the 
public notice issued for the application under paragraph (d)(2)(i) of 
this section to interested agencies at the time the applicant is 
notified that the application is accepted for filing.
    (e) In order for an application to conform adequately to the 
requirements of paragraphs (a), (b) and (c) of this section and of 
Sec. 4.38, an application must be completed fully. No blanks should be 
left in the application. No material or information required in the 
application should be omitted. If an applicant believes that its 
application conforms adequately without containing certain required 
material or information, it must explain in detail why the material or 
information is not being submitted and what steps were taken by the 
applicant to provide the material or information. If the Commission 
finds that an application does not adequately conform to the 
requirements of paragraphs (a), (b) and (c) of this section and of 
Sec. 4.38, the Commission or its designee will consider the application 
either deficient or patently deficient.

[[Page 79]]

    (1) Deficient applications. (i) An application that in the judgment 
of the Director of the Office of Hydropower Licensing does not conform 
to the requirements of paragraphs (a), (b) and (c) of this section and 
of Sec. 4.38, may be considered deficient. An applicant having a 
deficient application will be afforded additional time to correct 
deficiencies, not to exceed 45 days from the date of notification in the 
case of an application for a preliminary permit or exemption from 
licensing or 90 days from the date of notification in the case of an 
application for license. Notification will be by letter or, in the case 
of minor deficiencies, by telephone. Any notification will specify the 
deficiencies to be corrected. Deficiencies must be corrected by 
submitting an original and the number of copies specified in paragraph 
(b) of this section of the specified materials or information to the 
Secretary within the time specified in the notification of deficiency.
    (ii) Upon submission of a conforming application, action will be 
taken in accordance with paragraph (d) of this section.
    (iii) If the revised application is found not to conform to the 
requirements of paragraphs (a), (b) and (c) of this section and of 
Sec. 4.38, or if the revisions are not timely submitted, the revised 
application will be rejected. Procedures for rejected applications are 
specified in paragraph (e)(2)(iii).
    (2) Patently deficient applications. (i) If, within 90 days of its 
filing date, the Director of the Office of Hydropower Licensing 
determines that an application patently fails to substantially comply 
with the requirements of paragraph (a), (b), and (c) of this section and 
of Sec. 4.38 of this part or Sec. 16.8 of this chapter, or is for a 
project that is precluded by law, the application will be rejected as 
patently deficient with the specification of the deficiencies that 
render the application patently deficient.
    (ii) If, after 90 days of its filing date, the Director of the 
Office of Hydropower Licensing determines that an application patently 
fails to substantially comply with the requirements of paragraphs (a), 
(b), and (c) of this section and of Sec. 4.38 of this part or Sec. 16.8 
of this chapter, or is for a project that is precluded by law:
    (A) The application will be rejected by order of the Commission, if 
the Commission determines it is patently deficient; or
    (B) The application will be considered deficient under paragraph 
(e)(1) of this section, if the Commission determines it is not patently 
deficient.
    (iii) Any application that is rejected may be resubmitted if the 
deficiencies are corrected and if, in the case of a competing 
application, the resubmittal is timely. The date the rejected 
application is resubmitted will be considered the new filing date for 
purposes of determining its timeliness under Sec. 4.36 and the 
disposition of competing applications under Sec. 4.37.
    (f) Any application will be considered accepted for filing as of the 
application filing date if the Secretary receives all of the information 
and documents necessary to conform to the requirements of paragraphs 
(a), (b) and (c) of this section and of Sec. 4.38 within the time 
prescribed by the Commission or its delegate under paragraph (e) of this 
section.
    (g) An applicant may be required to submit any additional 
information or documents that the Commission or its designee considers 
relevant for an informed decision on the application. The information or 
documents must take the form, and must be submitted within the time, 
that the Commission or its designee prescribes. An applicant may also be 
required to provide within a specified time additional copies of the 
complete application, or any of the additional information or documents 
that are filed, to the Commission or to any person, agency, or other 
entity that the Commission or its designee specifies. If an applicant 
fails to provide timely additional information, documents, or copies of 
submitted materials as required, the Commission or its designee may 
dismiss the application, hold it in abeyance, or take other appropriate 
action under this chapter or the Federal Power Act.
    (h) A prospective applicant, prior to submitting its application for 
filing, may seek advice from the Commission staff regarding the 
sufficiency of the

[[Page 80]]

application. For this purpose, five copies of the draft application 
should be submitted to the Director of the Division of Project 
Management. An applicant or prospective applicant may confer with the 
Commission staff at any time regarding deficiencies or other matters 
related to its application. All conferences are subject to the 
requirements of Sec. 385.2201 of this chapter governing ex parte 
communications. The opinions or advice of the staff will not bind the 
Commission or any person delegated authority to act on its behalf.
    (i) Intervention in any preliminary permit proceeding will not 
constitute intervention in any subsequent licensing or exemption 
proceeding.
    (j) Any application, the effectiveness of which is conditioned upon 
the future occurrence of any event or circumstance, will be rejected.

[Order 413, 50 FR 11678, Mar. 25, 1985, as amended by Order 480, 52 FR 
37285, Oct. 6, 1987; Order 487, 52 FR 48404, Dec. 22, 1987; Order 499, 
53 FR 27001, July 18, 1988; Order 533, 56 FR 23147, May 20, 1991; 56 FR 
61155, Dec. 2, 1991; Order 540, 57 FR 21737, May 22, 1992]



Sec. 4.33  Limitations on submitting applications.

    (a) Limitations on submission and acceptance of a preliminary permit 
application. The Commission will not accept an application for a 
preliminary permit for project works that:
    (1) Would develop, conserve, and utilize, in whole or in part, the 
same water resources that would be developed, conserved, and utilized by 
a project for which there is an unexpired preliminary permit.
    (2) Would develop, conserve, and utilize, in whole or in part, the 
same water resources that would be developed, conserved, and utilized by 
a project for which an initial development application has been filed 
unless the preliminary permit application is filed not later than the 
time allowed under Sec. 4.36(a) for the filing of applications in 
competition against an initial application for a preliminary permit that 
would develop, conserve, and utilize, in whole or in part, the same 
resources.
    (b) Limitations on submission and acceptance of a license 
application. The Commission will not accept an application for a license 
for project works that would develop, conserve, and utilize, in whole or 
in part, the same water resources that would be developed, conserved, 
and utilized by a project for which there is an unexpired preliminary 
permit, unless the permittee has submitted an application for license.
    (c) Limitations on submission and acceptance of an application for a 
license that would affect an exempted project. (1) Except as permitted 
under Sec. 4.33(c)(2), Sec. 4.94(d), or Sec. 4.106 (c), (e) or (f), the 
Commission will not accept an application for a license for project 
works that are already exempted from licensing under this part.
    (2) If a project is exempted from licensing pursuant to Sec. 4.103 
or Sec. 4.109 and real property interests in any non-Federal lands would 
be necessary to develop or operate the project, any person who is both a 
qualified license applicant and has any of those real property interests 
in non-Federal lands may submit a license application for that project. 
If a license application is submitted under this clause, any other 
qualified license applicant may submit a competing license application 
in accordance with Sec. 4.36.
    (d) Limitations on submission and acceptance of exemption 
applications--(1) Unexpired permit or license. (i) If there is an 
unexpired permit in effect for a project, the Commission will accept an 
application for exemption of that project from licensing only if the 
exemption applicant is the permittee. Upon acceptance for filing of the 
permittee's application, the permit will be considered to have expired.
    (ii) If there is an unexpired license in effect for a project, the 
Commission will accept an application for exemption of that project from 
licensing only if the exemption applicant is the licensee.
    (2) Pending license applications. If an accepted license application 
for a project was submitted by a permittee before the preliminary permit 
expired, the Commission will not accept an application for exemption of 
that project from licensing submitted by a person other than the former 
permittee.

[[Page 81]]

    (3) Submitted by qualified exemption applicant. If the first 
accepted license application for a project was filed by a qualified 
exemption applicant, the applicant may request that its license 
application be treated initially as an application for exemption from 
licensing by so notifying the Commission in writing and, unless only 
rights to use or occupy Federal lands would be necessary to develop and 
operate the project, by submitting documentary evidence showing that the 
applicant holds the real property interests required under Sec. 4.31. 
Such notice and documentation must be submitted not later than the last 
date for filing protests or motions to intervene prescribed in the 
public notice issued for its license application under Sec. 4.32(d)(2).
    (e) Priority of exemption applicant's earlier permit or license 
application. Any accepted preliminary permit or license application 
submitted by a person who later applies for exemption of the project 
from licensing will retain its validity and priority under this subpart 
until the preliminary permit or license application is withdrawn or the 
project is exempted from licensing.

[Order 413, 50 FR 11680, Mar. 25, 1985, as amended by Order 499, 53 FR 
27002, July 18, 1988]



Sec. 4.34  Hearings on applications; consultation on terms and conditions; motions to intervene; alternative procedures.

    (a) Trial-type hearing. The Commission may order a trial-type 
hearing on an application for a preliminary permit, a license, or an 
exemption from licensing upon either its own motion or the motion of any 
interested party of record. Any trial-type hearing will be limited to 
the issues prescribed by order of the Commission. In all other cases the 
hearings will be conducted by notice and comment procedures.
    (b) Notice and comment hearings. All comments (including mandatory 
and recommended terms and conditions or prescriptions) on an application 
for exemption or license must be filed with the Commission no later than 
60 days after issuance by the Commission of public notice declaring that 
the application is ready for environmental analysis. All reply comments 
must be filed within 105 days of that notice. All comments and reply 
comments and all other filings described in this section must be served 
on all persons listed in the service list prepared by the Commission, in 
accordance with the requirements of Sec. 385.2010 of this chapter. If a 
party or interceder (as defined in Sec. 385.2201 of this Chapter) 
submits any written material to the Commission relating to the merits of 
an issue that may affect the responsibilities of a particular resource 
agency, the party or interceder must also serve a copy of the submission 
on this resource agency. The Commission may allow for longer comment or 
reply comment periods if appropriate. A commenter or reply commenter may 
obtain an extension of time from the Commission only upon a showing of 
good cause or extraordinary circumstances in accordance with 
Sec. 385.2008 of this chapter. Late-filed fish and wildlife 
recommendations will not be subject to the requirements of paragraphs 
(e), (f)(1)(ii), and (f)(3) of this section, and late-filed terms and 
conditions or prescriptions will not be subject to the requirements of 
paragraphs (f)(1)(iv), (f)(1)(v), and (f)(2) of this section. Late-filed 
fish and wildlife recommendations, terms and conditions, or 
prescriptions will be considered by the Commission under section 10(a) 
of the Federal Power Act if such consideration would not delay or 
disrupt the proceeding.
    (1) Agencies responsible for mandatory terms and conditions and 
presentations. Any agency responsible for mandatory terms and conditions 
or prescriptions for licenses or exemptions, pursuant to sections 4(e), 
18, and 30(c) of the Federal Power Act and section 405(d) of the Public 
Utility Regulatory Policies Act of l978, as amended, must provide these 
terms and conditions or prescriptions in its initial comments filed with 
the Commission pursuant to paragraph (b) of this section. In those 
comments, the agency must specifically identify and explain the 
mandatory terms and conditions or prescriptions and their evidentiary 
and legal basis. If ongoing agency proceedings to determine the terms 
and conditions or prescriptions

[[Page 82]]

are not completed by the date specified, the agency must submit to the 
Commission by the due date:
    (i) Preliminary terms and conditions or prescriptions and a schedule 
showing the status of the agency proceedings and when the terms and 
conditions or prescriptions are expected to become final; or
    (ii) A statement waiving the agency's right to file the terms and 
conditions or prescriptions or indicating the agency does not intend to 
file terms and conditions or prescriptions.
    (2) Fish and Wildlife agencies and Indian tribes. All fish and 
wildlife agencies must set forth any recommended terms and conditions 
for the protection, mitigation of damages to, or enhancement of fish and 
wildlife, pursuant to the Fish and Wildlife Coordination Act and section 
10(j) of the Federal Power Act, in their initial comments filed with the 
Commission by the date specified in paragraph (b) of this section. All 
Indian tribes must submit recommendations (including fish and wildlife 
recommendations) by the same date. In those comments, a fish and 
wildlife agency or Indian tribe must discuss its understanding of the 
resource issues presented by the proposed facilities and the evidentiary 
basis for the recommended terms and conditions.
    (3) Other Government agencies and members of the public. Resource 
agencies, other governmental units, and members of the public must file 
their recommendations in their initial comments by the date specified in 
paragraph (b) of this section. The comments must clearly identify all 
recommendations and present their evidentiary basis.
    (4) Submittal of modified recommendations, terms and conditions or 
prescriptions. (i) If the information and analysis (including reasonable 
alternatives) presented in a draft environmental impact statement, 
issued for comment by the Commission, indicate a need to modify the 
recommendations or terms and conditions or prescriptions previously 
submitted to the Commission pursuant to paragraphs (b)(1), (b)(2), or 
(b)(3) of this section, the agency, Indian tribe, or member of the 
public must file with the Commission any modified recommendations or 
terms and conditions or prescriptions on the proposed project (and 
reasonable alternatives) no later than the due date for comments on the 
draft environmental impact statement. Modified recommendations or terms 
and conditions or prescriptions must be clearly distinguished from 
comments on the draft statement.
    (ii) If an applicant files an amendment to its application that 
would materially change the project's proposed plans of development, as 
provided in Sec. 4.35, an agency, Indian tribe or member of the public 
may modify the recommendations or terms and conditions or prescriptions 
it previously submitted to the Commission pursuant to paragraphs (b)(1), 
(b)(2), or (b)(3) of this section no later than the due date specified 
by the Commission for comments on the amendment.
    (c) Additional procedures. If necessary or appropriate the 
Commission may require additional procedures (e.g., a pre-hearing 
conference, further notice and comment on specific issues or oral 
argument). A party may request additional procedures in a motion that 
clearly and specifically sets forth the procedures requested and the 
basis for the request. Replies to such requests may be filed within 15 
days of the request.
    (d) Consultation procedures. Pursuant to the Federal Power Act and 
the Public Utility Regulatory Policies Act of 1978, as amended, the 
Commission will coordinate as appropriate with other government agencies 
responsible for mandatory terms and conditions for exemptions and 
licenses for hydropower projects. Pursuant to the Federal Power Act and 
the Fish and Wildlife Coordination Act, the Commission will consult with 
fish and wildlife agencies concerning the impact of a hydropower 
proposal on fish and wildlife and appropriate terms and conditions for 
license to adequately and equitably protect, mitigate damages to, and 
enhance fish and wildlife (including related spawning grounds and 
habitat). Pursuant to the Federal Power Act and the Endangered Species 
Act, the Commission will consult with the U.S. Fish and Wildlife Service 
or the National

[[Page 83]]

Marine Fisheries Service, as appropriate, concerning the impact of a 
hydropower proposal on endangered or threatened species and their 
critical habitat.
    (e) Consultation on recommended fish and wildlife conditions; 
section 10(j) process. (1) In connection with its environmental review 
of an application for license, the Commission will analyze all terms and 
conditions timely recommended by fish and wildlife agencies pursuant to 
the Fish and Wildlife Coordination Act for the protection, mitigation of 
damages to, and enhancement of fish and wildlife affected by the 
development, operation, and management of the proposed project. 
Submission of such recommendations marks the beginning of the process 
under section 10(j) of the Federal Power Act.
    (2) Within 45 days of the filing of any fish and wildlife 
recommendation, the Commission may seek clarification of it, unless this 
deadline is extended by the Commission upon notice to the fish and 
wildlife agency concerned. If the Commission's request for clarification 
is communicated in writing, copies of the request will be sent by the 
Commission to all parties, affected resource agencies, and Indian 
tribes, which may file a response to the request for clarification 
within the time period specified by the Commission.
    (3) The Commission will make a preliminary determination of 
inconsistency of the fish and wildlife recommendation with the purposes 
and requirements of the Federal Power Act or other applicable law. This 
preliminary determination will be done in writing and shall include an 
explanation of its basis, including appropriate references to the 
environmental analysis conducted on the license application. A copy of 
the environmental analysis will be provided with the determination, and 
will be sent to all parties, affected resource agencies, and Indian 
tribes.
    (4) Any party, affected resource agency, or Indian tribe may file 
comments in response to the preliminary determination of inconsistency 
within 45 days of its issuance. In this filing, the fish and wildlife 
agency concerned may also request a meeting, telephone or video 
conference or other additional procedure to attempt to resolve any 
preliminary determination of inconsistency.
    (5) If the Commission decides to conduct any meeting, telephone or 
video conference, or other procedure to address issues raised by its 
preliminary determination of inconsistency and comments thereon, the 
Commission will give at least 15 days' advance notice to each party, 
affected resource agency, or Indian tribe, which may participate in the 
meeting or conference. Any meeting, conference, or additional procedure 
to address these issues will be scheduled to take place within 75 days 
of the date the Commission issues a preliminary determination of 
inconsistency. The Commission will prepare a written summary of any 
meeting held under this subsection to discuss 10(j) issues, and a copy 
of the summary will be sent to all parties, affected resource agencies, 
and Indian tribes. If the Commission believes that any fish and wildlife 
recommendation submitted by a fish and wildlife agency may be 
inconsistent with the purposes and requirements of the Federal Power Act 
or other applicable law, the Commission will attempt to resolve any such 
inconsistency by appropriate means, giving due weight to the 
recommendations, expertise, and statutory responsibilities of the fish 
and wildlife agency.
    (6) The section 10(j) process ends when the Commission issues an 
order granting or denying the license application in question.
    (f) Licenses and exemption conditions and required findings--(1) 
License conditions. (i) All licenses shall be issued on the conditions 
specified in section 10 of the Federal Power Act and such other 
conditions as the Commission determines are lawful and in the public 
interest.
    (ii) Subject to paragraph (f)(3) of this section, fish and wildlife 
conditions shall be based on recommendations timely received from the 
fish and wildlife agencies pursuant to the Fish and Wildlife 
Coordination Act.
    (iii) The Commission will consider the timely recommendations of 
resource agencies, other governmental units, and members of the public, 
and

[[Page 84]]

the timely recommendations (including fish and wildlife recommendations) 
of Indian tribes affected by the project.
    (iv) Licenses for a project located within any Federal reservation 
shall be issued only after the findings required by, and subject to any 
conditions that may be timely received pursuant to, section 4(e) of the 
Federal Power Act.
    (v) The Commission will require the construction, maintenance, and 
operation by a licensee at its own expense of such fishways as may be 
timely prescribed by the Secretary of Commerce or the Secretary of the 
Interior, as appropriate, pursuant to section 18 of the Federal Power 
Act.
    (2) Exemption conditions. Any exemption from licensing issued for 
conduit facilities, as provided in section 30 of the Federal Power Act, 
or for small hydroelectric power projects having a proposed installed 
capacity of 5,000 kilowatts or less, as provided in section 405(d) of 
the Public Utility Regulatory Policies Act of 1978, as amended, shall 
include such terms and conditions as the fish and wildlife agencies may 
timely determine are appropriate to carry out the responsibilities 
specified in section 30(c) of the Federal Power Act.
    (3) Required findings. If, after attempting to resolve 
inconsistencies between the fish and wildlife recommendations of a fish 
and wildlife agency and the purposes and requirements of the Federal 
Power Act or other applicable law, the Commission does not adopt in 
whole or in part a fish and wildlife recommendation of a fish and 
wildlife agency, the Commission will publish the findings and statements 
required by section 10(j)(2) of the Federal Power Act.
    (g) Application. The provisions of paragraphs (b) through (d) and 
(f) of this section apply only to applications for license or exemption; 
paragraph (e) applies only to applications for license.
    (h) Unless otherwise provided by statute, regulation or order, all 
filings in hydropower hearings, except those conducted by trial-type 
procedures, shall consist of an original and eight copies.
    (i) Alternative procedures. (1) An applicant may submit to the 
Commission a request to approve the use of alternative procedures for 
pre-filing consultation and the filing and processing of an application 
for an original, new or subsequent hydropower license or exemption that 
is subject to Sec. 4.38 or Sec. 16.8 of this chapter, or for the 
amendment of a license that is subject to the provisions of Sec. 4.38.
    (2) The goal of such alternative procedures shall be to:
    (i) Combine into a single process the pre-filing consultation 
process, the environmental review process under the National 
Environmental Policy Act and administrative processes associated with 
the Clean Water Act and other statutes;
    (ii) Facilitate greater participation by and improve communication 
among the potential applicant, resource agencies, Indian tribes, the 
public and Commission staff in a flexible pre-filing consultation 
process tailored to the circumstances of each case;
    (iii) Allow for the preparation of a preliminary draft environmental 
assessment by an applicant or its contractor or consultant, or of a 
preliminary draft environmental impact statement by a contractor or 
consultant chosen by the Commission and funded by the applicant;
    (iv) Promote cooperative efforts by the potential applicant and 
interested entities and encourage them to share information about 
resource impacts and mitigation and enhancement proposals and to narrow 
any areas of disagreement and reach agreement or settlement of the 
issues raised by the hydropower proposal; and
    (v) Facilitate an orderly and expeditious review of an agreement or 
offer of settlement of an application for a hydropower license, 
exemption or amendment to a license.
    (3) A potential hydropower applicant requesting the use of 
alternative procedures must:
    (i) Demonstrate that a reasonable effort has been made to contact 
all resource agencies, Indian tribes, citizens' groups, and others 
affected by the applicant's proposal, and that a consensus exists that 
the use of alternative procedures is appropriate under the 
circumstances;
    (ii) Submit a communications protocol, supported by interested 
entities,

[[Page 85]]

governing how the applicant and other participants in the pre-filing 
consultation process, including the Commission staff, may communicate 
with each other regarding the merits of the applicant's proposal and 
proposals and recommendations of interested entities; and
    (iii) Serve a copy of the request on all affected resource agencies 
and Indian tribes and on all entities contacted by the applicant that 
have expressed an interest in the alternative pre-filing consultation 
process.
    (4) As appropriate under the circumstances of the case, the 
alternative procedures should include provisions for:
    (i) Distribution of an initial information package and conduct of an 
initial information meeting open to the public;
    (ii) The cooperative scoping of environmental issues (including 
necessary scientific studies), the analysis of completed studies and any 
further scoping; and
    (iii) The preparation of a preliminary draft environmental 
assessment or preliminary draft environmental impact statement and 
related application.
    (5) The Commission will give public notice in the Federal Register 
inviting comment on the applicant's request to use alternative 
procedures. The Commission will consider any such comments in 
determining whether to grant or deny the applicant's request to use 
alternative procdures. Such a decision will not be subject to 
interlocutory rehearing or appeal.
    (6) If the Commission accepts the use of alternative procedures, the 
following provisions will apply.
    (i) To the extent feasible under the circumstances of the 
proceeding, the Commission will give notice in the Federal Register and 
the applicant will give notice, in a local newspaper of general 
circulation in the county or counties in which the project is located, 
of the initial information meeting and the scoping of environmental 
issues. The applicant will also send notice of these stages to a mailing 
list approved by the Commission.
    (ii) Every six months, the applicant shall file with the Commission 
a report summarizing the progress made in the pre-filing consultation 
process and referencing the applicant's public file, where additional 
information on that process can be obtained. Summaries or minutes of 
meetings held in the process may be used to satisfy this filing 
requirement. The applicant must also file with the Commission a copy of 
its initial information package, each scoping document, and the 
preliminary draft environmental review document. All filings with the 
Commission under this section must include the number of copies required 
by paragraph (h) of this section, and the applicant shall send a copy of 
these filings to each participant that requests a copy.
    (iii) At a suitable location, the applicant will maintain a public 
file of all relevant documents, including scientific studies, 
correspondence, and minutes or summaries of meetings, compiled during 
the pre-filing consultation process. The Commission will maintain a 
public file of the applicant's initial information package, scoping 
documents, periodic reports on the pre-filing consultation process, and 
the preliminary draft environmental review document.
    (iv) An applicant authorized to use alternative procedures may 
substitute a preliminary draft environmental review document and 
additional material specified by the Commission instead of Exhibit E to 
its application and need not supply additional documention of the pre-
filing consultation process. The applicant will file with the Commission 
the results of any studies conducted or other documentation as directed 
by the Commission, either on its own motion or in response to a motion 
by a party to the licensing or exemption proceeding.
    (v) Pursuant to the procedures approved, the participants will set 
reasonable deadlines requiring all resource agencies, Indian tribes, 
citizens' groups, and interested persons to submit to the applicant 
requests for scientific studies during the pre-filing consultation 
process, and additional requests for studies may be made to the 
Commission after the filing of the application only for good cause 
shown.
    (vi) During the pre-filing process the Commission may require the 
filing of

[[Page 86]]

preliminary fish and wildlife recommendations, prescriptions, mandatory 
conditions, and comments, to be submitted in final form after the filing 
of the application; no notice that the application is ready for 
environmental analysis need be given by the Commission after the filing 
of an application pursuant to these procedures.
    (vii) Any potential applicant, resource agency, Indian tribe, 
citizens' group, or other entity participating in the alternative pre-
filing consultation process may file a request with the Commission to 
resolve a dispute concerning the alternative process (including a 
dispute over required studies), but only after reasonable efforts have 
been made to resolve the dispute with other participants in the process. 
No such request shall be accepted for filing unless the entity 
submitting it certifies that it has been served on all other 
participants. The request must document what efforts have been made to 
resolve the dispute.
    (7) If the potential applicant or any resource agency, Indian tribe, 
citizens' group, or other entity participating in the alternative pre-
filing consultation process can show that it has cooperated in the 
process but a consensus supporting the use of the process no longer 
exists and that continued use of the alternative process will not be 
productive, the participant may petition the Commission for an order 
directing the use by the potential applicant of appropriate procedures 
to complete its application. No such request shall be accepted for 
filing unless the entity submitting it certifies that it has been served 
on all other participants. The request must recommend specific 
procedures that are appropriate under the circumstances.
    (8) The Commission may participate in the pre-filing consultation 
process and assist in the integration of this process and the 
environmental review process in any case, including appropriate cases 
where the applicant, contractor, or consultant funded by the applicant 
is not preparing a preliminary draft environmental assessment or 
preliminary draft environmental impact statement, but where staff 
assistance is available and could expedite the proceeding.
    (9) In all cases where the Commission has approved the use of 
alternative pre-filing consultation procedures prior to December 5, 
1997, during the pre-filing process the potential applicant need not 
follow any additional requirements imposed by paragraph (i) of this 
section, if in so doing the applicant would repeat any steps already 
taken in the preparation of its application and supporting documentation 
or act inconsistently with any written agreement signed before December 
5, 1997 by the applicant and the other participants in the alternative 
process.

[Order 533, 56 FR 23148, May 20, 1991, as amended at 56 FR 61155, Dec. 
2, 1991; Order 540, 57 FR 21737, May 22, 1992; Order 596, 62 FR 59810, 
Nov. 5, 1997]



Sec. 4.35  Amendment of application; date of acceptance.

    (a) General rule. Except as provided in paragraph (d) of this 
section, if an applicant amends its filed application as described in 
paragraph (b) of this section, the date of acceptance of the application 
under Sec. 4.32(f) is the date on which the amendment to the applicant 
was filed.
    (b) Paragraph (a) of this section applies if an applicant:
    (1) Amends its filed license or preliminary permit application in 
order to change the status or identity of the applicant or to materially 
amend the proposed plans of development; or
    (2) Amends its filed application for exemption from licensing in 
order to materially amend the proposed plans of development, or
    (3) Amends its filed application in order to change its statement of 
intent of whether or not it will seek benefits under section 210 of 
PURPA, as originally filed under Sec. 4.32(c)(1).
    (c) An application amended under paragraph (a) is a new filing for:
    (1) The purpose of determining its timeliness under Sec. 4.36 of 
this part;
    (2) Disposing of competing applications under Sec. 4.37; and
    (3) Reissuing public notice of the application under 
Sec. 4.32(d)(2).
    (d) If an application is amended under paragraph (a) of this 
section, the Commission will rescind any acceptance letter already 
issued for the application.

[[Page 87]]

    (e) Exceptions. This section does not apply to:
    (1) Any corrections of deficiencies made pursuant to 
Sec. 4.32(e)(1);
    (2) Any amendments made pursuant to Sec. 4.37(b)(4) by a State or a 
municipality to its proposed plans of development to make them as well 
adapted as the proposed plans of an applicant that is not a state or a 
municipality;
    (3) Any amendments made pursuant to Sec. 4.37(c)(2) by a priority 
applicant to its proposed plans of development to make them as well 
adapted as the proposed plans of an applicant that is not a priority 
applicant;
    (4) Any amendments made by a license or an exemption applicant to 
its proposed plans of development to satisfy requests of resource 
agencies or Indian tribes submitted after an applicant has consulted 
under Sec. 4.38 or concerns of the Commission; and
    (5)(i) Any license or exemption applicant with a project located at 
a new dam or diversion who is seeking PURPA benefits and who:
    (A) Has filed an adverse environmental effects (AEE) petition 
pursuant to Sec. 292.211 of this chapter; and
    (B) Has proposed measures to mitigate the adverse environmental 
effects which the Commission, in its initial determination on the AEE 
petition, stated the project will have.
    (ii) This exception does not protect any proposed mitigative 
measures that the Commission finds are a pretext to avoid the 
consequences of materially amending the application or are outside the 
scope of mitigating the adverse environmental effects.
    (f) Definitions. (1) For the purposes of this section, a material 
amendment to plans of development proposed in an application for a 
license or exemption from licensing means any fundamental and 
significant change, including but not limited to:
    (i) A change in the installed capacity, or the number or location of 
any generating units of the proposed project if the change would 
significantly modify the flow regime associated with the project;
    (ii) A material change in the location, size, or composition of the 
dam, the location of the powerhouse, or the size and elevation of the 
reservoir if the change would:
    (A) Enlarge, reduce, or relocate the area of the body of water that 
would lie between the farthest reach of the proposed impoundment and the 
point of discharge from the powerhouse; or
    (B) Cause adverse environmental impacts not previously discussed in 
the original application; or
    (iii) A change in the number of discrete units or development to be 
included within the project boundary.
    (2) For purposes of this section, a material amendment to plans of 
development proposed in an application for a preliminary permit means a 
material change in the location of the powerhouse or the size and 
elevation of the reservoir if the change would enlarge, reduce, or 
relocate the area of the body of water that would lie between the 
farthest reach of the proposed impoundment and the point of discharge 
from the powerhouse.
    (3) For purposes of this section, a change in the status of an 
applicant means:
    (i) The acquisition or loss of preference as a state or a 
municipality under section 7(a) of the Federal Power Act; or
    (ii) The loss of priority as a permittee under section 5 of the 
Federal Power Act.
    (4) For purposes of this section, a change in the identity of an 
applicant means a change that either singly, or together with previous 
amendments, causes a total substitution of all the original applicants 
in a permit or a license application.

[Order 413, 50 FR 11680, Mar. 25, 1985, as amended by Order 499, 53 FR 
27002, July 18, 1988; Order 533, 56 FR 23149, May 20, 1991]



Sec. 4.36  Competing applications: deadlines for filing; notices of intent; comparisons of plans of development.

    The public notice of an initial preliminary permit application or an 
initial development application shall prescribe the deadline for filing 
protests and motions to intervene in that proceeding (the prescribed 
intervention deadline).
    (a) Deadlines for filing applications in competition with an initial 
preliminary

[[Page 88]]

permit application. (1) Any preliminary permit application or any 
development application not filed pursuant to a notice of intent must be 
submitted for filing in competition with an initial preliminary permit 
application not later than the prescribed intervention deadline.
    (2) Any preliminary permit application filed pursuant to a notice of 
intent must be submitted for filing in competition with an initial 
preliminary permit application not later than 30 days after the 
prescribed intervention deadline.
    (3) Any development application filed pursuant to a notice of intent 
must be submitted for filing in competition with an initial preliminary 
permit application not later than 120 days after the prescribed 
intervention deadline.
    (b) Deadlines for filing applications in competition with an initial 
development application. (1) Any development application not filed 
pursuant to a notice of intent must be submitted for filing in 
competition with an initial development application not later than the 
prescribed intervention deadline.
    (2) Any development application filed pursuant to a notice of intent 
must be submitted for filing in competition with an initial development 
application not later than 120 days after the prescribed intervention 
deadline.
    (3) If the Commission has accepted an application for exemption of a 
project from licensing and the application has not yet been granted or 
denied, the applicant for exemption may submit a license application for 
the project if it is a qualified license applicant. The pending 
application for exemption from licensing will be considered withdrawn as 
of the date the Commission accepts the license application for filing. 
If a license application is accepted for filing under this provision, 
any qualified license applicant may submit a competing license 
application not later than the prescribed intervention deadline set for 
the license application.
    (4) Any preliminary permit application must be submitted for filing 
in competition with an initial development application not later than 
the deadlines prescribed in paragraphs (a)(1) and (a)(2) for the 
submission of preliminary permit applications filed in competition with 
an initial preliminary permit application.
    (c) Notices of intent. (1) Any notice of intent to file an 
application in competition with an initial preliminary permit or an 
initial development application must be submitted for filing not later 
than the prescribed intervention deadline for the initial application.
    (2) A notice of intent must include:
    (i) The exact name, business address, and telephone number of the 
prospective applicant; and
    (ii) An unequivocal statement of intent to submit a preliminary 
permit application or a development application (specify which type of 
application).
    (d) Requirements for competing applications. (1) Any competing 
application must:
    (i) Conform to all requirements for filing an initial application; 
and
    (ii) Include proof of service of a copy of the competing application 
on the person(s) designated in the public notice of the initial 
application for service of pleadings, documents, or communications 
concerning the initial application.
    (2) Comparisons of plans of development. (i) After the deadline for 
filing applications in competition against an initial development 
application has expired, the Commission will notify each license and 
exemption applicant of the identity of the other applicants.
    (ii) Not later than 14 days after the Commission serves the 
notification described in paragraph (d)(2)(i) of this section, if a 
license or exemption applicant has not already done so, it must serve a 
copy of its application on each of the other license and exemption 
applicants.
    (iii) Not later than 60 days after the Commission serves the 
notification described in paragraph (d)(2)(i) of this section, each 
license and exemption applicant must file with the Commission a detailed 
and complete statement of how its plans are as well or better adapted 
than are the plans of each of the other license and exemption applicants 
to develop, conserve, and utilize in the public interest the water 
resources of the region. These statements should be supported by any 
technical

[[Page 89]]

analyses that the applicant deems appropriate to support its proposed 
plans of development.

[Order 413, 50 FR 11680, Mar. 25, 1985; 50 FR 23947, June 7, 1985]



Sec. 4.37  Rules of preference among competing applications.

    Except as provided in Sec. 4.33(f), the Commission will select among 
competing applications on the following bases:
    (a) If an accepted application for a preliminary permit and an 
accepted application for a license propose project works that would 
develop, conserve, and utilize, in whole or in part, the same water 
resources, and the applicant for a license has demonstrated its ability 
to carry out its plans, the Commission will favor the license applicant 
unless the permit applicant substantiates in its filed application that 
its plans are better adapted to develop, conserve, and utilize in the 
public interest the water resources of the region.
    (b) If two or more applications for preliminary permits or two or 
more applications for licenses (not including applications for a new 
license under section 15 of the Federal Power Act) are filed by 
applicants for project works that would develop, conserve, and utilize, 
in whole or in part, the same water resources, and if none of the 
applicants is a preliminary permittee whose application for license was 
accepted for filing within the permit period, the Commission will select 
between or among the applicants on the following bases:
    (1) If both of two applicants are either a municipality or a state, 
the Commission will favor the applicant whose plans are better adapted 
to develop, conserve, and utilize in the public interest the water 
resources of the region, taking into consideration the ability of each 
applicant to carry out its plans.
    (2) If both of two applicants are either a municipality or a state, 
or neither of them is a municipality or a state, and the plans of the 
applicants are equally well adapted to develop, conserve, and utilize in 
the public interest the water resources of the region, taking into 
consideration the ability of each applicant to carry out its plans, the 
Commission will favor the applicant with the earliest application 
acceptance date.
    (3) If one of two applicants is a municipality or a state, and the 
other is not, and the plans of the municipality or a state are at least 
as well adapted to develop, conserve, and utilize in the public interest 
the water resources of the region, the Commission will favor the 
municipality or state.
    (4) If one of two applicant is a municipality or a state, and the 
other is not, and the plans of the applicant who is not a municipality 
or a state are better adapted to develop, conserve, and utilize in the 
public interest the water resources of the region, the Commission will 
inform the municipality or state of the specific reasons why its plans 
are not as well adapted and afford a reasonable period of time for the 
municipality or state to render its plans at least as well adapted as 
the other plans. If the plans of the municipality or state are rendered 
at least as well adapted within the time allowed, the Commission will 
favor the municipality or state. If the plans are not rendered at least 
as well adapted within the time allowed, the Commission will favor the 
other applicant.
    (c) If two or more applications for licenses are filed for project 
works which would develop, conserve, and utilize, in whole or in part, 
the same water resources, and one of the applicants was a preliminary 
permittee whose application was accepted for filing within the permit 
period (priority applicant), the Commission will select between or among 
the applicants on the following bases:
    (1) If the plans of the priority applicant are at least as well 
adapted as the plans of each other applicant to develop, conserve, and 
utilize in the public interest the water resources of the region, taking 
into consideration the ability of each applicant to carry out its plans, 
the Commission will favor the priority applicant.
    (2) If the plans of an applicant who is not a priority applicant are 
better adapted than the plans of the priority

[[Page 90]]

applicant to develop, conserve, and utilize in the public interest the 
water resources of the region, taking into consideration the ability of 
each applicant to carry out its plans, the Commission will inform the 
priority applicant of the specific reasons why its plans are not as well 
adapted and afford a reasonable period of time for the priority 
applicant to render its plans at least as well adapted as the other 
plans. If the plans of the priority applicant are rendered at least as 
well adapted within the time allowed, then the Commission will favor the 
priority applicant. If the plans of the priority applicant are not 
rendered as well adapted within the time allowed, the criteria specified 
in paragraph (b) will govern.
    (3) The criteria specified in paragraph (b) will govern selection 
among applicants other than the priority applicant.
    (d) With respect to a project for which an application for an 
exemption from licensing has been accepted for filing, the Commission 
will select among competing applications on the following bases:
    (1) If an accepted application for a preliminary permit and an 
accepted application for exemption from licensing propose to develop 
mutually exclusive small hydroelectric power projects, the Commission 
will favor the applicant whose substantiated plans in the application 
received by the Commission are better adapted to develop, conserve, and 
utilize in the public interest the water resources of the region. If the 
substantiated plans are equally well adapted, the Commission will favor 
the application for exemption from licensing.
    (2) If an application for a license and an application for exemption 
from licensing, or two or more applications for exemption from licensing 
are each accepted for filing and each proposes to develop a mutually 
exclusive project, the Commission will favor the applicant whose plans 
are better adapted to develop, conserve, and utilize in the public 
interest the water resources of the region. If the plans are equally 
well adapted, the Commission will favor the applicant with the earliest 
application acceptance date.
    (e) A municipal applicant must provide evidence that the 
municipality is competent under applicable state and local laws to 
engage in the business of developing, transmitting, utilizing, or 
distributing power, or such applicant will be considered a non-municipal 
applicant for the purpose of determining the disposition of competing 
applications.

[Order 413, 50 FR 11682, Mar. 25, 1985]



Sec. 4.38  Consultation requirements.

    (a) Requirement to consult. (1) Before it files any application for 
an original license or an exemption from licensing that is described in 
paragraph (a)(4) of this section, a potential applicant must consult 
with the relevant Federal, State, and interstate resource agencies, 
including the National Marine Fisheries Service, the United States Fish 
and Wildlife Service, the National Park Service, the United States 
Environmental Protection Agency, the Federal agency administering any 
United States lands or facilities utilized or occupied by the project, 
the appropriate State fish and wildlife agencies, the appropriate State 
water resource management agencies, the certifying agency under section 
401(a)(1) of the Federal Water Pollution Control Act (Clean Water Act), 
33 U.S.C. Sec. 1341(c)(1), and any Indian tribe that may be affected by 
the proposed project.
    (2) The Director of the Office of Hydropower Licensing or the 
Regional Director responsible for the area in which the project is 
located will, upon request, provide a list of known appropriate Federal, 
state, and interstate resource agencies and Indian tribes.
    (3) An applicant for an exemption from licensing or an applicant for 
a license seeking benefits under section 210 of the Public Utility 
Regulatory Policies Act, as amended, for a project that would be located 
at a new dam or diversion must, in addition to meeting the requirements 
of this section, comply with the consultation requirements in 
Sec. 4.301.
    (4) The pre-filing consultation requirements of this section apply 
only to an application for:
    (i) Original license;
    (ii) Exemption;

[[Page 91]]

    (iii) Amendment to an application for original license or exemption 
that materially amends the proposed plans of development as defined in 
Sec. 4.35(f)(1);
    (iv) Amendment to an existing license that would increase the 
capacity of the project as defined in Sec. 4.201(b); or
    (v) Amendment to an existing license that would not increase the 
capacity of the project as defined in Sec. 4.201(b), but that would 
involve:
    (A) The construction of a new dam or diversion in a location where 
there is no existing dam or diversion;
    (B) Any repair, modification, or reconstruction of an existing dam 
that would result in a significant change in the normal maximum surface 
area or elevation of an existing impoundment; or
    (C) The addition of new water power turbines other than to replace 
existing turbines.
    (5) Before it files a non-capacity related amendment as defined in 
Sec. 4.201(c), an applicant must consult with the resource agencies and 
Indian tribes listed in paragraph (a)(1) of this section to the extent 
that the proposed amendment would affect the interests of the agencies 
or tribes. When consultation is necessary, the applicant must, at a 
minimum, provide the resource agencies and Indian tribes with copies of 
the draft application and allow them at least 60 days to comment on the 
proposed amendment. The amendment as filed with the Commission must 
summarize the consultation with the resource agencies and Indian tribes 
on the proposed amendment, propose reasonable protection, mitigation, or 
enhancement measures to respond to impacts identified as being caused by 
the proposed amendment, and respond to any objections, recommendations, 
or conditions submitted by the agencies or Indian tribes. Copies of all 
written correspondence between the applicant, the agencies, and the 
tribes must be attached to the application.
    (6) This section does not apply to any application for a new 
license, a nonpower license, a subsequent license, or surrender of a 
license subject to sections 14 and 15 of the Federal Power Act.
    (7) If a potential applicant has any doubt as to whether a 
particular application or amendment would be subject to the pre-filing 
consultation requirements of this section or if a waiver of the pre-
filing requirements would be appropriate, the applicant may file a 
written request for clarification or waiver with the Director, Office of 
Hydropower Licensing.
    (b) First stage of consultation. (1) A potential applicant must 
promptly contact each of the appropriate resource agencies and affected 
Indian tribes; provide them with a description of the proposed project 
and supporting information; and confer with them on project design, the 
impact of the proposed project (including a description of any existing 
facilities, their operation, and any proposed changes), reasonable 
hydropower alternatives, and what studies the applicant should conduct. 
The potential applicant must provide to the resource agencies, Indian 
tribes, and the Commission the following information:
    (i) Detailed maps showing project boundaries, if any, proper land 
descriptions of the entire project area by township, range, and section, 
as well as by state, county, river, river mile, and closest town, and 
also showing the specific location of all proposed project facilities, 
including roads, transmission lines, and any other appurtenant 
facilities;
    (ii) A general engineering design of the proposed project, with a 
description of any proposed diversion of a stream through a canal or a 
penstock;
    (iii) A summary of the proposed operational mode of the project;
    (iv) Identification of the environment to be affected, the 
significant resources present, and the applicant's proposed 
environmental protection, mitigation, and enhancement plans, to the 
extent known at that time;
    (v) Streamflow and water regime information, including drainage 
area, natural flow periodicity, monthly flow rates and durations, mean 
flow figures illustrating the mean daily streamflow curve for each month 
of the year at the point of diversion or impoundment, with location of 
the stream gauging station, the method used to generate

[[Page 92]]

the streamflow data provided, and copies of all records used to derive 
the flow data used in the applicant's engineering calculations;
    (vi)(A) A statement (with a copy to the Commission) of whether or 
not the applicant will seek benefits under section 210 of PURPA by 
satisfying the requirements for qualifying hydroelectric small power 
production facilities in Sec. 292.203 of this chapter;
    (B) If benefits under section 210 of PURPA are sought, a statement 
on whether or not the applicant believes the project is located at a new 
dam or diversion (as that term is defined in Sec. 292.202(p) of this 
chapter) and a request for the agencies' view on that belief, if any;
    (vii) Detailed descriptions of any proposed studies and the proposed 
methodologies to be employed; and
    (viii) Any statement required by Sec. 4.301(a).
    (2) No earlier than 30 days, but no later than 60 days, from the 
date of the potential applicant's letter transmitting the information to 
the agencies and Indian tribes under paragraph (b)(1) of this section, 
the potential applicant must:
    (i) Hold a joint meeting at a convenient place and time, including 
an opportunity for a site visit, with all pertinent agencies and Indian 
tribes to explain the applicant's proposal and its potential 
environmental impact, to review the information provided, and to discuss 
the data to be obtained and studies to be conducted by the potential 
applicant as part of the consultation process;
    (ii) Consult with the resource agencies and Indian tribes on the 
scheduling and agenda of the joint meeting; and
    (iii) No later than 15 days in advance of the joint meeting, provide 
the Commission with written notice of the time and place of the meeting 
and a written agenda of the issues to be discussed at the meeting.
    (3) Members of the public must be informed of and invited to attend 
the joint meeting held pursuant to paragraph (b)(2)(i) of this section 
by means of the public notice published in accordance with paragraph (g) 
of this section. Members of the public attending the meeting are 
entitled to participate in the meeting and to express their views 
regarding resource issues that should be addressed in any application 
for license or exemption that may be filed by the potential applicant. 
Attendance of the public at any site visit held pursuant to paragraph 
(b)(2)(i) of this section will be at the discretion of the potential 
applicant. The potential applicant must make either audio recordings or 
written transcripts of the joint meeting, and must promptly provide 
copies of these recordings or transcripts to the Commission and, upon 
request, to any resource agency and Indian tribe.
    (4) Not later than 60 days after the joint meeting held under 
paragraph (b)(2) of this section (unless extended within this time 
period by a resource agency or Indian tribe for an additional 60 days by 
sending written notice to the applicant and the Director of OHL within 
the first 60 day period, with an explanation of the basis for the 
extension), each interested resource agency and Indian tribe must 
provide a potential applicant with written comments:
    (i) Identifying its determination of necessary studies to be 
performed or information to be provided by the potential applicant;
    (ii) Identifying the basis for its determination;
    (iii) Discussing its understanding of the resource issues and its 
goals and objectives for these resources;
    (iv) Explaining why each study methodology recommended by it is more 
appropriate than other available methodology alternatives, including 
those identified by the potential applicant pursuant to paragraph 
(b)(1)(vii) of this section;
    (v) Documenting that the use of each study methodology recommended 
by it is a generally accepted practice; and
    (vi) Explaining how the studies and information requested will be 
useful to the agency or Indian tribe in furthering its resource goals 
and objectives that are affected by the proposed project.
    (5)(i) If a potential applicant and a resource agency or Indian 
tribe disagree as to any matter arising during the first stage of 
consultation or as to the need to conduct a study or gather

[[Page 93]]

information referenced in paragraph (c)(2) of this section, the 
potential applicant or resource agency or Indian tribe may refer the 
dispute in writing to the Director of the Office of Hydropower Licensing 
(Director) for resolution.
    (ii) At the same time as the request for dispute resolution is 
submitted to the Director, the entity referring the dispute must serve a 
copy of its written request for resolution on the disagreeing party and 
any affected resource agency or Indian tribe, which may submit to the 
Director a written response to the referral within 15 days of the 
referral's submittal to the Director.
    (iii) Written referrals to the Director and written responses 
thereto pursuant to paragraphs (b)(5)(i) or (b)(5)(ii) of this section 
must be filed with the Secretary of the Commission in accordance with 
the Commission's Rules of Practice and Procedure, and must indicate that 
they are for the attention of the Director pursuant to Sec. 4.38(b)(5).
    (iv) The Director will resolve disputes by letter provided to the 
potential applicant and all affected resource agencies and Indian 
tribes.
    (v) If a potential applicant does not refer a dispute regarding a 
request for information (other than a dispute regarding the information 
specified in paragraph (b)(1) of this section) or a study to the 
Director under paragraph (b)(5)(i) of this section, or if a potential 
applicant disagrees with the Director's resolution of a dispute 
regarding a request for information (other than a dispute regarding the 
information specified in paragraph (b)(1) of this section) or a study, 
and if the potential applicant does not provide the requested 
information or conduct the requested study, the potential applicant must 
fully explain the basis for its disagreement in its application.
    (vi) Filing and acceptance of an application will not be delayed, 
and an application will not be considered deficient or patently 
deficient pursuant to Secs. 4.32 (e)(1) or (e)(2), merely because the 
application does not include a particular study or particular 
information if the Director had previously found, under paragraph 
(b)(5)(iv) of this section, that such study or information is 
unreasonable or unnecessary for an informed decision by the Commission 
on the merits of the application or use of the study methodology 
requested is not a generally accepted practice.
    (6) The first stage of consultation ends when all participating 
agencies and Indian tribes provide the written comments required under 
paragraph (b)(4) of this section or 60 days after the joint meeting held 
under paragraph (b)(2) of this section, whichever occurs first, unless a 
resource agency or Indian tribe timely notifies the applicant and the 
Director of OHL of its need for more time to provide written comments 
under paragraph (b)(4) of this section, in which case the first stage of 
consultation ends when all the participating agencies and Indian tribes 
provide the written comments required under paragraph (b)(4) of this 
section or 120 days after the joint meeting held under paragraph (b)(2) 
of this section, whichever occurs first.
    (c) Second stage of consultation. (1) Unless determined to be 
unnecessary by the Director pursuant to paragraph (b)(5) of this 
section, a potential applicant must diligently conduct all reasonable 
studies and obtain all reasonable information requested by resource 
agencies and Indian tribes under paragraph (b) of this section that are 
necessary for the Commission to make an informed decision regarding the 
merits of the application. These studies must be completed and the 
information obtained:
    (i) Prior to filing the application, if the results:
    (A) Would influence the financial (e.g., instream flow study) or 
technical feasibility of the project (e.g., study of potential mass soil 
movement); or
    (B) Are needed to determine the design or location of project 
features, reasonable alternatives to the project, the impact of the 
project on important natural or cultural resources (e.g., resource 
surveys), or suitable mitigation or enhancement measures, or to minimize 
impact on significant resources (e.g., wild and scenic river, anadromous 
fish, endangered species, caribou migration routes);

[[Page 94]]

    (ii) After filing the application but before issuance of a license 
or exemption, if the applicant otherwise complied with the provisions of 
paragraph (b)(1) of this section and the study or information gathering 
would take longer to conduct and evaluate than the time between the 
conclusion of the first stage of consultation and the expiration of the 
applicant's preliminary permit or the application filing deadline set by 
the Commission;
    (iii) After a new license or exemption is issued, if the studies can 
be conducted or the information obtained only after construction or 
operation of proposed facilities, would determine the success of 
protection, mitigation, or enhancement measures (e.g., post-construction 
monitoring studies), or would be used to refine project operation or 
modify project facilities.
    (2) If, after the end of the first stage of consultation as defined 
in paragraph (b)(6) of this section, a resource agency or Indian tribe 
requests that the potential applicant conduct a study or gather 
information not previously identified and specifies the basis and 
reasoning for its request, under paragraphs (b)(4) (i)-(vi) of this 
section, the potential applicant must promptly initiate the study or 
gather the information, unless the study or information is unreasonable 
or unnecessary for an informed decision by the Commission on the merits 
of the application or use of the methodology requested by a resource 
agency or Indian tribe for conducting the study is not a generally 
accepted practice. The applicant may refer any such request to the 
Director of the Office of Hydropower Licensing for dispute resolution 
under the procedures set forth in paragraph (b)(5) of this section and 
need not conduct prior to filing any study determined by the Director to 
be unreasonable or unnecessary or to employ a methodology that is not 
generally accepted.
    (3)(i) The results of studies and information-gathering referenced 
in paragraphs (c)(1)(ii) and (c)(2) of this section will be treated as 
additional information; and
    (ii) Filing and acceptance of an application will not be delayed and 
an application will not be considered deficient or patently deficient 
pursuant to Sec. 4.32 (e)(1) or (e)(2) merely because the study or 
information gathering is not complete before the application is filed.
    (4) A potential applicant must provide each resource agency and 
Indian tribe with:
    (i) A copy of its draft application that:
    (A) Indicates the type of application the potential applicant 
expects to file with the Commission; and
    (B) Responds to any comments and recommendations made by any 
resource agency and Indian tribe either during the first stage of 
consultation or under paragraph (c)(2) of this section;
    (ii) The results of all studies and information-gathering either 
requested by that resource agency or Indian tribe in the first stage of 
consultation (or under paragraph (c)(2) of this section if available) or 
which pertain to resources of interest to that resource agency or Indian 
tribe and which were identified by the potential applicant pursuant to 
paragraph (b)(1)(vii) of this section, including a discussion of the 
results and any proposed protection, mitigation, or enhancement 
measures; and
    (iii) A written request for review and comment.
    (5) A resource agency or Indian tribe will have 90 days from the 
date of the potential applicant's letter transmitting the paragraph 
(c)(4) information to it to provide written comments on the information 
submitted by a potential applicant under paragraph (c)(4) of this 
section.
    (6) If the written comments provided under paragraph (c)(5) of this 
section indicate that a resource agency or Indian tribe has a 
substantive disagreement with a potential applicant's conclusions 
regarding resource impacts or its proposed protection, mitigation, or 
enhancement measures, the potential applicant will:
    (i) Hold a joint meeting with the disagreeing resource agency or 
Indian tribe and other agencies with similar or related areas of 
interest, expertise, or responsibility not later than 60 days from the 
date of the written comments of the disagreeing agency or Indian tribe 
to discuss and to attempt to

[[Page 95]]

reach agreement on its plan for environmental protection, mitigation, or 
enhancement measures;
    (ii) Consult with the disagreeing agency or Indian tribe and other 
agencies with similar or related areas of interest, expertise, or 
responsibility on the scheduling of the joint meeting; and
    (iii) At least 15 days in advance of the meeting, provide the 
Commission with written notice of the time and place of the meeting and 
a written agenda of the issues to be discussed at the meeting.
    (7) The potential applicant and any disagreeing resource agency or 
Indian tribe may conclude a joint meeting with a document embodying any 
agreement among them regarding environmental protection, mitigation, or 
enhancement measures and any issues that are unresolved.
    (8) The potential applicant must describe all disagreements with a 
resource agency or Indian tribe on technical or environmental 
protection, mitigation, or enhancement measures in its application, 
including an explanation of the basis for the applicant's disagreement 
with the resource agency or Indian tribe, and must include in its 
application any document developed pursuant to paragraph (c)(7) of this 
section.
    (9) A potential applicant may file an application with the 
Commission if:
    (i) It has complied with paragraph (c)(4) of this section and no 
resource agency or Indian tribe has responded with substantive 
disagreements by the deadline specified in paragraph (c)(5) of this 
section; or
    (ii) It has complied with paragraph (c)(6) of this section and a 
resource agency or Indian tribe has responded with substantive 
disagreements.
    (10) The second stage of consultation ends:
    (i) Ninety days after the submittal of information pursuant to 
paragraph (c)(4) of this section in cases where no resource agency or 
Indian tribe has responded with substantive disagreements; or
    (ii) At the conclusion of the last joint meeting held pursuant to 
paragraph (c)(6) of this section in cases where a resource agency or 
Indian tribe has responded with substantive disagreements.
    (d) Third stage of consultation. (1) The third stage of consultation 
is initiated by the filing of an application for a license or exemption, 
accompanied by a transmittal letter certifying that at the same time 
copies of the application are being mailed to the resource agencies, 
Indian tribes, and other government offices specified in paragraph 
(d)(2) of this section.
    (2) As soon as an applicant files such application documents with 
the Commission, or promptly after receipt in the case of documents 
described in paragraph (d)(2)(iii) of this section, as the Commission 
may direct the applicant must serve on every resource agency and Indian 
tribe consulted and on other government offices copies of:
    (i) Its application for a license or an exemption from licensing;
    (ii) Any deficiency correction, revision, supplement, response to 
additional information request, or amendment to the application; and
    (iii) Any written correspondence from the Commission requesting the 
correction of deficiencies or the submittal of additional information.
    (e) Waiver of compliance with consultation requirements. (1) If a 
resource agency or Indian tribe waives in writing compliance with any 
requirement of this section, a potential applicant does not have to 
comply with that requirement as to that agency or tribe.
    (2) If a resource agency or Indian tribe fails to timely comply with 
a provision regarding a requirement of this section, a potential 
applicant may proceed to the next sequential requirement of this section 
without waiting for the resource agency or Indian tribe to comply.
    (3) The failure of a resource agency or Indian tribe to timely 
comply with a provision regarding a requirement of this section does not 
preclude its participation in subsequent stages of the consultation 
process.
    (f) Application requirements documenting consultation and any 
disagreements with resource agencies. An applicant must show in Exhibit 
E of its application that it has met the requirements of paragraphs (b) 
through (d)

[[Page 96]]

and paragraphs (g) and (h) of this section, and must include a summary 
of the consultation process and:
    (1) Any resource agency's or Indian tribe's letters containing 
comments, recommendations, and proposed terms and conditions;
    (2) Any letters from the public containing comments and 
recommendations;
    (3) Notice of any remaining disagreement with a resource agency or 
Indian tribe on:
    (i) The need for a study or the manner in which a study should be 
conducted and the applicant's reasons for disagreement, and
    (ii) Information on any environmental protection, mitigation, or 
enhancement measure, including the basis for the applicant's 
disagreement with the resource agency or Indian tribe;
    (4) Evidence of any waivers under paragraph (e) of this section;
    (5) Evidence of all attempts to consult with a resource agency or 
Indian tribe, copies of related documents showing the attempts, and 
documents showing the conclusion of the second stage of consultation;
    (6) An explanation of how and why the project would, would not, or 
should not, comply with any relevant comprehensive plan as defined in 
Sec. 2.l9 of this chapter and a description of any relevant resource 
agency or Indian tribe determination regarding the consistency of the 
project with any such comprehensive plan;
    (7)(i) With regard to certification requirements for a license 
applicant under section 401(a)(1) of the Federal Water Pollution Control 
Act (Clean Water Act):
    (A) A copy of the water quality certification;
    (B) A copy of the request for certification, including proof of the 
date on which the certifying agency received the request; or
    (C) Evidence of waiver of water quality certification as described 
in paragraph (f)(7)(ii) of this section.
    (ii) A certifying agency is deemed to have waived the certification 
requirements of section 401(a)(1) of the Clean Water Act if the 
certifying agency has not denied or granted certification by one year 
after the date the certifying agency received a written request for 
certification. If a certifying agency denies certification, the 
applicant must file a copy of the denial within 30 days after the 
applicant received it.
    (iii) Notwithstanding any other provision in title 18, chapter I, 
subpart B, any application to amend an existing license, and any 
amendment to a pending application for a license, requires a new request 
for water quality certification pursuant to paragraph (f)(7)(i) of this 
section if the amendment would have a material adverse impact on the 
water quality in the discharge from the project or proposed project.
    (8) A description of how the applicant's proposal addresses the 
significant resource issues raised at the joint meeting held pursuant to 
paragraph (b)(2) of this section; and
    (9) A list containing the name and address of every federal, state, 
and interstate resource agency and Indian tribe with which the applicant 
consulted pursuant to paragraph (a)(1) of this section.
    (g) Public participation. (1) At least 14 days in advance of the 
joint meeting held pursuant to paragraph (b)(2) of this section, the 
potential applicant must publish notice, at least once, of the purpose, 
location, and timing of the joint meeting, in a daily or weekly 
newspaper published in each county in which the proposed project or any 
part thereof is situated. The notice shall include a summary of the 
major issues to be discussed at the joint meeting.
    (2)(i) A potential applicant must make available to the public for 
inspection and reproduction the information specified in paragraph 
(b)(1) of this section from the date on which the notice required by 
paragraph (g)(1) of this section is first published until the date of 
the joint meeting required by paragraph (b)(2) of this section.
    (ii) The provisions of Sec. 4.32(b) will govern the form and manner 
in which the information is to be made available for public inspection 
and reproduction.
    (iii) A potential applicant must make available to the public for 
inspection at the joint meeting required by paragraph (b)(2) of this 
section at least two copies of the information specified in paragraph 
(b)(1) of this section.

[[Page 97]]

    (h) Transition provisions. (1) The provisions of this section are 
not applicable to applications filed before June 19, 1991.
    (2) The provisions of paragraphs (a) and (b) of this section are not 
applicable to potential applicants that complied with the provisions of 
paragraphs (a) and (b)(1) of this section prior to June 19, 1991.
    (3) The provisions of paragraph (c) of this section are not 
applicable to potential applicants that complied with the provisions of 
paragraph (b)(2) of this section prior to June 19, 1991.
    (4)(i) Any applicant that files its application on or after June 19, 
1991, and that complied with the provisions of paragraphs (a) and (b)(1) 
of this section prior to June 19, 1991, must hold a public meeting, 
within 90 days from June 19, 1991, at or near the site of the proposed 
project, to generally explain the potential applicant's proposal for the 
site and to obtain the views of the public regarding resource issues 
that should be addressed in any application for license or exemption 
that may be filed by the potential applicant. The public meeting must 
include both day and evening sessions, and the potential applicant must 
make either audio recordings or written transcripts of both sessions.
    (ii)(A) At least 15 days in advance of the meeting, the potential 
applicant must provide all affected resource agencies, Indian tribes, 
and the Commission with written notice of the time and place of the 
meeting and a written agenda of the issues to be discussed at the 
meeting.
    (B) At least 14 days in advance of the meeting, the potential 
applicant must publish notice, at least once, of the purpose, location, 
and timing of the meeting, in a daily or weekly newspaper published in 
each county in which the proposed project or any part thereof is 
situated.
    (iii)(A) A potential applicant must make available to the public for 
inspection and reproduction information comparable to that specified in 
paragraph (b)(1) of this section from the date on which the notice 
required by paragraph (h)(4)(ii) of this section is first published 
until the date of the public meeting required by paragraph (h)(4)(i) of 
this section.
    (B) The provisions of Sec. 4.32(b) will govern the form and manner 
in which the information is to be made available for public inspection 
and reproduction.
    (C) A potential applicant must make available to the public for 
inspection at both sessions of the public meeting required by paragraph 
(h)(4)(i) of this section at least two copies of the information 
specified in paragraph (h)(4)(iii)(A) of this section.
    (D) A potential applicant must promptly provide copies of the audio 
recordings or written transcripts of the sessions of the public meeting 
to the Commission and, upon request, to any resource agency or Indian 
tribe consulted.
    (iv) Any applicant holding a public meeting pursuant to paragraph 
(h)(4)(i) of this section must include in its filed application a 
description of how the applicant's proposal addresses the significant 
resource issues raised during the public meeting.

[Order 533, 56 FR 23153, May 20, 1991, as amended at 56 FR 61155, Dec. 
2, 1991]



Sec. 4.39  Specifications for maps and drawings.

    All required maps and drawings must conform to the following 
specifications, except as otherwise prescribed in this chapter:
    (a) Each original map or drawing must consist of a print on silver 
or gelatin 35mm microfilm mounted on Type D (3\1/4\ by 7\3/
8\) aperture cards. Two duplicates must be made of each 
original. Full-sized prints of maps and drawings must be on sheets no 
smaller than 24 by 36 inches and no larger than 28 by 40 inches. A space 
five inches high by seven inches wide must be provided in the lower 
right corner of each sheet. The upper half of this space must bear the 
title, numerical and graphical scale, and other pertinent information 
concerning the map or drawing. The lower half of the space must be left 
clear. If the drawing size specified in this paragraph limits the scale 
of drawings described in paragraph (c) of this section, a smaller scale 
may be used for those drawings.
    (b) Each map must have a scale in full-sized prints no smaller than 
one

[[Page 98]]

inch equals 0.5 miles for transmission lines, roads, and similar linear 
features and no smaller than one inch equals 1,000 feet for other 
project features. Where maps at these scales do not show sufficient 
detail, larger scale maps may be required under Sec. 4.31(f). Each map 
must show:
    (1) True and magnetic meridians;
    (2) State, county, and town lines; and
    (3) Boundaries of public lands and reservations of the United States 
[see 16 U.S.C. 796 (1) and (2)], if any. If a public land survey is 
available, the maps must show all lines of that survey crossing the 
project area and all official subdivisions of sections for the public 
lands and reservations, including lots and irregular tracts, as 
designated on the official plats of survey that may be obtained from the 
Bureau of Land Management, Washington, DC, or examined in the local land 
survey office; to the extent that a public land survey is not available 
for public lands and reservations of the United States, the maps must 
show the protractions of townships and section lines, which, if 
possible, must be those recognized by the Federal agency administering 
those lands.
    (c) Drawings depicting details of project structures must have a 
scale in full-sized prints no smaller than:
    (1) One inch equals 50 feet for plans, elevations, and profiles; and
    (2) One inch equals 10 feet for sections.
    (d) Each map or drawing must be drawn and lettered to be legible 
when it is reduced to a print that is 11 inches on its shorter side. 
Following notification to the applicant that the application has been 
accepted for filing [see Sec. 4.31(c)], prints reduced to that size must 
be bound in each copy of the application which is required to be 
submitted to the Commission or provided to any person, agency, or other 
entity.

[Order 54, 44 FR 61334, Oct. 25, 1979. Redesignated by Order 413, 50 FR 
11678, Mar. 25, 1985]



 Subpart E--Application for License for Major Unconstructed Project and 
                         Major Modified Project



Sec. 4.40  Applicability.

    (a) Applicability. The provisions of this subpart apply to any 
application for an initial license for a major unconstructed project 
that would have a total installed capacity of more than 5 megawatts, and 
any application for an initial or new license for a major modified 
project with a total installed capacity more than 5 megawatts. An 
applicant for license for any major unconstructed or major modified 
water power project that would have a total installed generating 
capacity of 5 megawatts or less must submit application under subpart G 
(Secs. 4.60 and 4.61).
    (b) Guidance from Commission staff. A prospective applicant for a 
license for a major unconstructed project or major modified project may 
seek advice from the Commission's Division of Hydropower Licensing 
regarding the applicability of this subpart to its project [see 
Sec. 4.32(h)], including the determinations whether any proposed repair, 
modification or reconstruction of an existing dam would result in a 
significant change in the normal maximum surface elevation of an 
existing impoundment, or whether any proposed change in existing project 
works or operation would result in a significant environmental impact.

[Order 184, 46 FR 55936, Nov. 13, 1981, as amended by Order 413, 50 FR 
11683, Mar. 25, 1985; Order 499, 53 FR 27002, July 18, 1988]



Sec. 4.41  Contents of application.

    Any application under this subpart must contain the following 
information in the form prescribed:

    (a) Initial statement.

[[Page 99]]

             Before the Federal Energy Regulatory Commission

    Application for License for Major Unconstructed Project or Major 
                            Modified Project

    (1) [Name of applicant] applies to the Federal Energy Regulatory 
Commission for a [license or new license, as appropriate] for the [name 
of project] water power project, as described in the attached exhibits. 
[Specify any previous FERC project number designation.]
    (2) The location of the proposed project is:

State or territory:_____________________________________________________
County:_________________________________________________________________
Township or nearby town:________________________________________________
Stream or other body of water:__________________________________________

    (3) The exact name, business address, and telephone number of the 
applicant are:

________________________________________________________________________
________________________________________________________________________

    (4) The applicant is a (citizen of the United States, association of 
citizens of the United States, domestic corporation, municipality, or 
State, as appropriate) and (is/is not) claiming preference under section 
7(a) of the Federal Power Act. See 16 U.S.C. 796.
    (5)(i) The statutory or regulatory requirements of the state(s) in 
which the project would be located and that affect the project as 
proposed with respect to bed and banks and to the appropriation, 
diversion, and use of water for power purposes, and with respect to the 
right to engage in the business of developing, transmitting, and 
distributing power and in any other business necessary to accomplish the 
purposes of the license under the Federal Power Act, are: [provide 
citation and brief identification of the nature of each requirement; if 
the applicant is a municipality, the applicant must submit copies of 
applicable state or local laws or a municipal charter or, if such laws 
or documents are not clear, any other appropriate legal authority, 
evidencing that the municipality is competent under such laws to engage 
in the business of developing, transmitting, utilizing, or distributing 
power.]
    (ii) The steps which the applicant has taken, or plans to take, to 
comply with each of the laws cited above are: [provide brief description 
for each requirement]

    (b) Exhibit A is a description of the project. If the project 
includes more than one dam with associated facilities, each dam and the 
associated component parts must be described together as a discrete 
development. The description for each development must contain:
    (1) The physical composition, dimensions, and general configuration 
of any dams, spillways, penstocks, powerhouses, tailraces or other 
structures proposed to be included as part of the project;
    (2) The normal maximum water surface area and normal maximum water 
surface elevation (mean sea level), gross storage capacity of any 
impoundments to be included as part of the project;
    (3) The number, type and rated capacity of any proposed turbines or 
generators to be included as part of the project;
    (4) The number, length, voltage and interconnections of any primary 
transmission lines proposed to be included a part of the project [See 16 
U.S.C. 796(11)];
    (5) The description of any additional mechanical, electrical, and 
transmission equipment appurtenant to the project; and
    (6) All lands of the United States, including lands patented subject 
to the provisions of section 24 of the Act, 16 U.S.C. 818, that are 
enclosed within the project boundary described under paragraph (h) of 
this section (Exhibit G), identified and tabulated by legal subdivisions 
of a public land survey, by the best available legal description. The 
tabulation must show the total acreage of the lands of the United States 
within the project boundary.
    (c) Exhibit B is a statement of project operation and resource 
utilization. If the project includes more than one dam with associated 
facilities, the information must be provided separately for each 
discrete development. The exhibit must contain:
    (1) A description of each alternative site considered in selecting 
of the proposed site;
    (2) A description of any alternative facility designs, processes, 
and operations that were considered.
    (3) A statement as to whether operation of the power plant will be 
manual or automatic, an estimate of the annual plant factor, and a 
statement of how the project will be operated during adverse, mean, and 
high water years;

[[Page 100]]

    (4) An estimate of the dependable capacity and average annual energy 
production in kilowatt-hours (or mechanical equivalent), supported by 
the following data:
    (i) The minimum, mean, and maximum recorded flows in cubic feet per 
second of the stream or other body of water at the powerplant intake or 
point of diversion, with a specification of any adjustment made for 
evaporation, leakage minimum flow releases (including duration of 
releases) or other reductions in available flow; a flow duration curve 
indicating the period of record and the gauging stations used in 
deriving the curve; and a specification of the critical streamflow used 
to determine the dependable capacity;
    (ii) An area-capacity curve showing the gross storage capacity and 
usable storage capacity of the impoundment, with a rule curve showing 
the proposed operation of the impoundment and how the usable storage 
capacity is to be utilized;
    (iii) The estimated hydraulic capacity of the powerplant in terms of 
flow and efficiency (cubic feet per second at one-half, full and best 
gate), and the corresponding generator output in kilowatts;
    (iv) A tailwater rating curve; and
    (v) A curve showing powerplant capability versus head and specifying 
maximum, normal, and minimum heads;
    (5) A statement of system and regional power needs and the manner in 
which the power generated at the project is to be utilized, including 
the amount of power to be used on-site, if any, supported by the 
following data:
    (i) Load curves and tabular data, if appropriate;
    (ii) Details of conservation and rate design programs and their 
historic and projected impacts on system loads; and
    (iii) The amount of power to be sold and the identity of proposed 
purchaser(s); and
    (6) A statement of the applicant's plans for future development of 
the project or of any other existing or proposed water power project on 
the affected stream or other body of water, indicating the approximate 
location and estimated installed capacity of the proposed developments.
    (d) Exhibit C is a proposed construction schedule for the project. 
The information required may be supplemented with a bar chart. The 
construction schedule must contain:
    (1) The proposed commencement and completion dates of any new 
construction, modification, or repair of major project works;
    (2) The proposed commencement date of first commercial operation of 
each new major facility and generating unit; and
    (3) If any portion of the proposed project consists of previously 
constructed, unlicensed water power structures or facilities, a 
chronology of original completion dates of those structures or 
facilities specifying dates (approximate dates must be identified as 
such) of:
    (i) Commencement and completion of construction or installation;
    (ii) Commencement of first commercial operation; and
    (iii) Any additions or modifications other than routine maintenance.
    (e) Exhibit D is a statement of project costs and financing. The 
exhibit must contain:
    (1) A statement of estimated costs of any new construction, 
modification, or repair, including:
    (i) The cost of any land or water rights necessary to the 
development;
    (ii) The total cost of all major project works;
    (iii) Indirect construction costs such as costs of construction 
equipment, camps, and commissaries;
    (iv) Interest during construction; and
    (v) Overhead, construction, legal expenses, and contingencies;
    (2) If any portion of the proposed project consists of previously 
constructed, unlicensed water power structures or facilities, a 
statement of the original cost of those structures or facilities 
specifying for each, to the extent possible, the actual or approximate 
total costs (approximate costs must be identified as such) of:
    (i) Any land or water rights necessary to the existing project 
works;
    (ii) All major project works; and
    (iii) Any additions or modifications other than routine maintenance;
    (3) If the applicant is a licensee applying for a new license, and 
is not a

[[Page 101]]

municipality or a state, an estimate of the amount which would be 
payable if the project were to be taken over pursuant to section 14 of 
the Federal Power Act, 16 U.S.C. 807, upon expiration of the license in 
effect including:
    (i) Fair value;
    (ii) Net investment; and
    (iii) Severance damages;
    (4) A statement of the estimated average annual cost of the total 
project as proposed, specifying any projected changes in the costs 
(life-cycle costs) over the estimated financing or licensing period if 
the applicant takes such changes into account, including:
    (i) Cost of capital (equity and debt);
    (ii) Local, state, and Federal taxes;
    (iii) Depreciation or amortization, and
    (iv) Operation and maintenance expenses, including interim 
replacements, insurance, administrative and general expenses, and 
contingencies;
    (5) A statement of the estimated annual value of project power based 
on a showing of the contract price for sale of power or the estimated 
average annual cost of obtaining an equivalent amount of power (capacity 
and energy) from the lowest cost alternative source of power, specifying 
any projected changes in the costs (life-cycle costs) of power from that 
source over the estimated financing or licensing period if the applicant 
takes such changes into account;
    (6) A statement describing other electric energy alternatives, such 
as gas, oil, coal and nuclear-fueled powerplants and other conventional 
and pumped storage hydroelectric plants;
    (7) A statement and evaluation of the consequences of denial of the 
license application and a brief perspective of what future use would be 
made of the proposed site if the proposed project were not constructed; 
and
    (8) A statement specifying the sources and extent of financing and 
annual revenues available to the applicant to meet the costs identified 
in paragraphs (e) (1) and (4) of this section.
    (f) Exhibit E is an Environmental Report. Information provided in 
the report must be organized and referenced according to the itemized 
subparagraphs below. See Sec. 4.38 for consultation requirements. The 
Environmental Report must contain the following information, 
commensurate with the scope of the project:
    (1) General description of the locale. The applicant must provide a 
general description of the environment of the proposed project area and 
its immediate vicinity. The description must include location and 
general information helpful to an understanding of the environmental 
setting.
    (2) Report on water use and quality. The report must discuss water 
quality and flows and contain baseline data sufficient to determine the 
normal and seasonal variability, the impacts expected during 
construction and operation, and any mitigative, enhancement, and 
protective measures proposed by the applicant. The report must be 
prepared in consultation with the state and Federal agencies with 
responsibility for management of water quality and quantity in the 
affected stream or other body of water. The report must include:
    (i) A description of existing instream flow uses of streams in the 
project area that would be affected by construction and operation; 
estimated quantities of water discharged from the proposed project for 
power production; and any existing and proposed uses of project waters 
for irrigation, domestic water supply, industrial and other purposes;
    (ii) A description of the seasonal variation of existing water 
quality for any stream, lake, or reservoir that would be affected by the 
proposed project, including (as appropriate) measurements of: 
significant ions, chlorophyll a, nutrients, specific conductance, pH, 
total dissolved solids, total alkalinity, total hardness, dissolved 
oxygen, bacteria, temperature, suspended sediments, turbidity and 
vertical illumination;
    (iii) A description of any existing lake or reservoir and any of the 
proposed project reservoirs including surface area, volume, maximum 
depth, mean depth, flushing rate, shoreline length, substrate 
classification, and gradient for streams directly affected by the 
proposed project;

[[Page 102]]

    (iv) A quantification of the anticipated impacts of the proposed 
construction and operation of project facilities on water quality and 
downstream flows, such as temperature, turbidity and nutrients;
    (v) A description of measures recommended by Federal and state 
agencies and the applicant for the purpose of protecting or improving 
water quality and stream flows during project construction and 
operation; an explanation of why the applicant has rejected any measures 
recommended by an agency; and a description of the applicant's 
alternative measures to protect or improve water quality stream flow;
    (vi) A description of groundwater in the vicinity of the proposed 
project, including water table and artesian conditions, the hydraulic 
gradient, the degree to which groundwater and surface water are 
hydraulically connected, aquifers and their use as water supply, and the 
location of springs, wells, artesian flows and disappearing streams; a 
description of anticipated impacts on groundwater and measures proposed 
by the applicant and others for the mitigation of impacts on 
groundwater; and
    (3) Report on fish, wildlife, and botanical resources. The applicant 
must provide a report that describes the fish, wildlife, and botanical 
resources in the vicinity of the proposed project; expected impacts of 
the project on these resources; and mitigation, enhancement, or 
protection measures proposed by the applicant. The report must be 
prepared in consultation with the state agency or agencies with 
responsibility for these resources, the U.S. Fish and Wildlife Service, 
the National Marine Fisheries Service (if the proposed project may 
affect anadromous, estuarine, or marine fish resources), and any state 
or Federal agency with managerial authority over any part of the 
proposed project lands. The report must contain:
    (i) A description of existing fish, wildlife, and plant communities 
of the proposed project area and its vicinity, including any downstream 
areas that may be affected by the proposed project and the area within 
the transmission line corridor or right-of-way. A map of vegetation 
types should be included in the description. For species considered 
important because of their commercial or recreational value, the 
information provided should include temporal and spatial distributions 
and densities of such species. Any fish, wildlife, or plant species 
proposed or listed as threatened or endangered by the U.S. Fish and 
Wildlife Service or National Marine Fisheries Service [see 50 CFR 17.11 
and 17.12] must be identified;
    (ii) A description of the anticipated impacts on fish, wildlife and 
botanical resources of the proposed construction and operation of 
project facilities, including possible changes in size, distribution, 
and reproduction of essential population of these resources and any 
impacts on human utilization of these resources;
    (iii) A description of any measures or facilities recommended by 
state or Federal agencies for the mitigation of impacts on fish, 
wildlife, and botanical resources, or for the protection or enhancement 
of these resources, the impact on threatened or endangered species, and 
an explanation of why the applicant has determined any measures or 
facilities recommended by an agency are inappropriate as well as a 
description of alternative measures proposed by applicant to protect 
fish, wildlife and botanical resources; and
    (iv) The following materials and information regarding any 
mitigation measures or facilities, identified under clause (iii), 
proposed for implementation or construction:
    (A) Functional design drawings;
    (B) A description of proposed operation and maintenance procedures 
for any proposed measures or facilities;
    (C) An implementation, construction and operation schedule for any 
proposed measures or facilities;
    (D) An estimate of the costs of construction, operation, and 
maintenance of any proposed facilities or implementation of any 
measures;
    (E) A statement of the sources and amount of financing for 
mitigation measures or facilities; and
    (F) A map or drawing showing, by the use of shading, crosshatching 
or other symbols, the identity and location of any proposed measures or 
facilities.

[[Page 103]]

    (4) Report on historic and archaeological resources. The applicant 
must provide a report that discusses any historical and archaeological 
resources in the proposed project area, the impact of the proposed 
project on those resources and the avoidance, mitigation, and protection 
measures proposed by the applicant. The report must be prepared in 
consultation with the State Historic Preservation Officer (SHPO) and the 
National Park Service of the U.S. Department of Interior. The report 
must contain:
    (i) A description of any discovery measures, such as surveys, 
inventories, and limited subsurface testing work, recommended by the 
specified state and Federal agencies for the purpose of locating, 
identifying, and assessing the significance of historic and 
archaeological resources that would be affected by construction and 
operation of the proposed project, together with a statement of the 
applicant's position regarding the acceptability of the recommendations;
    (ii) The results of surveys, inventories, and subsurface testing 
work recommended by the state and Federal agencies listed above, 
together with an explanation by the applicant of any variations from the 
survey, inventory, or testing procedures recommended;
    (iii) An identification (without providing specific site or property 
locations) of any historic or archaeological site in the proposed 
project area, with particular emphasis on sites or properties either 
listed in, or recommended by the SHPO for inclusion in, the National 
Register of Historic Places that would be affected by the construction 
of the proposed project;
    (iv) A description of the likely direct and indirect impacts of 
proposed project construction or operation on sites or properties either 
listed in, or recommended as eligible for, the National Register of 
Historic Places;
    (v) A management plan for the avoidance of, or mitigation of, 
impacts on historic or archaeological sites and resources based upon the 
recommendations of the state and Federal agencies listed above and 
containing the applicant's explanation of variations from those 
recommendations; and
    (vi) The following materials and information regarding the 
mitigation measures described under paragraph (f)(4)(v) of this section:
    (A) A schedule for implementing the mitigation proposals;
    (B) An estimate of the cost of the measures; and
    (C) A statement of the sources and extent of financing.
    (vii) The applicant must provide five copies (rather than the 
fourteen copies required under Sec. 4.32(b)(1) of the Commission's 
regulations) of any survey, inventory, or subsurface testing reports 
containing specific site and property information, and including maps 
and photographs showing the location and any required alteration of 
historic and archaeological resources in relation to proposed project 
facilities.
    (5) Report on socio-economic impacts. The applicant must provide a 
report which identifies and quantifies the impacts of constructing and 
operating the proposed project on employment, population, housing, 
personal income, local governmental services, local tax revenues and 
other factors within the towns and counties in the vicinity of the 
proposed project. The report must include:
    (i) A description of the socio-economic impact area;
    (ii) A description of employment, population and personal income 
trends in the impact area;
    (iii) An evaluation of the impact of any substantial in-migration of 
people on the impact area's governmental facilities and services, such 
as police, fire, health and educational facilities and programs;
    (iv) On-site manpower requirements and payroll during and after 
project construction, including a projection of total on-site employment 
and construction payroll provided by month;
    (v) Numbers of project construction personnel who:
    (A) Currently reside within the impact area;
    (B) Would commute daily to the construction site from places 
situated outside the impact area; and
    (C) Would relocate on a temporary basis within the impact area;
    (vi) A determination of whether the existing supply of available 
housing

[[Page 104]]

within the impact area is sufficient to meet the needs of the additional 
population;
    (vii) Numbers and types of residences and business establishments 
that would be displaced by the proposed project, procedures to be 
utilized to acquire these properties, and types and amounts of 
relocation assistance payments that would be paid to the affected 
property owners and businesses; and
    (viii) A fiscal impact analysis evaluating the incremental local 
government expenditures in relation to the incremental local government 
revenues that would result from the construction of the proposed 
project. Incremental expenditures may include, but are not be limited 
to, school operating costs, road maintenance and repair, public safety, 
and public utility costs.
    (6) Report on geological and soil resources. The applicant must 
provide a report on the geological and soil resources in the proposed 
project area and other lands that would be directly or indirectly 
affected by the proposed action and the impacts of the proposed project 
on those resources. The information required may be supplemented with 
maps showing the location and description of conditions. The report must 
contain:
    (i) A detailed description of geological features, including bedrock 
lithology, stratigraphy, structural features, glacial features, 
unconsolidated deposits, and mineral resources;
    (ii) A detailed description of the soils, including the types, 
occurrence, physical and chemical characteristics, erodability and 
potential for mass soil movement;
    (iii) A description showing the location of existing and potential 
geological and soil hazards and problems, including earthquakes, faults, 
seepage, subsidence, solution cavities, active and abandoned mines, 
erosion, and mass soil movement, and an identification of any large 
landslides or potentially unstable soil masses which could be aggravated 
by reservior fluctuation;
    (iv) A description of the anticipated erosion, mass soil movement 
and other impacts on the geological and soil resources due to 
construction and operation of the proposed project; and
    (v) A description of any proposed measures of facilities for the 
mitigtion of impacts on soils.
    (7) Report on recreational resources. The applicant must prepare a 
report containing a proposed recreation plan describing utilization, 
design and development of project recreational facilities, and public 
access to the project area. Development of the plan should include 
consideration of the needs of the physically handicapped. Public and 
private recreational facilities provided by others that would abut the 
project should be noted in the report. The report must be prepared in 
consultation with appropriate local, regional, state and Federal 
recreation agencies and planning commissions, the National Park Service 
of the U.S. Department of the Interior, and any other state or Federal 
agency with managerial responsibility for any part of the project lands. 
The report must contain:
    (i) A description of any areas within or in the vicinity of the 
proposed project boundary that are included in, or have been designated 
for study for inclusion in:
    (A) The National Wild and Scenic Rivers Systems (see 16 U.S.C. 
1271);
    (B) The National Trails System (see 16 U.S.C. 1241); or
    (C) A wilderness area designated under the Wilderness Act (see 16 
U.S.C. 1132);
    (ii) A detailed description of existing recreational facilities 
within the project vicinity, and the public recreational facilities 
which are to be provided by the applicant at its sole cost or in 
cooperation with others no later than 3 years from the date of first 
commercial opertion of the proposed project and those recreation 
facilities planned for future development based on anticipated demand. 
When public recreation facilities are to be provided by other entities, 
the applicant and those entities should enter into an agreement on the 
type of facilities to be provided and the method of operation. Copies of 
agreements with cooperating entities are to be appended to the plan;
    (iii) A provision for a shoreline buffer zone that must be within 
the project boundary, above the normal maximum

[[Page 105]]

surface elevation of the project reservoir, and of sufficient width to 
allow public access to project lands and waters and to protect the 
scenic, public recreational, cultural, and other environmental values of 
the reseroir shoreline;
    (iv) Estimates of existing and future recreational use at the 
project, in daytime and overnight visitation (recreation days), with a 
description of the methodology used in developing these data;
    (v) A development schedule and cost estimates of the construction, 
operation, and maintenance of existing, initial, and future public 
recreational facilities, including a statement of the source and extent 
of financing for such facilities;
    (vi) A description of any measures or facilities recommended by the 
agencies consulted for the purpose of creating, preserving, or enhancing 
recreational opportunities at the proposed project, and for the purpose 
of ensuring the safety of the public in its use of project lands and 
waters, including an explanation of why the applicant has rejected any 
measures or facilities recommended by an agency; and
    (vii) A drawing or drawings, one of which describes the entire 
project area, clearly showing:
    (A) The location of project lands, and the types and number of 
existing recreational facilities and those proposed for initial 
development, including access roads and trails, and facilities for 
camping, picnicking, swimming, boat docking and launching, fishing and 
hunting, as well as provisions for sanitation and waste disposal;
    (B) The location of project lands, and the type and number of 
recreational facilities planned for future development;
    (C) The location of all project lands reserved for recreational uses 
other than those included in paragraphs (f)(7)(vii) (A) and (B) of this 
section; and
    (D) The project boundary (excluding surveying details) of all areas 
designated for recreational development, sufficiently referenced to the 
appropriate Exhibit G drawings to show that all lands reserved for 
existing and future public recreational development and the shoreline 
buffer zone are included within the project boundary. Recreational 
cottages, mobile homes and year-round residences for private use are not 
to be considered as public recreational facilities, and the lands on 
which these private facilities are to be developed are not to be 
included within the proposed project boundary.
    (8) Report on aesthetic resources. The applicant must provide a 
report that describes the aesthetic resources of the proposed project 
area, the expected impacts of the project on these resources, and the 
mitigation, enhancement or protection measures proposed. The report must 
be prepared following consultation with Federal, state, and local 
agencies having managerial responsibility for any part of the proposed 
project lands or lands abutting those lands. The report must contain:
    (i) A description of the aesthetic character of lands and waters 
directly and indirectly affected by the proposed project facilities;
    (ii) A description of the anticipated impacts on aesthetic resources 
from construction activity and related equipment and material, and the 
subsequent presence of proposed project facilities in the landscape;
    (iii) A description of mitigative measures proposed by the 
applicant, including architectural design, landscaping, and other 
reasonable treatment to be given project works to preserve and enhance 
aesthetic and related resources during construction and operation of 
proposed project facilities; and
    (iv) Maps, drawings and photographs sufficient to provide an 
understanding of the information required under this paragraph. Maps or 
drawings may be consolidated with other maps or drawings required in 
this exhibit and must conform to the specifications of Sec. 4.39.
    (9) Report on land use. The applicant must provide a report that 
describes the existing uses of the proposed project lands and adjacent 
property, and those land uses which would occur if the project is 
constructed. The report may reference the discussions of land uses in 
other sections of this exhibit. The report must be prepared following 
consultation with local and

[[Page 106]]

state zoning or land management authorities, and any Federal or state 
agency with managerial responsibility for the proposed project or 
abutting lands. The report must include:
    (i) A description of existing land use in the proposed project area, 
including identification of wetlands, floodlands, prime or unique 
farmland as designated by the Soil Conservation Service of the U.S. 
Department of Agriculture, the Special Area Management Plan of the 
Office of Coastal Zone Management, National Oceanic and Atmospheric 
Administration, and lands owned or subject to control by government 
agencies;
    (ii) A description of the proposed land uses within and abutting the 
project boundary that would occur as a result of development and 
operation of the project; and
    (iii) Aerial photographs, maps, drawings or other graphics 
sufficient to show the location, extent and nature of the land uses 
referred to in this section.
    (10) Alternative locations, designs, and energy sources. The 
applicant must provide an environment assessment of the following:
    (i) Alternative sites considered in arriving at the selection of the 
proposed project site;
    (ii) Alternative facility designs, processes, and operations that 
were considered and the reasons for their rejection;
    (iii) Alternative electrical energy sources, such as gas, oil, coal, 
and nuclear-fueled power plants, purchased power or diversity exchange, 
and other conventional and pumped-storage hydroelectric plants; and
    (iv) The overall consequences if the license application is denied.
    (11) List of literature. Exhibit E must include a list of all 
publications, reports, and other literature which were cited or 
otherwise utilized in the preparation of any part of the environmental 
report.
    (g) Exhibit F consists of general design drawings of the principal 
project works described under paragraph (b) of this section (Exhibit A) 
and supporting information used as the basis of design. If the Exhibit F 
submitted with the application is preliminary in nature, applicant must 
so state in the application. The drawings must conform to the 
specifications of Sec. 4.39.
    (1) The drawings must show all major project structures in 
sufficient detail to provide a full understanding of the project, 
including:
    (i) Plans (overhead view);
    (ii) Elevations (front view);
    (iii) Profiles (side view); and
    (iv) Sections.
    (2) The applicant may submit preliminary design drawings with the 
application. The final Exhibit F may be submitted during or after the 
licensing process and must show the precise plans and specifications for 
proposed structures. If the project is licensed on the basis of 
preliminary designs, the applicant must submit a final Exhibit F for 
Commission approval prior to commencement of any construction of the 
project.
    (3) Supporting design report. The applicant must furnish, at a 
minimum, the following supporting information to demonstrate that 
existing and proposed structures are safe and adequate to fulfill their 
stated functions and must submit such information in a separate report 
at the time the application is filed. The report must include:
    (i) An assessment of the suitability of the site and the reservoir 
rim stability based on geological and subsurface investigations, 
including investigations of soils and rock borings and tests for the 
evaluation of all foundations and construction materials sufficient to 
determine the location and type of dam structure suitable for the site;
    (ii) Copies of boring logs, geology reports and laboratory test 
reports;
    (iii) An identification of all borrow areas and quarry sites and an 
estimate of required quantities of suitable construction material;
    (iv) Stability and stress analyses for all major structures and 
critical abutment slopes under all probable loading conditions, 
including seismic and hydrostatic forces induced by water loads up to 
the Probable Maximum Flood as appropriate; and
    (v) The bases for determination of seismic loading and the Spillway 
Design Flood in sufficient detail to permit independent staff 
evaluation.

[[Page 107]]

    (4) The applicant must submit two copies of the supporting design 
report described in paragraph (g)(3) of this section at the time 
preliminary and final design drawings are submitted to the Commission 
for review. If the report contains preliminary drawings, it must be 
designated a ``Preliminary Supporting Design Report.''
    (h) Exhibit G is a map of the project that must conform to the 
specifications of Sec. 4.39. If more than one sheet is used, the sheets 
must be numbered consecutively, and each sheet must bear a small insert 
sketch showing the entire project and indicating that portion of the 
project depicted on that sheet. If at any time after the application is 
filed there is any change in the project boundary, the applicant must 
submit, within a reasonable period following the completion of project 
construction, a final Exhibit G showing the extent of such changes. The 
map must show:
    (1) Location of the project and principal features. The map must 
show the location of the project as a whole with reference to the 
affected stream or other body of water and, if possible, to a nearby 
town or any other permanent monuments or objects, such as roads, 
transmission lines or other structures, that can be noted on the map and 
recognized in the field. The map must also show the relative locations 
and physical interrelationships of the principal project works and other 
features described under paragraph (b) of this section (Exhibit A).
    (2) Project boundary. The map must show a project boundary enclosing 
all project works and other features described under paragraph (b) of 
this section (Exhibit A) that are to be licensed. If accurate survey 
information is not available at the time the license application is 
filed, the applicant must so state, and a tentative boundary may be 
submitted. The boundary must enclose only those lands necessary for 
operation and maintenance of the project and for other project purposes, 
such as recreation, shoreline control, or protection of environmental 
resources (see paragraph (f) of this section (Exhibit E)). Existing 
residential, commercial, or other structures may be included within the 
boundary only to the extent that underlying lands are needed for project 
purposes (e.g., for flowage, public recreation, shoreline control, or 
protection of environmental resources). If the boundary is on land 
covered by a public survey, ties must be shown on the map at sufficient 
points to permit accurate platting of the position of the boundary 
relative to the lines of the public land survey. If the lands are not 
covered by a public land survey, the best available legal description of 
the position of the boundary must be provided, including distances and 
directions from fixed monuments or physical features. The boundary must 
be described as follows:
    (i) Impoundments. (A) The boundary around a project impoundment must 
be described by one of the following:
    (1) Contour lines, including the contour elevation (preferred 
method);
    (2) Specified courses and distances (metes and bounds);
    (3) If the project lands are covered by a public land survey, lines 
upon or parallel to the lines of the survey; or
    (4) Any combination of the above methods.
    (B) The boundary must be located no more than 200 feet (horizontal 
measurement) from the exterior margin of the reservoir, defined by the 
normal maximum surface elevation, except where deviations may be 
necessary in describing the boundary according to the above methods or 
where additional lands are necessary for project purposes, such as 
public recreation, shoreline control, or protection of environmental 
resources.
    (ii) Continuous features. The boundary around linear (continuous) 
project features such as access roads, transmission lines, and conduits 
may be described by specified distances from center lines or offset 
lines of survey. The width of such corridors must not exceed 200 feet 
unless good cause is shown for a greater width. Several sections of a 
continuous feature may be shown on a single sheet with information 
showing the sequence of contiguous sections.
    (iii) Noncontinuous features. (A) The boundary around noncontinuous 
project works such as dams, spillways, and powerhouses must be described 
by one of the following:
    (1) Contour lines;

[[Page 108]]

    (2) Specified courses and distances;
    (3) If the project lands are covered by a public land survey, lines 
upon or parallel to the lines of the survey; or
    (4) Any combination of the above methods.
    (B) The boundary must enclose only those lands that are necessary 
for safe and efficient operation and maintenance of the project or for 
other specified project purposes, such as public recreation or 
protection of environmental resources.
    (3) Federal lands. Any public lands and reservations of the United 
States (Federal lands) [see 16 U.S.C. 796 (1) and (2)] that are within 
the project boundary, such as lands administered by the U.S. Forest 
Service, Bureau of Land Management, or National Park Service, or Indian 
tribal lands, and the boundaries of those Federal lands, must be 
identified as such on the map by:
    (i) Legal subdivisions of a public land survey of the affected area 
(a protraction of identified township and section lines is sufficient 
for this purpose); and
    (ii) The Federal agency, identified by symbol or legend, that 
maintains or manages each identified subdivision of the public land 
survey within the project boundary; or
    (iii) In the absence of a public land survey, the location of the 
Federal lands according to the distances and directions from fixed 
monuments or physical features. When a Federal survey monument or a 
Federal bench mark will be destroyed or rendered unusable by the 
construction of project works, at least two permanent, marked witness 
monuments or bench marks must be established at accessible points. The 
maps show the location (and elevation, for bench marks) of the survey 
monument or bench mark which will be destroyed or rendered unusable, as 
well as of the witness monuments or bench marks. Connecting courses and 
distances from the witness monuments or bench marks to the original must 
also be shown.
    (4) Non-Federal lands. For those lands within the project boundary 
not identified under paragraph (h)(3) of this section, the map must 
identify by legal subdivision:
    (i) Lands owned in fee by the applicant and lands that the applicant 
plans to acquire in fee; and
    (ii) Lands over which the applicant has acquired or plans to acquire 
rights to occupancy and use other than fee title, including rights 
acquired to be required by easement or lease.

[Order 184, 46 FR 55936, Nov. 13, 1981; 48 FR 4459, Feb. 1, 1983, as 
amended by Order 413, 50 FR 11684, Mar. 25, 1985; Order 464, 52 FR 5449, 
Feb. 23, 1987; Order 540, 57 FR 21737, May 22, 1992]



   Subpart F--Application for License for Major Project--Existing Dam

    Authority: Federal Power Act, as amended (16 U.S.C. 792-828c); 
Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2601-2645); 
Department of Energy Organization Act (42 U.S.C. 7101-7352); E.O. 12009, 
42 FR 46267; Pub. L. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.).



Sec. 4.50  Applicability.

    (a) Applicability. (1) Except as provided in paragraph (a)(2) of 
this section, the provisions of this subpart apply to any application 
for either an initial license or new license for a major project--
existing dam that is proposed to have a total installed capacity of more 
than 5 megawatts.
    (2) This subpart does not apply to any major project--existing dam 
(see Sec. 4.40) that is proposed to entail or include:
    (i) Any repair, modification or reconstruction of an existing dam 
that would result in a significant change in the normal maximum surface 
area or normal maximum surface elevation of an existing impoundment; or
    (ii) Any new development or change in project operation that would 
result in a significant environmental impact.
    (3) An applicant for license for any major project--existing dam 
that would have a total installed capacity of 5 megawatts or less must 
submit application under subpart G (Secs. 4.60 and 4.61).
    (b) Guidance from Commission staff. A prospective applicant for a 
major license--existing dam may seek advice from the Commission staff 
regarding the applicability of these sections to its project (see 
Sec. 4.32(h)), including the determinations whether any proposed repair 
or reconstruction of an existing

[[Page 109]]

dam would result in a significant change in the normal maximum surface 
area or the normal maximum surface elevation of an existing impoundment, 
or whether any proposed new development or change in project operation 
would result in a significant environmental impact.

[Order 59, 44 FR 67651, Nov. 27, 1979, as amended by Order 184, 46 FR 
55942, Nov. 13, 1981; Order 413, 50 FR 11684, Mar. 25, 1985; Order 499, 
53 FR 27002, July 18, 1988]



Sec. 4.51  Contents of application.

    An application for license under this subpart must contain the 
following information in the form specified. As provided in paragraph 
(f) of this section, the appropriate Federal, state, and local resource 
agencies must be given the opportunity to comment on the proposed 
project, prior to filing of the application for license for major 
project--existing dam. Information from the consultation process must be 
included in this Exhibit E, as appropriate.
    (a) Initial statement.

             Before the Federal Energy Regulatory Commission

         Application for License for Major Project--Existing Dam

    (1) (Name of applicant) applies to the Federal Energy Regulatory 
Commission for a (license or new license, as appropriate) for the (name 
of project) water power project, as described in the attached exhibits. 
(Specify any previous FERC project number designation.)
    (2) The location of the project is:

State or territory:_____________________________________________________
County:_________________________________________________________________
Township or nearby town:________________________________________________
Stream or other body of water:__________________________________________

    (3) The exact name and business address of the applicant are:

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

    The exact name and business address of each person authorized to act 
as agent for the applicant in this application are:

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

    (4) The applicant is a [citizen of the United States, association of 
citizens of the United States, domestic corporation, municipality, or 
state, as appropriate] and (is/is not) claiming preference under section 
7(a) of the Federal Power Act. See 16 U.S.C. 796.
    (5)(i) The statutory or regulatory requirements of the state(s) in 
which the project would be located that affect the project as proposed, 
with respect to bed and banks and to the appropriation, diversion, and 
use of water for power purposes, and with respect to the right to engage 
in the business of developing, transmitting, and distributing power and 
in any other business necessary to accomplish the purposes of the 
license under the Federal Power Act, are: [Provide citation and brief 
identification of the nature of each requirement; if the applicant is a 
municipality, the applicant must submit copies of applicable state and 
local laws or a municipal charter, or, if such laws or documents are not 
clear, other appropriate legal authority, evidencing that the 
municipality is competent under such laws to engage in the business of 
developing, transmitting, utilizing, or distributing power.]
    (ii) The steps which the applicant has taken or plans to take to 
comply with each of the laws cited above are: (provide brief description 
for each law).
    (6) The applicant must provide the name and address of the owner of 
any existing project facilities. If the dam is federally owned or 
operated, provide the name of the agency.

    (b) Exhibit A is a description of the project. This exhibit need not 
include information on project works maintained and operated by the U.S. 
Army Corps of Engineers, the Bureau of Reclamation, or any other 
department or agency of the United States, except for any project works 
that are proposed to be altered or modified. If the project includes 
more than one dam with associated facilities, each dam and the 
associated component parts must be described together as a discrete 
development. The description for each development must contain:
    (1) The physical composition, dimensions, and general configuration 
of any dams, spillways, penstocks, powerhouses, tailraces, or other 
structures, whether existing or proposed, to be included as part of the 
project;
    (2) The normal maximum surface area and normal maximum surface 
elevation (mean sea level), gross storage capacity, and usable storage 
capacity of any impoundments to be included as part of the project;
    (3) The number, type, and rated capacity of any turbines or 
generators,

[[Page 110]]

whether existing or proposed, to be included as part of the project;
    (4) The number, length, voltage, and interconnections of any primary 
transmission lines, whether existing or proposed, to be included as part 
of the project (see 16 U.S.C. 796(11));
    (5) The specifications of any additional mechanical, electrical, and 
transmission equipment appurtenant to the project; and
    (6) All lands of the United States that are enclosed within the 
project boundary described under paragraph (h) of this section (Exhibit 
G), identified and tabulated by legal subdivisions of a public land 
survey of the affected area or, in the absence of a public land survey, 
by the best available legal description. The tabulation must show the 
total acreage of the lands of the United States within the project 
boundary.
    (c) Exhibit B is a statement of project operation and resource 
utilization. If the project includes more than one dam with associated 
facilities, the information must be provided separately for each such 
discrete development. The exhibit must contain:
    (1) A statement whether operation of the powerplant will be manual 
or automatic, an estimate of the annual plant factor, and a statement of 
how the project will be operated during adverse, mean, and high water 
years;
    (2) An estimate of the dependable capacity and average annual energy 
production in kilowatt-hours (or a mechanical equivalent), supported by 
the following data:
    (i) The minimum, mean, and maximum recorded flows in cubic feet per 
second of the stream or other body of water at the powerplant intake or 
point of diversion, with a specification of any adjustments made for 
evaporation, leakage, minimum flow releases (including duration of 
releases), or other reductions in available flow; a flow duration curve 
indicating the period of record and the gauging stations used in 
deriving the curve; and a specification of the period of critical 
streamflow used to determine the dependable capacity;
    (ii) An area-capacity curve showing the gross storage capacity and 
usable storage capacity of the impoundment, with a rule curve showing 
the proposed operation of the impoundment and how the usable storage 
capacity is to be utilized;
    (iii) The estimated hydraulic capacity of the powerplant (maximum 
flow through the powerplant) in cubic feet per second;
    (iv) A tailwater rating curve; and
    (v) A curve showing powerplant capability versus head and specifying 
maximum, normal, and minimum heads;
    (3) A statement, with load curves and tabular data, if necessary, of 
the manner in which the power generated at the project is to be 
utilized, including the amount of power to be used on-site, if any, the 
amount of power to be sold, and the identity of any proposed purchasers; 
and
    (4) A statement of the applicant's plans, if any, for future 
development of the project or of any other existing or proposed water 
power project on the stream or other body of water, indicating the 
approximate location and estimated installed capacity of the proposed 
developments.
    (d) Exhibit C is a construction history and proposed construction 
schedule for the project. The construction history and schedules must 
contain:
    (1) If the application is for an initial license, a tabulated 
chronology of construction for the existing projects structures and 
facilities described under paragraph (b) of this section (Exhibit A), 
specifying for each structure or facility, to the extent possible, the 
actual or approximate dates (approximate dates must be identified as 
such) of:
    (i) Commencement and completion of construction or installation;
    (ii) Commencement of commercial operation; and
    (iii) Any additions or modifications other than routine maintenance; 
and
    (2) If any new development is proposed, a proposed schedule 
describing the necessary work and specifying the intervals following 
issuance of a license when the work would be commenced and completed.
    (e) Exhibit D is a statement of costs and financing. The statement 
must contain:

[[Page 111]]

    (1) If the application is for an initial license, a tabulated 
statement providing the actual or approximate original cost (approximate 
costs must be identified as such) of:
    (i) Any land or water right necessary to the existing project; and
    (ii) Each existing structure and facility described under paragraph 
(b) of this section (Exhibit A).
    (2) If the applicant is a licensee applying for a new license, and 
is not a municipality or a state, an estimate of the amount which would 
be payable if the project were to be taken over pursuant to section 14 
of the Federal Power Act upon expiration of the license in effect [see 
16 U.S.C. 807], including:
    (i) Fair value;
    (ii) Net investment; and
    (iii) Severance damages.
    (3) If the application includes proposals for any new development, a 
statement of estimated costs, including:
    (i) The cost of any land or water rights necessary to the new 
development; and
    (ii) The cost of the new development work, with a specification of:
    (A) Total cost of each major item;
    (B) Indirect construction costs such as costs of construction 
equipment, camps, and commissaries;
    (C) Interest during construction; and
    (D) Overhead, construction, legal expenses, taxes, administrative 
and general expenses, and contingencies.
    (4) A statement of the estimated average annual cost of the total 
project as proposed, specifying any projected changes in the costs over 
the estimated financing or licensing period if the applicant takes such 
changes into account, including:
    (i) Cost of capital (equity and debt);
    (ii) Local, state, and Federal taxes;
    (iii) Depreciation or amortization, and
    (iv) Operation and maintenance expenses, including interim 
replacements, insurance, administrative and general expenses, and 
contingencies.
    (5) A statement of the estimated annual value of project power, 
based on a showing of the contract price for sale of power or the 
estimated average annual cost of obtaining an equivalent amount of power 
(capacity and energy) from the lowest cost alternative source, 
specifying any projected changes in the cost of power from that source 
over the estimated financing or licensing period if the applicant takes 
such changes into account.
    (6) A statement specifying the sources and extent of financing and 
annual revenues available to the applicant to meet the costs identified 
in paragraphs (e) (3) and (4) of this section.
    (f) Exhibit E is an Environmental Report. Information provided in 
the report must be organized and referenced according to the itemized 
subparagraphs below. See Sec. 4.38 for consultation requirements. The 
Environmental Report must contain the following information, 
commensurate with the scope of the proposed project:
    (1) General description of the locale. The applicant must provide a 
general description of the environment of the project and its immediate 
vicinity. The description must include general information concerning 
climate, topography, wetlands, vegetative cover, land development, 
population size and density, the presence of any floodplain and the 
occurrence of flood events in the vicinity of the project, and any other 
factors important to an understanding of the setting.
    (2) Report on water use and quality. The report must discuss the 
consumptive use of project waters and the impact of the project on water 
quality. The report must be prepared in consultation with the state and 
Federal agencies with responsibility for management of water quality in 
the affected stream or other body of water. Consultation must be 
documented by appending to the report a letter from each agency 
consulted that indicates the nature, extent, and results of the 
consultation. The report must include:
    (i) A description (including specified volume over time) of existing 
and proposed uses of project waters for irrigation, domestic water 
supply, steam-electric plant, industrial, and other consumptive 
purposes;
    (ii) A description of existing water quality in the project 
impoundment and downstream water affected by the

[[Page 112]]

project and the applicable water quality standards and stream segment 
classifications;
    (iii) A description of any minimum flow releases specifying the rate 
of flow in cubic feet per second (cfs) and duration, changes in the 
design of project works or in project operation, or other measures 
recommended by the agencies consulted for the purposes of protecting or 
improving water quality, including measures to minimize the short-term 
impacts on water quality of any proposed new development of project 
works (for any dredging or filling, refer to 40 CFR part 230 and 33 CFR 
320.3(f) and 323.3(e)) \1\;
---------------------------------------------------------------------------

    \1\ 33 CFR part 323 was revised at 47 FR 31810, July 22, 1982, and 
Sec. 323.3(e) no longer exists.
---------------------------------------------------------------------------

    (iv) A statement of the existing measures to be continued and new 
measures proposed by the applicant for the purpose of protecting or 
improving water quality, including an explanation of why the applicant 
has rejected any measures recommended by an agency and described under 
paragraph (f)(2)(iii) of this section.
    (v) A description of the continuing impact on water quality of 
continued operation of the project and the incremental impact of 
proposed new development of project works or changes in project 
operation; and
    (3) Report on fish, wildlife, and botanical resources. The report 
must discuss fish, wildlife, and botanical resources in the vicinity of 
the project and the impact of the project on those resources. The report 
must be prepared in consultation with any state agency with 
responsibility for fish, wildlife, and botanical resources, the U.S. 
Fish and Wildlife Service, the National Marine Fisheries Service (if the 
project may affect anadromous fish resources subject to that agency's 
jurisdiction), and any other state or Federal agency with managerial 
authority over any part of the project lands. Consultation must be 
documented by appending to the report a letter from each agency 
consulted that indicates the nature, extent, and results of the 
consultation. The report must include:
    (i) A description of the fish, wildlife, and botanical resources of 
the project and its vicinity, and of downstream areas affected by the 
project, including identification of any species listed as threatened or 
endangered by the U.S. Fish and Wildlife Service (See 50 CFR 17.11 and 
17.12);
    (ii) A description of any measures or facilities recommended by the 
agencies consulted for the mitigation of impacts on fish, wildlife, and 
botanical resources, or for the protection or improvement of those 
resources;
    (iii) A statement of any existing measures or facilities to be 
continued or maintained and any measures or facilities proposed by the 
applicant for the mitigation of impacts on fish, wildlife, and botanical 
resources, or for the protection or improvement of such resources, 
including an explanation of why the applicant has rejected any measures 
or facilities recommended by an agency and described under paragraph 
(f)(3)(ii) of this section.
    (iv) A description of any anticipated continuing impact on fish, 
wildlife, and botanical resources of continued operation of the project, 
and the incremental impact of proposed new development of project works 
or changes in project operation; and
    (v) The following materials and information regarding the measures 
and facilities identified under paragraph (f)(3)(iii) of this section:
    (A) Functional design drawings of any fish passage and collection 
facilities, indicating whether the facilities depicted are existing or 
proposed (these drawings must conform to the specifications of Sec. 4.39 
regarding dimensions of full-sized prints, scale, and legibility);
    (B) A description of operation and maintenance procedures for any 
existing or proposed measures or facilities;
    (C) An implementation or construction schedule for any proposed 
measures or facilities, showing the intervals following issuance of a 
license when implementation of the measures or construction of the 
facilities would be commenced and completed;
    (D) An estimate of the costs of construction, operation, and 
maintenance, of any proposed facilities, and of implementation of any 
proposed measures, including a statement of the sources and extent of 
financing; and

[[Page 113]]

    (E) A map or drawing that conforms to the size, scale, and 
legibility requirements of Sec. 4.39 showing by the use of shading, 
cross-hatching, or other symbols the identity and location of any 
measures or facilities, and indicating whether each measure or facility 
is existing or proposed (the map or drawings in this exhibit may be 
consolidated).
    (4) Report on historical and archeological resources. The report 
must discuss the historical and archeological resources in the project 
area and the impact of the project on those resources. The report must 
be prepared in consultation with the State Historic Preservation Officer 
and the National Park Service. Consultation must be documented by 
appending to the report a letter from each agency consulted that 
indicates the nature, extent, and results of the consultation. The 
report must contain:
    (i) Identification of any sites either listed or determined to be 
eligible for inclusion in the National Register of Historic Places that 
are located in the project area, or that would be affected by operation 
of the project or by new development of project facilities (including 
facilities proposed in this exhibit);
    (ii) A description of any measures recommended by the agencies 
consulted for the purpose of locating, identifying, and salvaging 
historical or archaeological resources that would be affected by 
operation of the project, or by new development of project facilities 
(including facilities proposed in this exhibit), together with a 
statement of what measures the applicant proposes to implement and an 
explanation of why the applicant rejects any measures recommended by an 
agency.
    (iii) The following materials and information regarding the survey 
and salvage activities described under paragraph (f)(4)(ii) of this 
section:
    (A) A schedule for the activities, showing the intervals following 
issuance of a license when the activities would be commenced and 
completed; and
    (B) An estimate of the costs of the activities, including a 
statement of the sources and extent of financing.
    (5) Report on recreational resources. The report must discuss 
existing and proposed recreational facilities and opportunities at the 
project. The report must be prepared in consultation with local, state, 
and regional recreation agencies and planning commissions, the National 
Park Service, and any other state or Federal agency with managerial 
authority over any part of the project lands. Consultation must be 
documented by appending to the report a letter from each agency 
consulted indicating the nature, extent, and results of the 
consultation. The report must contain:
    (i) A description of any existing recreational facilities at the 
project, indicating whether the facilities are available for public use;
    (ii) An estimate of existing and potential recreational use of the 
project area, in daytime and overnight visits;
    (iii) A description of any measures or facilities recommended by the 
agencies consulted for the purpose of creating, preserving, or enhancing 
recreational opportunities at the project and in its vicinity (including 
opportunities for the handicapped), and for the purpose of ensuring the 
safety of the public in its use of project lands and waters;
    (iv) A statement of the existing measures or facilities to be 
continued or maintained and the new measures or facilities proposed by 
the applicant for the purpose of creating, preserving, or enhancing 
recreational opportunities at the project and in its vicinity, and for 
the purpose of ensuring the safety of the public in its use of project 
lands and waters, including an explanation of why the applicant has 
rejected any measures or facilities recommended by an agency and 
described under paragraph (f)(5)(iii) of this section; and
    (v) The following materials and information regarding the measures 
and facilities identified under paragraphs (f)(5) (i) and (iv) of this 
section:
    (A) Identification of the entities responsible for implementing, 
constructing, operating, or maintaining any existing or proposed 
measures or facilities;
    (B) A schedule showing the intervals following issuance of a license 
at which implementation of the measures or

[[Page 114]]

construction of the facilities would be commenced and completed;
    (C) An estimate of the costs of construction, operation, and 
maintenance of any proposed facilities, including a statement of the 
sources and extent of financing;
    (D) A map or drawing that conforms to the size, scale, and 
legibility requirements of Sec. 4.39 showing by the use of shading, 
cross-hatching, or other symbols the identity and location of any 
facilities, and indicating whether each facility is existing or proposed 
(the maps or drawings in this exhibit may be consolidated); and
    (vi) A description of any areas within or in the vicinity of the 
proposed project boundary that are included in, or have been designated 
for study for inclusion in, the National Wild and Scenic Rivers System, 
or that have been designated as wilderness area, recommended for such 
designation, or designated as a wilderness study area under the 
Wilderness Act.
    (6) Report on land management and aesthetics. The report must 
discuss the management of land within the proposed project boundary, 
including wetlands and floodplains, and the protection of the 
recreational and scenic values of the project. The report must be 
prepared following consultation with local and state zoning and land 
management authorities and any Federal or state agency with managerial 
authority over any part of the project lands. Consultation must be 
documented by appending to the report a letter from each agency 
consulted indicating the nature, extent, and results of the 
consultation. The report must contain:
    (i) A description of existing development and use of project lands 
and all other lands abutting the project impoundment;
    (ii) A description of the measures proposed by the applicant to 
ensure that any proposed project works, rights-of-way, access roads, and 
other topographic alterations blend, to the extent possible, with the 
surrounding environment; (see, e.g., 44 F.P.C. 1496, et seq.);
    (iii) A description of wetlands or floodplains within, or adjacent 
to, the project boundary, any short-term or long-term impacts of the 
project on those wetlands or floodplains, and any mitigative measures in 
the construction or operation of the project that minimize any adverse 
impacts on the wetlands or floodplains;
    (iv) A statement, including an analysis of costs and other 
constraints, of the applicant's ability to provide a buffer zone around 
all or any part of the impoundment, for the purpose of ensuring public 
access to project lands and waters and protecting the recreational and 
aesthetic values of the impoundment and its shoreline;
    (v) A description of the applicant's policy, if any, with regard to 
permitting development of piers, docks, boat landings, bulkheads, and 
other shoreline facilities on project lands and waters; and
    (vi) Maps or drawings that conform to the size, scale and legibility 
requirements of Sec. 4.39, or photographs, sufficient to show the 
location and nature of the measures proposed under paragraph (f)(6)(ii) 
of this section (maps or drawings in this exhibit may be consolidated).
    (7) List of literature. The report must include a list of all 
publications, reports, and other literature which were cited or 
otherwise utilized in the preparation of any part of the environmental 
report.
    (g) Exhibit F consists of general design drawings of the principal 
project works described under paragraph (b) of this section (Exhibit A) 
and supporting information used to demonstrate that existing project 
structures are safe and adequate to fulfill their stated functions.
    (1) The drawings must show all major project structures in 
sufficient detail to provide a full understanding of the project, 
including:
    (i) Plans (overhead view);
    (ii) Elevations (front view); and
    (iii) Sections (side view).
    (2) Supporting design report. The applicant must furnish, at a 
minimum, the following supporting information to demonstrate that 
existing structures are safe and adequate to fulfill their stated 
functions, and must submit such infomation in a separate report at the 
time the application is filed. The report must include:

[[Page 115]]

    (i) A description of the physical condition or state of maintenance 
and repair of any existing and proposed structures or equipment; and
    (ii) Information relating to composition and competency of 
foundations and other structures, gradation of filter and riprap 
material, design strength and ultimate strength of concrete and steel, 
stress and stability analysis, spillway rating curves, water levels, and 
other appropriate data.
    (3) The applicant must submit two copies of the supporting design 
report as described in paragraph (g)(2) of this section at the time 
general design drawings are submitted to the Commission for review.
    (h) Exhibit G is a map of the project. The map must conform to the 
specifications of Sec. 4.39. If more than one sheet is used, the sheets 
must be numbered consecutively and each sheet must bear a small inset 
sketch showing the entire project (or development) and indicating the 
portion depicted on the sheet. The map must show:
    (1) Location of the project and principal features. The map must 
show the location of the project as a whole with reference to the 
affected stream or other body of water and, if possible, to a nearby 
town or any permanent monuments or objects, such as roads, transmission 
lines or other structures, that can be noted on the map and recognized 
in the field. The map must also show the relative locations and physical 
interrelationships of the principal project works and other features 
described under paragraph (b) of this section (Exhibit A).
    (2) Project boundary. The map must show a project boundary enclosing 
all of the principal project works and other features described under 
paragraph (b) of this section (Exhibit A) that are to be licensed. If 
accurate survey information is not available at the time the license 
application is filed, the applicant must so state, and a tentative 
boundary may be submitted. The boundary must enclose only those lands 
necessary for operation and maintenance of the project and for other 
project purposes, such as recreation, shoreline control, or protection 
of environmental resources (see paragraph (f) of this section (Exhibit 
E)). Existing residential, commercial, or other structures may be 
included within the boundary only to the extent that underlying lands 
are needed for project purposes (e.g., for flowage, public recreation, 
shoreline control, or protection of environmental resources). If the 
boundary is on land covered by a public land survey, ties must be shown 
on the map at sufficient points to permit accurate platting of the 
position of the boundary relative to the lines of the public land 
survey. If the lands are not covered by a public land survey, the best 
available legal description of the position of the boundary must be 
provided, including distances and directions from fixed monuments or 
physical features. The boundary must be described as follows:
    (i) Impoundments. (A) The boundary around a project impoundment may 
be described by any of the following:
    (1) Contour lines, including the contour elevation (preferred 
method);
    (2) Specified courses and distances (metes and bounds);
    (3) If the project lands are covered by a public land survey, lines 
upon or parallel to the lines of the survey; or
    (4) Any combination of the above methods.
    (B) The boundary must be located no more than 200 feet (horizontal 
measurement) from the exterior margin of the reservoir, defined by the 
normal maximum surface elevation, except where deviations may be 
necessary in describing the boundary according to the above methods, or 
where additional lands are necessary for project purposes, such as 
public recreation, shoreline control, or protection of environmental 
resources.
    (ii) Continuous features. The boundary around linear (continuous) 
project features such as access roads, transmission lines, and conduits 
may be described by specified distances from center lines or offset 
lines of survey. The width of such corridors must not exceed 200 feet, 
unless good cause is shown for a greater width. Several sections of a 
continuous feature may be shown on a single sheet, with information 
showing the sequence of contiguous sections.
    (iii) Noncontinuous features. (A) the boundary around noncontinuous

[[Page 116]]

project works such as dams, spillways, and powerhouses may be described 
by:
    (1) Contour lines;
    (2) Specified courses and distances;
    (3) If the project lands are covered by a public land survey, lines 
upon or parallel to the lines of the survey; or
    (4) Any combination of the above methods.
    (B) The boundary must enclose only those lands that are necessary 
for safe and efficient operation and maintenance of the project, or for 
other specified project purposes, such as public recreation or 
protection of environmental resources.
    (3) Federal lands. Any public lands and reservations of the United 
States (see 16 U.S.C. 796(1) and (2)) (Federal lands) that are within 
the project boundary, e.g., lands adminstered by the U.S. Forest 
Service, Bureau of Land Management, National Park Service, or Indian 
tribal lands, and the boundaries of those Federal lands, must be 
identified on the map:
    (i) By legal subdivisions of a public land survey of the affected 
area (a protraction of identified township and section lines is 
sufficient for this purpose);
    (ii) By the Federal agency, identified by symbol or legend if 
desired, that maintains or manages each identified subdivision of the 
public land survey within the project boundary; and
    (iii) In the absence of a public land survey, by the location of the 
Federal lands according to the distances and directions from fixed 
monuments or physical features. When a Federal survey monument or a 
Federal bench mark will be destroyed or rendered unusable by the 
construction of project works, at least two permanent, marked, witness 
monuments or bench marks must be established at accessible points. The 
maps must show the location (and elevation, for bench marks) of the 
survey monument or bench mark which will be destroyed or rendered 
unusable, as well as of the witness monuments or bench marks. Connecting 
courses and distances from the witness monuments or bench marks to the 
original must also be shown.
    (4) Non-Federal lands. For those lands within the project boundary 
not identified under paragraph (h)(3) of this section, the map must 
identify by legal subdivision:
    (i) Lands owned in fee by the applicant and lands that the applicant 
plans to acquire in fee; and
    (ii) Lands over which the applicant has acquired or plans to acquire 
rights to occupancy and use other than fee title, including rights 
acquired or to be required by easement or lease.

[Order 141, 12 FR 8485, Dec. 19, 1947, as amended by Order 123, 46 FR 
9029, Jan. 28, 1981; Order 183, 46 FR 55251, Nov. 9, 1981; Order 184, 46 
FR 55942, Nov. 13, 1981; Order 413, 50 FR 11684, Mar. 25, 1985; Order 
464, 52 FR 5449, Feb. 23, 1987; Order 540, 57 FR 21737, May 22, 1992]



 Subpart G--Application for License for Minor Water Power Projects and 
             Major Water Power Projects 5 Megawatts or Less



Sec. 4.60  Applicability and notice to agencies.

    (a) Applicability. The provisions of this subpart apply to any 
application for an initial license or a new license for:
    (1) A minor water power project, as defined in Sec. 4.30(b)(17);
    (2) Any major project--existing dam, as defined in Sec. 4.30(b)(16), 
that has a total installed capacity of 5 MW or less; or
    (3) Any major unconstructed project or major modified project, as 
defined in Sec. 4.30 (b) (15) and (14) respectively, that has a total 
installed capacity of 5 MW or less.
    (b) Notice to agencies. The Commission will supply interested 
Federal, state, and local agencies with notice of any application for 
license for a water power project 5 MW or less and request comment on 
the application. Copies of the application will be available for 
inspection at the Commission's Division of Public Information. The 
applicant shall also furnish copies of the filed application to any 
Federal, state, or local agency that so requests.
    (c) Unless an applicant for a license for a minor water power 
project requests in its application that the Commission apply the 
following provisions of Part I of the Federal Power Act when it issues a 
minor license for a

[[Page 117]]

project, the Commission, unless it determines it would not be in the 
public interest to do so, will waive:
    (1) Section 4(b), insofar as it requires a licensee to file a 
statement showing the actual legitimate costs of construction of a 
project;
    (2) Section 4(e), insofar as it relates to approval by the Chief of 
Engineers and the Secretary of the Army of plans affecting navigation;
    (3) Section 6, insofar as it relates to the acceptance and 
expression in the license of terms and conditions of the Federal Power 
Act that are waived in the licensing order;
    (4) Section 10(c), insofar as it relates to a licensee's maintenance 
of depreciation reserves;
    (5) Sections 10(d) and 10(f);
    (6) Section 14, with the exception of the right of the United States 
or any state or municipality to take over, maintain, and operate a 
project through condemnation proceedings; and
    (7) Sections 15, 16, 19, 20 and 22.

[Order 413, 50 FR 11685, Mar. 25, 1985, as amended by Order 513, 54 FR 
23806, June 2, 1989]



Sec. 4.61  Contents of application.

    (a) General instructions. (1) Entry upon land. No work may be 
started on any proposed project works until the applicant receives a 
signed license from the Commission. Acceptance of an application does 
not authorize entry upon public lands or reservations of the United 
States for any purpose. The applicant should determine whether any 
additional Federal, state, or local permits are required.
    (2) Exhibits F and G must be submitted on separate drawings. 
Drawings for Exhibits F and G must have identifying title blocks and 
bear the following certification: ``This drawing is a part of the 
application for license made by the undersigned this ------ day of -----
-----, 19----.''
    (3) Each application for a license for a water power project 5 
megawatts or less must include the information requested in the initial 
statement and lettered exhibits described by paragraphs (b) through (f) 
of this section, and must be provided in the form specified. The 
Commission reserves the right to require additional information, or 
another filing procedure, if data provided indicate such action to be 
appropriate.
    (b) Initial statement.

             Before the Federal Energy Regulatory Commission

Application for License for a [Minor Water Power Project, or Major Water 
           Power Project, 5 Megawatts or Less, as Appropriate]

    (1) ---------- (Name of Applicant) applies to the Federal Energy 
Regulatory Commission for ---------- (license or new license, as 
appropriate) for the ---------- (name of project) water power project, 
as described hereinafter. (Specify any previous FERC project number 
designation.)
    (2) The location of the project is:
State or territory:_____________________________________________________
County:_________________________________________________________________
Township or nearby town:________________________________________________
Stream or other body of water:__________________________________________
    (3) The exact name, address, and telephone number of the applicant 
are:

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
    (4) The exact name, address, and telephone number of each person 
authorized to act as agent for the applicant in this application, if 
applicable, are:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
    (5) The applicant is a ------ [citizen of the United States, 
association of citizens of the United States, domestic corporation, 
municipality, or State, as appropriate] and (is/is not) claiming 
perference under section 7(a) of the Federal Power Act. See 16 U.S.C. 
796.
    (6)(i) The statutory or regulatory requirements of the state(s) in 
which the project would be located that affect the project as proposed 
with respect to bed and banks and the appropriation, diversion, and use 
of water for power purposes, and with respect to the right to engage in 
the business of developing, transmitting, and distributing power and in 
any other business necessary to accomplish the purposes of the license 
under the Federal Power Act, are: [provide citation and brief 
identification of the nature of each requirement; if the applicant is a 
municipality, the applicant must submit copies of applicable state or 
local laws or a municipal charter or, if such laws or documents are not 
clear, any other appropriate legal authority, evidencing that the 
municipality is competent under such laws to engage in the business of 
developing, transmitting, utilizing, or distributing power.]
    (ii) The steps which the applicant has taken or plans to take to 
comply with each

[[Page 118]]

of the laws cited above are: [provide brief description for each 
requirement]
    (7) Brief project description
    (i) Proposed installed generating capacity ------ MW.
    (ii) Check appropriate box:
        existing dam    [ballot]  unconstructed dam  [ballot]
        existing dam, major modified project (see Sec. 4.30(b)(14))
    (8) Lands of the United States affected (shown on Exhibit G):

 
                                                (Name)           (Acres)
 
(i) National Forest..................  ........................  .......
(ii) Indian Reservation..............  ........................  .......
(iii) Public Lands Under Jurisdiction  ........................  .......
 of.
(iv) Other...........................  ........................  .......
(v) Total U.S. Lands.................  ........................  .......
(vi) Check appropriate box:
 

    [ballot]  Surveyed land    [ballot]  Unsurveyed land
    (9) Construction of the project is planned to start within ---- 
months, and is planned to be completed within ---- months, from the date 
of issuance of license.

    (c) Exhibit A is a description of the project and the proposed mode 
of operation.
    (1) The exhibit must include, in tabular form if possible, as 
appropriate:
    (i) The number of generating units, including auxiliary units, the 
capacity of each unit, and provisions, if any, for future units;
    (ii) The type of hydraulic turbine(s);
    (iii) A description of how the plant is to be operated, manual or 
automatic, and whether the plant is to be used for peaking;
    (iv) The estimated average annual generation in kilowatt-hours or 
mechanical energy equivalent;
    (v) The estimated average head on the plant;
    (vi) The reservoir surface area in acres and, if known, the net and 
gross storage capacity;
    (vii) The estimated hydraulic capacity of the plant (flow through 
the plant) in cubic feet per second and estimated average flow of the 
stream or water body at the plant or point of diversion; for projects 
with installed capacity of more than 1.5 megawatts, a flow duration 
curve and a description of the drainage area for the project site must 
be provided;
    (viii) Sizes, capacities, and construction materials, as 
appropriate, of pipelines, ditches, flumes, canals, intake facilities, 
powerhouses, dams, transmission lines, and other appurtenances; and
    (ix) The estimated cost of the project.
    (2) State the purposes of project (for example, use of power 
output).
    (d) Exhibit E is an Environmental Report.
    (1) For major unconstructed and major modified projects 5 MW or 
less. Any application must contain an Exhibit E conforming with the data 
and consultation requirements of Sec. 4.41(f) of this chapter, if the 
application is for license for a water power project which has or is 
proposed to have a total installed generating capacity greater than 1.5 
MW but not greater than 5 MW, and which:
    (i) Would use the water power potential of a dam and impoundment 
which, at the time of application, has not been constructed (see 
Sec. 4.30(b)(15)); or
    (ii) Involves any repair, modification or reconstruction of an 
existing dam that would result in a significant change in the normal 
maximum surface area or elevation of an existing impoundment or involves 
any change in existing project works or operations that would result in 
a significant environmental impact (see Sec. 4.30(b)(14)).
    (2) For minor projects and major projects at existing dams 5 MW or 
less. An application for license for either a minor water power project 
with a total proposed installed generating capacity of 1.5 MW or less or 
a major project--existing dam with a proposed total installed capacity 
of 5 MW or less must contain an Exhibit E under this subparagraph. See 
Sec. 4.38 for consultation requirements. The Environmental Report must 
contain the following information:
    (i) A description, including any maps or photographs which the 
applicant considers appropriate, of the environmental setting of the 
project, including vegetative cover, fish and wildlife resources, water 
quality and quantity, land and water uses, recreational uses, historical 
and archeological resources, and scenic and aesthetic resources. The

[[Page 119]]

report must include a discussion of endangered or threatened plant and 
animal species, any critical habitats, and any sites included in, or 
eligible for inclusion in, the National Register of Historic Places. The 
applicant may obtain assistance in the preparation of this information 
from state natural resources agencies, the state historic preservation 
officer, and from local offices of Federal natural resources agencies.
    (ii) A description of the expected environmental impacts from 
proposed construction or development and the proposed operation of the 
power project, including any impacts from any proposed changes in the 
capacity and mode of operation of the project if it is already 
generating electric power, and an explanation of the specific measures 
proposed by the applicant, the agencies, and others to protect and 
enhance environmental resources and values and to mitigate adverse 
impacts of the project on such resources. The applicant must explain its 
reasons for not undertaking any measures proposed by any agency 
consulted.
    (iii) A description of the steps taken by the applicant in 
consulting with Federal, state, and local agencies with expertise in 
environmental matters during the preparation of this exhibit prior to 
filing the application for license with the Commission. In this report, 
the applicant must:
    (A) Indicate which agencies were consulted during the preparation of 
the environmental report and provide copies of letters or other 
documentation showing that the applicant consulted or attempted to 
consult with each of the relevant agencies (specifying each agency) 
before filing the application, including any terms or conditions of 
license that those agencies have determined are appropriate to prevent 
loss of, or damage to, natural resources; and
    (B) List those agencies that were provided copies of the application 
as filed with the Commission, the date or dates provided, and copies of 
any letters that may be received from agencies commenting on the 
application.
    (iv) Any additional information the applicant considers important.
    (e) Exhibit F consists of general drawings of the principal project 
works. The drawings need not conform to the specifications of Sec. 4.39. 
The exhibit must conform to the following requirements:
    (1) The exhibit must consist of ink drawings, or drawings of similar 
quality, on sheets no smaller than 8 and one-half inches by 11 inches, 
drawn to a scale no smaller than 1 inch equals 50 feet for plans, 
elevations, and profiles, and 1 inch equals 10 feet for sections. After 
initial review of the application, an original and 2 copies of any 
drawing must be submitted on 35mm microfilm, if requested by Commission 
staff.
    (2) The drawings must show a plan, elevation, profile, and section 
of the dam structure and powerplant. Generating and auxiliary equipment 
proposed must be clearly and simply depicted and described. A north 
arrow must be included on the plan view.
    (f) Exhibit G is a map of the project. The map need not conform to 
the specifications of Sec. 4.39. The exhibit must instead conform to the 
following requirements:
    (1) The exhibit is a map or maps that show the location of all 
project works and their location in relation to the stream or other 
water body on which the project is located and to the nearest town or 
any permanent monuments or objects, such as roads, transmission lines, 
or other structures, that can be noted on the map and recognized in the 
field. In the case of unsurveyed public land, or land that is not public 
land, give the best legal description available. If surveyed land, 
provide sections, subdivisions, range and township, and principal base 
and meridian.
    (2) The map must consist of ink drawings or drawings of similar 
quality on sheets no smaller than 8 and one-half inches by 11 inches and 
not larger than 24 inches by 36 inches, drawn to a scale no smaller than 
one inch equals 1,000 feet. After review of the application, the 
applicant must submit an original of the map(s), if requested by 
Commission staff. Each original map must consist of a print on silver or 
gelatin 35mm microfilm mounted on Type D (3\1/4\ x 7\3/
8\) aperture cards. Two duplicates of each original must also 
be submitted at that time.

[[Page 120]]

    (3)(i) If an application for a license for a minor water power 
project that will not occupy any public lands or reservations of the 
United States does not contain a statement that the applicant requests 
the Commission to apply the provisions of Part I of the Federal Power 
Act enumerated in Sec. 4.60(c), the applicant:
    (A) Must provide a reasonably accurate description of the project 
location and all project works and features; and
    (B) Must identify, in Exhibit G of its application, the owners of 
all lands necessary for the construction and operation of the project; 
but
    (C) Need not show a project boundary.
    (ii) If an application for a license for a minor water power project 
contains a statement that the applicant requests the Commission to apply 
the provisions of Part I of the Federal Power Act enumerated in 
Sec. 4.60(c), the applicant must show the project boundary on the map it 
submits as Exhibit G to its application, as specified in 
Sec. 4.41(h)(2).
    (iii) If an application for a license for a minor water power 
project proposes that the project would occupy any public lands or 
reservations of the United States, the applicant must show the project 
boundaries on public lands and reservations on the map it submits as 
Exhibit G to its application, as specified in Sec. 4.41(h)(2).
    (4) Water power projects not excepted by paragraph (f)(3) of this 
section must include a project boundary as follows:
    (i) The project boundary must enclose all project works, such as the 
dam, reservoir, pipelines, access and other roads, powerplant, and 
transmission lines. The boundary must be set at the minimum feasible 
distance from project works necessary to allow operation and maintenance 
of the project and control of the shoreline and reservoir. The project 
boundary may be contour elevation lines, specified courses and 
distances, or lines upon or parallel to public land survey lines.
    (ii) The project boundary must be depicted on the map by use of 
contour lines (preferred method), courses and distances, public land 
survey, or lines parallel to the lines of the survey, or any combination 
of those methods for reservoirs and impoundments, and the project 
boundary around dams, spillways, and powerhouses; and must be depicted 
by specified distances from a surveyed center line or offset lines of 
survey for continuous features such as access roads, transmission lines, 
pipelines, or canals. A tape-compass survey is acceptable for 
determining courses and distances.
    (iii) Federal lands. Any public lands and reservations of the United 
States (see 16 U.S.C. 796 (1) and (2)) (Federal lands) that are within 
the project boundary, e.g., lands administered by the U.S. Forest 
Service, Bureau of Land Management, National Park Service, or Indian 
tribal lands, and the boundaries of those Federal lands, must be 
identified on the map:
    (A) By legal subdivisions of a public land survey of the affected 
area (a protraction of identified township and section lines is 
sufficient for this purpose);
    (B) By the Federal agency, identified by symbol or legend if 
desired, that maintains or manages each identified subdivision of the 
public land survey within the project boundary; and
    (C) In the absence of a public land survey, by the location of the 
Federal lands according to the distances and directions from fixed 
monuments or physical features.
    (iv) For clarity, use inset sketches to a larger scale than that 
used for the overview map to show relationships of project works, 
natural features, and property lines.
    (v) Show one or more ties by distance and bearing from a definite, 
identifiable point or points on project works or the project boundary to 
established corners of the public land survey or other survey monuments, 
if available.
    (vi) If the project affects unsurveyed Federal lands, the 
protraction of township and section lines must be shown. Such 
protractions, whenever available, must be those recognized by the agency 
of the United States having jurisdiction over the lands. On unsurveyed 
lands, show ties by distance and bearing to fixed recognizable objects.

[Order 185, 46 FR 55949, Nov. 13, 1981, as amended by Order 413, 50 FR 
11685, Mar. 25, 1985; Order 464, 52 FR 5449, Feb. 23, 1987; Order 513, 
54 FR 23806, June 2, 1989]

[[Page 121]]



      Subpart H--Application for License for Transmission Line Only



Sec. 4.70  Applicability.

    This subpart applies to any application for license issued solely 
for a transmission line that transmits power from a licensed water power 
project or other hydroelectric project authorized by Congress to the 
point of junction with the distribution system or with the 
interconnected primary transmission system.

[Order 184, 46 FR 55942, Nov. 13, 1981]



Sec. 4.71  Contents of application.

    An application for license for transmission line only must contain 
the following information in the form specified.
    (a) Initial statement.

             Before the Federal Energy Regulation Commission

           Application for License for Transmission Line Only

    (1) [Name of applicant] applies to the Federal Energy Regulatory 
Commission for a [license or new license, as appropriate] for the [name 
of project] transmission line only, as described in the attached 
exhibits, that is connected with FERC Project No. ------, for which a 
license [was issued, or application was made, as appropriate] on the --
---- day of ----------, 19----.
    (2) The location of the transmission line would be:
State or territory:_____________________________________________________
County:_________________________________________________________________
Township or nearby town:________________________________________________
    (3) The proposed use or market for the power to be transmitted.
    (4) The exact name, business address, and telephone number of the 
applicant are:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
    (5) The applicant is a [citizen of the United States, association of 
citizens of the United States, domestic corporation, municipality, or 
State, as appropriate] and (is/is not) claiming preference under section 
7(a) of the Federal Power Act. See 16 U.S.C. 796.
    (6)(i) [For any applicant which, at the time of application for 
license for transmission line only, is a non-licensee.] The statutory or 
regulatory requirements of the state(s) in which the project would be 
located and that affect the project as proposed with respect to bed and 
banks and to the appropriation, diversion, and use of water for power 
purposes, and with respect to the right to engage in the business of 
developing, transmitting, and distribution power and in any other 
business necessary to accomplish the purposes of the license under the 
Federal Power Act, are: [provide citation and brief identification of 
the nature of each requirement; if the applicant is a municipality, the 
applicant must submit copies of applicable state or local laws or a 
municipal charter or, if such laws or documents are not clear, other 
appropriate legal authority, evidencing that the municipality is 
competent under such laws to engage in the business of developing, 
transmitting, utilizing, or distributing power.]
    (ii) [For any applicant which, at the time of application for 
license for transmission line only, is a licensee.] The statutory or 
regulatory requirements of the state(s) in which the transmission line 
would be located and that affect the project as proposed with respect to 
bed and banks and to the appropriation, diversion, and use of water for 
power purposes, are: [provide citations and brief identification of the 
nature of each requirement.]
    (iii) The steps which the applicant has taken or plans to take to 
comply with each of the laws cited above are: [provide brief 
descriptions for each law.]

    (b) Required exhibits. The application must contain the following 
exhibits, as appropriate:
    (1) For any transmission line that, at the time the application is 
filed, is not constructed and is proposed to be connected to a licensed 
water power project with an installed generating capacity of more than 5 
MW--Exhibits A, B, C, D, E, F, and G under Sec. 4.41 of this chapter;
    (2) For any transmission line that, at the time the application is 
filed, is not constructed and is proposed to be connected to a licensed 
water power project with an installed generating capacity of 5 MW or 
less--Exhibits E, F, and G under Sec. 4.61 of this chapter; and
    (3) For any transmission line that, at the time the application is 
filed, has been constructed and is proposed to be connected to any 
licensed water power project--Exhibits E, F, and G under Sec. 4.61 of 
this chapter.

[Order 184, 46 FR 55942, Nov. 13, 1981, as amended by Order 413, 50 FR 
11685, Mar. 25, 1985]

[[Page 122]]



      Subpart I--Application for Preliminary Permit; Amendment and 
                   Cancellation of Preliminary Permit

    Authority: Federal Power Act, as amended 16 U.S.C. 792-828c; 
Department of Energy Organization Act, 42 U.S.C. 7101-7352; E.O. 12009, 
42 FR 46267; Public Utility Regulatory Policies Act of 1978, 16 U.S.C. 
2601-2645, unless otherwise noted.



Sec. 4.80  Applicability.

    Sections 4.80 through 4.83 pertain to preliminary permits under Part 
I of the Federal Power Act. The sole purpose of a preliminary permit is 
to secure priority of application for a license for a water power 
project under Part I of the Federal Power Act while the permittee 
obtains the data and performs the acts required to determine the 
feasibility of the project and to support an application for a license.

[Order 54, 44 FR 61336, Oct. 25, 1979, as amended by Order 413, 50 FR 
11685, Mar. 25, 1985]



Sec. 4.81  Contents of application.

    Each application for a preliminary permit must include the following 
initial statement and numbered exhibits containing the information and 
documents specified:
    (a) Initial statement:

             Before the Federal Energy Regulatory Commission

                   Application for Preliminary Permit

    (1) [Name of applicant] applies to the Federal Energy Regulatory 
Commission for a preliminary permit for the proposed [name of project] 
water power project, as described in the attached exhibits. This 
application is made in order that the applicant may secure and maintain 
priority of application for a license for the project under Part I of 
the Federal Power Act while obtaining the data and performing the acts 
required to determine the feasibility of the project and to support an 
application for a license.
    (2) The location of the proposed project is:

State or territory:_____________________________________________________
County:_________________________________________________________________
Township or nearby town:________________________________________________
Stream or other body of water:__________________________________________
________________________________________________________________________
    (3) The exact name, business address, and telephone number of the 
applicant are:

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

    The exact name and business address of each person authorized to act 
as agent for the applicant in this application are:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
    (4) [Name of applicant] is a [citizen, association, citizens, 
domestic corporation, municipality, or State, as appropriate] and (is/is 
not) claiming preference under section 7(a) of the Federal Power Act. 
[If the applicant is a municipality, the applicant must submit copies of 
applicable state or local laws or a municipal charter or, if such laws 
or documents are not clear, any other appropriate legal authority, 
evidencing that the municipality is competent under such laws to engage 
in the business of development, transmitting, utilizing, or distributing 
power].
    (5) The proposed term of the requested permit is [period not to 
exceed 36 months].
    (6) If there is any existing dam or other project facility, the 
applicant must provide the name and address of the owner of the dam and 
facility. If the dam is federally owned or operated, provide the name of 
the agency.

    (b) Exhibit 1 must contain a description of the proposed project, 
specifying and including, to the extent possible:
    (1) The number, physical composition, dimensions, general 
configuration and, where applicable, age and condition, of any dams, 
spillways, penstocks, powerhouses, tailraces, or other structures, 
whether existing or proposed, that would be part of the project;
    (2) The estimated number, surface area, storage capacity, and normal 
maximum surface elevation (mean sea level) of any reservoirs, whether 
existing or proposed, that would be part of the project;
    (3) The estimated number, length, voltage, interconnections, and, 
where applicable, age and condition, of any primary transmission lines 
whether existing or proposed, that would be part of the project [see 16 
U.S.C. 796(11)];
    (4) The total estimated average annual energy production and 
installed capacity (provide only one energy and capacity value), the 
hydraulic head for estimating capacity and energy output, and the 
estimated number, rated capacity, and, where applicable, the age and 
condition, of any turbines and generators, whether existing or proposed,

[[Page 123]]

that would be part of the project works;
    (5) All lands of the United States that are enclosed within the 
proposed project boundary described under paragraph (e)(3) of this 
section, identified and tabulated on a separate sheet by legal 
subdivisions of a public land survey of the affected area, if available; 
and
    (6) Any other information demonstrating in what manner the proposed 
project would develop, conserve, and utilize in the public interest the 
water resources of the region.
    (c) Exhibit 2 is a description of studies conducted or to be 
conducted with respect to the proposed project, including field studies. 
Exhibit 2 must supply the following information:
    (1) General requirement. For any proposed project, a study plan 
containing a description of:
    (i) Any studies, investigations, tests, or surveys that are proposed 
to be carried out, and any that have already taken place, for the 
purposes of determining the technical, economic, and financial 
feasibility of the proposed project, taking into consideration its 
environmental impacts, and of preparing an application for a license for 
the project; and
    (ii) The approximate locations and nature of any new roads that 
would be built for the purpose of conducting the studies; and
    (2) Work plan for new dam construction. For any development within 
the project that would entail new dam construction, a work plan and 
schedule containing:
    (i) A description, including the approximate location, of any field 
study, test, or other activity that may alter or disturb lands or waters 
in the vicinity of the proposed project, including floodplains and 
wetlands; measures that would be taken to minimize any such disturbance; 
and measures that would be taken to restore the altered or disturbed 
areas; and
    (ii) A proposed schedule (a chart or graph may be used), the total 
duration of which does not exceed the proposed term of the permit, 
showing the intervals at which the studies, investigations, tests, and 
surveys, identified under this paragraph are proposed to be completed.
    (iii) For purposes of this paragraph, new dam construction means any 
dam construction the studies for which would require test pits, borings, 
or other foundation exploration in the field.
    (3) Waiver. The Commission may waive the requirements of paragraph 
(c)(2) pursuant to Sec. 385.207 of this chapter, upon a showing by the 
applicant that the field studies, tests, and other activities to be 
conducted under the permit would not adversely affect cultural resources 
or endangered species and would cause only minor alterations or 
disturbances of lands and waters, and that any land altered or disturbed 
would be adequately restored.
    (d) Exhibit 3 must contain a statement of costs and financing, 
specifying and including, to the extent possible:
    (1) The estimated costs of carrying out or preparing the studies, 
investigations, tests, surveys, maps, plans or specifications identified 
under paragraph (c) of this section;
    (2) The expected sources and extent of financing available to the 
applicant to carry out or prepare the studies, investigations, tests, 
surveys, maps, plans, or specifications identified under paragraph (c) 
of this section; and
    (3) A description of the proposed market for the power generated at 
the project, including:
    (i) The identity of the proposed purchaser(s) of the power, and any 
information that is available concerning the revenues to be derived from 
the sale of the power; or
    (ii) If the applicant proposes to utilize the power output, the size 
of the applicant's power system, system peak demand and annual energy 
requirements, and the number of customers served by the applicant.
    (e) Exhibit 4 must include a map or series of maps, to be prepared 
on United States Geological Survey topographic quadrangle sheets or 
similar topographic maps of a State agency, if available. The maps need 
not conform to the precise specifications of Sec. 4.39 (a) and (b). If 
the scale of any base map is not sufficient to show clearly and legibly 
all of the information required by this paragraph, the maps submitted 
must

[[Page 124]]

be enlarged to a scale that is adequate for that purpose. (If Exhibit 4 
comprises a series of maps, it must also include an index sheet showing, 
by outline, the parts of the entire project covered by each map of the 
series.) The maps must show:
    (1) The location of the project as a whole with reference to the 
affected stream or other body of water and, if possible, to a nearby 
town or any permanent monuments or objects that can be noted on the maps 
and recognized in the field;
    (2) The relative locations and physical interrelationships of the 
principal project features identified under paragraph (b) of this 
section;
    (3) A proposed boundary for the project, enclosing:
    (i) All principal project features identified under paragraph (b) of 
this section, including but not limited to any dam, reservoir, water 
conveyance facilities, powerplant, transmission lines, and other 
appurtenances; if the project is located at an existing Federal dam, the 
Federal dam and impoundment must be shown, but may not be included 
within the project boundary;
    (ii) Any non-Federal lands and any public lands or reservations of 
the United States [see 16 U.S.C. 796 (1) and (2)] necessary for the 
purposes of the project. To the extent that those public lands or 
reservations are covered by a public land survey, the project boundary 
must enclose each of and only the smallest legal subdivisions (quarter-
quarter section, lots, or other subdivisions, identified on the map by 
subdivision) that may be occupied in whole or in part by the project.
    (4) Areas within or in the vicinity of the proposed project boundary 
which are included in or have been designated for study for inclusion in 
the National Wild and Scenic Rivers System; and
    (5) Areas within the project boundary that, under the provisions of 
the Wilderness Act, have been:
    (i) Designated as wilderness area;
    (ii) Recommended for designation as wilderness area; or
    (iii) Designated as wilderness study area.

(Federal Power Act, as amended, 16 U.S.C. 792-828c (1976); Department of 
Energy Organization Act, 42 U.S.C. 7101-7352 (Supp. IV 1980); E.O. 
12009, 3 CFR part 142 (1978); 5 U.S.C. 553 (Supp. IV 1980))

[Order 54, 44 FR 61336, Oct. 25, 1979, as amended by Order 123, 46 FR 
9029, Jan. 28, 1981; 46 FR 11811, Feb. 11, 1981; Order 225, 47 FR 19056, 
May 3, 1982; Order 413, 50 FR 11685, Mar. 25, 1985]



Sec. 4.82  Amendments.

    (a) Any permittee may file an application for amendment of its 
permit, including any extension of the term of the permit that would not 
cause the total term to exceed three years. (Transfer of a permit is 
prohibited by section 5 of the Federal Power Act.) Each application for 
amendment of a permit must conform to any relevant requirements of 
Sec. 4.81 (b), (c), (d), and (e).
    (b) If an application for amendment of a preliminary permit requests 
any material change in the proposed project, public notice of the 
application will be issued as required in Sec. 4.32(d)(2)(i).
    (c) If an application to extend the term of a permit is submitted 
not less than 30 days prior to the termination of the permit, the permit 
term will be automatically extended (not to exceed a total term for the 
permit of three years) until the Commission acts on the application for 
an extension. The Commission will not accept extension requests that are 
filed less than 30 days prior to the termination of the permit.

[Order 413, 50 FR 11685, Mar. 25, 1985, as amended by Order 499, 53 FR 
27002, July 18, 1988]



Sec. 4.83  Cancellation and loss of priority.

    (a) The Commission may cancel a preliminary permit after notice and 
opportunity for hearing if the permittee fails to comply with the 
specific terms and conditions of the permit. The Commission may also 
cancel a permit for other good cause shown after notice and opportunity 
for hearing. Cancellation of a permit will result in loss of the 
permittee's priority of application for a license for the proposed 
project.

[[Page 125]]

    (b) Failure of a permittee to file an acceptable application for a 
license before the permit expires will result in loss of the permittee's 
priority of application for a license for the proposed project.

[Order 413, 50 FR 11686, Mar. 25, 1985]



Sec. 4.84  Surrender of permit.

    A permittee must submit a petition to the Commission before the 
permittee may voluntarily surrender its permit. Unless the Commission 
issues an order to the contrary, the permit will remain in effect 
through the thirtieth day after the Commission issues a public notice of 
receipt of the petition.

[Order 413, 50 FR 11686, Mar. 25, 1985]



     Subpart J--Exemption of Small Conduit Hydroelectric Facilities



Sec. 4.90  Applicability and purpose.

    This subpart implements section 30 of the Federal Power Act and 
provides procedures for obtaining an exemption for constructed or 
unconstructed small conduit hydroelectric facilities, as defined in 
Sec. 4.30(b)(26), from all or part of the requirements of Part I of the 
Federal Power Act, including licensing, and the regulations issued under 
Part I.

[Order 76, 45 FR 28090, Apr. 28, 1980, as amended by Order 413, 50 FR 
11686, Mar. 25, 1985]



Sec. 4.91  [Reserved]



Sec. 4.92  Contents of exemption application.

    (a) An application for exemption for this subpart must include:
    (1) An introductory statement, including a declaration that the 
facility for which application is made meets the requirements of 
Sec. 4.30(b)(26), the facility qualifies but for the discharge 
requirement of Sec. 4.30(b)(26)(v), the introductory statement must 
identify that fact and state that the application is accompanied by a 
petition for waiver of Sec. 4.30(b)(26)(v), filed pursuant to 
Sec. 385.207 of this chapter);
    (2) Exhibits A, B, E, and G;
    (3) An appendix containing documentary evidence showing that the 
applicant has the real property interests required under Sec. 4.31(b); 
and
    (4) Identification of all Indian tribes that may be affected by the 
project.
    (b) Introductory Statement. The introductory statement must be set 
forth in the following format:

             Before the Federal Energy Regulatory Commission

   Application for Exemption for Small Conduit Hydroelectric Facility

    [Name of applicant] applies to the Federal Energy Regulatory 
Commission for an exemption for the [name of facility], a small conduit 
hydroelectric facility that meets the requirements of [insert the 
following language, as appropriate: ``Sec. 4.30(b)(26) of this subpart'' 
or ``Sec. 4.30(b)(26) of this subpart, except paragraph (b)(26)(v)''], 
from certain provisions of Part I of the Federal Power Act.

The location of the facility is:
State or Territory:_____________________________________________________

County:_________________________________________________________________

Township or nearby town:________________________________________________

The exact name and business address of each applicant is:

________________________________________________________________________

The exact name and business address of each person authorized to act as 
agent for the applicant in this application is:

________________________________________________________________________

    [Name of applicant] is [a citizen of the United States, an 
association of citizens of the United States, a municipality, State, or 
a corporation incorporated under the laws of (specify the United States 
or the state of incorporation, as appropriate), as appropriate].
    The provisions of Part I of the Federal Power Act for which 
exemption is requested are:
    [List here all sections or subsections for which exemption is 
requested.]
    [If the facility does not meet the requirement of 
Sec. 4.30(b)(26)(v), add the following sentence: ``This application is 
accompanied by a petition for waiver of Sec. 4.30(b)(26)(v), submitted 
pursuant to 18 CFR 385.207.'']

    (c) Exhibit A. Exhibit A must describe the small conduit 
hydroelectric facility and proposed mode of operation with appropriate 
references to Exhibits B and G. To the extent feasible the information 
in this exhibit may be submitted in tabular form. The following 
information must be included:
    (1) A brief description of any conduits and associated consumptive 
water supply facilities, intake facilities,

[[Page 126]]

powerhouses, and any other structures associated with the facility.
    (2) The proximate natural sources of water that supply the related 
conduit.
    (3) The purposes for which the conduit is used.
    (4) The number of generating units, including auxiliary units, the 
capacity of each unit, and provisions, if any, for future units.
    (5) The type of each hydraulic turbine.
    (6) A description of how the plant is to be operated, manually or 
automatically, and whether the plant is to be used for peaking.
    (7) Estimations of:
    (i) The average annual generation in kilowatt hours;
    (ii) The average head of the plant;
    (iii) The hydraulic capacity of the plant (flow through the plant) 
in cubic feet per second;
    (iv) The average flow of the conduit at the plant or point of 
diversion (using best available data and explaining the sources of the 
data and the method of calculation); and
    (v) The average amount of the flow described in paragraph (c)(7)(iv) 
of this section available for power generation.
    (8) The planned date for beginning construction of the facility.
    (9) If the hydroelectric facility discharges directly into a natural 
body of water and a petition for waiver of Sec. 4.30(b)(26)(v) has not 
been submitted, evidence that a quantity of water equal to or greater 
than the quantity discharged from the hydroelectric facility is 
withdrawn from that water body downstream into a conduit that is part of 
the same water supply system as the conduit on which the hydroelectric 
facility is located.
    (10) If the hydroelectric facility discharges directly to a point of 
agricultural, municipal, or industrial consumption, a description of the 
nature and location of that point of consumption.
    (11) A description of the nature and extent of any construction of a 
dam that would occur in association with construction of the proposed 
small conduit hydroelectric facility, including a statement of the 
normal maximum surface area and normal maximum surface elevation of any 
existing impoundment before and after that construction; and any 
evidence that the construction would occur for agricultural, municipal, 
or industrial consumptive purposes even if hydroelectric generating 
facilities were not installed.
    (d) Exhibit B. Exhibit B is a general location map that must show 
the following information:
    (1) The physical structures of the small conduit hydroelectric 
facility in relation to the conduit and any dam to which any of these 
structures is attached;
    (2) A proposed project boundary enclosing all project works to be 
exempted from licensing; and
    (3) The ownership of the parcels of land within the proposed 
boundary for the small conduit hydroelectric facility.
    (e) Exhibit E. This exhibit is an Environmental Report. It must be 
prepared pursuant to Sec. 4.38 and must include the following 
information, commensurate with the scope and environmental impact of the 
facility's construction and operation:
    (1) A description of the environmental setting in the vicinity of 
the facility, including vegetative cover, fish and wildlife resources, 
water quality and quantity, land and water uses, recreational use, 
socio-economic conditions, historical and archeological resources, and 
visual resources. The report must give special attention to endangered 
or threatened plant and animal species, critical habitats, and sites 
eligible for or included on the National Register of Historic Places. 
The applicant may obtain assistance in the preparation of this 
information from State natural resources agencies, the State historic 
preservation officer, and from local offices of Federal natural 
resources agencies.
    (2) A description of the expected environmental impacts resulting 
from the continued operation of an existing small conduit hydroelectric 
facility, or from the construction and operation of a proposed small 
conduit hydroelectric facility, including a discussion of the specific 
measures proposed by the applicant and others to protect and enhance 
environmental resources and to mitigate adverse impacts of the facility 
on them.

[[Page 127]]

    (3) A description of alternative means of obtaining an amount of 
power equivalent to that provided by the proposed or existing facility.
    (4) Any additional information the applicant considers important.
    (f) Exhibit G. Exhibit G is a set of drawings showing the structures 
and equipment of the small conduit hydroelectric facility. The drawings 
must include plan, elevation, profile, section views of the power plant, 
and any other principal facility structure and of any dam to which a 
facility structure is attached. Each drawing must be an ink drawing or a 
drawing of similar quality on a sheet no smaller than eight and one-half 
inches by eleven inches, with a scale no smaller than one inch equals 50 
feet for plans and profiles and one inch equals 10 feet for sections. 
Generating and auxiliary equipment must be clearly and simply depicted 
and described. For purposes of this subpart, these drawing 
specifications replace those required in Sec. 4.39 of the Commission's 
regulations.

[Order 76, 45 FR 28090, Apr. 28, 1980, as amended by Order 413, 50 FR 
11686, Mar. 25, 1985; Order 533, 56 FR 23153, May 20, 1991]



Sec. 4.93  Action on exemption applications.

    (a) An application for exemption that does not meet the eligibility 
requirements of Sec. 4.30(b)(26)(v) may be accepted, provided the 
application has been accompanied by a request for waiver under 
Sec. 4.92(a)(1) and the waiver request has not been denied. Acceptance 
of an application that has been accompanied by a request for waiver 
under Sec. 4.92(a)(1) does not constitute a ruling on the waiver 
request, unless expressly stated in the acceptance.
    (b) The Commission will circulate a notice of application for 
exemption to interested agencies and Indian tribes at the time the 
applicant is notified that the application is accepted for filing.
    (c) In granting an exemption the Commission may prescribe terms or 
conditions in addition to those set forth in Sec. 4.94, in order to:
    (1) Protect the quality or quantity of the related water supply for 
agricultural, municipal, or industrial consumption;
    (2) Otherwise protect life, health, or property;
    (3) Avoid or mitigate adverse environmental impact; or
    (4) Conserve, develop, or utilize in the public interest the water 
power resources of the region.
    (d) Conversion to license application. (1) If an application for 
exemption under this subpart is denied by the Commission, the applicant 
may convert the exemption application into an application for license 
for the hydroelectric project.
    (2) The applicant must provide the Commission with written 
notification, within 30 days after the date of issuance of the order 
denying exemption, that it intends to convert the exemption application 
into a license application. The applicant must submit to the Commission, 
no later than 90 days after the date of issuance of the order denying 
exemption, additional information that is necessary to conform the 
exemption application to the relevant regulations for a license 
application.
    (3) If all the information timely submitted is found sufficient, 
together with the application for exemption, to conform to the relevant 
regulations for a license application, the converted application will be 
considered accepted for filing as of the date that the exemption 
application was accepted for filing.

[Order 76, 45 FR 28090, Apr. 28, 1980, as amended by Order 413, 50 FR 
11687, Mar. 25, 1985; Order 533, 56 FR 23153, May 20, 1991]



Sec. 4.94  Standard terms and conditions of exemption.

    Any exemption granted under Sec. 4.93 for a small conduit 
hydroelectric facility is subject to the following standard terms and 
conditions:
    (a) Article 1. The Commission reserves the right to conduct 
investigations under sections 4(g), 306, 307, and 311 of the Federal 
Power Act with respect to any acts, complaints, facts, conditions, 
practices, or other matters related to the construction, operation, or 
maintenance of the exempt facility. If any term or condition of the 
exemption is violated, the Commission may revoke the exemption, issue a 
suitable order under section 4(g) of the Federal Power

[[Page 128]]

Act, or take appropriate action for enforcement, forfeiture, or 
penalties under Part III of the Federal Power Act.
    (b) Article 2. The construction, operation, and maintenance of the 
exempt project must comply with any terms and conditions that the United 
States Fish and Wildlife Service, the National Marine Fisheries Service, 
and any state fish and wildlife agencies have determined are appropriate 
to prevent loss of, or damage to, fish or wildlife resources or 
otherwise to carry out the purposes of the Fish and Wildlife 
Coordination Act, as specified in exhibit E of the application for 
exemption from licensing or in the comments submitted in response to the 
notice of exemption application.
    (c) Article 3. The Commission may revoke this exemption if actual 
construction of any proposed generating facilities has not begun within 
two years or has not been completed within four years from the effective 
date of this exemption. If an exemption is revoked under this article, 
the Commission will not accept from the prior exemption holder a 
subsequent application for exemption from licensing or a notice of 
exemption from licensing for the same project within two years of the 
revocation.
    (d) Article 4. In order to best develop, conserve, and utilize in 
the public interest the water resources of the region, the Commission 
may require that the exempt facilities be modified in structure or 
operation or may revoke this exemption.
    (e) Article 5. The Commission may revoke this exemption if, in the 
application process, material discrepancies, inaccuracies, or falsehoods 
were made by or on behalf of the applicant.
    (f) Article 6. Before transferring any property interests in the 
exempt project, the exemption holder must inform the transferee of the 
terms and conditions of the exemption. Within 30 days of transferring 
the property interests, the exemption holder must inform the Commission 
of the identity and address of the transferee.

[Order 76, 45 FR 28090, Apr. 28, 1980, as amended by Order 413, 50 FR 
11687, Mar. 25, 1985; Order 413-A, 56 FR 31331, July 10, 1991]



Sec. 4.95  Surrender of exemption.

    (a) To voluntarily surrender its exemption, a holder of an exemption 
for a small conduit hydroelectric facility must file a petition with the 
Commission.
    (b)(1) If construction has begun, prior to filing a petition with 
the Commission, the exemption holder must consult with the fish and 
wildlife agencies in accordance with Sec. 4.38, substituting for the 
information required under Sec. 4.38(b)(1) information appropriate to 
the disposition and restoration of the project works and lands. The 
petition must set forth the exemption holder's plans with respect to 
disposition and restoration of the project works and lands.
    (2) If construction has begun, public notice of the petition will be 
given, and, at least 30 days thereafter, the Commission will act upon 
the petition.
    (c) If no construction has begun, unless the Commission issues an 
order to the contrary, the exemption will remain in effect through the 
thirtieth day after the Commission issues a public notice of receipt of 
the petition. New applications involving the site of the surrendered 
exemption may be filed on the next business day.
    (d) Exemptions may be surrendered only upon fulfillment by the 
exemption holder of such obligations under the exemption as the 
Commission may prescribe and, if construction has begun, upon such 
conditions with respect to the disposition of such project works and 
restoration of project lands as may be determined by the Commission and 
the Federal and state fish and wildlife agencies.

[Order 413, 50 FR 11687, Mar. 25, 1985]



Sec. 4.96  Amendment of exemption.

    (a) An exemption holder must construct and operate its project as 
described in the exemption application approved by the Commission or its 
delegate.
    (b) If an exemption holder desires to change the design, location, 
method of construction or operation of its

[[Page 129]]

project, it must first notify the appropriate Federal and state fish and 
wildlife agencies and inform them in writing of the changes it intends 
to implement. If these agencies determine that the changes would not 
cause the project to violate the terms and conditions imposed by the 
agencies, and if the changes would not materially alter the design, 
location, method of construction or operation of the project, the 
exemption holder may implement the changes. If any of these agencies 
determines that the changes would cause the project to violate the terms 
and conditions imposed by the agencies, or if the changes would 
materially alter the design, location, method of construction or the 
operation of the project works, the exemption holder may not implement 
the changes without first acquiring authorization from the Commission to 
amend its exemption, or acquiring a license that authorizes the project, 
as changed.
    (c) An application to amend an exemption may be filed only by the 
holder of the exemption. An application to amend an exemption will be 
governed by the Commission's regulations governing applications for 
exemption. The Commission will not accept applications in competition 
with an application to amend an exemption, unless the Director of the 
Office of Hydropower Licensing determines that it is in the public 
interest to do so.

[Order 413, 50 FR 11687, Mar. 25, 1985]



    Subpart K--Exemption of Small Hydroelectric Power Projects of 5 
                            Megawatts or Less



Sec. 4.101  Applicability.

    This subpart provides procedures for exemption on a case-specific 
basis from all or part of Part I of the Federal Power Act (Act), 
including licensing, for small hydroelectric power projects as defined 
in Sec. 4.30(b)(27).

(Energy Security Act of 1980, Pub. L. 96-294, 94 Stat. 611; Federal 
Power Act, as amended (16 U.S.C. 792-828c); Public Utility Regulatory 
Policies Act of 1978 (16 U.S.C. 2601-2645); and the Department of Energy 
Organization Act (42 U.S.C. 7101-7352); E.O. 12009, 3 CFR 142 (1978))

[Order 202, 47 FR 4243, Jan. 29, 1982, as amended by Order 413, 50 FR 
11687, Mar. 25, 1985; Order 482, 52 FR 39630, Oct. 23, 1987]



Sec. 4.102  Surrender of exemption.

    (a) To voluntarily surrender its exemption, a holder of an exemption 
for a small hydroelectric power project must file a petition with the 
Commission.
    (b)(1) If construction has begun, prior to filing a petition with 
the Commission, the exemption holder must consult with the fish and 
wildlife agencies in accordance with Sec. 4.38, substituting for the 
information required under Sec. 4.38(b)(1) information appropriate to 
the disposition and restoration of the project works and lands. The 
petition must set forth the exemption holder's plans with respect to 
disposition and restoration of the project works and lands.
    (2) If construction has begun, public notice of the petition will be 
given, and, at least 30 days thereafter, the Commission will act upon 
the petition. New applications involving the site may be filed on the 
next business day.
    (c) If no construction had begun, unless the Commission issues an 
order to the contrary, the surrender will take effect at the close of 
the thirtieth day after the Commission issues a public notice of receipt 
of the petition. New applications involving the site may be filed on the 
next business day.
    (d) Exemptions may be surrendered only upon fulfillment by the 
exemption holder of such obligations under the exemption as the 
Commission may prescribe and, if construction has begun, upon such 
conditions with respect to the disposition of such project works and 
restoration of project lands as may be determined by the Commission and

[[Page 130]]

the Federal and state fish and wildlife agencies.
    (e) Where occupancy of United States lands or reservations has been 
permitted by a Federal agency having supervision over such lands, the 
exemption holder must concurrently notify that agency of the petition to 
surrender and of the steps that will be taken to restore the affected 
U.S. lands or reservations.

[Order 413, 50 FR 11688, Mar. 25, 1985]



Sec. 4.103  General provisions for case-specific exemption.

    (a) Exemptible projects. Subject to the provisions in paragraph (b) 
of this section, Sec. 4.31(c), and Secs. 4.105 and 4.106, the Commission 
may exempt on a case-specific basis any small hydroelectric power 
project from all or part of Part I of the Act, including licensing 
requirements. Any applications for exemption for a project shall conform 
to the requirements of Secs. 4.107 or 4.108, as applicable.
    (b) Limitation for licensed water power project. The Commission will 
not accept for filing an application for exemption from licensing for 
any project that is only part of a licensed water power project.
    (c) Waiver. In applying for case-specific exemption from licensing, 
a qualified exemption applicant may petition under Sec. 385.207 of this 
chapter for waiver of any specific provision of Secs. 4.102 through 
4.107. The Commission will grant a waiver only if consistent with 
section 408 of the Energy Security Act of 1980.

[Order 413, 50 FR 11688, Mar. 25, 1985, as amended by Order 503, 53 FR 
36568, Sept. 21, 1988]



Sec. 4.104  Amendment of exemption.

    (a) An exemption holder must construct and operate its project as 
described in the exemption application approved by the Commission or its 
delegate.
    (b) If an exemption holder desires to change the design, location, 
method of construction or operation of its project, it must first notify 
the appropriate Federal and state fish and wildlife agencies and inform 
them in writing of the changes it intends to implement. If these 
agencies determine that the changes would not cause the project to 
violate the terms and conditions imposed by the agencies, and if the 
changes would not materially alter the design, location, method of 
construction or operation of the project, the exemption holder may 
implement the changes. If any of these agencies determines that the 
changes would cause the project to violate the terms and conditions 
imposed by that agency, or if the changes would materially alter the 
design, location, method of construction or the operation of the project 
works, the exemption holder may not implement the changes without first 
acquiring authorization from the Commission to amend its exemption or 
acquiring a license for the project works that authorizes the project, 
as changed.
    (c) An application to amend an exemption may be filed only by the 
holder of an exemption. An application to amend an exemption will be 
governed by the Commission's regulations governing applications for 
exemption. The Commission will not accept applications in competition 
with an application to amend an exemption, unless the Director of the 
Office of Hydropower Licensing determines that it is in the public 
interest to do so.

[Order 413, 50 FR 11688, Mar. 25, 1985]



Sec. 4.105  Action on exemption applications.

    (a) Exemption from provisions other than licensing. An application 
for exemption of a small hydroelectric power project from provisions of 
Part I of the Act other than the licensing requirement will be processed 
and considered as part of the related application for license or 
amendment of license.
    (b)(1) Consultation. The Commission will circulate a notice of 
application for exemption from licensing to interested agencies and 
Indian tribes at the time the applicant is notified that the application 
is accepted for filing.
    (2) Non-standard terms and conditions. In approving any application 
for exemption from licensing, the Commission may prescribe terms or 
conditions in addition to those set forth in Sec. 4.106 in order to:

[[Page 131]]

    (i) Protect the quality or quantity of the related water supply;
    (ii) Otherwise protect life, health, or property;
    (iii) Avoid or mitigate adverse environmental impact; or
    (iv) Better conserve, develop, or utilize in the public interest the 
water resouces of the region.

(Energy Security Act of 1980, Pub. L. 96-294, 94 Stat. 611; Federal 
Power Act, as amended (16 U.S.C. 792-828c); Public Utility Regulatory 
Policies Act of 1978 (16 U.S.C. 2601-2645); and the Department of Energy 
Organization Act (42 U.S.C. 7101-7352); E.O. 12009, 3 CFR 142 (1978))

[Order 106, 45 FR 76123, Nov. 18, 1980, as amended by Order 202, 47 FR 
4246, Jan. 29, 1982; Order 413, 50 FR 11688, Mar. 25, 1985; Order 533, 
56 FR 23154, May 20, 1991]



Sec. 4.106  Standard terms and conditions of case-specific exemption from licensing.

    Any case-specific exemption from licensing granted for a small 
hydroelectric power project is subject to the following standard terms 
and conditions:
    (a) Article 1. The Commission reserves the right to conduct 
investigations under sections 4(g), 306, 307, and 311 of the Federal 
Power Act with respect to any acts, complaints, facts, conditions, 
practices, or other matters related to the construction, operation, or 
maintenance of the exempt project. If any term or condition of the 
exemption is violated, the Commission may revoke the exemption, issue a 
suitable order under section 4(g) of the Federal Power Act, or take 
appropriate action for enforcement, forfeiture, or penalties under Part 
III of the Federal Power Act.
    (b) Article 2. The construction, operation, and maintenance of the 
exempt project must comply with any terms and conditions that the United 
States Fish and Wildlife Service, the National Marine Fisheries Service, 
and any state fish and wildlife agencies have determined are appropriate 
to prevent loss of, or damage to, fish or wildlife resources or 
otherwise to carry out the purposes of the Fish and Wildlife 
Coordination Act, as specified in exhibit E of the application for 
exemption from licensing or in the comments submitted in response to the 
notice of exemption application.
    (c) Article 3. The Commission may revoke this exemption if actual 
construction of any proposed generating facilities has not begun within 
two years or has not been completed within four years from the date on 
which this exemption was granted. If an exemption is revoked under this 
article, the Commission will not accept from the prior exemption holder 
a subsequent application for exemption from licensing for the same 
project within two years of the revocation.
    (d) Article 4. This exemption is subject to the navigation servitude 
of the United States if the project is located on navigable waters of 
the United States.
    (e) Article 5. This exemption does not confer any right to use or 
occupy any Federal lands that may be necessary for the development or 
operation of the project. Any right to use or occupy any Federal lands 
for those purposes must be obtained from the administering Federal land 
agencies. The Commission may accept a license application submitted by 
any qualified license applicant and revoke this exemption, if any 
necessary right to use or occupy Federal lands for those purposes has 
not been obtained within one year from the date on which this exemption 
was granted.
    (f) Article 6. In order to best develop, conserve, and utilize in 
the public interest the water resources of the region, the Commission 
may require that the exempt facilities be modified in structure or 
operation or may revoke this exemption.
    (g) Article 7. The Commission may revoke this exemption if, in the 
application process, material discrepancies, inaccuracies, or falsehoods 
were made by or on behalf of the applicant.
    (h) Article 8. Any exempted small hydroelectric power project that 
utilizes a dam that is more than 33 feet in height above streambed, as 
defined in 18 CFR 12.31(c) of this chapter, impounds more than 2,000 
acre-feet of water, or has a significant or high hazard potential, as 
defined in 33 CFR part 222, is subject to the following provisions of 18 
CFR part 12, as it may be amended:

[[Page 132]]

    (1) Section 12.4(b)(1) (i) and (ii), (b)(2) (i) and (iii), (b)(iv), 
and (b)(v);
    (2) Section 12.4(c);
    (3) Section 12.5;
    (4) Subpart C; and
    (5) Subpart D.

For the purposes of applying these provisions of 18 CFR part 12, the 
exempted project is deemed to be a licensed project development and the 
owner of the exempted project is deemed to be a licensee.
    (i) Before transferring any property interests in the exempt 
project, the exemption holder must inform the transferee of the terms 
and conditions of the exemption. Within 30 days of transferring the 
property interests, the exemption holder must inform the Commission of 
the identity and address of the transferee.

[Order 106, 45 FR 76123, Nov. 18, 1980; 45 FR 77420, Nov. 24, 1980, as 
amended by Order 202, 47 FR 4246, Jan. 29, 1982; Order 413, 50 FR 11688, 
Mar. 25, 1985; Order 482, 52 FR 39630, Oct. 23, 1987; Order 413-A, 56 FR 
31331, July 10, 1991]



Sec. 4.107  Contents of application for exemption from licensing.

    (a) General requirements. An application for exemption from 
licensing submitted under this subpart must contain the introductory 
statement, the exhibits described in this section, the fee prescribed in 
Sec. 381.601 of this chapter and, if the project structures would use or 
occupy any lands other than Federal lands, an appendix containing 
documentary evidence showing that applicant has the real property 
interests required under Sec. 4.31(c)(2)(ii). The applicant must 
identify in its application all Indian tribes that may be affected by 
the project.
    (b) Introductory statement. The application must include an 
introductory statement that conforms to the following format:

             Before the Federal Energy Regulatory Commission

  Application for Exemption of Small Hydroelectric Power Project From 
                                Licensing

    (1) [Name of applicant] applies to the Federal Energy Regulatory 
Commission for an exemption for [name of project], a small hydroelectric 
power project that is proposed to have an installed capacity of 5 
megawatts or less, from licensuing under the Federal Power Act. [If 
applicable: The project is currently licensed as FERC Project No. ---.]
    (2) The location of the project is:
[State or territory]____________________________________________________
________________________________________________________________________
[County]________________________________________________________________
[Township or nearby town]_______________________________________________
________________________________________________________________________
[Stream or body of water]_______________________________________________
________________________________________________________________________
    (3) The exact name and business address of each applicant are:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
    (4) The exact name and business address of each person authorized to 
act as agent for the applicant in this application are:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
    (5) [Name of applicant] is [specify, as appropriate: a citizen of 
the United States or other identified nation; an association of citizens 
of the United States or other identified nation; a municipality; a 
state; or a corporation incorporated under the laws of (specify the 
United States or the state or nation of incorporation, as appropriate).]

    (c) Exhibit A. Exhibit A must describe the small hydroelectric power 
project and its proposed mode of operation. To the extent feasible, the 
information in this exhibit may be submitted in tabular form. The 
applicant must submit the following information:
    (1) A brief description of any existing dam and impoundment proposed 
to be utilized by the small hydroelectric power project and any other 
existing or proposed project works and appurtenant facilities, including 
intake facilities, diversion structures, powerhouses, primary 
transmission lines, penstocks, pipelines, spillways, and other 
structures, and the sizes, capacities, and construction materials of 
those structures.
    (2) The number of existing and proposed generating units at the 
project, including auxiliary units, the capacity of each unit, any 
provisions for future units, and a brief description of any plans for 
retirement or rehabilitation of existing generating units.
    (3) The type of each hydraulic turbine of the small hydroelectric 
power project.
    (4) A description of how the power plant is to be operated, that is, 
run-of-river or peaking.

[[Page 133]]

    (5) A graph showing a flow duration curve for the project. Identify 
stream gauge(s) and period of record used. If a synthetic record is 
utilized, provide details concerning its derivation. Furnish 
justification for selection of installed capacity if the hydraulic 
capacity of proposed generating unit(s) plus the minimum flow 
requirements, if not usable for power production, is less than the 
stream flow that is exceeded 25 percent of the time.
    (6) Estimations of:
    (i) The average annual generation in kilowatt-hours;
    (ii) The average and design head of the power plant;
    (iii) The hydraulic capacity of each turbine of the power plant 
(flow through the plant) in cubic feet per second;
    (iv) The number of surface acres of the man-made or natural 
impoundment used, if any, at its normal maximum surface elevation and 
its net and gross storage capacities in acre-feet.
    (7) The planned date for beginning and completing the proposed 
construction or development of generating facilities.
    (8) A description of the nature and extent of any repair, 
reconstruction, or other modification of a dam that would occur in 
association with construction or development of the proposed small 
hydroelectric power project, including a statement of the normal maximum 
surface area and normal maximum surface elevation of any existing 
impoundment before and after construction.
    (d) Exhibit B. Exhibit B is a general location map, which may be 
prepared on United States Geological Survey topographic quadrangle 
sheets or similar topographic maps of a state agency, enlarged, if 
necessary, to show clearly and legibly all of the information required 
by this paragraph. The map must show the following information:
    (1) The location of the existing and proposed physical structures of 
the small hydroelectric power project, including any dam or diversion 
structure, reservoir or impoundment, penstocks, pipelines, power plants, 
access roads, transmission lines, and other important features.
    (2) The relationship of the project structures to the stream or 
other body of water on which the project is located and to the nearest 
town or other permanent objects that can be readily recognized in the 
field.
    (3) A description of who owns or otherwise has real property 
interests in any tract of land occupied by the small hydroelectric power 
project or the structures to which it is directly connected.
    (4) A proposed project boundary enclosing project works to be 
exempted from licensing.
    (e) Exhibit E. This exhibit is an environmental report that must 
include the following information, commensurate with the scope and 
environmental impact of the construction and operation of the small 
hydroelectric power project. See Sec. 4.38 for consultation 
requirements.
    (1) A description of the environmental setting of the project, 
including vegetative cover, fish and wildlife resources, water quality 
and quantity, land and water uses, recreational uses, historical and 
archeological resources, and scenic and aesthetic resources. The report 
must list any endangered or threatened plant and animal species, any 
critical habitats, and any sites eligible for or included on the 
National Register of Historic Places. The applicant may obtain 
assistance in the preparation of this information from state natural 
resources agencies, the state historic preservation officer, and from 
local offices of Federal natural resources agencies.
    (2) A description of the expected environmental impacts from the 
proposed construction or development and the proposed operation of the 
small hydroelectric power project, including any impacts from any 
proposed changes in the capacity and mode of operation of the project if 
it is already generating electric power, and an explanation of the 
specific measures proposed by the applicant, the agencies consulted, and 
others to protect and enhance environmental resources and values and to 
mitigate adverse impacts of the project on such resources.
    (3) Any additional information the applicant considers important.
    (f) Exhibit G. Exhibit G is a set of drawings showing the structures 
and equipment, that is, the proposed and

[[Page 134]]

existing project works, of the small hydroelectric power project. The 
drawings must include plan, elevation, and section views of the power 
plant, any existing dam or diversion structure, and any other principal 
structure of the project.

[Order 106, 45 FR 76123, Nov. 18, 1980, as amended by Order 225, 47 FR 
19056, May 3, 1982; Order 413, 50 FR 11689, Mar. 25, 1985; Order 494, 53 
FR 15381, Apr. 29, 1988; Order 533, 56 FR 23154, May 20, 1991]



Sec. 4.108  Contents of application for exemption from provisions other than licensing.

    An application for exemption of a small hydroelectric power project 
from provisions of Part I of the Act other than the licensing 
requirement need not be prepared according to any specific format, but 
must be included as an identified appendix to the related application 
for license or amendment of license. The application for exemption must 
list all sections or subsections of Part I of the Act for which 
exemption is requested.

[Order 106, 45 FR 76123, Nov. 18, 1980]



             Subpart L--Application for Amendment of License



Sec. 4.200  Applicability.

    This part applies to any application for amendment of a license, if 
the applicant seeks to:
    (a) Make a change in the physical features of the project or its 
boundary, or make an addition, betterment, abandonment, or conversion, 
of such character as to constitute an alteration of the license;
    (b) Make a change in the plans for the project under license; or
    (c) Extend the time fixed on the license for commencement or 
completion of project works.

[Order 184, 46 FR 55943, Nov. 13, 1981]



Sec. 4.201  Contents of application.

    An application for amendment of a license for a water power project 
must contain the following information in the form specified.
    (a) Initial statement.

             Before the Federal Energy Regulatory Commission

                  Application for Amendment of License

    (1) [Name of applicant] applies to the Federal Energy Regulatory 
Commission for an amendment of license for the [name of project] water 
power project.
    (2) The exact name, business address, and telephone number of the 
applicant are:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
    (3) The applicant is a [citizen of the United States, association of 
citizens of the United States, domestic corporation, municipality, or 
state, as appropriate, see 16 U.S.C. 796], licensee for the water power 
project, designated as Project No. ------ in the records of the Federal 
Energy Regulatory Commission, issued on the ------ day of ----------, 
19----.
    (4) The amendments of license proposed and the reason(s) why the 
proposed changes are necessary, are: [Give a statement or description]
    (5)(i) The statutory or regulatory requirements of the state(s) in 
which the project would be located that affect the project as proposed 
with respect to bed and banks and to the appropriation, diversion, and 
use of water for power purposes are: [provide citation and brief 
identification of the nature of each requirement.]
    (ii) The steps which the applicant has taken or plans to take to 
comply with each of the laws cited above are: [provide brief description 
for each law.]

    (b) Required exhibits for capacity related amendments. Any 
application to amend a license for a hydropower project that involves 
additional capacity not previously authorized, and that would increase 
the actual or proposed total installed capacity of the project, would 
result in an increase in the maximum hydraulic capacity of the project 
of 15 percent or more, and would result in an increase in the installed 
name-plate capacity of 2 megawatts or more, must contain the following 
exhibits, or revisions or additions to any exhibits on file, 
commensurate with the scope of the licensed project:
    (1) For amendment of a license for a water power project that, at 
the time the application is filed, is not constructed and is proposed to 
have a total installed generating capacity of more than 5 MW--Exhibits 
A, B, C, D, E, F, and G under Sec. 4.41 of this chapter;
    (2) For amendment of a license for a water power project that, at 
the time

[[Page 135]]

the application is filed, is not constructed and is proposed to have a 
total installed generating capacity of 1.5 MW or less--Exhibits E, F, 
and G under Sec. 4.61 of this chapter;
    (3) For amendment of a license for a water power project that, at 
the time the application is filed, is not constructed and is proposed to 
have a total installed generating capacity of 5 MW or less, but more 
than 1.5 MW--Exhibits F and G under Sec. 4.61 of this chapter, and 
Exhibit E under Sec. 4.41 of this chapter;
    (4) For amendment of a license for a water power project that, at 
the time the application for amendment is filed, has been constructed, 
and is proposed to have a total installed generating capacity of 5 MW or 
less--Exhibit E, F and G under Sec. 4.61 of this chapter;
    (5) For amendment of a license for a water power project that, at 
the time the application is filed, has been constructed and is proposed 
to have a total installed generating capacity of more than 5 MW--
Exhibits A, B, C, D, E, F, and G under Sec. 4.51 of this chapter.
    (c) Required exhibits for non-capacity related amendments. Any 
application to amend a license for a water power project that would not 
be a capacity related amendment as described in paragraph (b) of this 
section must contain those exhibits that require revision in light of 
the nature of the proposed amendments.
    (d) Consultation and waiver. (1) If an applicant for license under 
this subpart believes that any exhibit required under paragraph (b) of 
this section is inappropriate with respect to the particular amendment 
of license sought by the applicant, a petition for waiver of the 
requirement to submit such exhibit may be submitted to the Commission 
under Sec. 385.207(c)(4) of this chapter, after consultation with the 
Commission's Division by Hydropower Licensing.
    (2) A licensee wishing to file an application for amendment of 
license under this section may seek advice from the Commission staff 
regarding which exhibits(s) must be submitted and whether the proposed 
amendment is consistent with the scope of the existing licensed project.

[Order 184, 46 FR 55943, Nov. 13, 1981, as amended by Order 225, 47 FR 
19056, May 3, 1982; 48 FR 4459, Feb. 1, 1983; 48 FR 16653, Apr. 19, 
1983; Order 413, 50 FR 11689, Mar. 25, 1985; Order 533, 56 FR 23154, May 
20, 1991]



Sec. 4.202  Alteration and extension of license.

    (a) If it is determiend that approval of the application for 
amendment of license would constitute a significant alteration of 
license pursuant to section 6 of the Act, 16 U.S.C. 799, public notice 
of such application shall be given at least 30 days prior to action upon 
the application.
    (b) Any application for extension of time fixed in the license for 
commencement or completion of construction of project works must be 
filed with the Commission not less than three months prior to the date 
or dates so fixed.

[Order 184, 46 FR 55943, Nov. 13, 1981]



             Subpart M--Fees Under Section 30(e) of the Act

    Source: Order 487, 52 FR 48404, Dec. 22, 1987, unless otherwise 
noted.



Sec. 4.300  Purpose, definitions, and applicability.

    (a) Purpose. This subpart implements the amendments of section 30 of 
the Federal Power Act enacted by section 7(c) of the Electric Consumers 
Protection Act of 1986 (ECPA). It establishes procedures for reimbursing 
fish and wildlife agencies for costs incurred in connection with 
applications for an exemption from licensing and applications for 
licenses seeking benefits under section 210 of the Public Utility 
Regulatory Policies Act of 1978, as amended, for a project that would 
impound or divert the water of a natural watercourse by means of a new 
dam or diversion.
    (b) Definitions. For the purposes of this subpart--
    (1) Cost means an expenditure made by a fish and wildlife agency:
    (i) On or after the effective date of this regulation for an 
application filed

[[Page 136]]

on or after the effective date of this regulation; and
    (ii) Directly related to setting mandatory terms and conditions for 
a proposed project pursuant to section 30(c) of the Federal Power Act.
    (2) Cost statement means a statement of the total costs for which a 
fish and wildlife agency requests reimbursement including an itemized 
schedule of costs including, but not limited to, costs of fieldwork and 
testing, contract costs, travel costs, personnel costs, and 
administrative and overhead costs.
    (3) Mandatory terms and conditions means terms and conditions of a 
license or exemption that a fish and wildlife agency determines are 
appropriate to prevent loss of, or damage to, fish and wildlife 
resources pursuant to section 30(c) of the Federal Power Act.
    (4) New dam or diversion license applicant means an applicant for a 
license for a project that would impound or divert the water of a 
natural watercourse by means of a new dam or diversion, as defined in 
section 210(k) of the Public Utility Regulatory Policies Act of 1978, as 
amended.
    (5) PURPA benefits means benefits under section 210 of the Public 
Utility Regulatory Policies Act of 1978, as amended.
    (6) Section 30(c) application means an application for an exemption 
from licensing or a new dam or diversion license application seeking 
PURPA benefits.
    (c) Applicability. Except as provided in paragraph (d) of this 
section, this subpart applies to:
    (1) Any application for exemption filed on or after the effective 
date of these regulations for costs incurred by fish and wildlife 
agencies after the effective date of these regulations;
    (2) Any new dam or diversion license application seeking PURPA 
benefits filed on or after April 16, 1988;
    (3) Any new dam or diversion license application seeking PURPA 
benefits filed after the effective date of this regulation, but before 
April 16, 1988, if the applicant fails to demonstrate in a monetary 
resources petition filed with the Commission pursuant to Sec. 292.208 of 
this chapter that, before October 16, 1986, it had committed substantial 
monetary resources directly related to the development of the proposed 
project and to the diligent and timely completion of all requirements of 
the Commission for filing an acceptable application; and
    (4) Any new dam or diversion license application seeking PURPA 
benefits filed after the effective date of this regulation, if the 
application is not accepted for filing before October 16, 1989.
    (d) Exceptions. (1) This subpart does not apply to any new dam or 
diversion license application seeking PURPA benefits if the moratorium 
described in section 8(e) of ECPA is in effect. The moratorium will end 
at the expiration of the first full session of Congress following the 
session during which the Commission reports to Congress on the results 
of the study required under section 8(d) of ECPA.
    (2) This subpart does not apply to any new dam or diversion license 
application seeking PURPA benefits for a project located at a Government 
dam, as defined in section 3(10) of the Federal Power Act, at which non-
Federal hydroelectric development is permissible.



Sec. 4.301  Notice to fish and wildlife agencies and estimation of fees prior to filing.

    (a) Notice to agencies--(1) New dam or diversion license applicants. 
During the initial stage or pre-filing agency consultation under 
Sec. 4.38(b)(1), a prospective new dam or diversion license applicant 
must inform each fish and wildlife agency consulted in writing with a 
copy to the Commission whether it will seek PURPA benefits.
    (2) Exemption applicants. During the initial stage of pre-filing 
agency consultation under Sec. 4.38(b)(1), a prospective exemption 
applicant must notify each fish and wildlife agency consulted that it 
will seek an exemption from licensing.
    (b) Estimate of fees. Within the comment period provided in 
Sec. 4.38(b)(2)(iv), a fish and wildlife agency must provide a 
prospective section 30(c) applicant with a reasonable estimate of the 
total costs the agency anticipates it will incur to set mandatory terms 
and conditions for the proposed project. An agency may provide an 
applicant with

[[Page 137]]

an updated estimate as it deems necessary. If an agency believes that 
its most recent estimate will be exceeded by more than 25 percent, it 
must supply the prospective applicant or applicant with a new estimate 
and submit a copy to the Commission.



Sec. 4.302  Fees at filing.

    (a) Filing requirement. A section 30(c) application must be 
accompanied by a fee or a bond, together with copies of the most recent 
cost estimates provided by fish and wildlife agencies pursuant to 
Sec. 4.301(b).
    (b) Amount. The fee required under paragraph (a) of this section 
must be in an amount equal to 50 percent of the most recent cost 
estimates provided by fish and wildlife agencies pursuant to 
Sec. 4.301(b). In lieu of this amount, an applicant may provide an 
unlimited term surety bond from a company on the Department of 
Treasury's list of companies certified to write surety bonds. Applicants 
bonded by a company whose certification by the Department of the 
Treasury lapses must provide evidence of purchase of another bond from a 
certified company. A bond must be for an amount no less than 100 percent 
of the agencies' most recent cost estimates pursuant to Sec. 4.301(b).
    (c) Failure to file. The Commission will reject a section 30(c) 
application if the applicant fails to comply with the provisions of 
paragraphs (a) and (b) of this section.



Sec. 4.303  Post-filing procedures.

    (a) Submission of cost statement--(1) Accepted applications. Within 
60 days after the last date for filing mandatory terms and conditions 
pursuant to Sec. 4.32(c)(4) for a new dam or diversion license 
application seeking PURPA benefits, Sec. 4.93(b) for an application for 
exemption of a small conduit hydroelectric facility, or Sec. 4.105(b)(1) 
for an application for case-specific exemption of a small hydroelectric 
power project, a fish and wildlife agency must file with the Commission 
a cost statement of the reasonable costs the agency incurred in setting 
mandatory terms and conditions for the proposed project. An agency may 
request, in writing, along with any supporting documentation an 
extension of this 60-day period.
    (2) Rejected, withdrawn or dismissed applications. The Director of 
the Office of Hydropower Licensing (Director) will, by letter, notify 
each fish and wildlife agency if a section 30(c) application is 
rejected, withdrawn or dismissed. Within 60 days from the date of 
notification, a fish and wildlife agency must file with the Commission a 
cost statement of the reasonable costs the agency incurred prior to the 
date the application was rejected, withdrawn, or dismissed. An agency 
may submit a written request for an extension of this 60-day period 
along with any supporting documentation.
    (b) If an agency has not submitted a cost statement or extension 
request within the time provided in paragraph (a)(2) of this section, it 
waives its right to receive fees for that project pursuant to this 
subpart.
    (c) Billing. After the Commission receives a cost statement from all 
fish and wildlife agencies as required by paragraph (a) of this section, 
the Commission will bill the section 30(c) applicant. The bill will 
show:
    (1) The cost statement submitted to the Commission by each fish and 
wildlife agency;
    (2) Any amounts already paid by the applicant pursuant to 
Sec. 4.302; and
    (3)(i) The amount due, if the amount already paid by the applicant 
pursuant to Sec. 4.302 is less than the total of all the cost 
statements; or
    (ii) The amount to be refunded to the applicant, if the amount 
already paid by the applicant pursuant to Sec. 4.302 is more than the 
total of all the cost statements.
    (d) Within 45 days from the date of a bill issued under paragraph 
(b) of this section, a section 30(c) applicant must pay in full to the 
Commission any remaining amounts due on the cost statements regardless 
of whether any of these amounts are in dispute.
    (e) Dispute procedures--(1) When to dispute. Any dispute regarding 
the reasonableness of any fish and wildlife agency cost statement must 
be made within 45 days from the date of a bill issued under paragraph 
(b) of this section.
    (2) Assessment of disputed cost statements The burden of showing 
that an agency's cost statement is unreasonable is on the applicant. 
However, a

[[Page 138]]

fish and wildlife agency must supply the disputing applicant and the 
Commission with the documentation necessary to support its cost 
statement. The Director of the Office of Hydropower Licensing will 
determine the reasonableness of a disputed fish and wildlife agency cost 
statement. The Director's decision will be in writing. The Director will 
notify the disputing applicant and the fish and wildlife agency of the 
decision by letter. Any decision of the Director may be appealed by 
either party pursuant to 18 CFR 385.1902. In deciding whether or not a 
disputed cost statement is reasonable, the Director will review the 
application, the disputed cost statement and any other documentation 
relating to the particular environmental problems associated with the 
disputing applicant's proposed project. The Director will consider such 
factors as:
    (i) The time the fish and wildlife agency spent reviewing the 
application;
    (ii) The proportion of the cost statement to the time the fish and 
wildlife agency spent reviewing the application;
    (iii) Whether the fish and wildlife agency's expenditures conform to 
Federal expenditure guidelines for such items as travel, per diem, 
personnel, and contracting; and
    (iv) Whether the studies conducted by the agency, if any, are 
duplicative, limited to the proposed project area, unnecessary to 
determine the impacts to or mitigation measures for the particular fish 
and wildlife resources affected by the proposed project, or otherwise 
unnecessary to set terms and conditions for the proposed project.
    (3) Unreasonable cost statements. If the Director determines that a 
disputed fish and wildlife agency cost statement is unreasonable, the 
disputing applicant and the fish and wildlife agency will be afforded 45 
days from the date of notification to attempt to reach an agreement 
regarding the reimbursable costs of the agency. If the disputing 
applicant and the fish and wildlife agency fail to reach an agreement on 
the disputed cost statement within 45 days from the date of 
notification, the Director will determine the costs that the agency 
should reasonably have incurred.
    (f) Refunds. (1) If the amount paid by a section 30(c) applicant 
under Sec. 4.302 exceeds the total amount of the cost statements 
submitted by fish and wildlife agencies under paragraph (a) of this 
section, the Commission will notify the Treasury to refund the 
difference to the applicant within 45 days from the date of the bill 
issued to the applicant under paragraph (b) of this section.
    (2) If the amount paid by a section 30(c) applicant exceeds the 
amount determined to be reasonable by the Director pursuant to paragraph 
(d)(2) of this section, the Commission will notify the Treasury to 
refund the difference to the applicant within 45 days of the resolution 
of all dispute proceedings.



Sec. 4.304  Payment.

    (a) A payment required under this subpart must be made by check 
payable to the United States Treasury. The check must indicate that the 
payment is for ECPA Fees.
    (b) If a payment required under this subpart is not made within the 
time period prescribed for making such payment, interest and penalty 
charges will be assessed. Interest and penalty charges will be computed 
in accordance with 31 U.S.C. 3717 and 4 CFR part 102.
    (c) The Commission will not issue a license or exemption, unless the 
applicant has made full payments of any fees due under Sec. 4.303(c).



Sec. 4.305  Enforcement.

    (a) The Commision may take any appropriate action permitted by law 
if a section 30(c) applicant does not make a payment required under this 
subpart. The Commission will not be liable to any fish and wildlife 
agency for failure to collect any amounts under this subpart.
    (b) If the Commission is unable to collect the full amount due by a 
section 30(c) applicant on behalf of more than one agency, the amount 
the Commission does collect will be distributed to the agencies on a 
pro-rata basis except if an agency's cost statement is greater than its 
most recent estimate to the applicant under Sec. 4.301(b), then the 
difference between the estimate

[[Page 139]]

and the cost statement will not be reimbursed until any amounts owed to 
other agencies have been paid.



PART 6--SURRENDER OR TERMINATION OF LICENSE--Table of Contents




Sec.
6.1  Application for surrender.
6.2  Surrender of license.
6.3  Termination of license.
6.4  Termination by implied surrender.
6.5  Annual charges.

    Authority: Secs. 6, 10(i), 13, 41 Stat. 1067, 1068, 1071, as 
amended, sec. 309, 49 Stat. 858; 16 U.S.C. 799, 803(i), 806, 825h; Pub. 
L. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.), unless otherwise 
noted.



Sec. 6.1  Application for surrender.

    Every application for surrender of a license shall state the reason 
therefor; and, except in the case of an application for surrender of a 
license for a minor project, or for a transmission line only, shall be 
executed by the licensee and filed in the same form and manner as the 
application for license, and shall be accompanied by the license and all 
amendments thereof. Public notice of such application shall be given at 
least 30 days prior to action upon the application.

(Secs. 308 and 309; 49 Stat. 858, 859 (16 U.S.C. 825g, 825h))

[Order No. 570, 42 FR 40191, Aug. 9, 1977]

    Cross References: For application for license, general provisions, 
see Secs. 4.30 to 4.33, inclusive, of this chapter. For application for 
license for proposed major project or minor part thereof, see Secs. 4.40 
to 4.42, inclusive, of this chapter. For application for license for 
constructed major project or minor part thereof, see Secs. 4.50 and 4.51 
of this chapter. For forms for application for licenses, see Secs. 131.2 
to 131.6, inclusive, of this chapter.



Sec. 6.2  Surrender of license.

    Licenses may be surrendered only upon the fulfillment by the 
licensee of such obligations under the license as the Commission may 
prescribe, and, if the project works authorized under the license have 
been constructed in whole or in part, upon such conditions with respect 
to the disposition of such works as may be determined by the Commission. 
Where project works have been constructed on lands of the United States 
the licensee will be required to restore the lands to a condition 
satisfactory to the Department having supervision over such lands and 
annual charges will continue until such restoration has been 
satisfactorily completed.

[Order 175, 19 FR 5217, Aug. 18, 1954]



Sec. 6.3  Termination of license.

    Licenses may be terminated by written order of the Commission not 
less than 90 days after notice thereof shall have been mailed to the 
licensee by certified mail to the last address whereof the Commission 
has been notified by the licensee, if there is failure to commence 
actual construction of the project works within the time prescribed in 
the license, or as extended by the Commission. Upon like notice, the 
authority granted under a license with respect to any separable part of 
the project works may be terminated if there is failure to begin 
construction of such separable part within the time prescribed or as 
extended by the Commission.

(Administrative Procedure Act, 5 U.S.C. 551-557 (1976); Federal Power 
Act, as amended, 16 U.S.C. 291-628 (1976 & Supp. V 1981), Dept. of 
Energy Organization Act 42 U.S.C. 7101-7352 (Supp. V 1981); E.O. 12009, 
3 CFR 142 (1978))

[Order 141, 12 FR 8491, Dec. 19, 1947, as amended by Order 344, 48 FR 
49010, Oct. 24, 1983]



Sec. 6.4  Termination by implied surrender.

    If any licensee holding a license subject to the provisions of 
section 10(i) of the Act shall cause or suffer essential project 
property to be removed or destroyed, or become unfit for use, without 
replacement, or shall abandon, or shall discontinue good faith operation 
of the project for a period of three years, the Commission will deem it 
to be the intent of the licensee to surrender the license; and not less 
than 90 days after public notice may in its discretion terminate the 
license.

[Order 141, 12 FR 8491, Dec. 19, 1947]



Sec. 6.5  Annual charges.

    Annual charges arising under a license surrendered or terminated 
shall continue until the effective date set

[[Page 140]]

forth in the Commission's order with respect to such surrender or 
termination.

[Order 175, 19 FR 5217, Aug. 18, 1954]

    Cross Reference: For annual charges, see part 11 of this chapter.



PART 8--RECREATIONAL OPPORTUNITIES AND DEVELOPMENT AT LICENSED PROJECTS--Table of Contents




Sec.
8.1  Publication of license conditions relating to recreation.
8.2  Posting of project lands as to recreational use and availability of 
          information.
8.3  Discrimination prohibited.
8.11  Information respecting use and development of public recreational 
          opportunities.

    Authority: 5 U.S.C. 551-557; 16 U.S.C. 791a-825r; 42 U.S.C. 7101-
7352.



Sec. 8.1  Publication of license conditions relating to recreation.

    Following the issuance or amendment of a license, the licensee shall 
make reasonable efforts to keep the public informed of the availability 
of project lands and waters for recreational purposes, and of the 
license conditions of interest to persons who may be interested in the 
recreational aspects of the project or who may wish to acquire lands in 
its vicinity. Such efforts shall include but not be limited to: the 
publication of notice in a local newspaper once each week for 4 weeks of 
the project's license conditions which relate to public access to and 
the use of the project waters and lands for recreational purposes, 
recreational plans, installation of recreation and fish and wildlife 
facilities, reservoir water surface elevations, minimum water releases 
or rates of change of water releases and such other conditions of 
general public interest as the Commission may designate in the order 
issuing or amending the license.

[Order 299, 30 FR 7313, June 3, 1965]



Sec. 8.2  Posting of project lands as to recreational use and availability of information.

    (a) Following the issuance or amendment of a license, the licensee 
shall post and shall maintain at all points of public access which are 
required by the license (or at such access points as are specifically 
designated for this purpose by the licensee) and at such other points as 
are subsequently prescribed by the Commission on its own motion or upon 
the recommendation of a public recreation agency operating in the area 
in which the project is located, a conspicuous sign giving the name of 
the project and the owner of the project, a statement that it is 
licensed by the Commission and the project number, directions to the 
areas of the project which are available for public recreation use, 
permissible times and activities, and other regulations regarding such 
use, and advising that further information may be obtained at local 
offices of the licensee in the vicinity of the project. In addition, the 
licensee shall post at such locations conspicuous notice that the 
recreation facilities are open to all members of the public without 
discrimination.
    (b) The licensee shall make available for inspection at its local 
offices in the vicinity of the project the recreation plan approved by 
the Commission and the entire license instrument, properly indexed for 
easy reference to the license conditions designated for publications in 
Sec. 8.1.

[Order 299, 30 FR 7313, June 3, 1965, as amended by Order 341, 32 FR 
6488, Apr. 27, 1967; 32 FR 11640, Aug. 11, 1967]



Sec. 8.3  Discrimination prohibited.

    Every licensee maintaining recreation facilities for the use of the 
public at a licensed project, or employing or permitting any other 
person to maintain such facilities, shall permit, or require such other 
person to permit, equal and unobstructed use of such facilities to all 
members of the public without regard to race, color, religious creed or 
national origin.

[Order 341, 32 FR 6488, Apr. 27, 1967]



Sec. 8.11  Information respecting use and development of public recreational opportunities.

    (a) Applicability. (1) Except as provided in paragraph (b) of this 
section, each licensee of a project under major or minor Commission 
license shall prepare with respect to each development within such 
project an original and two

[[Page 141]]

conformed copies of FERC Form No. 80 prescribed by Sec. 141.14 of this 
chapter and submit them to a Commission Regional Office pursuant to the 
requirements in the General Information portion of the form.
    (2) FERC Form No. 80 is due on April 1, 1991, for data compiled 
during the calendar year ending December 31, 1990. Thereafter, FERC Form 
No. 80 is due on April 1 of every sixth year for data compiled during 
the previous calendar year.
    (3) The Form No. 80 shall be completed in its entirety for each 
initial filing of the report. Filings of Form No. 80 made subsequent to 
an initial filing of the report shall be completed only to the extent 
necessary to change, delete or add to the information supplied in a 
previously-filed form.
    (4) A copy of the Form No. 80 should be retained by the respondent 
licensee in its file.
    (b) Initial Form No. 80 filings. Each licensee of an unconstructed 
project shall file an initial Form No. 80 after such project has been in 
operation for a full calendar year prior to the filing deadline. Each 
licensee of an existing (constructed) project shall file an initial Form 
No. 80 after such project has been licensed for a full calendar year 
prior to the filing deadline.
    (c) Exemptions. A licensee who has filed a Form No. 80 may request 
an exemption from any further filing of the form for any development 
that has no existing or potential recreational use or only a minor 
existing or potential recreational use (as indicated by fewer than 100 
recreation days of use during the previous calendar year) by submitting 
a statement not later than 6 months prior to the due date for the next 
filing, stating that Form No. 80 has been filed previously for such 
development and setting out the basis for believing that the development 
has no existing or potential recreational use or a minor existing or 
potential recreational use.

(Approved by the Office of Management and Budget under control number 
1902-0106)

[46 FR 50059, Oct. 9, 1981, as amended by 49 FR 5073, Feb. 10, 1984; 
Order 419, 50 FR 20096, May 14, 1985; Order 540, 57 FR 21737, May 22, 
1992]



PART 9--TRANSFER OF LICENSE OR LEASE OF PROJECT PROPERTY--Table of Contents




                   Application for Transfer of License

Sec.
9.1  Filing.
9.2  Contents of application.
9.3  Transfer.

                Application for Lease of Project Property

9.10  Filing.

    Authority: Sec. 8, 41 Stat. 1068, sec. 309, 49 Stat. 858; 16 U.S.C. 
801, 825h; Pub. L. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.)

    Cross Reference: For application for approval of transfer of 
license, see Sec. 131.20 of this chapter.

                   Application for Transfer of License



Sec. 9.1  Filing.

    Any licensee desiring to transfer a license or rights thereunder 
granted, and the person, association, corporation, State, or 
municipality desiring to acquire the same, shall jointly or severally 
file an application for approval of such transfer and acquisition. Such 
application shall be verified, shall conform to Sec. 131.20 of this 
chapter, and shall be filed in accordance with Sec. 4.31 of this 
chapter.

[Order 501, 39 FR 2267, Jan. 18, 1974]



Sec. 9.2  Contents of application.

    Every application for approval of such transfer and acquisition by 
the proposed transferee shall set forth in appropriate detail the 
qualifications of the transferee to hold such license and to operate the 
property under license, which qualifications shall be the same as those 
required of applicants for license.

[Order 141, 12 FR 8491, Dec. 19, 1947]

    Cross References: For administrative rules relating to applicants 
for license, see part 385 of this chapter. For regulations as to 
licenses and permits, see part 4 of this chapter.



Sec. 9.3  Transfer.

    (a) Approval by the Commission of transfer of a license is 
contingent upon the transfer of title to the properties under license, 
delivery of all license instruments, and a showing that such

[[Page 142]]

transfer is in the public interest. The transferee shall be subject to 
all the conditions of the license and to all the provisions and 
conditions of the act, as though such transferee were the original 
licensee and shall be responsible for the payment of annual charges 
which accrue prior to the date of transfer.
    (b) When the Commission shall have approved the transfer of the 
license, its order of approval shall be forwarded to the transferee for 
acknowledgment of acceptance. Unless application for rehearing is filed, 
or unless the order is stayed by the Commission, the order shall become 
final thirty (30) days from date of issuance and the acknowledgment of 
acceptance shall be filed in triplicate with the Commission within sixty 
(60) days from date of issuance accompanied by a certified copy of the 
deed of conveyance or other instrument evidencing transfer of the 
property under license, together with evidence of the recording thereof.

[Order 175, 19 FR 5217, Aug. 18, 1954]

                Application for Lease of Project Property



Sec. 9.10  Filing.

    Any licensee desiring to lease the project property covered by a 
license or any part thereof, whereby the lessee is granted the exclusive 
occupancy, possession, or use of project works for purposes of 
generating, transmitting, or distributing power, and the person, 
association, or corporation, State, or municipality desiring to acquire 
such project property by lease, shall file as many copies of such 
proposed lease together with as many copies of the application as 
required in accordance with Sec. 4.31 of this chapter. Such application 
and action thereon by the Commission will, in general, be subject to the 
provisions of Secs. 9.1 through 9.3.

[Order 501, 39 FR 2267, Jan. 18, 1974]



PART 11--ANNUAL CHARGES UNDER PART I OF THE FEDERAL POWER ACT--Table of Contents




Subpart A--Charges for Costs of Administration, Use of Tribal Lands and 
           Other Government Lands, and Use of Government Dams

Sec.
11.1  Costs of administration.
11.2  Use of government lands.
11.3  Use of government dams, excluding pumped storage projects.
11.4  Use of government dams for pumped storage projects, and use of 
          tribal lands.
11.5  Exemption of minor projects.
11.6  Exemption of State and municipal licensees and exemptees.
11.7  Effective date.
11.8  Adjustment of annual charges.

                Subpart B--Charges for Headwater Benefits

11.10  General provision; waiver and exemption; definitions.
11.11  Energy gains method of determining headwater benefits charges.
11.12  Determination of section 10(f) costs.
11.13  Energy gains calculations.
11.14  Procedures for establishing charges without an energy gains 
          investigation.
11.15  Procedures for determining charges by energy gains investigation.
11.16  Filing requirements.
11.17  Procedures for payment of charges and costs.

                      Subpart C--General Procedures

11.20  Time for payment.
11.21  Penalties.

Appendix A to Part 11--Fee Schedule for FY 2003

    Authority: 16 U.S.C. 791a-825r; 42 U.S.C. 7101-7352.

[[Page 143]]



Subpart A--Charges for Costs of Administration, Use of Tribal Lands and 
           Other Government Lands, and Use of Government Dams



Sec. 11.1  Costs of administration.

    (a) Authority. Pursuant to section 10(e) of the Federal Power Act 
and section 3401 of the Omnibus Budget Reconciliation Act of 1986, the 
Commission will assess reasonable annual charges against licensees and 
exemptees to reimburse the United States for the costs of administration 
of the Commission's hydropower regulatory program.
    (b) Scope. The annual charges under this section will be charged to 
and allocated among:
    (1) All licensees of projects of more than 1.5 megawatts of 
installed capacity; and
    (2) All holders of exemptions under either section 30 of the Federal 
Power Act or sections 405 and 408 of the Public Utility Regulatory 
Policies Act of 1978, as amended by section 408 of the Energy Security 
Act of 1980, but only if the exemption was issued subsequent to April 
21, 1995 and is for a project of more than 1.5 megawatts of installed 
capacity.
    (3) If the exemption for a project of more than 1.5 megawatts of 
installed capacity was issued subsequent to April 21, 1995 but pursuant 
to an application filed prior to that date, the exemptee may credit 
against its annual charge any filing fee paid pursuant to Sec. 381.601 
of this chapter, which was removed effective April 21, 1995, 18 CFR 
381.601 (1994), until the total of all such credits equals the filing 
fee that was paid.
    (c) Licenses and exemptions other than State or municipal. For 
licensees and exemptees, other than State or municipal:
    (1) A determination shall be made for each fiscal year of the costs 
of administration of Part I of the Federal Power Act chargeable to such 
licensees or exemptees, from which shall be deducted any administrative 
costs that are stated in the license or exemption or fixed by the 
Commission in determining headwater benefit payments.
    (2) For each fiscal year the costs of administration determined 
under paragraph (c)(1) of this section will be assessed against such 
licenses or exemptee in the proportion that the annual charge factor for 
each such project bears to the total of the annual charge factors under 
all such outstanding licenses and exemptions.
    (3) The annual charge factor for each such project shall be found as 
follows:
    (i) For a conventional project the factor is its authorized 
installed capacity plus 112.5 times its annual energy output in millions 
of kilowatt-hours.
    (ii) For a pure pumped storage project the factor is its authorized 
installed capacity.
    (iii) For a mixed conventional-pumped storage project the factor is 
its authorized installed capacity plus 112.5 times its gross annual 
energy output in millions of kilowatt-hours less 75 times the annual 
energy used for pumped storage pumping in million of kilowatt-hours.
    (iv) For purposes of determining their annual charges factor, 
projects that are operated pursuant to an exemption will be deemed to 
have an annual energy output of zero.
    (4) To enable the Commission to determine such charges annually, 
each licensee whose authorized installed capacity exceeds 1.5 megawatts 
must file with the Commission, on or before November 1 of each year, a 
statement under oath showing the gross amount of power generated (or 
produced by nonelectrical equipment) and the amount of power used for 
pumped storage pumping by the project during the preceding fiscal year, 
expressed in kilowatt hours. If any licensee does not report the gross 
energy output of its project within the time specified above, the 
Commission's staff will estimate the energy output and this estimate may 
be used in lieu of the filings required by this section made by such 
licensee after November 1.
    (5) For unconstructed projects, the assessments start on the date of 
commencement of project construction. For constructed projects, the 
assessments start on the effective date of the license or exemption, 
except for any new capacity authorized therein. The

[[Page 144]]

assessments for new authorized capacity start on the date of 
commencement of construction of such new capacity. In the event that 
construction commences during a fiscal year, the charges will be 
prorated based on the date on which construction commenced.
    (d) State and municipal licensees and exemptees. For State or 
municipal licensees and exemptees:
    (1) A determination shall be made for each fiscal year of the cost 
of administration under Part I of the Federal Power Act chargeable to 
such licensees and exemptees, from which shall be deducted any 
administrative costs that are stated in the license or exemption or that 
are fixed by the Commission in determining headwater benefit payments.
    (2) An exemption will be granted to a licensee or exemptee to the 
extent, if any, to which it may be entitled under section 10(e) of the 
Act provided the data is submitted as requested in paragraphs (d) (4) 
and (5) of this section.
    (3) For each fiscal year the total actual cost of administration as 
determined under paragraph (d)(1) of this section will be assessed 
against each such licensee or exemptee (except to the extent of the 
exemptions granted pursuant to paragraph (d)(2) of this section) in the 
proportion that the authorized installed capacity of each such project 
bears to the total such capacity under all such outstanding licenses or 
exemptions.
    (4) To enable the Commission to compute on the bill for annual 
charges the exemption to which State and municipal licensees and 
exemptees are entitled because of the use of power by the licensee or 
exemptee for State or municipal purposes, each such licensee or exemptee 
must file with the Commission, on or before November 1 of each year, a 
statement under oath showing the following information with respect to 
the power generated by the project and the disposition thereof during 
the preceding fiscal year, expressed in kilowatt-hours:
    (i) Gross amount of power generated by the project.
    (ii) Amount of power used for station purposes and lost in 
transmission, etc.
    (iii) Net amount of power available for sale or use by licensee or 
exemptee, classified as follows:
    (A) Used by licensee or exemptee.
    (B) Sold by licensee or exemptee.
    (5) When the power from a licensed or exempted project owned by a 
State or municipality enters into its electric system, making it 
impracticable to meet the requirements of this section with respect to 
the disposition of project power, such licensee or exemptee may, in lieu 
thereof, furnish similar information with respect to the disposition of 
the available power of the entire electric system of the licensee or 
exemptee.
    (6) The assessments commence on the date of commencement of project 
operation. In the event that project operation commences during a fiscal 
year, the charges will be prorated based on the date on which operation 
commenced.
    (e) Transmission lines. For projects involving transmission lines 
only, the administrative charge will be stated in the license.
    (f) Maximum charge. No licensed or exempted project's annual charge 
may exceed a maximum charge established each year by the Commission to 
equal 2.0 percent of the adjusted Commission costs of administration of 
the hydropower regulatory program. For every project with an annual 
charge determined to be above the maximum charge, that project's annual 
charge will be set at the maximum charge, and any amount above the 
maximum charge will be reapportioned to the remaining projects. The 
reapportionment will be computed using the method outlined in paragraphs 
(c) and (d) of this section (but excluding any project whose annual 
charge is already set at the maximum amount). This procedure will be 
repeated until no project's annual charge exceeds the maximum charge.
    (g) Commission's costs. (1) With respect to costs incurred by the 
Commission, the assessment of annual charges will be based on an 
estimate of the costs of administration of Part I of the Federal Power 
Act that will be incurred during the fiscal year in which the annual 
charges are assessed. After the end of the fiscal year, the assessment 
will be

[[Page 145]]

recalculated based on the costs of administration that were actually 
incurred during that fiscal year; the actual costs will be compared to 
the estimated costs; and the difference between the actual and estimated 
costs will be carried over as an adjustment to the assessment for the 
subsequent fiscal year.
    (2) The issuance of bills based on the administrative costs incurred 
by the Commission during the year in which the bill is issued will 
commence in 1993. The annual charge for the administrative costs that 
were incurred in fiscal year 1992 will be billed in 1994. At the 
licensee's option, the charge may be paid in three equal annual 
installments in fiscal years 1994, 1995, and 1996, plus any accrued 
interest. If the licensee elects the three-year installment plan, the 
Commission will accrue interest (at the most recent yield of two-year 
Treasury securities) on the unpaid charges and add the accrued interest 
to the installments billed in fiscal years 1995 and 1996.
    (h) In making their annual reports to the Commission on their costs 
in administering Part I of the Federal Power Act, the United States Fish 
and Wildlife Service and the National Marine Fisheries Service are to 
deduct any amounts that were deposited into their Treasury accounts 
during that year as reimbursements for conducting studies and reviews 
pursuant to section 30(e) of the Federal Power Act.
    (i) Definition. As used in paragraphs (c) and (d) of this section, 
authorized installed capacity means the lesser of the ratings of the 
generator or turbine units. The rating of a generator is the product of 
the continuous-load capacity rating of the generator in kilovolt-amperes 
(kVA) and the system power factor in kW/kVA. If the licensee or exemptee 
does not know its power factor, a factor of 1.0 kW/kVA will be used. The 
rating of a turbine is the product of the turbine's capacity in 
horsepower (hp) at best gate (maximum efficiency point) opening under 
the manufacturer's rated head times a conversion factor of 0.75 kW/hp. 
If the generator or turbine installed has a rating different from that 
authorized in the license or exemption, or the installed generator is 
rewound or otherwise modified to change its rating, or the turbine is 
modified to change its rating, the licensee or exemptee must apply to 
the Commission to amend its authorized installed capacity to reflect the 
change.
    (j) Transition. For a license having the capacity of the project for 
annual charge purposes stated in horsepower, that capacity shall be 
deemed to be the capacity stated in kilowatts elsewhere in the license, 
including any amendments thereto.

[60 FR 15047, Mar. 22, 1995, as amended by Order 584, 60 FR 57925, Nov. 
24, 1995]



Sec. 11.2  Use of government lands.

    (a) Reasonable annual charges for recompensing the United States for 
the use, occupancy, and enjoyment of its lands (other than lands 
adjoining or pertaining to Government dams or other structures owned by 
the United States Government) or its other property, will be fixed by 
the Commission. In fixing such charges the Commission may take into 
consideration such factors as commercial value, the most profitable use 
for which the lands or other property may be suited, the beneficial 
purpose for which said lands or other property have been or may be used, 
and such other factors as the Commission may deem pertinent.
    (b) Pending further order of the Commission and subject to 
adjustments as conditions may warrant, annual charges for the use of 
government lands will be payable in advance, and will be set on the 
basis of the schedule of rental fees for linear rights-of-way as set out 
in Appendix A of this part. Annual charges for transmission line rights-
of-way will be equal to the per-acre charges established by the above 
schedule. Annual charges for other project lands will be equal to twice 
the charges established by the schedule. The Commission, by its designee 
the Executive Director, will update its fees schedule to reflect changes 
in land values established by the Forest Service. The Executive Director 
will publish the updated fee schedule in the Federal Register.
    (c)(1) The annual land use charge payable for the nine month 
transition year of the implementation of this rule

[[Page 146]]

(1987) will be payable in three equal installments, with an installment 
included in the land use charges bills for 1988, 1989, and 1990.
    (2) The charge for one year will equal an amount as computed under 
the procedures outlined in this section, or twice the previous full 
normal year's bill (not including the installments described in 
paragraph (c)(1) of this section), whichever is less.
    (d) The minimum annual charge for use of Government lands under any 
license will be $25.
    (e) No licensee under a license issued prior to August 26, 1935, 
shall be required to pay annual charges in an amount greater than that 
prescribed in such license, except as may be otherwise provided in the 
license.

[Order 560, 42 FR 1229, Jan. 6, 1977; 42 FR 6366, Feb. 2, 1977. 
Redesignated at 51 FR 24318, July 3, 1986; Order No. 469, 52 FR 18209, 
May 14, 1987; 53 FR 44859, Nov. 7, 1988]



Sec. 11.3  Use of government dams, excluding pumped storage projects.

    (a) General rule. (1) Any licensee whose non-Federal project uses a 
Government dam or other structure for electric power generation and 
whose annual charges are not already specified in final form in the 
license must pay the United States an annual charge for the use of that 
dam or other structure as determined in accordance with this section. 
Payment of such annual charge is in addition to any reimbursement paid 
by a licensee for costs incurred by the United States as a direct result 
of the licensee's project development at such Government dam.
    (2) Any licensee that is obligated under the terms of a license 
issued on or before September 16, 1986 to pay specified annual charges 
for the use of a Government dam must continue to pay the annual charges 
prescribed in the project license pending any readjustment of the annual 
charge for the project made pursuant to section 10(e) of the Federal 
Power Act.
    (b) Graduated flat rates. Annual charges for the use of Government 
dams or other structures owned by the United States are 1 mill per 
kilowatt-hour for the first 40 gigawatt-hours of energy a project 
produces, 1\1/2\ mills per kilowatt-hour for over 40 up to and including 
80 gigawatt-hours, and 2 mills per kilowatt-hour for any energy the 
project produces over 80 gigawatt-hours.
    (c) Information reporting. (1) Except as provided in paragraph 
(c)(2) of this section, each licensee must file with the Commission, on 
or before November 1 of each year, a sworn statement showing the gross 
amount of energy generated during the preceding fiscal year and the 
amount of energy provided free of charge to the Government. The 
determination of the annual charge will be based on the gross energy 
production less the energy provided free of charge to the Government.
    (2) A licensee who has filed these data under another section of 
part 11 or who has submitted identical data with FERC or the Energy 
Information Administration for the same fiscal year is not required to 
file the information described in paragraph (c)(1) of this section. 
Referenced filings should be identified by company name, date filed, 
docket or project number, and form, number.
    (d) Credits. A licensee may file a request with the Director of the 
Office of Hydropower Licensing for a credit for contractual payments 
made for construction, operation, and maintenance of a Government dam at 
any time before 30 days after receiving a billing for annual charges 
determined under this section. The Director, or his designee, will grant 
such a credit only when the licensee demonstrates that a credit is 
reasonably justified. The Director, or his designee, shall consider, 
among other factors, the contractual arrangements between the licensee 
and the Federal agency which owns the dam and whether these arrangements 
reveal clearly that substantial payments are being made for power 
purposes, relevant legislation, and other equitable factors.

[Order 379, 49 FR 22778, June 1, 1984, as amended by Order 379-A, 49 FR 
33862, Aug. 27, 1984. Redesignated at 51 FR 24318, July 3, 1986; Order 
No. 469, 52 FR 18209, May 14, 1987; 52 FR 33802, Sept. 8, 1987; 53 FR 
44859, Nov. 7, 1988]

[[Page 147]]



Sec. 11.4  Use of government dams for pumped storage projects, and use of tribal lands.

    (a) General Rule. The Commission will determine on a case-by-case 
basis under section 10(e) of the Federal Power Act the annual charges 
for any pumped storage project using a Government dam or other structure 
and for any project using tribal lands within Indian reservations.
    (b) Information reporting. (1) Except as provided in paragraph 
(b)(2) of this section a Licensee whose project includes pumped storage 
facilities must file with the Commission, on or before November 1 of 
each year, a sworn statement showing the gross amount of energy 
generated during the preceding fiscal year, and the amount of energy 
provided free of charge to the Government, and the amount of energy used 
for pumped storage pumping.
    (2) A licensee who has filed these data under another section of 
part 11 or who has submitted identical data with FERC or the Energy 
Information Administration for the same fiscal year is not required to 
file the information required in paragraph (b)(1) of this section. 
Referenced filings should be identified by company name, date filed, 
docket or project number, and form number.
    (c) Commencing in 1993, the annual charges for any project using 
tribal land within Indian reservations will be billed during the fiscal 
year in which the land is used, for the use of that land during that 
year.

[Order 379, 49 FR 22778, June 1, 1984. Redesignated at 51 FR 24318, July 
3, 1986; Order 469, 52 FR 18209, May 14, 1987; 52 FR 33802, Sept. 8, 
1987; Order 551, 58 FR 15770, Mar. 24, 1993]



Sec. 11.5  Exemption of minor projects.

    No exemption will be made from payment of annual charges for the use 
of Government dams or tribal lands within Indian reservations but 
licenses may be issued without charges other than for such use for the 
development, transmission, or distribution of power for domestic, 
mining, or other beneficial use in minor projects.

[Order 141, 12 FR 8492, Dec. 19, 1947. Redesignated by Order 379, 49 FR 
22778, June 1, 1984. Redesignated at 51 FR 24318, July 3, 1986]



Sec. 11.6  Exemption of State and municipal licensees and exemptees.

    (a) Bases for exemption. A State or municipal licensee or exemptee 
may claim total or partial exemption from the assessment of annual 
charges upon one or more of the following grounds:
    (1) The project was primarily designed to provide or improve 
navigation;
    (2) To the extent that power generated, transmitted, or distributed 
by the project was sold directly or indirectly to the public (ultimate 
consumer) without profit;
    (3) To the extent that power generated, transmitted, or distributed 
by the project was used by the licensee for State or municipal purposes.
    (b) Projects primarily for navigation. No State or municipal 
licensee shall be entitled to exemption from the payment of annual 
charges on the ground that the project was primarily designed to provide 
or improve navigation unless the licensee establishes that fact from the 
actual conditions under which the project was constructed and was 
operated during the calendar year for which the charge is made.
    (c) State or municipal use. A State or municipal licensee shall be 
entitled to exemption from the payment of annual charges for the project 
to the extent that power generated, transmitted, or distributed by the 
project is used by the licensee itself for State or municipal purposes, 
such as lighting streets, highways, parks, public buildings, etc., for 
operating licensee's water or sewerage system, or in performing other 
public functions of the licensee.
    (d) Sales to public. No State or municipal licensee shall be 
entitled to exemption from the payment of annual charges on the ground 
that power generated, transmitted, or distributed by the project is sold 
to the public without profit, unless such licensee shall show:
    (1) That it maintains an accounting system which segregates the 
operations of the licensed project and reflects with reasonable accuracy 
the revenues and expenses of the project;
    (2) That an income statement, prepared in accordance with the 
Commission's Uniform System of Accounts, shows that the revenues from 
the sale

[[Page 148]]

of project power do not exceed the total amount of operating expenses, 
maintenance, depreciation, amortization, taxes, and interest on 
indebtedness, applicable to the project property. Periodic accruals or 
payments for redemption of the principal of bonds or other indebtedness 
may not be deducted in determining the net profit of the project.
    (e) Sales for resale. Notwithstanding compliance by a State or 
municipal licensee with the requirements of paragraph (d) of this 
section, it shall be subject to the payment of annual charges to the 
extent that electric power generated, transmitted, or distributed by the 
project is sold to another State, municipality, person, or corporation 
for resale, unless the licensee shall show that the power was sold to 
the ultimate consumer without profit. The matter of whether or not a 
profit was made is a question of fact to be established by the licensee.
    (f) Interchange of power. Notwithstanding compliance by a State or 
municipal licensee with the requirements of paragraph (d) of this 
section, it shall be subject to the payment of annual charges to the 
extent that power generated, transmitted, or distributed by the project 
was supplied under an interchange agreement to a State, municipality, 
person, or corporation for sale at a profit (which power was not offset 
by an equivalent amount of power received under such interchange 
agreement) unless the licensee shall show that the power was sold to 
ultimate consumers without profit.
    (g) Construction period. During the period when the licensed project 
is under construction and is not generating power, it will be considered 
as operating without profit within the meaning of this section, and 
licensee will be entitled to total exemption from the payment of annual 
charges, except as to those charges relating to the use of a Government 
dam or tribal lands within Indian reservations.
    (h) Optional showing. When the power from the licensed project 
enters into the electric power system of the State or municipal 
licensee, making it impracticable to meet the requirements set forth in 
this section with respect to the operations of the project only, such 
licensee may, in lieu thereof, furnish the same information with respect 
to the operations of said electric power system as a whole.
    (i) Application for exemption. Applications for exemption from 
payment of annual charges shall be signed by an authorized executive 
officer or chief accounting officer of the licensee or exemptee and 
verified under oath. An original and three copies of such application 
shall be filed with the Commission within the time allowed (by 
Sec. 11.28) for the payment of the annual charges. If the licensee or 
exemptee, within the time allowed for the payment of the annual charges, 
files notice that it intends to file an application for exemption, an 
additional period of 30 days is allowed within which to complete and 
file the application for exemption. The filing of an application for 
exemption does not by itself alleviate the requirement to pay the annual 
charges, nor does it exonerate the licensee or exemptee from the 
assessment of penalties under Sec. 11.21. If a bill for annual charges 
becomes payable after an application for an exemption has been filed and 
while the application is still pending for decision, the bill may be 
paid under protest and subject to refund.

[Order 143, 13 FR 6681, Nov. 13, 1948. Redesignated and amended by Order 
379, 49 FR 22778, June 1, 1984. Redesignated at 51 FR 24318, July 3, 
1986; 60 FR 15048, Mar. 22, 1995]



Sec. 11.7  Effective date.

    All annual charges imposed under this subpart will be computed 
beginning on the effective date of the license unless some other date is 
fixed in the license.

[51 FR 24318, July 3, 1986]



Sec. 11.8  Adjustment of annual charges.

    All annual charges imposed under this subpart continue in effect as 
fixed unless changed as authorized by law.

[51 FR 24318, July 3, 1986]



                Subpart B--Charges for Headwater Benefits

    Source: 51 FR 24318, July 3, 1986, unless otherwise noted.

[[Page 149]]



Sec. 11.10  General provision; waiver and exemptions; definitions.

    (a) Headwater benefits charges. (1) The Commission will assess or 
approve charges under this subpart for direct benefits derived from 
headwater projects constructed by the United States, a licensee, or a 
pre-1920 permittee. Charges under this subpart will amount to an 
equitable part of the annual costs of interest, maintenance, and 
depreciation expenses of such headwater projects and the costs to the 
Commission of determining headwater benefits charges. Except as provided 
in paragraph (b) of this section, the owner of any non-Federal 
downstream project that receives headwater benefits must pay charges 
determined under this subpart.
    (2) Headwater benefits are the additional electric generation at a 
downstream project that results from regulation of the flow of the river 
by the headwater, or upstream, project, usually by increasing or 
decreasing the release of water from a storage reservoir.
    (b) Waiver and exemptions. The owner of a downstream project with 
installed generating capacity of 1.5 MW (2000 horsepower) or less or for 
which the Commission has granted an exemption from section 10(f) is not 
required to pay headwater benefits charges.
    (c) Definitions. For purposes of this subpart:
    (1) Energy gains means the difference between the number of 
kilowatt-hours of energy produced at a downstream project with the 
headwater project and that which would be produced without the headwater 
project.
    (2) Generation means gross generation of electricity at a 
hydroelectric project, including generation needed for station use or 
the equivalent for direct drive units, measured in kilowatt-hours. It 
does not include energy used for or derived from pumping in a pumped 
storage facility.
    (3) Headwater project costs means the total costs of an upstream 
project constructed by the United States, a licensee, or pre-1920 
permittee.
    (4) Separable cost means the difference between the cost of a 
multiple-function headwater project with and without any particular 
function.
    (5) Remaining benefits means the difference between the separable 
cost of a specific function in a multiple-function project and the 
lesser or:
    (i) The benefits of that function in the project, as determined by 
the responsible Federal agency at the time the project or function was 
authorized; or
    (ii) The cost of the most likely alternative single-function project 
providing the same benefits.
    (6) Joint-use cost means the difference between the total project 
cost and the total separable costs. Joint-use costs are allocated among 
the project functions according to each function's percentage of the 
total remaining benefits.
    (7) Specific power cost means that portion of the headwater project 
costs that is directly attributable to the function of power generation 
at the headwater project, including, but not limited to, the cost of the 
electric generators, turbines, penstocks, and substation.
    (8) Joint-use power cost means the portion of the joint-use cost 
allocated to the power function of the project.
    (9) Section 10(f) costs means the annual interest, depreciation, and 
maintenance expense portion of the joint-use power cost, including costs 
of non-power functions required by statute to be paid by revenues from 
the power function.
    (10) Party means:
    (i) The owner of a non-Federal downstream hydroelectric project 
which is directly benefited by a headwater project constructed by the 
United States, a licensee, or a pre-1920 permittee;
    (ii) The owner of a headwater project constructed by the United 
States, a licensee, or a pre-1920 permittee;
    (iii) An operating agency of, or an agency marketing power from, a 
headwater project constructed by the United States; or
    (iv) Any party, as defined in Sec. 385.102(c) of this chapter.
    (11) Final charge means a charge assessed on an annual basis to 
recover section 10(f) costs and which represents the final determination 
of the charge for the period for which headwater benefits are assessed. 
Final charges may

[[Page 150]]

be established retroactively, to finalize an interim charge, or 
prospectively.
    (12) Interim charge means a charge assessed to recover section 10(f) 
costs for a specified period of headwater benefits pending determination 
of a final charge for that period.
    (13) Investment cost means the sum of:
    (i) Project construction costs, including cost of land, labor and 
materials, cost of pre- and post-authorization investigations, and cost 
of engineering, supervision, and administration during construction of 
the project; and
    (ii) Interest during construction.



Sec. 11.11  Energy gains method of determining headwater benefits charges.

    (a) Applicability. This section applies to any determination of 
headwater benefits charges, unless:
    (1) The Commission has approved headwater benefits charges pursuant 
to an existing coordination agreement among the parties;
    (2) The parties reach, and the Commission approves, a settlement 
with respect to headwater benefits charges, pursuant to Sec. 11.14(a) of 
this subpart; or
    (3) Charges may be assessed under Sec. 11.14(b).
    (b) General rule--(1) Summary. Except as provided in paragraph 
(b)(3) of this section, a headwater benefits charge for a downstream 
project is determined under this subpart by apportioning the section 
10(f) costs of the headwater project among the headwater project and all 
downstream projects that are not exempt from or waived from headwater 
benefits charges under Sec. 11.10(b) of this chapter, according to each 
project's share of the total energy benefits to those projects resulting 
from the headwater project.
    (2) Calculation; headwater benefits formula. The annual headwater 
benefits charge for a downstream project is derived by multiplying the 
section 10(f) cost by the ratio of the energy gains received by the 
downstream project to the sum of total energy gains received by all 
downstream projects (except those projects specified in Sec. 11.10(b) of 
this chapter) plus the energy generated at the headwater project that is 
assigned to the joint-use power cost, as follows:
[GRAPHIC] [TIFF OMITTED] TC14NO91.093

In which:

P=annual payment to be made for headwater benefits received by a 
downstream project,
Cp=annual section 10(f) cost of the headwater project,
En=annual energy gains received at a downstream project, or 
group of projects if owned by one entity,
Ed=annual energy gains received at all downstream projects 
(except those specified in Sec. 11.10(b) of this chapter), and
Ej=portion of the annual energy generated at the headwater 
project assigned to the joint-use power cost.

    (3) If power generation is not a function of the headwater project, 
section 10(f) costs will be apportioned only among the downstream 
projects.
    (4) If the headwater project is constructed after the downstream 
project, liability for headwater benefits charges will accrue beginning 
on the day on which any energy losses at the downstream project due to 
filling the headwater reservoir have been offset by subsequent energy 
gains. If the headwater project is constructed prior to the downstream 
project, liability for headwater benefits charges will accrue beginning 
on the day on which benefits are first realized by the downstream 
project.
    (5) No final charge assessed by the Commission under this subpart 
may exceed 85 percent of the value of the energy gains. If a party 
demonstrates, within the time specified in Sec. 11.17(b)(3) for response 
to a preliminary assessment, that any final charge assessed under this 
subpart, not including the cost of the investigation assessed under 
Sec. 11.17(c), exceeds 85 percent of the value of the energy gains 
provided to the downstream project for the period for which the charge 
is assessed, the Commission will reduce the charge to not more than 85 
percent of the value. For purposes of this paragraph, the value of the 
energy gains is the cost of obtaining an equivalent amount of 
electricity from the most likely alternative source during the period 
for which the charge is assessed.

[[Page 151]]



Sec. 11.12  Determination of section 10(f) costs.

    (a) for non-Federal headwater projects. If the headwater project was 
constructed by a licensee or pre-1920 permittee and a party requests the 
Commission to determine charges, the Commission will determine on a 
case-by-case basis what portion of the annual interest, maintenance, and 
depreciation costs of the headwater project constitutes the section 
10(f) costs, for purposes of this subpart.
    (b) For Federal headwater projects. (1) If the headwater project was 
constructed or is operated by the United States, and the Commission has 
not approved a settlement between the downstream project owner and the 
headwater project owner, the section 10(f) cost will be determined by 
deriving, from information provided by the headwater project owner 
pursuant to Sec. 11.16 of this subpart, the joint-use power cost and the 
portion of the annual joint-use power cost that represents the interest, 
maintenance, and depreciation costs of the project.
    (2) If power is not an authorized function of the headwater project, 
the section 10(f) cost is the annual interest, maintenance, and 
depreciation portion of the headwater project costs designated as the 
joint-use power cost, derived by deeming a power function at the 
project. The value of the benefits assigned to the deemed power 
function, for purposes of determining the value of remaining benefits of 
the joint-use power cost, is the total value of downstream energy gains 
included in the headwater benefits formula.
    (3) For purposes of this paragraph, total value of downstream energy 
gains means the lesser of:
    (i) The cost of generating an equivalent amount of electricity at 
the most likely alternative facility at the time the headwater project 
became operational; or
    (ii) The incremental cost of installing electrical generation at the 
headwater project at the time the project became operational.



Sec. 11.13  Energy gains calculations.

    (a) Energy gains at a downstream project. (1) Energy gains at a 
downstream project are determined by simulating operation of the 
downstream project with and without the effects of the headwater 
project. Except for determinations which are not complex or in which 
headwater benefits are expected to be small, calculations will be made 
by application of the Headwater Benefits Energy Gains Model, as 
presented in The Headwater Benefits Energy Gains (HWBEG) Model 
Description and Users Manual, which is available for the National 
Technical Information Service, U.S. Department of Commerce, 5285 Port 
Royal Road, Springfield, VA 22161.
    (2) If more than one headwater project provide energy gains to a 
downstream project, the energy gains at the dowstream project are 
attributed to the headwater projects according to the time sequence of 
commencement of operation in which each headwater project provided 
energy gains at the downstream project, by:
    (i) Crediting the headwater project that is first in time with the 
amount of energy gains that it provided to the downstream project prior 
to operation of the headwater project that is next in time; and
    (ii) Crediting any subsequent headwater project with the additional 
increment of energy gains provided by it to the downstream project.
    (3) Annual energy losses at a downstream project, or group of 
projects owned by the same entity, that are attributable to the 
headwater project will be subtracted from energy gains for the same 
annual period at the downstream project or group of projects. A net loss 
in one calendar year will be subtracted from net gains in subsequent 
years until no net loss remains.
    (b) Energy generated at the headwater project. (1) Except as 
provided in paragraphs (b)(2) and (b)(3) of this section, the portion of 
the total annual energy generation at the headwater project that is to 
be attributed to the joint-use power cost is derived by multiplying the 
total annual generation at the headwater project and the ratio of the 
project investment cost assigned to the joint-use power cost to the sum 
of the investment cost assigned to both the specific power cost and the 
joint-use power cost of the headwater project, as follows:

[[Page 152]]

[GRAPHIC] [TIFF OMITTED] TC14NO91.112

In which:

Ej=annual energy generated at the headwater project to be 
attributed to the joint-use power cost,
E=total annual generation at the headwater project,
Cj=project investment costs assigned to the joint-use power 
cost, and
Cs=project investment costs assigned to specific power costs.

    (2) If the headwater project contains a pumped storage facility, 
calculation of the portion of the total annual energy generation at the 
headwater project that is attributable to the joint-use power cost will 
be determined on a case-by-case basis.
    (3) If no power is generated at the headwater project, the amount of 
energy attributable to the joint-use power cost under this section is 
the total of all downstream energy gains included in the headwater 
benefits formula.



Sec. 11.14  Procedures for establishing charges without an energy gains investigation.

    (a) Settlements. (1) Owners of downstream and headwater projects 
subject to this subpart may negotiate a settlement for headwater 
benefits charges. Settlements must be filed with the Commission for its 
approval, according to the provisions of Sec. 385.602.
    (2) If the headwater project is a Federal project, any settlement 
under this section must result in headwater benefits payments that 
approximate those that would result under the energy gains method.
    (b) Continuation of previous headwater benefits determinations. (1) 
For any downstream project being assessed headwater benefit charges on 
or before September 16, 1986, the Commission will continue to assess 
charges to that project on the same basis until changes occur in the 
river basin, including hydrology or project development, that affect 
headwater benefits.
    (2) Any procedures that apply to Sec. 11.17(b)(5) of this subpart 
will apply to any prospectively fixed charges that are continued under 
this paragraph.



Sec. 11.15  Procedures for determining charges by energy gains investigation.

    (a) Purpose of investigations; limitation. Except as permitted under 
Sec. 11.14, the Commission will conduct an investigation to obtain 
information for establishing headwater benefits charges under this 
subpart. The Commission will investigate and determine charges for a 
project downstream from a non-Federal headwater project only if the 
parties are unable to agree to a settlement and one of the parties 
requests the Commission to determine charges.
    (b) Notification. The Commission will notify each downstream project 
owner and each headwater project owner when it initiates an 
investigation under this section, and the period of project operations 
to be studied will be specified. An investigation will continue until a 
final charge has been established for all years studied in the 
investigation.
    (c) Jurisdictional objections. If any project owner wishes to object 
to the assessment of a headwater benefits charge on jurisdictional 
grounds, such objection must:
    (1) Be raised within 30 days after the notice of the investigation 
is issued; and
    (2) State in detail the grounds for its objection.
    (d) Investigations. (1) For any downstream project for which a final 
charge pursuant to an investigation has never been established, the 
Commission will conduct an initial investigation to determine a final 
charge.
    (2) The Commission may, for good cause shown by a party or on its 
own motion, initiate a new investigation of a river basin to determine 
whether, because of any change in the hydrology, project development, or 
other characteristics of the river basin that effects headwater 
benefits, it should:
    (i) Establish a new final charge to replace a final charge 
previously established under Sec. 11.17(b)(5); or
    (ii) Revise any variable of the headwater benefits formula that has 
become a constant in calculating a final charge.
    (3) Scope of investigations. (i) The Commission will establish a 
final charge pursuant to an investigation

[[Page 153]]

based on information available to the Commission through the annual data 
submission requirements of Sec. 11.16, if such information is adequate 
to establish a reasonably accurate final charge.
    (ii) If the information available to the Commission is not 
sufficient to provide a reasonably accurate calculation of the final 
charge, the Commission will request additional data and conduct any 
studies, including studies of the hydrology of the river basin and 
project operations, that it determines necessary to establish the 
charge.



Sec. 11.16  Filing requirements.

    (a) Applicability. (1) Any party subject to a headwater benefits 
determination under this subpart must supply project-specific data, in 
accordance with this section, by February 1 of each year for data from 
the preceding calendar year.
    (2) Within 30 days of notice of initiation of an investigation under 
Sec. 11.15, a party must supply project-specific data, in accordance 
with this section, for the years specified in the notice.
    (b) Data required from owner of the headwater project. The owner of 
any headwater project constructed by the United States, a licensee, or a 
pre-1920 permittee that is upstream from a non-Federal hydroelectric 
project must submit the following:
    (1) Name and location of the headwater project, including the name 
of the stream on which it is located.
    (2) The total nameplate rating of installed generating capacity of 
the project, expressed in kilowatts, with the portion of total capacity 
that represents pumped storage generating capacity separately 
designated.
    (3) A description of the total storage capacity of the reservoir and 
allocation of storage capacity to each of its functions, such as dead 
storage, power storage, irrigation storage, and flood control storage. 
Identification, by reservoir elevation, of the portion of the reservoir 
assigned to each of its respective storage functions.
    (4) An elevation-capacity curve, or a tabulation of reservoir pool 
elevations with corresponding reservoir storage capacities.
    (5) A copy of rule curves, coordination contracts, agreements, or 
other relevant data governing the release of water from the reservoir, 
including a separate statement of their effective dates.
    (6) A curve or tabulation showing actual reservoir pool elevations 
throughout the immediately preceding calendar year and for each year 
included in an investigation.
    (7) The total annual gross generation of the hydroelectric plant in 
kilowatt-hours, not including energy from pumped storage operation.
    (8) The total number of kilowatt-hours of energy produced from 
pumped storage operation.
    (9) The investigation costs attributed to the power generation 
function of the project as of the close of the calendar year or at a 
specified date during the year, categorized according to that portion 
that is attributed to the specific power costs, and that portion that is 
attributed to the joint-use power costs.
    (10) The portion of the joint-use power cost, and other costs 
required by law to be allocated to joint-use power cost, each item shown 
separately, that are attributable to the annual costs of interest, 
maintenance, and depreciation, identifying the annual interest rate and 
the method used to compute the depreciation charge, or the interest rate 
and period used to compute amortization if used in lieu of depreciation, 
including any differing interest rates used for major replacements or 
rehabilitation.
    (c) Data required from owners of downstream projects. The owner of 
any hydroelectric project which is downstream from a headwater project 
constructed by the United States, a licensee, or pre-1920 permittee must 
submit the following:
    (1) Name and location of the downstream project, including the name 
of the stream on which it is located.
    (2) Total nameplate rating of the installed generating capacity of 
the plant, expressed in kilowatts, with the portion of total capacity 
that represents pumped storage generating capacity separately 
designated.
    (3) Record of daily gross generation, not including energy used for 
pumped storage, and any unit outage which may have occurred.

[[Page 154]]

    (4) The total number of kilowatt-hours of energy produced from 
pumped storage operation.
    (d) Abbreviated data submissions. (1) For those items in paragraphs 
(b) and (c) of this section in which data for the current period are the 
same as data furnished for a prior period, the data need not be 
resubmitted if the owner identifies the last period for which the data 
were reported.
    (2) The Commission will notify the project owner that certain data 
items in paragraphs (b) and (c) are no longer required to be submitted 
annually if:
    (i) A variable in the headwater benefits formula has become a 
constant; or
    (ii) A prospective final charge, as described in Sec. 11.17(b)(5), 
has been established.
    (e) Additional data. Owners of headwater projects or downstream 
projects must furnish any additional data required by the Commission 
staff under paragraph (a) of this section and may provide other data 
which they consider relevant.



Sec. 11.17  Procedures for payment of charges and costs.

    (a) Payment for benefits from a non-Federal headwater project. Any 
billing procedures and payments determined between a non-Federal 
headwater project owner and a downstream project owner will occur 
according to the agreement of those parties.
    (b) Charges and payment for benefits from a Federal headwater 
project--(1) Interim charges. (i) If the Commission has not established 
a final charge and an investigation is pending, the Commission will 
issue a downstream project owner a bill for the interim charge and costs 
and a staff report explaining the calculation of the interim charge.
    (ii) An interim charge will be a percentage of the estimate by the 
Commission staff of what the final charge will be, as follows:
    (A) 100 percent of the estimated final charge if the Commission 
previously has completed an investigation of the project for which it is 
assessed; or
    (B) 80 percent of the estimated final charge if the Commission has 
not completed an investigation of the project for which it is assessed.
    (iii) When a final charge is established for a period for which an 
interim charge was paid, the Commission will apply the amount paid to 
the final charge.
    (2) Preliminary assessment of a final charge. Unless the project 
owner was assessed a final charge in the previous year, the Commission 
will issue to the downstream project owner a preliminary assessment of 
any final charge when it is determined. A staff technical report 
explaining the basis of the assessment will be enclosed with the 
preliminary assessment. Copies of the preliminary assessment will be 
mailed to all parties.
    (3) Opportunity to respond. After issuance of a preliminary 
assessment of a final charge, parties may respond in writing within 60 
days after the preliminary assessment.
    (4) Order and bill. (i) After the opportunity for written response 
by the parties to the preliminary assessment of a final charge, the 
Commission will issue to the downstream project owner an order 
establishing the final charge. Copies of the order will be mailed to all 
parties. A bill will be issued for the amount of the final charge and 
costs.
    (ii) If a final charge is not established prospectively under 
paragraph (b)(5) of this section, the Commission will issue an order and 
a bill for the final charge and costs each year until prospective final 
charges are established. After the Commission issues an order 
establishing a prospective final charge, a bill will be issued annually 
for the amount of the final charge and costs.
    (5) Prospective final charges. When the Commission determines that 
historical data, including the hydrology, development, and other 
characteristics of the river basin, demonstrate sufficient stability to 
project average energy gains and section 10(f) costs, the Commission 
will issue to the downstream project owner an order establishing the 
final charge from future years. Copies of the order will be mailed to 
all parties. The prospective final charge will remain in effect until a 
new investigation is initiated under Sec. 11.15(d)(2).
    (6) Payment under protest. Any payment of a final charge required by 
this section may be made under protest if a party is also appealing the 
final charge

[[Page 155]]

pursuant to Sec. 385.1902, or requesting rehearing. If payment is made 
under protest, that party will avoid any penalty for failure to pay 
under Sec. 11.21.
    (7) Accounting for payments pending appeal or rehearing. The 
Commission will retain any payment received for final charges from bills 
issued pursuant to this section in a special account. No disbursements 
to the U.S. Treasury will be made from the account until 31 days after 
the bill is issued. If an appeal under Sec. 385.1902 or a request for 
rehearing is filed by any party, no disbursements to the U.S. Treasury 
will be made until final disposition of the appeal or request for 
rehearing.
    (c) Charges for costs of determinations of headwater benefits 
charges. (1) Any owner of a downstream project that benefits from a 
Federal headwater project must pay to the United States the cost of 
making any investigation, study, or determination relating to the 
assessment of the relevant headwater benefits charge under this subpart.
    (2) If any owner of a headwater or downstream project requests that 
the Commission determine headwater benefits charges for benefits 
provided by non-Federal headwater projects, the headwater project owners 
must pay a pro rata share of 50 percent of the cost of making the 
investigation and determination, in proportion to the benefits provided 
by their projects, and the downstream project owners must pay a pro rata 
share of the remaining 50 percent in proportion to the energy gains 
received by their projects.
    (3) Any charge assessed under this paragraph is separate from and 
will be added to, any final or interim charge under this subpart.



                      Subpart C--General Procedures



Sec. 11.20  Time for payment.

    Annual charges must be paid no later than 45 days after rendition of 
a bill by the Commission. If the licensee or exemptee believes that the 
bill is incorrect, no later than 45 days after its rendition the 
licensee or exemptee may file an appeal of the bill with the Chief 
Financial Officer. No later than 30 days after the date of issuance of 
the Chief Financial Officer's decision on the appeal, the licensee or 
exemptee may file a request for rehearing of that decision pursuant to 
Sec. 385.713 of this chapter. In the event that a timely appeal to the 
Chief Financial Officer or a timely request to the Commission for 
rehearing is filed, the payment of the bill may be made under protest, 
and subject to refund pending the outcome of the appeal or rehearing.

[60 FR 15048, Mar. 22, 1995]



Sec. 11.21  Penalties.

    If any person fails to pay annual charges within the periods 
specified in Sec. 11.20, a penalty of 5 percent of the total delinquent 
amount will be assessed and added to the total charges for the first 
month or part of month in which payment is delinquent. An additional 
penalty of 3 percent for each full month thereafter will be assessed 
until the charges and penalties are satisfied in accordance with law. 
The Commission may, by order, waive any penalty imposed by this 
subsection, for good cause shown.

[51 FR 24318, July 3, 1986]

             Appendix A to Part 11--Fee Schedule for FY 2003

------------------------------------------------------------------------
                                                                Rate per
                         State/County                             acre
------------------------------------------------------------------------
Alabama:
    All counties.............................................     $26.25
Arkansas:
    All counties.............................................      19.69
Arizona:
    Apache...................................................       6.54
    Cochise..................................................  .........
    Gila.....................................................  .........
    Graham...................................................  .........
    La Paz...................................................  .........
    Mohave...................................................  .........
    Navajo...................................................  .........
    Pima.....................................................  .........
    Yavapai..................................................  .........
    Yuma.....................................................  .........
    Coconino (north of Colorado R.)..........................  .........
    Coconino (south of Colorado R.)..........................      26.25
    Greenlee.................................................  .........
    Maricopa.................................................  .........
    Pinal....................................................  .........
    Santa Cruz...............................................  .........
California:
    Imperial.................................................      13.12
    Inyo.....................................................  .........
    Lassen...................................................  .........
    Modoc....................................................  .........
    Riverside................................................  .........
    San Bernardino...........................................  .........
    Siskiyou.................................................      19.69
    Alameda..................................................      32.81
    Alpine...................................................  .........
    Amador...................................................  .........
    Butte....................................................  .........

[[Page 156]]

 
    Calaveras................................................  .........
    Colusa...................................................  .........
    Contra Costa.............................................  .........
    Del Norte................................................  .........
    El Dorado................................................  .........
    Fresno...................................................  .........
    Glenn....................................................  .........
    Humboldt.................................................  .........
    Kern.....................................................      32.81
    Kings....................................................  .........
    Lake.....................................................  .........
    Madera...................................................  .........
    Mariposa.................................................  .........
    Mendicino................................................  .........
    Merced...................................................  .........
    Mono.....................................................  .........
    Napa.....................................................  .........
    Nevada...................................................  .........
    Placer...................................................  .........
    Plumas...................................................  .........
    Sacramento...............................................  .........
    San Benito...............................................  .........
    San Joaquin..............................................  .........
    Santa Clara..............................................  .........
    Shasta...................................................  .........
    Sierra...................................................  .........
    Solano...................................................  .........
    Sonoma...................................................  .........
    Stanislaus...............................................  .........
    Sutter...................................................  .........
    Tehama...................................................  .........
    Trinity..................................................  .........
    Tulare Kings.............................................  .........
    Tuolumne.................................................  .........
    Yolo.....................................................  .........
    Yuba.....................................................  .........
    Los Angeles..............................................      39.39
    Marin....................................................  .........
    Monterey.................................................  .........
    Orange...................................................  .........
    San Diego................................................  .........
    San Francisco............................................  .........
    San Luis Obispo..........................................  .........
    San Mateo................................................  .........
    Santa Barbara............................................  .........
    Santa Cruz...............................................  .........
    Ventura..................................................  .........
Colorado:
    Adams....................................................       6.54
    Arapahoe.................................................  .........
    Bent.....................................................  .........
    Cheyenne.................................................  .........
    Crowley..................................................  .........
    Elbert...................................................  .........
    El Paso..................................................  .........
    Huerfano.................................................  .........
    Kiowa....................................................  .........
    Kit Carson...............................................  .........
    Lincoln..................................................       6.54
    Logan....................................................  .........
    Moffat...................................................  .........
    Montezuma................................................  .........
    Morgan...................................................  .........
    Pueblo...................................................  .........
    Sedgewick................................................  .........
    Washington...............................................  .........
    Weld.....................................................  .........
    Yuma.....................................................  .........
    Baca.....................................................      13.12
    Broomfield \1\...........................................  .........
    Dolores..................................................  .........
    Garfield.................................................  .........
    Las Animas...............................................  .........
    Mesa.....................................................  .........
    Montrose.................................................  .........
    Otero....................................................  .........
    Prowers..................................................  .........
    Rio Blanco...............................................  .........
    Routt....................................................  .........
    San Miguel...............................................  .........
    Alamosa..................................................      26.25
    Archuleta................................................  .........
    Boulder..................................................  .........
    Chaffee..................................................  .........
    Clear Creek..............................................  .........
    Conejos..................................................  .........
    Costilla.................................................  .........
    Custer...................................................  .........
    Denver...................................................  .........
    Delta....................................................  .........
    Douglas..................................................  .........
    Eagle....................................................  .........
    Fremont..................................................  .........
    Gilpin...................................................  .........
    Grand....................................................  .........
    Gunnison.................................................  .........
    Hinsdale.................................................  .........
    Jackson..................................................  .........
    Jefferson................................................  .........
    Lake.....................................................  .........
    La Plata.................................................  .........
    Larimer..................................................  .........
    Mineral..................................................  .........
    Ouray....................................................  .........
    Park.....................................................  .........
    Pitkin...................................................  .........
    Rio Grande...............................................  .........
    Saguache.................................................  .........
    San Juan.................................................      26.25
    Summit...................................................  .........
    Teller...................................................  .........
Connecticut:
    All Counties.............................................       6.54
Florida:
    Baker....................................................      39.39
    Bay......................................................  .........
    Bradford.................................................  .........
    Calhoun..................................................  .........
    Clay.....................................................  .........
    Columbia.................................................  .........
    Dixie....................................................  .........
    Duval....................................................  .........
    Escambia.................................................  .........
    Franklin.................................................  .........
    Gadsden..................................................  .........
    Gilchrist................................................  .........
    Gulf.....................................................  .........
    Hamilton.................................................  .........
    Holmes...................................................  .........
    Jackson..................................................  .........
    Jefferson................................................  .........
    Lafayette................................................  .........
    Leon.....................................................  .........
    Liberty..................................................  .........
    Madison..................................................  .........
    Nassau...................................................  .........
    OKaloosa.................................................  .........
    Santa Rosa...............................................  .........
    Suwannee.................................................  .........
    Taylor...................................................  .........
    Union....................................................  .........
    Wakulla..................................................  .........
    Walton...................................................  .........
    Washington...............................................  .........
    All Other Counties.......................................      65.61
Georgia:
    All Counties.............................................      39.39

[[Page 157]]

 
Idaho:
    Cassia...................................................       6.54
    Gooding..................................................  .........
    Jerome...................................................  .........
    Lincoln..................................................  .........
    Minidoka.................................................  .........
    Oneida...................................................  .........
    Owyhee...................................................  .........
    Power....................................................  .........
    Twin Falls...............................................  .........
    Ada......................................................     $19.69
    Adams....................................................      19.69
    Bannock..................................................      19.69
    Bear Lake................................................      19.69
    Benewah..................................................      19.69
    Bingham..................................................      19.69
    Blaine...................................................      19.69
    Boise....................................................      19.69
    Bonner...................................................      19.69
    Bonneville...............................................      19.69
    Boundary.................................................      19.69
    Butte....................................................      19.69
    Camas....................................................      19.69
    Canyon...................................................      19.69
    Caribou..................................................      19.69
    Clark....................................................      19.69
    Clearwater...............................................      19.69
    Custer...................................................      19.69
    Elmore...................................................      19.69
    Franklin.................................................      19.69
    Fremont..................................................      19.69
    Gem......................................................      19.69
    Idaho....................................................      19.69
    Jefferson................................................      19.69
    Kootenai.................................................      19.69
    Latah....................................................      19.69
    Lemhi....................................................      19.69
    Lewis....................................................      19.69
    Madison..................................................      19.69
    Nez Perce................................................      19.69
    Payette..................................................      19.69
    Shoshone.................................................      19.69
    Teton....................................................      19.69
    Valley...................................................      19.69
    Washington...............................................      19.69
Illinois:
    All counties.............................................      19.69
Indiana:
    All counties.............................................      32.81
Kansas:
    Morton...................................................      13.12
    All other counties.......................................       6.54
Kentucky:
    All counties.............................................      19.69
Louisiana:
    All counties.............................................      39.39
Maine:
    All counties.............................................      19.69
Michigan:
    Alger....................................................      19.69
    Baraga...................................................      19.69
    Chippewa.................................................      19.69
    Delta....................................................      19.69
    Dickinson................................................      19.69
    Gogebic..................................................      19.69
    Houghton.................................................      19.69
    Iron.....................................................      19.69
    Keweenaw.................................................      19.69
    Luce.....................................................      19.69
    Macking..................................................      19.69
    Marquette................................................      19.69
    Menominee................................................      19.69
    Ontonagon................................................      19.69
    Schoolcraft..............................................      19.69
    All other counties.......................................      26.25
Minnesota:
    All counties.............................................      19.69
Mississippi:
    All counties.............................................      26.25
Missouri:
    All counties.............................................      19.69
Montana:
    Big Horn.................................................       6.54
    Blaine...................................................       6.54
    Carter...................................................       6.54
    Cascade..................................................       6.54
    Chouteau.................................................       6.54
    Custer...................................................       6.54
    Daniels..................................................       6.54
    Mccone...................................................       6.54
    Meagher..................................................       6.54
    Dawson...................................................       6.54
    Fallon...................................................       6.54
    Fergus...................................................       6.54
    Garfield.................................................       6.54
    Glacier..................................................       6.54
    Golden Valley............................................       6.54
    Hill.....................................................       6.54
    Judith Basin.............................................       6.54
    Liberty..................................................       6.54
    Musselshell..............................................       6.54
    Petroleum................................................       6.54
    Phillips.................................................       6.54
    Pondera..................................................       6.54
    Powder River.............................................       6.54
    Prairie..................................................       6.54
    Richland.................................................       6.54
    Roosevelt................................................       6.54
    Rosebud..................................................       6.54
    Sheridan.................................................       6.54
    Teton....................................................       6.54
    Toole....................................................       6.54
    Treasure.................................................       6.54
    Valley...................................................       6.54
    Wheatland................................................       6.54
    Wibaux...................................................       6.54
    Yellowstone..............................................       6.54
    Beaverhead...............................................      19.69
    Broadwater...............................................      19.69
    Carbon...................................................      19.69
    Deer Lodge...............................................      19.69
    Flathead.................................................      19.69
    Gallatin.................................................      19.69
    Granite..................................................      19.69
    Jefferson................................................      19.69
    Lake.....................................................      19.69
    Lewis & Clark............................................      19.69
    Lincoln..................................................      19.69
    Madison..................................................      19.69
    Mineral..................................................      19.69
    Missoula.................................................      19.69
    Park.....................................................      19.69
    Powell...................................................      19.69
    Ravalli..................................................      19.69
    Sanders..................................................      19.69
    Silver Bow...............................................      19.69
    Stillwater...............................................      19.69
    Sweet Grass..............................................      19.69
Nebraska:
    All counties.............................................       6.54
Nevada:
    Churchill................................................       3.28
    Clark....................................................       3.28
    Elko.....................................................       3.28
    Esmeralda................................................       3.28
    Eureka...................................................       3.28

[[Page 158]]

 
    Humboldt.................................................       3.28
    Lander...................................................       3.28
    Lincoln..................................................       3.28
    Lyon.....................................................       3.28
    Mineral..................................................       3.28
    Nye......................................................       3.28
    Pershing.................................................       3.28
    Washoe...................................................       3.28
    White Pine...............................................       3.28
    Carson City..............................................      32.81
    Douglas..................................................      32.81
    Story....................................................      32.81
New Hampshire:
    All counties.............................................      19.69
New Mexico:
    Chaves...................................................       6.54
    Curry....................................................       6.54
    De Baca..................................................       6.54
    Dona Ana.................................................       6.54
    Eddy.....................................................       6.54
    Grant....................................................       6.54
    Guadalupe................................................       6.54
    Harding..................................................       6.54
    Hidalgo..................................................       6.54
    Lea......................................................       6.54
    Luna.....................................................       6.54
    McKinley.................................................       6.54
    Otero....................................................       6.54
    Quay.....................................................       6.54
    Roosevelt................................................       6.54
    San Juan.................................................       6.54
    Socorro..................................................       6.54
    Torrence.................................................       6.54
    Rio Arriba...............................................      13.12
    Sandoual.................................................      13.12
    Union....................................................      13.12
    Bernalillo...............................................      26.25
    Catron...................................................      26.25
    Cibola...................................................      26.25
    Colfax...................................................      26.25
    Lincoln..................................................      26.25
    Los Alamos...............................................      26.25
    Mora.....................................................      26.25
    San Miguel...............................................      26.25
    Santa Fe.................................................      26.25
    Sierra...................................................      26.25
    Taos.....................................................      26.25
    Valencia.................................................      26.25
New York:
    All counties.............................................      26.25
North Carolina:
    All counties.............................................      39.39
North Dakota:
    All counties.............................................       6.54
Ohio:
    All counties.............................................      26.25
Oklahoma:
    Beaver...................................................      13.12
    Cimarron.................................................      13.12
    Roger Mills..............................................      13.12
    Texas....................................................      13.12
    LeFlore..................................................      19.69
    McCurtain................................................
    All other counties.......................................       6.54
Oregon:
    Harney...................................................       6.54
    Lake.....................................................  .........
    Malheur..................................................  .........
    Baker....................................................      13.12
    Crook....................................................  .........
    Deschutes................................................  .........
    Gilliam..................................................  .........
    Grant....................................................  .........
    Jefferson................................................  .........
    Klamath..................................................  .........
    Morrow...................................................  .........
    Sherman..................................................  .........
    Umatilla.................................................  .........
    Union....................................................  .........
    Wallowa..................................................  .........
    Wasco....................................................  .........
    Wheeler..................................................  .........
    Coos.....................................................      19.69
    Curry....................................................  .........
    Douglas..................................................  .........
    Jackson..................................................  .........
    Josephine................................................  .........
    Benton...................................................      26.25
    Clackamas................................................  .........
    Clatsop..................................................  .........
    Columbia.................................................  .........
    Hood River...............................................  .........
    Lane.....................................................  .........
    Lincoln..................................................  .........
    Linn.....................................................  .........
    Marion...................................................  .........
    Multnomah................................................  .........
    Polk.....................................................  .........
    Tillamook................................................  .........
    Washington...............................................  .........
    Yamhill..................................................  .........
Pennsylvania:
    All counties.............................................      26.25
Puerto Rico:
    All......................................................      39.39
South Carolina:
    All counties.............................................      39.39
South Dakota:
    Butte....................................................      19.69
    Custer...................................................  .........
    Fall river...............................................  .........
    Lawrence.................................................  .........
    Mead.....................................................      19.69
    Pennington...............................................  .........
    All other counties.......................................       6.54
Tennessee:
    All counties.............................................      26.25
Texas:
    Culberson................................................       6.54
    El Paso..................................................  .........
    Hudspeth.................................................  .........
    All other counties.......................................      39.39
Utah:
    Beaver...................................................       6.54
    Box Elder................................................  .........
    Carbon...................................................  .........
    Duchesne.................................................  .........
    Emery....................................................  .........
    Garfield.................................................  .........
    Grand....................................................  .........
    Iron.....................................................  .........
    Juab.....................................................  .........
    Kane.....................................................  .........
    Millard..................................................  .........
    San Juan.................................................  .........
    Tooele...................................................  .........
    Uintah...................................................  .........
    Wayne....................................................  .........
    Washington...............................................      13.12
    Cache....................................................      19.69
    Daggett..................................................  .........
    Davis....................................................  .........
    Morgan...................................................  .........
    Piute....................................................  .........
    Rich.....................................................  .........
    Salt Lake................................................  .........

[[Page 159]]

 
    Sanpete..................................................  .........
    Sevier...................................................  .........
    Summit...................................................  .........
    Utah.....................................................  .........
    Wasatch..................................................  .........
    Weber....................................................  .........
Vermont:
    All counties.............................................      26.25
Virginia:
    All counties.............................................      26.25
Washington:
    Adams....................................................      13.12
    Asotin...................................................  .........
    Benton...................................................  .........
    Chelan...................................................  .........
    Columbia.................................................  .........
    Douglas..................................................  .........
    Franklin.................................................  .........
    Garfield.................................................  .........
    Grant....................................................  .........
    Kittitas.................................................  .........
    Klickitat................................................  .........
    Lincoln..................................................  .........
    Okanogan.................................................  .........
    Spokane..................................................  .........
    Walla Walla..............................................  .........
    Whitman..................................................  .........
    Yakima...................................................  .........
    Ferry....................................................      19.69
    Pend Oreille.............................................  .........
    Stevens..................................................  .........
    Clallam..................................................      26.25
    Clark....................................................  .........
    Cowlitz..................................................  .........
    Grays Harbor.............................................  .........
    Island...................................................  .........
    Jefferson................................................  .........
    King.....................................................  .........
    Kitsap...................................................  .........
    Lewis....................................................  .........
    Mason....................................................  .........
    Pacific..................................................  .........
    Pierce...................................................  .........
    San Juan.................................................  .........
    Skagit...................................................  .........
    Skamania.................................................  .........
    Snohomish................................................  .........
    Thurston.................................................  .........
    Wahkiakum................................................  .........
    Whatcom..................................................  .........
West Virginia:
    All Counties.............................................      26.25
Wisconsin:
    All Counties.............................................      19.69
Wyoming:
    Albany...................................................       6.54
    Campbell.................................................  .........
    Carbon...................................................  .........
    Converse.................................................  .........
    Goshen...................................................  .........
    Hot Springs..............................................  .........
    Johnson..................................................       6.54
    Laramie..................................................  .........
    Lincoln..................................................  .........
    Natrona..................................................  .........
    Niobrara.................................................  .........
    Platte...................................................  .........
    Sheridan.................................................  .........
    Sweetwater...............................................  .........
    Fremont..................................................  .........
    Sublette.................................................  .........
    Uinta....................................................  .........
    Washakie.................................................  .........
    Big Horn.................................................      19.69
    Crook....................................................  .........
    Park.....................................................  .........
    Teton....................................................  .........
    Weston...................................................  .........
All Other Zones:
                                                                    6.20
------------------------------------------------------------------------
\1\ Note: Broomfield County created November 2001 from parts of Adams,
  Boulder, Jefferson and Weld Counties.


[67 FR 70159, Nov. 21, 2002]



PART 12--SAFETY OF WATER POWER PROJECTS AND PROJECT WORKS--Table of Contents




                      Subpart A--General Provisions

Sec.
12.1  Applicability.
12.2  Rules of construction.
12.3  Definitions.
12.4  Staff administrative responsibility and supervisory authority.
12.5  Responsibilities of licensee or applicant.

                     Subpart B--Reports and Records

12.10  Reporting safety-related incidents.
12.11  Reporting modifications of the project or project works.
12.12  Maintenance of records.
12.13  Verification form.

                    Subpart C--Emergency Action Plans

12.20  General requirements.
12.21  Exemptions.
12.22  Contents of emergency action plan.
12.23  Time for filing emergency action plan.
12.24  Review and updating of plans.
12.25  Posting and readiness.

             Subpart D--Inspection by Independent Consultant

12.30  Applicability.
12.31  Definitions.
12.32  General inspection requirement.
12.33  Exemption.
12.34  Approval of independent consultant.
12.35  Specific inspection requirements.
12.36  Emergency corrective measures.
12.37  Report of the independent consultant.
12.38  Time for inspections and reports.
12.39  Taking corrective measures after the report.

       Subpart E--Other Responsibilities of Applicant or Licensee

12.40  Quality control programs.
12.41  Monitoring instruments.
12.42  Warning and safety devices.

[[Page 160]]

12.43  Power and communication lines and gas pipelines.
12.44  Testing spillway gates.

    Authority: Federal Power Act, as amended, 16 U.S.C. 792-828c (1982); 
Department of Energy Organization Act, 42 U.S.C. 7101-7352 (1982); E.O. 
12009, 3 CFR 142 (1978).

    Source: Order 122, 46 FR 9036, Jan. 28, 1981, unless otherwise 
noted.



                      Subpart A--General Provisions



Sec. 12.1  Applicability.

    (a) Except as otherwise provided in this part or ordered by the 
Commission or its authorized representative, the provisions of this part 
apply to:
    (1) Any project licensed under Part I of the Federal Power Act;
    (2) Any unlicensed constructed project for which the Commission has 
determined that an application for license must be filed under Part I of 
the Act; and
    (3) Any project exempted from licensing under Part I of the Federal 
Power Act, pursuant to subparts J or K of part 4 of this chapter, to the 
extent that the Commission has conditioned the exemption on compliance 
with any particular provisions of this part.
    (b) The provisions of this part apply to a project that uses a 
Government dam only with respect to those project works, lands, and 
waters specifically licensed by the Commission.



Sec. 12.2  Rules of construction.

    (a) If any term, condition, article, or other provision in a project 
license is similar to any provision of this part, the licensee must 
comply with the relevant provision of this part, unless the Commission 
or the Director of the Office of Hydropower Licensing determines that 
compliance with the relevant provision of the license will better 
protect life, health, or property.
    (b) A licensee may request from the Director of the Office of 
Hydropower Licensing a ruling on the applicability to its actions of any 
provision of its license that is similar to a provision of this part. A 
ruling by the Director may be appealed under Sec. 385.207 of this 
chapter.

[Order 122, 46 FR 9036, Jan. 28, 1981, as amended by Order 225, 47 FR 
19056, May 3, 1982; 49 FR 29370, July 20, 1984]



Sec. 12.3  Definitions.

    (a) General rule. For purposes of this part, terms defined in 
section 3 of the Federal Power Act, 16 U.S.C. 796, have the same meaning 
as they have under the Act.
    (b) Definitions. The following definitions apply for the purposes of 
this part:
    (1) Applicant means any person, state, or municipality that has 
applied for a license for an unlicensed, constructed project and any 
owner of an unlicensed, constructed project for which the Commission has 
determined that an application for license must be filed.
    (2) Owner means any person, state, or municipality, or combination 
thereof, that has a real property interests in a water power project 
sufficient to operate and maintain the project works.
    (3) Authorized Commission representative means the Director of the 
Office of Hydropower Licensing, the Director of the Division of 
Inspections, the Regional Engineer, or any other member of the 
Commission staff whom the Commission may specifically designate.
    (4) Condition affecting the safety of a project or project works 
means any condition, event, or action at the project which might 
compromise the safety, stability, or integrity of any project work or 
the ability of any project work to function safely for its intended 
purposes, including navigation, water power development, or other 
beneficial public uses; or which might otherwise adversely affect life, 
health, or property. Conditions affecting the safety of a project or 
project works include, but are not limited to:
    (i) Unscheduled rapid draw-down of impounded water;
    (ii) Failure of any facility that controls the release or storage of 
impounded water, such as a gate or a valve;
    (iii) Failure or unusual movement, subsidence, or settlement of any 
part of a project work;
    (iv) Unusual concrete deterioration or cracking, including 
development of new cracks or the lengthening or widening of existing 
cracks;
    (v) Piping, slides, or settlements of materials in any dam, 
abutment, dike, or embankment;

[[Page 161]]

    (vi) Significant slides or settlements of materials in areas 
adjacent to reservoirs;
    (vii) Significant damage to slope protection;
    (viii) Unusual instrumentation readings;
    (ix) New seepage or leakage or significant gradual increase in pre-
existing seepage or leakage;
    (x) Sinkholes;
    (xi) Significant instances of vandalism or sabotage;
    (xii) Natural disasters, such as floods, earthquakes, or volcanic 
activity;
    (xiii) Any other signs of instability of any project work.
    (5) Constructed project means any project with an existing dam.
    (6) Dam means any structure for impounding or diverting water.
    (7) Development means that part of a project comprising an 
impoundment and its associated dams, forebays, water conveyance 
facilities, power plants, and other appurtenant facilities. A project 
may comprise one or more developments.
    (8) Modification means any activity, including repair or 
reconstruction, that in any way changes the physical features of the 
project from the state reflected in the plans or drawings or other 
documents filed with the Commission.
    (9) Project emergency means an impending or actual sudden release of 
water at the project caused by natural disaster, accident, or failure of 
project works.
    (10) Regional Engineer means the person in charge of the 
Commission's regional office for the region (Atlanta, Chicago, Fort 
Worth, New York, or San Francisco) where a particular project is 
located.
    (11) Act means the Federal Power Act.

[Order 122, 46 FR 9036, Jan. 28, 1981, as amended at 49 FR 29370, July 
20, 1984]



Sec. 12.4  Staff administrative responsibility and supervisory authority.

    (a) Administrative responsibility. The Director of the Office of 
Hydropower Licensing is responsible for administering the Commission's 
project safety program and reports directly to the Chairman of the 
Federal Energy Regulatory Commission.
    (b) Supervisory authority of the Regional Engineer or other 
authorized representative. (1) Any water power project and the 
construction, operation, maintenance, use, repair, or modification of 
any project works are subject to the inspection and the supervision of 
the Regional Engineer or any other authorized Commission representative 
for the purpose of:
    (i) Achieving or protecting the safety, stability, and integrity of 
the project works or the ability of any project work to function safely 
for its intended purposes, including navigation, water power 
development, or other beneficial public uses; or
    (ii) Otherwise protecting life, health, or property.
    (2) For the purposes set forth in paragraph (b)(1) of this section, 
a Regional Engineer or other authorized Commission representative may:
    (i) Test or inspect any water power project or project works or 
require that the applicant or licensee perform such tests or inspections 
or install monitoring instruments;
    (ii) Require an applicant or a licensee to submit reports or 
information, regarding:
    (A) The design, construction, operation, maintenance, use, repair, 
or modification of a water power project or project works; and
    (B) Any condition affecting the safety of a project or project works 
or any death or injury that occurs at, or might be attributable to, the 
water power project;
    (iii) Require an applicant or a licensee to modify:
    (A) Any emergency action plan filed under subpart C of this part; or
    (B) Any plan of corrective measures, including related schedules, 
submitted after the report of an independent consultant pursuant to 
Sec. 12.37 or any other inspection report;
    (iv) Require an applicant or licensee to take any other action with 
respect to the design, construction, operation, maintenance, repair, 
use, or modification of the project or its works that is, in the 
judgment of the Regional Engineer or other authorized Commission 
representative, necessary or desirable.

[[Page 162]]

    (v) Establish the time for an applicant or licensee to provide a 
schedule for or to perform any actions specified in this paragraph.
    (c) Appeal, stay, rescission, or amendment of order or directive. 
(1) Any order or directive issued under this section or under the 
provisions of subparts B through E of this part by a Regional Engineer 
or other authorized Commission representative may be appealed to the 
Commission under Sec. 385.207 of this chapter.
    (2) Any order or directive issued under this section by a Regional 
Engineer or other authorized Commission representative is immediately 
effective and remains in effect until:
    (i) The Regional Engineer or other authorized Commission 
representative who issued the order or directive rescinds or amends that 
order or directive or stays its effect; or
    (ii) The Commission stays the effect of the order or directive, or 
amends or rescinds the order or directive on appeal.
    (3) An appeal or motion for rescission, amendment, or stay of any 
order or directive issued under this section must contain a full 
explanation of why granting the appeal or the request for rescission or 
amendment of the order or directive, or for stay for the period 
requested, will not endanger life, health, or property.

[Order 122, 46 FR 9036, Jan. 28, 1981, as amended by Order 225, 47 FR 
19056, May 3, 1982; 49 FR 29370, July 20, 1984]



Sec. 12.5  Responsibilities of licensee or applicant.

    A licensee or applicant must use sound and prudent engineering 
practices in any action relating to the design, construction, operation, 
maintenance, use, repair, or modification of a water power project or 
project works.



                     Subpart B--Reports and Records



Sec. 12.10  Reporting safety-related incidents.

    (a) Conditions affecting the safety of a project or its works--(1) 
Oral reports. An applicant or licensee must report by telephone to the 
Regional Engineer any condition affecting the safety of a project or 
projects works, as defined in Sec. 12.3(b)(4). The initial oral report 
must be made as soon as practicable after that condition is discovered, 
without unduly interfering with any necessary or appropriate emergency 
repair, alarm, or other emergency action procedure.
    (2) Written reports. Following the initial oral report required in 
paragraph (a)(1), the applicant or licensee must submit to the Regional 
Engineer a written report on the condition affecting the safety of the 
project or project works verified in accordance with Sec. 12.13. The 
written report must be submitted within the time specified by the 
Regional Engineer and must contain any information the Regional Engineer 
directs, including:
    (i) The causes of the condition;
    (ii) A description of any unusual occurrences or operating 
circumstances preceding the condition;
    (iii) An account of any measure taken to prevent worsening of the 
condition;
    (iv) A detailed description of any damage to project works and the 
status of any repair;
    (v) A detailed description of any personal injuries;
    (vi) A detailed description of the nature and extent of any private 
property damages; and
    (vii) Any other relevant information requested by the Regional 
Engineer.
    (3) The level of detail required in any written report must be 
commensurate with the severity and complexity of the condition.
    (b) Deaths or serious injuries. (1) Promptly after becoming aware of 
any drowning or other accident resulting in death or serious injury that 
occurs at the project, the applicant or licensee must report that 
drowning or other accident to the Regional Engineer in writing, 
including a description of the cause and location of the accident.
    (2) The written report of any death or serious injury considered or 
alleged to be project related must also describe any remedial actions 
taken or proposed to avoid or reduce the chance of similar occurrences 
in the future and be verified in accordance with Sec. 12.13.
    (3) Accidents that are not project-related may be reported by 
providing a

[[Page 163]]

copy of a clipping from a newspaper article, if available.
    (4) For the purposes of this paragraph, project-related includes any 
deaths or serious injuries involving a dam, spillway, intake, or power 
line, or which take place at or immediately above or below a dam.



Sec. 12.11  Reporting modifications of the project or project works.

    (a) Reporting requirement. Regardless of whether a particular 
modification is permitted without specific prior Commission approval, an 
applicant or licensee must report any modification of the project or 
project works to the Regional Engineer in writing, verified in 
accordance with Sec. 12.13, at the time specified in paragraph (b) of 
this section.
    (b) Time of reporting. (1) Any modification that is an emergency 
measure taken in response to a condition affecting the safety of the 
project or project works must be submitted with the report of that 
condition required by Sec. 12.10(a)(2).
    (2) In all other instances, the modification must be reported at 
least 60 days before work on the modification begins.



Sec. 12.12  Maintenance of records.

    (a) Kinds of records--(1) General rule. Except as provided in 
paragraph (a)(2) of this section, the applicant or licensee must 
maintain as permanent project records in addition to those required in 
part 125 of this chapter, the following information:
    (i) Engineering and geological data relating to design, 
construction, maintenance, repair, or modification of the project, 
including design memoranda and drawings, laboratory and other testing 
reports, geologic data (such as maps, sections, or logs of exploratory 
borings or trenches, foundation treatment, and excavation), plans and 
specifications, inspection and quality control reports, as built 
construction drawings, designers' operating criteria, photographs, and 
any other data necessary to demonstrate that construction, maintenance, 
repair, or modification of the project has been performed in accordance 
with plans and specifications;
    (ii) Instrumentation observations and data collected during 
construction, operation, or maintenance of the project, including 
continuously maintained tabular records and graphs illustrating the data 
collected pursuant to Sec. 12.41; and
    (iii) The operational and maintenance history of the project, 
including:
    (A) The dates, times, nature, and causes of any complete or partial 
unscheduled shut-down, suspension of project operations, or reservoir 
filling restrictions related to the safety of the project or project 
works; and
    (B) Any reports of project modifications, conditions affecting the 
safety of the project or project works, or deaths or serious injuries at 
the project.
    (2) Exception. The applicant or licensee is not required to maintain 
as permanent project records any information specified in paragraph 
(a)(1) of this section that was or reasonably would have been prepared 
before the applicant or licensee acquired control of the project and 
that the applicant or the licensee never acquired or reasonably could 
have acquired.
    (b) Location of records--(1) Original records. The applicant or 
licensee must maintain the originals of all permanent project records at 
a central location, such as the project site or the main business office 
of the applicant or licensee, secure from damage from any conceivable 
failure of the project works and convenient for inspection. The 
applicant or licensee must keep the Regional Engineer advised of the 
location of the permanent project records.
    (2) Record copies. If the originals of the permanent project records 
are maintained at a central location other than the project site, the 
applicant or licensee must maintain at the project site copies of at 
least the project Exhibit G or L (design drawings), instrumentation 
data, and operational history that are necessary to the safe and 
efficient operation of the project.
    (3) In accordance with the provisions of part 125 of this chapter, 
the applicant or licensee may maintain original records, or record 
copies at the project site, in microform, if appropriate equipment is 
readily available to view the records.

[[Page 164]]

    (c) Transfer of records. If the project is taken over by the United 
States at the end of a license term or the Commission issues a new 
license to a different licensee, the prior licensee must transfer the 
originals of all permanent project records to the custody of the 
administering Federal agency or department or to the new licensee.



Sec. 12.13  Verification form.

    If a document submitted in accordance with the provisions of this 
part must be verified, the form of verification attached to the document 
must be the following:

State of [        ],
County of [            ], ss:
    The undersigned, being first duly sworn, states that [he, she] has 
read the above document and knows the contents of it, and that all of 
the statements contained in that document are true and correct, to the 
best of [his, her] knowledge and belief.

________________________________________________________________________
[Name of person signing]

    Sworn to and subscribed before me this [day] of [month], [year].

[Seal]

________________________________________________________________________

[Signature of notary public or other state or local official authorized 
by law to notarize documents.]



                    Subpart C--Emergency Action Plans



Sec. 12.20  General requirements.

    (a) Unless provided with a written exemption pursuant to Sec. 12.21, 
every applicant or licensee must develop and file with the Regional 
Engineer three copies of an emergency action plan and appendices, 
verified in accordance with Sec. 12.13.
    (b) The emergency action plan must be:
    (1) Developed in consultation and cooperation with appropriate 
Federal, state, and local agencies responsible for public health and 
safety; and
    (2) Designed to provide early warning to upstream and downstream 
inhabitants, property owners, operators of water-related facilities, 
recreational users, and other persons in the vicinity who might be 
affected by a project emergency as defined in Sec. 12.3(b)(9).



Sec. 12.21  Exemptions.

    (a) Grant of exemption. Except as provided in paragraph (b), if an 
applicant or licensee satisfactorily demonstrates that no reasonably 
foreseeable project emergency would endanger life, health, or property, 
the Regional Engineer may exempt the applicant or licensee from filing 
an emergency action plan.
    (b) No exemption. A licensee or applicant may not be exempted from 
the requirements of Sec. 12.22(c) for a radiological response plan.
    (c) Conditions of exemptions. (1) An applicant or licensee who 
receives an exemption from filing an emergency action plan has the 
continuing responsibility to review circumstances upstream and 
downstream from the project to determine if, as a result of changed 
circumstances, a project emergency might endanger life, health, or 
property.
    (2) Promptly after the applicant or licensee learns that, as a 
result of any change in circumstances, a project emergency might 
endanger life, health, or property, the applicant or licensee must 
inform the Regional Engineer of that changed condition without unduly 
delaying the preparation and implementation of the emergency action 
plan.
    (3) Comprehensive review of the necessity for an emergency action 
plan must be conducted at least once each year.
    (d) Revocation of exemption. (1) The Regional Engineer may revoke an 
exemption granted under this section if it is determined that, as a 
result of any change in circumstances, a project emergency might 
endanger life, health, or property.
    (2) If an exemption is revoked, the applicant or licensee must file 
an emergency action plan within the time specified by the Regional 
Engineer.



Sec. 12.22  Contents of emergency action plan.

    (a) Contents--(1) The plan itself. An emergency action plan must 
conform with the guidelines established, and from time to time revised, 
by the Director of the Office of Hydropower Licensing (available from 
the division of Inspections or the Regional Engineer) to provide:

[[Page 165]]

    (i) Instructions to project operators and attendants and other 
responsible personnel about the actions they are to take during a 
project emergency;
    (ii) Detailed plans for notifying potentially affected persons, 
appropriate Federal, state, and local agencies, including public safety 
and law enforcement bodies, and medical units; and
    (iii) Procedures for controlling the flow of water, including 
actions to reduce in-flows to reservoirs, such as limiting outflows from 
upstream dams or control structures, and actions to reduce downstream 
flows, such as increasing or decreasing outflows from downstream dams or 
control structures, on the waterway on which the project is located or 
its tributaries.
    (2) Appendix to the plan. Each copy of the emergency action plan 
submitted to the Regional Engineer must be accompanied by an appendix 
conforming with the guidelines established by the Director of the Office 
of Hydropower Licensing that contains:
    (i) Plans for training project operators, attendants, and other 
responsible personnel to respond properly during a project emergency, 
including instructions on the procedures to be followed throughout a 
project emergency and the manner in which the licensee will periodically 
review the knowledge and understanding that these personnel have of 
those procedures;
    (ii) A summary of the study used for determining the upstream and 
downstream areas that may be affected by sudden release of water, 
including a summary of all criteria and assumptions used in the study 
and, if required by the Regional Engineer, inundation maps; and
    (iii) Documentation of consultations with Federal, state, and local 
agencies, including public safety and law enforcement bodies, and 
medical units.
    (b) Special factors. The applicant or licensee must take into 
account in its emergency action plan the time of day, particularly hours 
of darkness, in establishing the proper actions and procedures for use 
during a project emergency.
    (c) Additional requirements for projects near nuclear power plants--
(1) Radiological response plan. If the personnel operating any 
powerhouse or any spillway control facilities, such as gates or valves, 
of a project would be located within ten miles of a nuclear power plant 
reactor, the applicant or licensee must file, separately or as a 
supplement to any required emergency action plan, a radiological 
response plan that provides for emergency procedures to be taken if an 
accident or other incident results in the release of radioactive 
materials from the nuclear power plant reactor.
    (2) A radiological response plan must:
    (i) To the maximum extent practicable, include sufficient procedural 
safeguards to ensure that, during or following an accident or other 
incident involving the nearby nuclear power plant reactor, the project 
may be safely operated and, if evacuation is necessary, the project may 
be left unattended without danger to the safety of any project dam or to 
life, health, or safety upstream or downstream from the project; and
    (ii) Explain the provisions, developed after consultation with the 
direct purchasers of project power, for cessation, curtailment, or 
continuation of generation of electric power at the project during or 
following an accident or other incident involving the nearby nuclear 
power plant reactor.
    (3) Time of filing radiological response plan. (i) For a constructed 
project with an otherwise acceptable emergency action plan on file, any 
radiological response plan required must be filed:
    (A) If an operating license for the nuclear power plant has been 
issued on or before March 1, 1981, not later than three months from 
March 1, 1981; or
    (B) In all other instances, not later than three months after the 
date an operating license for the nuclear power plant is issued.
    (ii) For any project not described in Sec. 12.22(c)(3)(i), any 
radiological response plan required must be filed contemporaneously with 
the emergency action plan or, if the project has been exempted from 
filing an emergency action plan, at the time the emergency action plan 
would otherwise have been required to be filed pursuant to Sec. 12.23.

[Order 122, 46 FR 9036, Jan. 28, 1981, as amended at 49 FR 29370, July 
20, 1984]

[[Page 166]]



Sec. 12.23  Time for filing emergency action plan.

    (a) Unconstructed project. (1) Except as set forth in paragraph 
(a)(2), the emergency action plan for an unconstructed project must be 
filed no later than 60 days before the initial filling of the project 
reservoir begins.
    (2) Temporary impoundment during construction. (i) For any 
unconstructed project, if a temporary impoundment would be created 
during construction, such as through construction of temporary or 
permanent cofferdams or large sediment control structures, and an 
accident to or failure of the impounding structures might endanger 
construction workers or otherwise endanger public health or safety, a 
temporary construction emergency action plan must be filed no later than 
60 days before construction begins.
    (ii) No later than 60 days before the initial filling of a project 
reservoir begins at a project for which a temporary emergency action 
plan has been filed the applicant or licensee must file modifications to 
that plan or a new plan, taking into account the differences in 
circumstances between the construction and post-construction periods.
    (b) Unlicensed constructed project. (1) If the Commission has 
determined on or before March 1, 1981 that a license is required for an 
unlicensed constructed project, the emergency action plan for that 
project must be filed no later than:
    (i) Six months after March 1, 1981; or
    (ii) Any earlier date specified by the Commission or its authorized 
representative.
    (2) Except as set forth in paragraph (b)(1) of this section, the 
emergency action plan for an unlicensed constructed project must be 
filed no later than the earliest of:
    (i) Six months after the date that a license application is filed;
    (ii) Six months after the date that the Commission issues an order 
determining that licensing is required; or
    (iii) A date specified by the Commission or its authorized 
representative.
    (c) Licensed constructed project. If a licensed constructed project 
does not have an acceptable emergency action plan on file on March 1, 
1981 the emergency action plan must be filed no later than:
    (1) Six months after March 1, 1981; or
    (2) Any earlier date specified by the Commission or its authorized 
representative.
    (d) For good cause shown, the Regional Engineer may grant an 
extension of time for filing all or any part of an emergency action 
plan.



Sec. 12.24  Review and updating of plans.

    (a) The emergency action plan must be continually updated to reflect 
any changes in the names or titles of project operators and attendants 
and other personnel with specified responsibilities for actions in an 
emergency and any changes in names of persons to call, telephone 
numbers, radio call signals, or other information critical to providing 
notification to affected persons, Federal, state, and local agencies, 
and medical units.
    (b) An applicant or licensee has continuing responsibility to review 
the adequacy of the emergency action plan in light of any significant 
changes in upstream or downstream circumstances which might affect water 
flows or the location or extent of the areas, persons, or property that 
might be harmed in a project emergency.
    (c) Promptly after an applicant or licensee learns of any change in 
circumstances described in paragraph (b) of this section, the applicant 
or licensee must:
    (1) Inform the Regional Engineer of that change in circumstances;
    (2) Consult and cooperate with appropriate Federal, state, and local 
agencies responsible for public health and safety to determine any 
advisable revisions to the emergency action plan; and
    (3) File with the Regional Engineer three copies of any revisions to 
the appropriate studies, maps, plans, procedures, or other information 
in the emergency action plan itself or its appendices that have changed 
as a result of that consultation.
    (d) An applicant or licensee must conduct a comprehensive review of 
the adequacy of the emergency action plan at least once each year.

[[Page 167]]



Sec. 12.25  Posting and readiness.

    (a) A copy of the current emergency action plan itself must be 
posted in a prominent location readily accessible to the licensee's or 
applicant's operating personnel who are responsible for controlling 
water flows and for notifying public health and safety agencies and 
affected persons.
    (b) Each licensee or applicant must annually test the state of 
training and readiness of key licensee or applicant personnel 
responsible for responding properly during a project emergency to ensure 
that they know and understand the procedures to be followed throughout a 
project emergency.



             Subpart D--Inspection by Independent Consultant



Sec. 12.30  Applicability.

    This subpart applies to any licensed project development that has a 
dam:
    (a) That is more than 32.8 feet (10 meters) in height above 
streambed, as defined in Sec. 12.31(c);
    (b) That impounds an impoundment with a gross storage capacity of 
more than 2,000 acre-feet (2.5 million cubic meters); or
    (c) That has a high hazard potential and is determined by the 
Regional Engineer or other authorized Commission representative to 
require inspection by an independent consultant under this subpart.



Sec. 12.31  Definitions.

    For purposes of this subpart:
    (a) Independent consultant means any person who:
    (1) Is a licensed professional engineer;
    (2) Has at least 10 years experience and expertise in dam design and 
construction and in the investigation of the safety of existing dams; 
and
    (3) Is not, and has not been within two years before being retained 
to perform an inspection under this subpart, an employee of the licensee 
or its affiliates or an agent acting on behalf of the licensee or its 
affiliates.
    (b) Dam that has a high hazard potential means any dam whose 
failure, in the judgment of the Commission or its authorized 
representative, might endanger human life or cause significant property 
damage, or which meets the criteria for high hazard potential as defined 
by the Corps of Engineers in 33 CFR part 222.
    (c) Height above streambed means:
    (1) For a dam with a spillway, the vertical distance from the lowest 
elevation of the natural streambed at the downstream toe of the dam to 
the maximum water storage elevation possible without any discharge from 
the spillway. The maximum water storage elevation is:
    (i) For gated spillways, the elevation of the tops of the gates;
    (ii) For ungated spillways, the elevation of the spillway crest or 
the top of any flashboards, whichever is higher;
    (2) For a dam without a spillway, the vertical distance from the 
lowest elevation of the natural streambed at the downstream tow of the 
dam to the lowest point on the crest of the dam.
    (d) Gross storage capacity means the maximum possible volume of 
water impounded by a dam with zero spill, that is, without the discharge 
of water over the dam or a spillway.
    (e) The Director of the Office of Hydropower Licensing may, for good 
cause shown, grant a waiver of the 10 year requirement in paragraph 
(a)(2) of this section. Any petition for waiver under this paragraph 
must be filed in accordance with Sec. 1.7(b) of this chapter.

[Order 122, 46 FR 9036, Jan. 28, 1981, as amended at 49 FR 29370, July 
20, 1984]



Sec. 12.32  General inspection requirement.

    In accordance with the procedures in Sec. 12.35, the project works 
of each development to which this subpart applies, excluding 
transmission and transformation facilities and generating equipment, 
must be periodically inspected and evaluated by or under the 
responsibility and direction of at least one independent consultant, who 
may be a member of a consulting firm, to identify any actual or 
potential deficiencies, whether in the condition of those project works 
or in the quality or adequacy of project maintenance, surveillance, or 
methods of operation, that might endanger public safety.

[[Page 168]]



Sec. 12.33  Exemption.

    (a) Upon written request from the licensee, the Director of the 
Office of Hydropower Licensing may grant an exemption from the 
requirements of this subpart in extraordinary circumstances that clearly 
establish good cause for exemption.
    (b) Good cause for exemption may include the finding that the 
development in question has no dam except dams that meet the criteria 
for low hazard potential as defined by the Corps of Engineers in 33 CFR 
part 222.

[Order 122, 46 FR 9036, Jan. 28, 1981, as amended at 49 FR 29370, July 
20, 1984]



Sec. 12.34  Approval of independent consultant.

    At least 60 days before the initiation of an inspection under this 
subpart, the licensee must submit to the Director of the Office of 
Hydropower Licensing for approval, with a copy to the Regional Engineer, 
a detailed resume that (a) describes the experience of the independent 
consultant; and, (b) shows that the consultant is an independent 
consultant as defined in Sec. 12.31(a).

[Order 122, 46 FR 9036, Jan. 28, 1981, as amended at 49 FR 29370, July 
20, 1984]



Sec. 12.35  Specific inspection requirements.

    (a) Scope of inspection. The inspection by the independent 
consultant shall include:
    (1) Due consideration of all relevant reports on the safety of the 
development made by or written under the direction of Federal or state 
agencies, submitted under Commission regulations, or made by other 
consultants;
    (2) Physical field inspection of the project works and review and 
assessment of all relevant data concerning:
    (i) Settlement;
    (ii) Movement;
    (iii) Erosion;
    (iv) Seepage;
    (v) Leakage;
    (vi) Cracking;
    (vii) Deterioration;
    (viii) Seismicity;
    (ix) Internal stress and hydrostatic pressures in project structures 
or their foundations or abutments;
    (x) The functioning of foundation drains and relief wells;
    (xi) The stability of critical slopes adjacent to a reservoir or 
project works; and
    (xii) Regional and site geological conditions; and
    (3) Specific evaluation of:
    (i) The adequacy of spillways;
    (ii) The effects of overtopping of nonoverflow structures;
    (iii) The structural adequacy and stability of structures under all 
credible loading conditions;
    (iv) The relevant hydrological data accumulated since the project 
was constructed or last inspected under this subpart;
    (v) The history of the performance of the project works through 
analysis of data from monitoring instruments; and
    (vi) The quality and adequacy of maintenance, surveillance, and 
methods of project operations for the protection of public safety.
    (b) Evaluation of spillway adequacy. The adequacy of any spillway 
must be evaluated by considering hazard potential which would result 
from failure of the project works during flood flows.
    (1) If structural failure would present a hazard to human life or 
cause significant property damage, the independent consultant must 
evaluate the ability of project works to withstand the loading or 
overtopping which may occur from a flood up to the probable maximum 
flood or the capacity of spillways to prevent the reservoir from rising 
to an elevation that would endanger the project works.
    (2) If structural failure would not present a hazard to human life 
of cause significant property damage, spillway adequacy may be evaluated 
by means of a design flood of lesser magnitude than the probable maximum 
flood, if the report of the independent consultant pursuant to 
Sec. 12.37 provides a detailed explanation of the bases for the finding 
that structural failure would not present a hazard to human life or 
cause significant property damage.



Sec. 12.36  Emergency corrective measures.

    If, in the course of an inspection, an independent consultant 
discovers any

[[Page 169]]

condition for which emergency corrective measures are advisable, the 
independent consultant must immediately notify the licensee and the 
licensee must report that condition to the Regional Engineer pursuant to 
Sec. 12.10(a) of this part.



Sec. 12.37  Report of the independent consultant.

    (a) General requirement. Following inspection of a project 
development as required under this subpart, the independent consultant 
must prepare a report and the licensee must file three copies of that 
report with the Regional Engineer. The report must conform to the 
provisions of this section and be satisfactory to the authorized 
Commission representative.
    (b) General information in the initial report. (1) The initial 
report filed under this subpart for any project development must 
contain:
    (i) A description of the project development;
    (ii) A map of the region indicating the location of the project 
development;
    (iii) Plans, elevations, and sections of the principal project 
works;
    (iv) A summary of the design assumptions, design analyses, spillway 
design flood, and the factors of safety used to evaluate the structural 
adequacy and stability of the project works; and
    (v) A summary of the geological conditions that may affect the 
safety of the project works.
    (2) To the extent that the information and analyses required in 
paragraph (b)(1) of this section, are contained in a report of an 
independent consultant prepared and filed in compliance with Commission 
regulations in effect before March 1, 1981 the information and analyses 
may be incorporated by specific reference into the first report prepared 
and filed under this subpart.
    (c) Information required for all reports. Any report of an 
independent consultant filed under this subpart must contain the 
information specified in this paragraph.
    (1) Monitoring information. The report must contain monitoring 
information that includes time-versus-reading graphs depicting data 
compiled from any existing critical or representative monitoring 
instruments that measure the behavior, movement, deflection, or loading 
of project works or from which the stability, performance, or 
functioning of the structures may be determined.
    (i) Any monitoring data plotted on graphs must be presented in a 
manner that will facilitate identification and analysis of trends. The 
data may be summarized to facilitate graphical representation.
    (ii) Plan and sectional drawings of project structures sufficient to 
show the location of all critical or representative existing monitoring 
instruments must be included. If these drawings have been included in a 
previous report prepared and filed by an independent consultant, they 
may be incorporated by specific reference to that earlier report.
    (2) Analyses. The report must:
    (i) Analyze the safety of the project works and the maintenance and 
methods of operation of the development fully in light of the 
independent consultant's reviews, field inspections, assessments, and 
evaluations described in Sec. 12.35;
    (ii) Identify any changes in the information and analyses required 
by paragraph (b) of this section that have occurred since the last 
report by an independent consultant under this subpart and analyze the 
implications of those changes; and
    (iii) Analyze the adequacy of existing monitoring instruments, 
periodic observation programs, and other methods of monitoring project 
works and conditions effecting the safety of the project or project 
works with respect to the development.
    (3) Incorporation by reference. To the extent that conditions, 
assumptions, and available information have not changed since the last 
previous report by an independent consultant under this subpart, the 
analyses required under paragraphs (c)(2)(i) and (ii) of this section 
may be incorporated by specific reference to the last previous report.
    (4) Recommendations. Based on the independent consultant's field 
observations and evaluations of the project

[[Page 170]]

works and the maintenance, surveillance, and methods of operation of the 
development, the report must contain the independent consultant's 
recommendations on:
    (i) Any corrective measures necessary for the structures or for the 
maintance or surveillance procedures or methods of operation of the 
project works;
    (ii) A reasonable time to carry out each corrective measure; and
    (iii) Any new or additional monitoring instruments, periodic 
observations, or other methods of monitoring project works or conditions 
that may be required.
    (5) Dissenting views. If the inspection and report were conducted 
and prepared by more than one independent consultant, the report must 
clearly indicate any dissenting views concerning the analyses or 
recommendations of the report that might be held by any individual 
consultant.
    (6) List of participants. The report must identify all professional 
personnel who have participated in the inspection of the project or in 
preparation of the report and the independent consultant who directed 
those activities.
    (7) Statement of independence. The independent consultant must 
declare that all conclusions and recommendations in the report are made 
independently of the licensee, its employees, and its representatives.
    (8) Signature. The report must be signed by each independent 
consultant responsible for the report.



Sec. 12.38  Time for inspections and reports.

    (a) General rule. After the initial inspection and report under this 
subpart for a project development, a new inspection under this subpart 
must be completed and the report on it filed not later than five years 
from the date the last report on an inspection was to be filed under 
this subpart.
    (b) Initial inspection and report. (1) For any development that has 
a dam that is more than 32.8 feet (10 meters) in height above streambed 
or impounds an impoundment with a gross storage capacity of more than 
2,000 acre feet (2.5 million cubic meters), which development was 
constructed before the date of issuance of the order licensing or 
amending a license to include that development, the initial inspection 
under this subpart must be completed and the report on it filed not 
later than two years after the date of issuance of the order licensing 
the development or amending the license to include the development.
    (2) For any development that was constructed after the date of 
issuance of the order licensing or amending a license to include the 
development, the initial inspection under this subpart must be completed 
and the report on it filed not later than five years from the date of 
first commercial operation, or the date on which the impoundment first 
reaches its normal maximum surface elevation, whichever occurs first.
    (3) For any development not set forth in either subparagraph (b)(1) 
or (b)(2), the initial inspection under this subpart must be completed 
and the report on it filed by a date specified by the Regional Engineer. 
The filing date must not be more than two years after the date of 
notification that an inspection and report under this subpart are 
required.
    (4) The last independent consultant's inspection and report made for 
a development before March 1, 1981 in compliance with the Commission's 
rules then in effect is deemed to fulfill the requirements for an 
initial inspection and report under this subpart for that development, 
except that the first report filed under this subpart for that 
development after March 1, 1981 must contain the information and 
analyses required by Sec. 12.37(b).
    (c) Extension of time. For good cause shown, the Regional Engineer 
may extend the time for filing an independent consultant's report under 
this subpart.



Sec. 12.39  Taking corrective measures after the report.

    (a) Corrective plan and schedule. (1) Not later than 60 days after 
the report of the independent consultant is filed with the Regional 
Engineer, the licensee must submit to the Regional Engineer three copies 
of a plan and schedule for designing and carrying out any corrective 
measures that the licensee proposes.

[[Page 171]]

    (2) The plan and schedule may include any proposal, including taking 
no action, that the licensee considers a preferable alternative to any 
corrective measure recommended in the report of the independent 
consultant. Any proposed alternative must be accompanied by the 
licensee's complete justification and detailed analysis and evaluation 
in support of that alternative.
    (b) Carrying out the plan. The licensee must complete all corrective 
measures in accordance with the plan and schedule submitted to, and 
approved or modified by, the Regional Engineer.
    (c) Extension of time. For good cause shown, the Regional Engineer 
may extend the time for filing the plan and schedule required by this 
section.



       Subpart E--Other Responsibilities of Applicant or Licensee



Sec. 12.40  Quality control programs.

    (a) General rule. During any construction, repair, or modification 
of project works, including any corrective measures taken pursuant to 
Sec. 12.39 of this part, the applicant or licensee must maintain any 
quality control program that may be required by the Regional Engineer, 
commensurate with the scope of the work and meeting any requirements or 
standards set by the Regional Engineer. If a quality control program is 
required, the construction, repair, or modification may not begin until 
the Regional Engineer has approved the program.
    (b) If the construction, repair, or modification work is performed 
by a construction contractor, quality control inspection must be 
performed by the licensee, the design engineer, or an independent firm, 
other than the construction contractor, directly accountable to the 
licensee. This paragraph is not intended to prohibit additional quality 
control inspections by the construction contractor, or a firm 
accountable to the construction contractor, for the construction 
contractor's purposes.
    (c) If the construction, repair, or modification of project works is 
performed by the applicant's or licensee's own personnel, the applicant 
or licensee must provide for separation of authority within its 
organization to make certain that the personnel responsible for quality 
control inspection are, to the satisfaction of the Regional Engineer or 
other authorized Commission representative, independent from the 
personnel who are responsible for the construction, repair or 
modification.



Sec. 12.41  Monitoring instruments.

    (a) In designing a project, a licensee must make adequate provision 
for installing and maintaining appropriate monitoring instrumentation 
whenever any physical condition that might affect the stability of a 
project structure has been discovered or is anticipated. The 
instrumentation must be satisfactory to the Regional Engineer and may 
include, for example, instruments to monitor movement of joints, 
foundation or embankment deformation, seismic effects, hydrostatic pore 
pressures, structural cracking, or internal stresses on the structure.
    (b) If an applicant or licensee discovers any condition affecting 
the safety of the project or project works during the course of 
construction or operation, the applicant or licensee must install and 
maintain any monitoring devices and instruments that may be required by 
the Regional Engineer or other authorized Commission representative to 
monitor that condition.



Sec. 12.42  Warning and safety devices.

    To the satisfaction of, and within a time specified by, the Regional 
Engineer, an applicant or licensee must install, operate, and maintain 
any signs, lights, sirens, barriers, or other safety devices that may 
reasonably be necessary or desirable to warn the public of fluctuations 
in flow from the project or otherwise to protect the public in the use 
of project lands and waters.



Sec. 12.43  Power and communication lines and gas pipelines.

    (a) A licensee must take all reasonable precautions, and comply with 
all reasonable specifications that may be provided by the Regional 
Engineer, to ensure that any power or communication line or gas pipeline 
that is located over, under, or in project waters does

[[Page 172]]

not obstruct navigation for recreational or commercial purposes or 
otherwise endanger public safety.
    (b) Clearances between any power or communication line constructed 
after March 1, 1981 and any vessels using project waters must be at 
least sufficient to conform to any applicable requirements of the 
National Electrical Safety Code in effect at the time the power or 
communication line is constructed.
    (c) The Regional Engineer may require a licensee or applicant to 
provide signs at or near power or communication lines to advise the 
public of the clearances for any power or communication lines located 
over, under, or in project waters.



Sec. 12.44  Testing spillway gates.

    (a) General requirement. An applicant or licensee must make adequate 
provision, to the satisfaction of the Regional Engineer or other 
authorized Commission representative, to ensure that all spillway gates 
are operable at all times, particularly during adverse weather 
conditions.
    (b) Annual test. (1) At least once each year, each spillway gate at 
a project must be operated to spill water, either during regular project 
operation or on a test basis.
    (2) If an applicant or licensee does not operate each spillway gate 
on a test basis during the periodic inspection by the Commission staff, 
the applicant or licensee must submit to the Regional Engineer at least 
once each year a written statement, verified in accordance with 
Sec. 12.13, that each spillway has been operated at least once during 
the twelve months preceding the inspection.
    (c) Load-test of standby power. (1) An applicant or licensee must 
load-test the standby emergency power for spillway gate operation at 
regular intervals, but not less than once during each year, and submit 
to the Regional Engineer, at least once each year, a written statement, 
verified in accordance with Sec. 12.13, describing the intervals at 
which the standby emergency power was load-tested during the year 
preceding the inspection.
    (2) The Commission staff may direct that a spillway gate be operated 
using standby emergency power during the periodic inspection.



PART 16--PROCEDURES RELATING TO TAKEOVER AND RELICENSING OF LICENSED PROJECTS--Table of Contents




                      Subpart A--General Provisions

Sec.
16.1  Applicability.
16.2  Definitions.
16.3  Public notice of projects under expiring licenses.
16.4  Acceleration of a license expiration date.
16.5  Site access for a competing applicant.

 Subpart B--Applications for Projects Subject to Sections 14 and 15 of 
                          the Federal Power Act

16.6  Notification procedures under section 15 of the Federal Power Act.
16.7  Information to be made available to the public at the time of 
          notification of intent under section 15(b) of the Federal 
          Power Act.
16.8  Consultation requirements.
16.9  Applications for new licenses and nonpower licenses for projects 
          subject to sections 14 and 15 of the Federal Power Act.
16.10  Information to be provided by an applicant for new license: 
          Filing requirements.
16.11  Nonpower licenses.
16.12  Application for exemption from licensing by a licensee whose 
          license is subject to sections 14 and 15 of the Federal Power 
          Act.
16.13  Standards and factors for issuing a new license.

 Subpart C--Takeover Provisions for Projects Subject to Sections 14 and 
                       15 of the Federal Power Act

16.14  Departmental recommendation for takeover.
16.15  Commission recommendation to Congress.
16.16  Motion for stay by Federal department or agency.

[[Page 173]]

16.17  Procedures upon Congressional authorization of takeover.

Subpart D--Annual Licenses for Projects Subject to Sections 14 and 15 of 
                          the Federal Power Act

16.18  Annual licenses for projects subject to sections 14 and 15 of the 
          Federal Power Act.

 Subpart E--Projects With Minor and Minor Part Licenses Not Subject to 
               Sections 14 and 15 of the Federal Power Act

16.19  Procedures for an existing licensee of a minor hydroelectric 
          power project or of a minor part of a hydroelectric power 
          project with a license not subject to sections 14 and 15 of 
          the Federal Power Act.
16.20  Applications for subsequent license for a project with an 
          expiring license not subject to sections 14 and 15 of the 
          Federal Power Act.
16.21  Operation of projects with a minor or minor part license not 
          subject to sections 14 and 15 of the Federal Power Act after 
          expiration of a license.
16.22  Application for an exemption by a licensee with a minor or minor 
          part license for a project not subject to sections 14 and 15 
          of the Federal Power Act.

                      Subpart F--Procedural Matters

16.23  Failure to file timely notices of intent.
16.24  Prohibitions against filing applications for new license, 
          nonpower license, exemption, or subsequent license.
16.25  Disposition of a project for which no timely application is filed 
          following a notice of intent to file.
16.26  Disposition of a project for which no timely application is filed 
          following a notice of intent not to file.

    Authority: 16 U.S.C. 791a-825r; 42 U.S.C. 7101-7352.

    Source: Order 513, 54 FR 23806, June 2, 1989, unless otherwise 
noted.



                      Subpart A--General Provisions



Sec. 16.1  Applicability.

    This part applies to the filing and processing of an application 
for:
    (a) A new license, a nonpower license, or an exemption from 
licensing for a hydroelectric project with an existing license subject 
to the provisions of sections 14 and 15 of the Federal Power Act.
    (b) A subsequent license or an exemption from licensing for a 
hydroelectric project with an existing minor license or minor part 
license not subject to the provisions of sections 14 and 15 of the 
Federal Power Act because those sections were waived pursuant to section 
10(i) of the Federal Power Act.



Sec. 16.2  Definitions.

    For purposes of this part:
    (a) New license means a license, except an annual license, for a 
water power project that is issued under section 15(a) of the Federal 
Power Act after an original license expires.
    (b) New license application filing deadline, as provided in section 
15(c)(1) of the Federal Power Act, is the date 24 months before the 
expiration of an existing license.
    (c) Nonpower license means a license for a nonpower project issued 
under section 15(b) of the Federal Power Act.
    (d) Subsequent license means a license for a water power project 
issued under Part I of the Federal Power Act after a minor or minor part 
license that is not subject to sections 14 and 15 of the Federal Power 
Act expires.

[Order 513, 54 FR 23806, June 2, 1989, as amended by Order 513-A, 55 FR 
15, Jan. 2, 1990; Order 533, 56 FR 23154, May 20, 1991]



Sec. 16.3  Public notice of projects under expiring licenses.

    In addition to the notice of a licensee's intent to file or not to 
file an application for a new license provided in Sec. 16.6(d), the 
Commission will publish, in its annual report and annually in the 
Federal Register, a table showing the projects whose licenses will 
expire during the succeeding six years. The table will:
    (a) List the licenses according to their expiration dates; and
    (b) Contain the following information: license expiration date; 
licensee's name; project number; type of principal project works 
licensed, e.g., dam and reservoir, powerhouse, transmission lines; 
location by state, county, and stream; location by city or nearby city 
when appropriate; whether the existing license is subject to sections 14 
and 15 of the Federal Power Act; and plant installed capacity.

[[Page 174]]



Sec. 16.4  Acceleration of a license expiration date.

    (a) Request for acceleration. (1) A licensee may file with the 
Commission, in accordance with the formal filing requirements in subpart 
T of part 385 of this chapter, a written request for acceleration of the 
expiration date of its existing license, containing the statements and 
information specified in Sec. 16.6(b) and a detailed explanation of the 
basis for the acceleration request.
    (2) If the Commission grants the request for acceleration pursuant 
to paragraph (c), the Commission will deem the request for acceleration 
to be a notice of intent under Sec. 16.6 and, unless the Commission 
directs otherwise, the licensee shall make available the information 
specified in Sec. 16.7 no later than 90 days from the date that the 
Commission grants the request for acceleration.
    (b) Notice of request for acceleration. (1) Upon receipt of a 
request for acceleration, the Commission will give notice of the 
licensee's request and provide a 45-day period for comments by 
interested persons by:
    (i) Publishing notice in the Federal Register;
    (ii) Publishing notice once in a daily or weekly newspaper published 
in the county or counties in which the project or any part thereof or 
the lands affected thereby are situated; and
    (iii) Notifying appropriate Federal, state, and interstate resource 
agencies and Indian tribes by mail.
    (2) The notice issued pursuant to paragraphs (1) (i) and (ii) and 
the written notice given pursuant to paragraph (1)(iii) will be 
considered as fulfilling the notice provisions of Sec. 16.6(d) should 
the Commission grant the acceleration request and will include an 
explanation of the basis for the licensee's acceleration request.
    (c) Commission order. If the Commission determines it is in the 
public interest, the Commission will issue an order accelerating the 
expiration date of the license to not less than five years and 90 days 
from the date of the Commission order.



Sec. 16.5  Site access for a competing applicant.

    (a) Access. If a potential applicant for a new license, subsequent 
license, or nonpower license for a project has complied with the first 
stage consultation provisions of Sec. 16.8(b)(1) and has notified the 
existing licensee in writing of the need for and extent of the access 
required, the existing licensee must allow the potential applicant to 
enter upon or into designated land, buildings, or other property in the 
project area at a reasonable time and under reasonable conditions, 
including, but not limited to, reasonable liability conditions, 
conditions for compensation to the existing licensee for all reasonable 
costs incurred in providing access, including energy generation lost as 
a result of modification of project operations that may be necessary to 
provide access, and in a manner that will not adversely affect the 
environment, for the purposes of:
    (1) Conducting a study or gathering information required by a 
resource agency under Sec. 16.8 or by the Commission pursuant to 
Sec. 4.32 of this chapter;
    (2) Conducting a study or gathering information not covered by 
paragraph (a)(1) but necessary to prepare an application for new 
license, subsequent license, or nonpower license; or
    (3) Holding a site visit for a resource agency under Sec. 16.8.
    (b)(1) Disputes. Except as specified by paragraph (b)(2), disputes 
regarding the timing and conditions of access for the purposes specified 
in paragraphs (a) (1), (2), or (3) of this section and the need for the 
studies or information specified in paragraph (a)(2) may be referred to 
the Director of the Office of Hydropower Licensing for resolution in the 
manner specified in Sec. 16.8(b)(5) prior to the providing of access.
    (2) Disputes regarding the amount of compensation to be paid the 
existing licensee for access may be referred to the Director of the 
Office of Hydropower Licensing for resolution in the manner specified in 
Sec. 16.8(b)(5) after the access has been provided.

[[Page 175]]



 Subpart B--Applications for Projects Subject to Sections 14 and 15 of 
                          the Federal Power Act



Sec. 16.6  Notification procedures under section 15 of the Federal Power Act.

    (a) Applicability. This section applies to a licensee of an existing 
project subject to sections 14 and 15 of the Federal Power Act.
    (b) Requirement to notify. In order to notify the Commission under 
section 15 of the Federal Power Act whether a licensee intends to file 
or not to file an application for new license, the licensee must file 
with the Commission an original and fourteen copies of a letter, that 
contains the following information:
    (1) The licensee's name and address.
    (2) The project number.
    (3) The license expiration date.
    (4) An unequivocal statement of the licensee's intention to file or 
not to file an application for a new license.
    (5) The type of principal project works licensed, such as dam and 
reservoir, powerhouse, or transmission lines.
    (6) Whether the application is for a power or nonpower license.
    (7) The location of the project by state, county and stream, and, 
when appropriate, by city or nearby city.
    (8) The installed plant capacity.
    (9) The location or locations of all the sites where the information 
required under Sec. 16.16 is available to the public.
    (10) The names and mailing addresses of:
    (i) Every county in which any part of the project is located, and in 
which any Federal facility that is used by the project is located;
    (ii) Every city, town, Indian tribe, or similar local political 
subdivision:
    (A) In which any part of the project is located and any Federal 
facility that is used by the project is located, or
    (B) That has a population of 5,000 or more people and is located 
within 15 miles of the project dam,
    (iii) Every irrigation district, drainage district, or similar 
special purpose political subdivision:
    (A) In which any part of the project is located and any Federal 
facility that is used by the project is located, or
    (B) That owns, operates, maintains, or uses any project facility or 
any Federal facility that is used by the project; and
    (iv) Every other political subdivision in the general area of the 
project that there is reason to believe would be likely to be interested 
in, or affected by, the notification.
    (c) When to notify. (1) Except as provided in paragraph (c)(2) of 
this section, if a license expires on or after October 17, 1992, the 
licensee must notify the Commission as required in paragraph (b) of this 
section at least five years, but no more than five and one-half years, 
before the existing license expires.
    (2) The requirement in paragraph (c)(1) of this section does not 
apply if a licensee filed notice more than five and one-half years 
before its existing license expired and before the effective date of 
this rule.
    (d) Commission notice. Upon receipt of the notification required 
under paragraph (b) of this section, the Commission will provide notice 
of the licensee's intent to file or not to file an application for a new 
license by:
    (1) Publishing notice in the Federal Register;
    (2) Publishing notice once in a daily or weekly newspaper published 
in the county or counties in which the project or any part thereof or 
the lands affected thereby are situated; and
    (3) Notifying appropriate Federal and state resource agencies and 
Indian tribes by mail.

[Order 496, 53 FR 15810, May 4, 1988. Redesignated and amended by Order 
513, 54 FR 23807, June 2, 1989]



Sec. 16.7  Information to be made available to the public at the time of notification of intent under section 15(b) of the Federal Power Act.

    (a) Applicability. This section applies to a licensee of an existing 
project subject to sections 14 and 15 of the Federal Power Act.
    (b) Requirement to make information available. A licensee must make 
the information specified in paragraph (d) of this section reasonably 
available to the

[[Page 176]]

public for inspection and reproduction, from the date on which the 
licensee notifies the Commission pursuant to Sec. 16.6(b) of this part 
until the date any relicensing proceeding for the project is terminated.
    (c) Requirement to supplement information. A licensee must 
supplement the information it is required to make available under the 
provisions of paragraph (d) with any additional information developed 
after the filing of a notice of intent.
    (d) Information to be made available. A licensee must make the 
following information regarding its existing project reasonably 
available to the public as provided in paragraph (b) of this section:
    (1) The following construction and operation information:
    (i) The original license application and the order issuing the 
license and any subsequent license application and subsequent order 
issuing a license for the existing project, including
    (A) Approved Exhibit drawings, including as-built exhibits,
    (B) Any order issuing amendments or approving exhibits, and
    (C) Any order issuing annual licenses for the existing project;
    (ii) All data relevant to whether the project is and has been 
operated in accordance with the requirements of each license article, 
including minimum flow requirements, ramping rates, reservoir elevation 
limitations, and environmental monitoring data;
    (iii) A compilation of project generation and respective outflow 
with time increments not to exceed one hour, unless use of another time 
increment can be justified, for the period beginning five years before 
the filing of a notice of intent;
    (iv) Any public correspondence relating to the existing project;
    (v) Any report on the total actual annual generation and annual 
operation and maintenance costs for the period beginning five years 
before the filing of a notice of intent;
    (vi) Any reports on original project costs, current net investment, 
and available funds in the amortization reserve account;
    (vii) A current and complete electrical single-line diagram of the 
project showing the transfer of electricity from the project to the area 
utility system or point of use; and
    (viii) Any bill issued to the existing licensee for annual charges 
under section 10(e) of the Federal Power Act.
    (2) The following safety and structural adequacy information:
    (i) The most recent emergency action plan for the project or a 
letter exempting the project from the emergency action plan requirement;
    (ii) Any independent consultant's reports required by part 12 of the 
Commission's regulations and filed on or after January 1, 1981;
    (iii) Any report on operation or maintenance problems, other than 
routine maintenance, occurring within the five years preceding the 
filing of a notice of intent or within the most recent five-year period 
for which data exists, and associated costs of such problems under the 
Commission's Uniform System of Accounts;
    (iv) Any construction report for the existing project; and
    (v) Any public correspondence relating to the safety and structural 
adequacy of the existing project.
    (3) The following fish and wildlife resources information:
    (i) Any report on the impact of the project's construction and 
operation on fish and wildlife resources;
    (ii) Any existing report on any threatened or endangered species or 
critical habitat located in the project area, or affected by the 
existing project outside the project area;
    (iii) Any fish and wildlife management plan related to the project 
area prepared by the existing licensee or any resource agency; and
    (iv) Any public correspondence relating to the fish and wildlife 
resources within the project area.
    (4) The following recreation and land use resources information:
    (i) Any report on past and current recreational uses of the project 
area;
    (ii) Any map showing recreational facilities and areas reserved for 
future development in the project area, designated or proposed 
wilderness areas in the project area, Land and Conservation Fund lands 
in the project area, and designated or proposed Federal or

[[Page 177]]

state wild and scenic river corridors in the project area;
    (iii) Any documentation listing the entity responsible for operating 
and maintaining any existing recreational facilities in the project 
area; and
    (iv) Any public correspondence relating to recreation and land use 
resources within the project area.
    (5) The following cultural resources information:
    (i) Except as provided in paragraph (d)(5)(ii) of this section, a 
licensee must make available:
    (A) Any report concerning documented archaeological resources 
identified in the project area;
    (B) Any report on past or present use of the project area and 
surrounding areas by Native Americans; and
    (C) Any public correspondence relating to cultural resources within 
the project area.
    (ii) A licensee must delete from any information made available 
under paragraph (d)(5)(i) of this section, specific site or property 
locations the disclosure of which would create a risk of harm, theft, or 
destruction of archaeological or Native American cultural resources or 
to the site at which the resources are located, or would violate any 
Federal law, including the Archaeological Resources Protection Act of 
1979, 16 U.S.C. 470w-3, and the National Historic Preservation Act of 
1966, 16 U.S.C. 470hh.
    (6) The following energy conservation information under section 
10(a)(2)(C) of the Federal Power Act, related to the licensee's efforts 
to conserve electricity or to encourage conservation by its customers 
including:
    (i) Any plan of the licensee;
    (ii) Any public correspondence; and
    (iii) Any other pertinent information relating to a conservation 
plan.
    (e) Form, place, and hours of availability, and cost of 
reproduction. (1) A licensee must make the information specified in 
paragraph (d) of this section available to the public for inspection:
    (i) At its principal place of business or at any other location or 
locations that are more accessible to the public, provided that all of 
the information is available in at least one location;
    (ii) During regular business hours; and
    (iii) In a form that is readily accessible, reviewable, and 
reproducible.
    (2) Except as provided in paragraph (d)(3) of this section, a 
licensee must make requested copies of the information specified in 
paragraph (c) of this section available either:
    (i) At its principal place of business or at any other location or 
locations that are more accessible to the public, after obtaining 
reimbursement for reasonable costs of reproduction; or
    (ii) Through the mail, after obtaining reimbursement for postage 
fees and reasonable costs of reproduction.
    (3) A licensee must make requested copies of the information 
specified in paragraph (d) of this section available to the United 
States Fish and Wildlife Service, the National Marine Fisheries Service, 
and the state agency responsible for fish and wildlife resources without 
charge for the costs of reproduction or postage.
    (f) Unavailability of required information. Anyone may file a 
petition with the Commission requesting access to the information 
specified in paragraph (d) of this section if it believes that a 
licensee is not making the information reasonably available for public 
inspection or reproduction. The petition must describe in detail the 
basis for the petitioner's belief.
    (g) Public correspondence. A licensee may compile and make available 
in one file all the public correspondence required to be made available 
for inspection and reproduction by Sec. 16.16(d)(1)(iv), (d)(2)(v), 
(d)(3)(iv), (d)(4)(iv), and (d)(6)(ii).

[Order 496, 53 FR 15810, May 4, 1988. Redesignated by Order 513, 54 FR 
23807, June 2, 1989; Order 513-C, 55 FR 10768, Mar. 23, 1990]



Sec. 16.8  Consultation requirements.

    (a) Requirement to consult. (1) Before it files any application for 
a new license, a nonpower license, an exemption from licensing, or, 
pursuant to Sec. 16.25 or Sec. 16.26 of this part, a surrender of a 
project, a potential applicant must consult with the relevant Federal, 
State, and interstate resource agencies, including the National Marine 
Fisheries Service, the United States Fish and Wildlife Service, the 
National

[[Page 178]]

Park Service, the United States Environmental Protection Agency, the 
Federal agency administering any United States lands or facilities 
utilized or occupied by the project, the appropriate state fish and 
wildlife agencies, the appropriate State water resource management 
agencies, the certifying agency under section 401(a)(1) of the Federal 
Water Pollution Control Act (Clean Water Act), 33 U.S.C. 1341(c)(1), and 
any Indian tribe that may be affected by the project.
    (2) The Director of the Office of Hydropower Licensing or the 
Regional Director responsible for the area in which the project is 
located will, upon request, provide a list of known appropriate Federal, 
state, and interstate resource agencies and Indian tribes.
    (3)(i) Before it files an amendment that would be considered as 
material under Sec. 4.35 of this part, to any application subject to 
this section, an applicant must consult with the resource agencies and 
Indian tribes listed in paragraph (a)(1) of this section and allow such 
agencies and tribes at least 60 days to comment on a draft of the 
proposed amendment and to submit recommendations and conditions to the 
applicant. The amendment as filed with the Commission must summarize the 
consultation with the resource agencies and Indian tribes on the 
proposed amendment and respond to any obligations, recommendations or 
conditions submitted by the agencies or Indian tribes.
    (ii) If an applicant has any doubt as to whether a particular 
amendment would be subject to the pre-filing consultation requirements 
of this section, the applicant may file a written request for 
clarification with the Director, Office of Hydropower Licensing.
    (b) First stage of consultation. (1) A potential applicant must 
provide each of the appropriate resource agencies and Indian tribes, 
listed in paragraph (a)(1) of this section, and the Commission with the 
following information:
    (i) Detailed maps showing existing project boundaries, if any, 
proper land descriptions of the entire project area by township, range, 
and section, as well as by state, county, river, river mile, and closest 
town, and also showing the specific location of all existing and 
proposed project facilities, including roads, transmission lines, and 
any other appurtenant facilities;
    (ii) A general engineering design of the existing project and any 
proposed changes, with a description of any existing or proposed 
diversion of a stream through a canal or a penstock;
    (iii) A summary of the existing operational mode of the project and 
any proposed changes;
    (iv) Identification of the environment affected or to be affected, 
the significant resources present and the applicant's existing and 
proposed environmental protection, mitigation, and enhancement plans, to 
the extent known at that time;
    (v) Streamflow and water regime information, both existing and 
proposed, including drainage area, natural flow periodicity, monthly 
flow rates and durations, mean flow figures illustrating the mean daily 
streamflow curve for each month of the year at the point of diversion or 
impoundment, with location of the stream gauging station, the method 
used to generate the streamflow data provided, and copies of all records 
used to derive the flow data used in the applicant's engineering 
calculations;
    (vi) Detailed descriptions of any proposed studies and the proposed 
methodologies to be employed; and
    (vii) Any statement required by Sec. 4.301(a) of this chapter.
    (2) Not earlier than 30 days, but not later than 60 days, from the 
date of the potential applicant's letter transmitting the information to 
the agencies and Indian tribes under paragraph (b)(1) of this section, 
the potential applicant will:
    (i) Hold a joint meeting, including an opportunity for a site visit, 
with all pertinent agencies and Indian tribes to review the information 
and to discuss the data and studies to be provided by the potential 
applicant as part of the consultation process; and
    (ii) Consult with the resource agencies and Indian tribes on the 
scheduling of the joint meeting and provide each resource agency, Indian 
tribe, and the Commission with written notice of the time and place of 
the joint meeting and a written agenda of the issues to be

[[Page 179]]

discussed at the meeting at least 15 days in advance.
    (3) Members of the public are invited to attend the joint meeting 
held pursuant to paragraph (b)(2)(i) of this section. Members of the 
public attending the meeting are entitled to participate fully in the 
meeting and to express their views regarding resource issues that should 
be addressed in any application for new license that may be filed by the 
potential applicant. Attendance of the public at any site visit held 
pursuant to paragraph (b)(2)(i) shall be at the discretion of the 
potential applicant. The potential applicant must make either audio 
recordings or written transcripts of the joint meeting, and must upon 
request promptly provide copies of these recordings or transcripts to 
the Commission and any resource agency and Indian tribe.
    (4) Unless otherwise extended by the Director of the Office of 
Hydropower Licensing pursuant to paragraph (b)(5) of this section, not 
later than 60 days after the joint meeting held under paragraph (b)(2) 
of this section each interested resource agency and Indian tribe must 
provide a potential applicant with written comments:
    (i) Identifying its determination of necessary studies to be 
performed or information to be provided by the potential applicant;
    (ii) Identifying the basis for its determination;
    (iii) Discussing its understanding of the resource issues and its 
goals and objectives for these resources;
    (iv) Explaining why each study methodology recommended by it is more 
appropriate than other available methodology alternatives, including 
those identified by the potential applicant pursuant to paragraph 
(b)(1)(vi) of this section;
    (v) Documenting that the use of each study methodology recommended 
by it is a generally accepted practice, and
    (vi) Explaining how the studies and information requested will be 
useful to the agency or Indian tribe in furthering its resource goals 
and objectives.
    (5)(i) If a potential applicant and a resource agency or Indian 
tribe disagree as to any matter arising during the first stage of 
consultation or as to the need to conduct a study or gather information 
referenced in paragraph (c)(2) of this section, the potential applicant 
or resource agency or Indian tribe may refer the dispute in writing to 
the Director of the Office of Hydropower Licensing for resolution.
    (ii) The entity referring the dispute must serve a copy of its 
written request for resolution on the disagreeing party at the time the 
request is submitted to the Director. The disagreeing party may submit 
to the Director of the Office of Hydropower Licensing a written response 
to the referral within 15 days of the referral's submittal to the 
Director.
    (iii) Written referrals to the Director of the Office of Hydropower 
Licensing and written responses thereto pursuant to paragraphs (b)(5)(i) 
or (b)(5)(ii) of this section must be filed with the Secretary of the 
Commission in accordance with the Commission's Rules of Practice and 
Procedure, and must indicate that they are for the attention of the 
Director of the Office of Hydropower Licensing pursuant to 
Sec. 16.8(b)(5).
    (iv) The Director of the Office of Hydropower Licensing will resolve 
disputes by letter provided to the potential applicant and the 
disagreeing resource agency or Indian tribe.
    (v) If a potential applicant does not refer a dispute regarding a 
request for information (other than a dispute regarding the information 
specified in paragraph (b)(1) of this section) or a study to the 
Director under paragraph (b)(5)(i) of this section or if a potential 
applicant disagrees with the Director's resolution of a dispute 
regarding a request for information (other than a dispute regarding the 
information specified in paragraph (b)(1) of this section) or a study, 
and if the potential applicant does not provide the requested 
information or conduct the requested study, the potential applicant must 
fully explain the basis for its disagreement in its application.
    (vi) Filing and acceptance of an application will not be delayed, 
and an application will not be considered deficient or patently 
deficient pursuant to Sec. 4.32 (e)(1) or (e)(2) of this chapter, merely 
because the application does not include a particular study or 
particular information if the Director of

[[Page 180]]

the Office of Hydropower Licensing had previously found, under paragraph 
(b)(5)(iv) of this section, that such study or information was 
unreasonable or unnecessary.
    (6) Unless otherwise extended by the Director of the Office of 
Hydropower Licensing pursuant to paragraph (b)(5) of this section, the 
first stage of consultation ends when all participating agencies and 
Indian tribes provide the written comments required under paragraph 
(b)(4) of this section or 60 days after the joint meeting under 
paragraph (b)(2) of this section, whichever occurs first.
    (c) Second stage of consultation. (1) Unless determined otherwise by 
the Director of the Office of Hydropower Licensing pursuant to paragraph 
(b)(5) of this section, a potential applicant must complete all 
reasonable and necessary studies and obtain all reasonable and necessary 
information requested by resource agencies and Indian tribes under 
paragraph (b):
    (i) Prior to filing the application, if the results:
    (A) Would influence the financial (e.g., instream flow study) or 
technical feasibility of the project (e.g., study of potential mass soil 
movement); or
    (B) Are needed to determine the design or location of project 
features, reasonable alternatives to the project, the impact of the 
project on important natural or cultural resources (e.g., resource 
surveys), suitable mitigation or enhancement measures, or to minimize 
impact on significant resources (e.g., wild and scenic river, anadromous 
fish, endangered species, caribou migration routes);
    (ii) After filing the application but before license issuance, if 
the applicant complied with the provisions of paragraph (b)(1) of this 
section no later than four years prior to the expiration date of the 
existing license and the results:
    (A) Would be those described in paragraphs (c)(1)(i) (A) or (B) of 
this section; and
    (B) Would take longer to conduct and evaluate than the time between 
the conclusion of the first stage of consultation and the new license 
application filing deadline.
    (iii) After a new license is issued, if the studies can be conducted 
or the information obtained only after construction or operation of 
proposed facilities, would determine the success of protection, 
mitigation, or enhancement measures (e.g., post-construction monitoring 
studies), or would be used to refine project operation or modify project 
facilities.
    (2) If, after the end of the first stage of consultation as defined 
in paragraph (b)(6) of this section, a resource agency or Indian tribe 
requests that the potential applicant conduct a study or gather 
information not previously identified and specifies the basis for its 
request, under paragraphs (b)(4)(i)-(vi) of this section, the potential 
applicant will promptly initiate the study or gather the information, 
unless the Director of the Office of Hydropower Licensing determines 
under paragraph (b)(5) of this section either that the study or 
information is unreasonable or unnecessary or that use of the 
methodology requested by a resource agency or Indian tribe for 
conducting the study is not a generally accepted practice.
    (3) (i) The results of studies and information gathering referenced 
in paragraphs (c)(1)(ii) and (c)(2) of this section will be treated as 
additional information; and
    (ii) Filing and acceptance of an application will not be delayed and 
an application will not be considered deficient or patently deficient 
pursuant to Sec. 4.32 (e)(1) or (e)(2) of this chapter merely because 
the study or information gathering is not complete before the 
application is filed.
    (4) A potential applicant must provide each resource agency and 
Indian tribe with:
    (i) A copy of its draft application that:
    (A) Indicates the type of application the potential applicant 
expects to file with the Commission; and
    (B) Responds to any comments and recommendations made by any 
resource agency or Indian tribe either during the first stage of 
consultation or under paragraph (c)(2) of this section;
    (ii) The results of all studies and information gathering either 
requested

[[Page 181]]

by that resource agency or Indian tribe in the first stage of 
consultation (or under paragraph (c)(2) of this section if available) or 
which pertains to resources of interest to that resource agency or 
Indian tribe and which were identified by the potential applicant 
pursuant to paragraph (b)(1)(vi) of this section, including a discussion 
of the results and any proposed protection, mitigation, or enhancement 
measure; and
    (iii) A written request for review and comment.
    (5) A resource agency or Indian tribe will have 90 days from the 
date of the potential applicant's letter transmitting the paragraph 
(c)(4) of this section information to it to provide written comments on 
the information submitted by a potential applicant under paragraph 
(c)(4) of this section.
    (6) If the written comments provided under paragraph (c)(5) of this 
section indicate that a resource agency or Indian tribe has a 
substantive disagreement with a potential applicant's conclusions 
regarding resource impacts or its proposed protection, mitigation, or 
enhancement measures, the potential applicant will:
    (i) Hold at least one joint meeting with the disagreeing resource 
agency or Indian tribe and other agencies with similar or related areas 
of interest, expertise, or responsibility not later than 60 days from 
the date of the disagreeing agency's or Indian tribe's written comments 
to discuss and to attempt to reach agreement on its plan for 
environmental protection, mitigation, or enhancement measures; and
    (ii) Consult with the disagreeing agency or Indian tribe and other 
agencies with similar or related areas of interest, expertise, or 
responsibility on the scheduling of the joint meeting and provide the 
disagreeing resource agency or Indian tribe, other agencies with similar 
or related areas of interest, expertise, or responsibility, and the 
Commission with written notice of the time and place of each meeting and 
a written agenda of the issues to be discussed at the meeting at least 
15 days in advance.
    (7) The potential applicant and any disagreeing resource agency or 
Indian tribe may conclude a joint meeting with a document embodying any 
agreement among them regarding environmental protection, mitigation, or 
enhancement measures and any issues that are unresolved.
    (8) The potential applicant must describe all disagreements with a 
resource agency or Indian tribe on technical or environmental 
protection, mitigation, or enhancement measures in its application, 
including an explanation of the basis for the applicant's disagreement 
with the resource agency or Indian tribe, and must include in its 
application any document developed pursuant to paragraph (c)(7) of this 
section.
    (9) A potential applicant may file an application with the 
Commission if:
    (i) It has complied with paragraph (c)(4) of this section and no 
resource agency or Indian tribe has responded with substantive 
disagreements by the deadline specified in paragraph (c)(5) of this 
section; or
    (ii) It has complied with paragraph (c)(6) of this section if any 
resource agency or Indian tribe has responded with substantive 
disagreements.
    (10) The second stage of consultation ends:
    (i) Ninety days after the submittal of information pursuant to 
paragraph (c)(4) of this section in cases where no resource agency or 
Indian tribe has responded with substantive disagreements; or
    (ii) At the conclusion of the last joint meeting held pursuant to 
paragraph (c)(6) of this section in cases where a resource agency or 
Indian tribe has responded with substantive disagreements.
    (d) Third stage of consultation. (1) The third stage of consultation 
is initiated by the filing of an application for a new license, nonpower 
license, exemption from licensing, or surrender of license, accompanied 
by a transmittal letter certifying that at the same time copies of the 
application are being mailed to the resource agencies, Indian tribes, 
and other government offices specified in paragraph (d)(2) of this 
section and Sec. 16.10(f) of this part, if applicable.
    (2) As soon as an applicant files such application documents with 
the Commission, or promptly after receipt in the case of documents 
described in

[[Page 182]]

paragraph (d)(2)(iii) of this section, as the Commission may direct, the 
applicant must serve on every resource agency and Indian tribe 
consulted, on other government offices, and, in the case of applications 
for surrender or nonpower license, any state, municipal, interstate, or 
Federal agency which is authorized to assume regulatory supervision over 
the land, waterways, and facilities covered by the application for 
surrender or nonpower license, copies of:
    (i) Its application for a new license, a nonpower license, an 
exemption from licensing, or a surrender of the project;
    (ii) Any deficiency correction, revision, supplement, response to 
additional information request, or amendment to the application; and
    (iii) Any written correspondence from the Commission requesting the 
correction of deficiencies or the submittal of additional information.
    (e) Resource agency or Indian tribe waiver of compliance with 
consultation requirement. (1) If a resource agency or Indian tribe 
waives in writing compliance with any requirement of this section, a 
potential applicant does not have to comply with that requirement as to 
that agency or Indian tribe.
    (2) If a resource agency or Indian tribe fails to timely comply with 
a provision regarding a requirement of this section, a potential 
applicant may proceed to the next sequential requirement of this section 
without waiting for the resource agency or Indian tribe to comply.
    (3) The failure of a resource agency or Indian tribe to timely 
comply with a provision regarding a requirement of this section does not 
preclude its participation in subsequent stages of the consultation 
process.
    (f) Application requirements documenting consultation and any 
disagreements with resource agencies or Indian tribes. An applicant must 
show in Exhibit E of its application that it has met the requirements of 
paragraphs (b) through (d) of this section, and Sec. 16.8(i), and must 
include:
    (1) Any resource agency's or Indian tribe's letters containing 
comments, recommendations, and proposed terms and conditions;
    (2) Any letters from the public containing comments and 
recommendations;
    (3) Notice of any remaining disagreement with a resource agency or 
Indian tribe on:
    (i) The need for a study or the manner in which a study should be 
conducted and the applicant's reasons for disagreement, and
    (ii) Information on any environmental protection, mitigation, or 
enhancement measure, including the basis for the applicant's 
disagreement with the resource agency or Indian tribe.
    (4) Evidence of any waivers under paragraph (e) of this section;
    (5) Evidence of all attempts to consult with a resource agency or 
Indian tribe, copies of related documents showing the attempts, and 
documents showing the conclusion of the second stage of consultation;
    (6) An explanation of how and why the project would, would not, or 
should not, comply with any relevant comprehensive plan as defined in 
Sec. 2.19 of this chapter and a description of any relevant resource 
agency or Indian tribe determination regarding the consistency of the 
project with any such comprehensive plan;
    (7)(i) With regard to certification requirements for a license 
applicant under section 401(a)(1) of the Clean Water Act:
    (A) A copy of the water quality certification;
    (B) A copy of the request for certification, including proof of the 
date on which the certifying agency received the request; or
    (C) Evidence of waiver of water quality certification as described 
in paragraph (f)(7)(ii) of this section.
    (ii) A certifying agency is deemed to have waived the certification 
requirements of section 401(a)(1) of the Clean Water Act if the 
certifying agency has not denied or granted certification by one year 
after the date the certifying agency received a written request for 
certification. If a certifying agency denies certification, the 
applicant must file a copy of the denial within 30 days after the 
applicant received it.

[[Page 183]]

    (iii) Any amendment to an application for a license requires a new 
request for certification if the amendment would have a material adverse 
impact on the water quality in the discharge from the project.
    (8) A description of how the applicant's proposal addresses the 
significant resource issues raised by members of the public during the 
joint meeting held pursuant to paragraph (b)(2) of this section.
    (g) Requests for privileged treatment of pre-filing submission. If a 
potential applicant requests privileged treatment of any information 
submitted to the Commission during pre-filing consultation (except for 
the information specified in paragraph (b)(1) of this section), the 
Commission will treat the request in accordance with the provisions in 
Sec. 388.112 of this chapter until the date the application is filed 
with the Commission.
    (h) Other meetings. Prior to holding a meeting with a resource 
agency or Indian tribe, other than a joint meeting pursuant to paragraph 
(b)(2)(i) or (c)(6)(i) of this section, a potential applicant must 
provide the Commission and each resource agency or Indian tribe (with an 
area of interest, expertise, or responsibility similar or related to 
that of the resource agency or Indian tribe with which the potential 
applicant is to meet) with written notice of the time and place of each 
meeting and a written agenda of the issues to be discussed at the 
meeting at least 15 days in advance.
    (i) Public participation. (1) At least 14 days in advance of the 
joint meeting held pursuant to paragraph (b)(2), the potential applicant 
must publish notice, at least once, of the purpose, location, and timing 
of the joint meeting, in a daily or weekly newspaper published in the 
county or counties in which the existing project or any part thereof or 
the lands affected thereby are situated. The notice shall include a copy 
of the written agenda of the issues to be discussed at the joint meeting 
prepared pursuant to paragraph (b)(2)(ii) of this section.
    (2)(i) A potential applicant must make available to the public for 
inspection and reproduction the information specified in paragraph 
(b)(1) of this section from the date on which the notice required by 
paragraph (i)(1) of this section is first published until the date of 
the joint meeting required by paragraph (b)(2) of this section.
    (ii) The provisions of Sec. 16.7(e) shall govern the form and manner 
in which the information is to be made available for public inspection 
and reproduction.
    (iii) A potential applicant must make available to the public for 
inspection at the joint meeting required by paragraph (b)(2) of this 
section the information specified in paragraph (b)(1) of this section.
    (j) Transition provisions. (1) The provisions of this section are 
not applicable to applications filed before July 3, 1989.
    (2) The provisions of paragraphs (a) and (b) of this section are not 
applicable to potential applicants that complied with the provisions of 
Sec. 4.38 (a) and (b)(1) of this chapter prior to July 3, 1989.
    (3) The provisions of paragraph (c) are not applicable to potential 
applicants that complied with the provisions of Sec. 4.38(b)(2) of this 
chapter prior to July 3, 1989.
    (4)(i) Any applicant that files its application on or after July 3, 
1989 and that complied with the provisions of Sec. 4.38 (a) and (b)(1) 
of this chapter prior to July 3, 1989 must hold a public meeting, within 
90 days from July 3, 1989, at or near the site of the existing project 
to generally explain the potential applicant's proposal for the site and 
to obtain the views of the public regarding resource issues that should 
be addressed in any application for new license that may be filed by the 
potential applicant. The public meeting must include both day and 
evening sessions, and the potential applicant must make either audio 
recordings or written transcripts of both sessions.
    (ii) At least 14 days in advance of the meeting, the potential 
applicant must publish notice, at least once, of the purpose, location, 
and timing of the meeting, in a daily or weekly newspaper published in 
the county or counties in which the existing project or any part thereof 
or the lands affected thereby are situated.
    (iii)(A) A potential applicant must make available to the public for 
inspection and reproduction information

[[Page 184]]

comparable to that specified in paragraph (b)(1) from the date on which 
the notice required by paragraph (j)(4)(ii) is first published until the 
date of the public meeting required by paragraph (j)(4)(i).
    (B) The provisions of Sec. 16.7(e) shall govern the form and manner 
in which the information is to be made available for public inspection 
and reproduction.
    (C) A potential applicant must make available to the public for 
inspection at both sessions of the public meeting required by paragraph 
(j)(4)(i) of this section the information specified in paragraph 
(j)(4)(iii)(A).
    (D) A potential applicant must upon request promptly provide to the 
Commission and any resource agency or Indian tribe copies of the audio 
recordings or written transcripts of the sessions of the public meeting.
    (iv) Any applicant holding a public meeting pursuant to paragraph 
(j)(4)(i) must include in its filed application a description of how the 
applicant's proposal addresses the significant resource issues raised 
during the public meeting.
    (5) All requests for waiver of, or clarification regarding, the 
application of the provisions of this subsection to a proceeding must be 
submitted to the Director of the Office of Hydropower Licensing not 
later than 90 days after July 3, 1989 and will be subject to, and 
processed in accordance with, the provisions of paragraph (b)(5).
    (6) A potential applicant that has initiated consultation with 
resource agencies in accord with this section must initiate consultation 
with Indian tribes meeting the criteria set forth in Sec. 16.2(f) not 
later than February 9, 1990..

[Order 513, 54 FR 23806, June 2, 1989, as amended by Order 513-A, 55 FR 
16, Jan. 2, 1990; Order 533, 56 FR 23154, May 20, 1991; 56 FR 61156, 
Dec. 2, 1991]



Sec. 16.9  Applications for new licenses and nonpower licenses for projects subject to sections 14 and 15 of the Federal Power Act.

    (a) Applicability. This section applies to an applicant for a new 
license or nonpower license for a project subject to sections 14 and 15 
of the Federal Power Act.
    (b) Filing requirement. (1) An applicant for a license under this 
section must file its application at least 24 months before the existing 
license expires.
    (2) An application for a license under this section must meet the 
requirements of Sec. 4.32 (except that the Director of the Office of 
Hydropower Licensing may provide more than 90 days in which to correct 
deficiencies in applications) and, as appropriate, Secs. 4.41, 4.51, or 
4.61 of this chapter.
    (3) The requirements of Sec. 4.35 of this chapter do not apply to an 
application under this section, except that the Commission will reissue 
a public notice of the application in accordance with the provisions of 
Sec. 16.9(d)(1) if an amendment described in Sec. 4.35(f) of this 
chapter is filed.
    (4) If the Commission rejects or dismisses an application pursuant 
to the provisions of Sec. 4.32 of this chapter, the application may not 
be refiled after the new license application filing deadline specified 
in Sec. 16.9(b)(1).
    (c) Final amendments. All amendments to an application, including 
the final amendment, must be filed with the Commission and served on all 
competing applicants no later than the date specified in the notice 
issued under paragraph (d)(2).
    (d) Commission notice. (1) Upon acceptance of an application for a 
new license or a nonpower license, the Commission will give notice of 
the application and of the dates for comment, intervention, and protests 
by:
    (i) Publishing notice in the Federal Register;
    (ii) Publishing notice once every week for four weeks in a daily or 
weekly newspaper published in the county or counties in which the 
project or any part thereof or the lands affected thereby are situated; 
and
    (iii) Notifying appropriate Federal, state, and interstate resource 
agencies and Indian tribes by mail.
    (2) Within 60 days after the new license application filing 
deadline, the Commission will issue a notice on the processing deadlines 
established under Sec. 4.32 of this chapter, estimated dates for further 
processing deadlines under Sec. 4.32 of this chapter, deadlines for 
complying with the provisions of Sec. 4.36(d)(2) (ii) and (iii) of this 
chapter in cases

[[Page 185]]

where competing applications are filed, and the date for final 
amendments and will:
    (i) Publish the notice in the Federal Register;
    (ii) Provide the notice to appropriate Federal, state, and 
interstate resource agencies and Indian tribes; and
    (iii) Serve the notice on all parties to the proceedings pursuant to 
Sec. 385.2010 of this chapter.
    (3) Where two or more mutually exclusive competing applications have 
been filed for the same project, the final amendment date and deadlines 
for complying with the provisions of Sec. 4.36(d)(2) (ii) and (iii) of 
this chapter established pursuant to the notice issued under paragraph 
(d)(2) of this section will be the same for all such applications.
    (4) The provisions of Sec. 4.36(d)(2)(i) of this chapter will not be 
applicable to applications filed pursuant to this section.



Sec. 16.10  Information to be provided by an applicant for new license: Filing requirements.

    (a) Information to be supplied by all applicants. All applicants for 
a new license under this part must file the following information with 
the Commission:
    (1) A discussion of the plans and ability of the applicant to 
operate and maintain the project in a manner most likely to provide 
efficient and reliable electric service, including efforts and plans to:
    (i) Increase capacity or generation at the project;
    (ii) Coordinate the operation of the project with any upstream or 
downstream water resource projects; and
    (iii) Coordinate the operation of the project with the applicant's 
or other electrical systems to minimize the cost of production.
    (2) A discussion of the need of the applicant over the short and 
long term for the electricity generated by the project, including:
    (i) The reasonable costs and reasonable availability of alternative 
sources of power that would be needed by the applicant or its customers, 
including wholesale customers, if the applicant is not granted a license 
for the project;
    (ii) A discussion of the increase in fuel, capital, and any other 
costs that would be incurred by the applicant or its customers to 
purchase or generate power necessary to replace the output of the 
licensed project, if the applicant is not granted a license for the 
project;
    (iii) The effect of each alternative source of power on:
    (A) The applicant's customers, including wholesale customers;
    (B) The applicant's operating and load characteristics; and
    (C) The communities served or to be served, including any 
reallocation of costs associated with the transfer of a license from the 
existing licensee.
    (3) The following data showing need and the reasonable cost and 
availability of alternative sources of power:
    (i) The average annual cost of the power produced by the project, 
including the basis for that calculation;
    (ii) The projected resources required by the applicant to meet the 
applicant's capacity and energy requirements over the short and long 
term including:
    (A) Energy and capacity resources, including the contributions from 
the applicant's generation, purchases, and load modification measures 
(such as conservation, if considered as a resource), as separate 
components of the total resources required;
    (B) A resource analysis, including a statement of system reserve 
margins to be maintained for energy and capacity; and
    (C) If load management measures are not viewed as resources, the 
effects of such measures on the projected capacity and energy 
requirements indicated separately;
    (iii) For alternative sources of power, including generation of 
additional power at existing facilities, restarting deactivated units, 
the purchase of power off-system, the construction or purchase and 
operation of a new power plant, and load management measures such as 
conservation:
    (A) The total annual cost of each alternative source of power to 
replace project power;
    (B) The basis for the determination of projected annual cost; and
    (C) A discussion of the relative merits of each alternative, 
including the

[[Page 186]]

issues of the period of availability and dependability of purchased 
power, average life of alternatives, relative equivalent availability of 
generating alternatives, and relative impacts on the applicant's power 
system reliability and other system operating characteristics; and
    (iv) The effect on the direct providers (and their immediate 
customers) of alternate sources of power.
    (4) If an applicant uses power for its own industrial facility and 
related operations, the effect of obtaining or losing electricity from 
the project on the operation and efficiency of such facility or related 
operations, its workers, and the related community.
    (5) If an applicant is an Indian tribe applying for a license for a 
project located on the tribal reservation, a statement of the need of 
such tribe for electricity generated by the project to foster the 
purposes of the reservation.
    (6) A comparison of the impact on the operations and planning of the 
applicant's transmission system of receiving or not receiving the 
project license, including:
    (i) An analysis of the effects of any resulting redistribution of 
power flows on line loading (with respect to applicable thermal, 
voltage, or stability limits), line losses, and necessary new 
construction of transmission facilities or upgrading of existing 
facilities, together with the cost impact of these effects;
    (ii) An analysis of the advantages that the applicant's transmission 
system would provide in the distribution of the project's power; and
    (iii) Detailed single-line diagrams, including existing system 
facilities identified by name and circuit number, that show system 
transmission elements in relation to the project and other principal 
interconnected system elements. Power flow and loss data that represent 
system operating conditions may be appended if applicants believe such 
data would be useful to show that the operating impacts described would 
be beneficial.
    (7) If the applicant has plans to modify existing project facilities 
or operations, a statement of the need for, or usefulness of, the 
modifications, including at least a reconnaissance-level study of the 
effect and projected costs of the proposed plans and any alternate 
plans, which in conjunction with other developments in the area would 
conform with a comprehensive plan for improving or developing the 
waterway and for other beneficial public uses as defined in section 
10(a)(1) of the Federal Power Act.
    (8) If the applicant has no plans to modify existing project 
facilities or operations, at least a reconnaissance-level study to show 
that the project facilities or operations in conjunction with other 
developments in the area would conform with a comprehensive plan for 
improving or developing the waterway and for other beneficial public 
uses as defined in section 10(a)(1) of the Federal Power Act.
    (9) A statement describing the applicant's financial and personnel 
resources to meet its obligations under a new license, including 
specific information to demonstrate that the applicant's personnel are 
adequate in number and training to operate and maintain the project in 
accordance with the provisions of the license.
    (10) If an applicant proposes to expand the project to encompass 
additional lands, a statement that the applicant has notified, by 
certified mail, property owners on the additional lands to be 
encompassed by the project and governmental agencies and subdivisions 
likely to be interested in or affected by the proposed expansion.
    (11) The applicant's electricity consumption efficiency improvement 
program, as defined under section 10(a)(2)(C) of the Federal Power Act, 
including:
    (i) A statement of the applicant's record of encouraging or 
assisting its customers to conserve electricity and a description of its 
plans and capabilities for promoting electricity conservation by its 
customers; and
    (ii) A statement describing the compliance of the applicant's energy 
conservation programs with any applicable regulatory requirements.
    (12) The names and mailing addresses of every Indian tribe with land 
on which any part of the proposed project

[[Page 187]]

would be located or which the applicant reasonably believes would 
otherwise be affected by the proposed project.
    (b) Information to be provided by an applicant who is an existing 
licensee. An existing licensee that applies for a new license must 
provide:
    (1) The information specified in paragraph (a).
    (2) A statement of measures taken or planned by the licensee to 
ensure safe management, operation, and maintenance of the project, 
including:
    (i) A description of existing and planned operation of the project 
during flood conditions;
    (ii) A discussion of any warning devices used to ensure downstream 
public safety;
    (iii) A discussion of any proposed changes to the operation of the 
project or downstream development that might affect the existing 
Emergency Action Plan, as described in subpart C of part 12 of this 
chapter, on file with the Commission;
    (iv) A description of existing and planned monitoring devices to 
detect structural movement or stress, seepage, uplift, equipment 
failure, or water conduit failure, including a description of the 
maintenance and monitoring programs used or planned in conjunction with 
the devices; and
    (v) A discussion of the project's employee safety and public safety 
record, including the number of lost-time accidents involving employees 
and the record of injury or death to the public within the project 
boundary.
    (3) A description of the current operation of the project, including 
any constraints that might affect the manner in which the project is 
operated.
    (4) A discussion of the history of the project and record of 
programs to upgrade the operation and maintenance of the project.
    (5) A summary of any generation lost at the project over the last 
five years because of unscheduled outages, including the cause, 
duration, and corrective action taken.
    (6) A discussion of the licensee's record of compliance with the 
terms and conditions of the existing license, including a list of all 
incidents of noncompliance, their disposition, and any documentation 
relating to each incident.
    (7) A discussion of any actions taken by the existing licensee 
related to the project which affect the public.
    (8) A summary of the ownership and operating expenses that would be 
reduced if the project license were transferred from the existing 
licensee.
    (9) A statement of annual fees paid under Part I of the Federal 
Power Act for the use of any Federal or Indian lands included within the 
project boundary.
    (c) Information to be provided by an applicant who is not an 
existing licensee. An applicant that is not an existing licensee must 
provide:
    (1) The information specified in paragraph (a).
    (2) A statement of the applicant's plans to manage, operate, and 
maintain the project safely, including:
    (i) A description of the differences between the operation and 
maintenance procedures planned by the applicant and the operation and 
maintenance procedures of the existing licensee;
    (ii) A discussion of any measures proposed by the applicant to 
implement the existing licensee's Emergency Action Plan, as described in 
subpart C of part 12 of this chapter, and any proposed changes;
    (iii) A description of the applicant's plans to continue safety 
monitoring of existing project instrumentation and any proposed changes; 
and
    (iv) A statement indicating whether or not the applicant is 
requesting the licensee to provide transmission services under section 
15(d) of the Federal Power Act.
    (d) Extended deadline for certain applicants. If an applicant must 
file an application under Sec. 16.9 within 90 days after July 3, 1989, 
that applicant may provide the information required in this section 
within 90 days after the date on which it files the application.
    (e) Inclusion in application. Except as permitted in paragraph (d), 
the information required to be provided by this section must be included 
in the application as a separate exhibit labeled ``Exhibit H.''
    (f) Filing requirements. For all applications for new licenses due 
to be filed with the Commission on or after June

[[Page 188]]

19, 1991, and prior to January 1, 1992, the following number of copies 
must be submitted to the Commission and served on resource agencies
    (1) If the application is hand-delivered to the Commission, as by 
messenger or courier service, only an original and five copies of the 
application need be delivered to the Secretary, but the filing must be 
accompanied by a transmittal letter certifying that at the same time 
five copies of the application are being hand delivered to the Director, 
Division of Project Review, Office of Hydropower Licensing, and copies 
are being mailed to the resource agencies consulted and the government 
offices specified in Sec. 16.8(d)(2) of this part, including each of the 
following:
    (i) The Regional Office of the Commission for the area in which the 
project is located;
    (ii) The U.S. Department of the Interior, Washington, DC (6 copies 
for projects located in the Eastern United States, including Minnesota, 
Iowa, Missouri, Arkansas, and Louisiana, and 9 copies for projects 
located in the Western United States westward of the western boundaries 
of Minnesota, Iowa, Missouri, Arkansas, and Louisiana);
    (iii) The U.S. Bureau of Land Management District Office for the 
area in which the project is located; and
    (iv) The U.S. Corps of Engineers District Office for the area in 
which the project is located.
    (2) If the application is mailed to the Commission, only an original 
and ten copies of the application need be sent to the Secretary, but the 
application must be accompanied by a transmittal letter certifying that 
at the same time copies of the application are being mailed to each of 
the offices listed in paragraphs (f)(1) (i) through (iv) of this 
section.

[Order 513, 54 FR 23806, June 2, 1989, as amended by Order 533, 56 FR 
23154, May 20, 1991; 56 FR 61156, Dec. 2, 1991]



Sec. 16.11  Nonpower licenses.

    (a) Information to be provided by all applicants for nonpower 
licenses. (1) An applicant for a nonpower license must provide the 
following information in its application:
    (i) The information required by Secs. 4.51 or 4.61 of this chapter, 
as appropriate;
    (ii) A description of the nonpower purpose for which the project is 
to be used;
    (iii) A showing of how the nonpower use conforms with a 
comprehensive plan for improving or developing the waterway and for 
other beneficial public uses as defined in section 10(a)(1) of the 
Federal Power Act;
    (iv) A statement of any impact that converting the project to 
nonpower use may have on the power supply of the system served by the 
project, including the additional cost of power if an alternative 
generating source is used to offset the loss of the project's 
generation;
    (v) A statement identifying the state, municipal, interstate, or 
Federal agency, which is authorized and willing to assume regulatory 
supervision over the land, waterways, and facilities to be included 
within the nonpower project;
    (vi) Copies of written communication and documentation of oral 
communication that the applicant may have had with any jurisdictional 
agency or governmental unit authorized and willing to assume regulatory 
control over the project and the point of time at which the agency or 
unit would assume regulatory control;
    (vii) A statement that demonstrates that the applicant has complied 
with the requirements of Sec. 16.8(d)(2);
    (viii) A proposal that shows the manner in which the applicant plans 
to remove or otherwise dispose of the project's power facilities;
    (ix) Any proposal to repair or rehabilitate any nonpower facilities;
    (x) A statement of the costs associated with removing the project's 
power facilities and with any necessary restoration and rehabilitation 
work; and
    (xi) A statement that demonstrates that the applicant has resources 
to ensure the integrity and safety of the remaining project facilities 
and to maintain the nonpower functions of the project until the 
governmental unit or agency assumes regulatory control over the project.
    (2) If an applicant must file an application for a nonpower license 
under Sec. 16.9 within 90 days after July 3, 1989,

[[Page 189]]

that applicant may provide the information required in paragraph (a) 
(except the information specified in paragraph (a)(1)(i)), within 90 
days after the date it files the application.
    (b) Termination of a proceeding for a nonpower license. The 
Commission may deny an application for a nonpower license and turn the 
project over to any agency that has jurisdiction over the land or 
reservations if:
    (1) An existing project is located on public lands or reservations 
of the United States;
    (2) Neither the existing licensee nor any other entity has filed an 
application for a new license for the project;
    (3) No one has filed a recommendation to take over the project 
pursuant to Sec. 16.14; and
    (4) The agency that has jurisdiction over the land or reservations 
demonstrates that it is able and willing to:
    (i) Accept immediate responsibility for the nonpower use of the 
project; and.
    (ii) Pay the existing licensee for its net investment in the project 
and any severance damages specified in section 14(a) of the Federal 
Power Act.
    (c) Termination of nonpower license. A nonpower license will be 
terminated by Commission order when the Commission determines that a 
state, municipal, interstate, or Federal agency has jurisdiction over, 
and is willing to assume regulatory responsibility for, the land, 
waterways, and facilities included within the nonpower license.



Sec. 16.12  Application for exemption from licensing by a licensee whose license is subject to sections 14 and 15 of the Federal Power Act.

    (a) An existing licensee whose license is subject to sections 14 and 
15 of the Federal Power Act may apply for an exemption for the project.
    (b) An applicant for an exemption under paragraph (a) must meet the 
requirements of subpart K or subpart J of part 4 of this chapter, and 
Secs. 16.5, 16.6, 16.7, 16.8, 16.9(b) (1), (2) (except the requirement 
to comply with Secs. 4.41, 4.51, or 4.61 of this chapter), 16.9(c), 
16.10(a), 16.10(b), 16.10(d), and 16.10(e).
    (c) The Commission will process an application by an existing 
licensee for an exemption for the project in accordance with 
Secs. 16.9(b)(3), 16.9(b)(4), and 16.9(d).
    (d) If a license application is filed in competition with an 
application for exemption filed by the existing licensee, the Commission 
will decide among the competing applications in accordance with the 
standards of Sec. 16.13 and not in accordance with the provisions of 
Sec. 4.37(d)(2) of this chapter.



Sec. 16.13  Standards and factors for issuing a new license.

    (a) In determining whether a final proposal for a new license under 
section 15 of the Federal Power Act is best adapted to serve the public 
interest, the Commission will consider the factors enumerated in 
sections 15(a)(2) and (a)(3) of the Federal Power Act.
    (b) If there are only insignificant differences between the final 
applications of an existing licensee and a competing applicant after 
consideration of the factors enumerated in section 15(a)(2) of the 
Federal Power Act, the Commission will determine which applicant will 
receive the license after considering:
    (1) The existing licensee's record of compliance with the terms and 
conditions of the existing license; and
    (2) The actions taken by the existing licensee related to the 
project which affect the public.
    (c) An existing licensee that files an application for a new license 
in conjunction with an entity or entities that are not currently 
licensees of all or part of the project will not be considered an 
existing licensee for the purpose of the insignificant differences 
provision of section 15(a)(2) of the Federal Power Act.



 Subpart C--Takeover Provisions for Projects Subject to Sections 14 and 
                       15 of the Federal Power Act



Sec. 16.14  Departmental recommendation for takeover.

    (a) A Federal department or agency may file a recommendation that 
the United States exercise its right to take over a hydroelectric power 
project with a license that is subject to sections 14 and 15 of the 
Federal Power Act. The recommendation must:

[[Page 190]]

    (1) Be filed no earlier than five years before the license expires 
and no later than the end of the comment period specified by the 
Commission in:
    (i) A notice of application for a new license, a nonpower license, 
or an exemption for the project; or
    (ii) A notice of an amendment to an application for a new license, a 
nonpower license, or an exemption;
    (2) Be filed in accordance with the formal requirements for filings 
in subpart T of part 385 of the Commission's regulations and be served 
on each relevant Federal and state resource agency, all applicants for 
new license, nonpower license or exemption, and any other party to the 
proceeding;
    (3) Specify the project works that would be taken over by the United 
States;
    (4) Describe the proposed Federal operation of the project, 
including any plans for its redevelopment, and discuss the manner in 
which takeover would serve the public interest as fully as non-Federal 
development and operation;
    (5) State whether the agency intends to undertake the operation of 
the project; and
    (6) Include the information required by Secs. 4.41, 4.51, or 4.61 of 
this chapter, as appropriate.
    (b) A department or agency that files a takeover recommendation 
becomes a party to the proceeding.
    (c) An applicant or potential applicant for a new license, a 
nonpower license, or an exemption that involves a takeover 
recommendation may file a reply to the recommendation, within 120 days 
from the date the takeover recommendation is filed with the Commission. 
The reply must be filed with the Commission in accordance with part 385 
of the Commission's regulations and a copy of such a reply must be 
served on the agency recommending the takeover and on any other party to 
the proceeding.



Sec. 16.15  Commission recommendation to Congress.

    Upon receipt of a recommendation from any Federal department or 
agency, a proposal of any party, or on the Commission's own motion, and 
after notice and opportunity for hearing, the Commission may determine 
that a project may be taken over by the United States, issue an order on 
its findings and recommendations, and forward a copy to Congress.



Sec. 16.16  Motion for stay by Federal department or agency.

    (a) Within 30 days of the date on which an order granting a new 
license or exemption is issued, a Federal department or agency that has 
filed a takeover recommendation under Sec. 16.14 may file a motion under 
Sec. 385.2010 of this chapter to request a stay of the effective date of 
the license or exemption order.
    (b)(1) If a Federal department or agency files a motion under 
paragraph (a), the Commission will stay the effective date of the order 
issuing the license or exemption for two years.
    (2) The stay issued under paragraph (b)(1) of this section may be 
terminated either:
    (i) Upon motion of the department or agency that requested the stay; 
or
    (ii) By action of Congress.
    (c) The Commission will notify Congress if:
    (1) An order granting a stay under paragraph (b)(1) of this section 
is issued;
    (2) Any license or exemption order becomes effective by reason of 
the termination of a stay; or
    (3) Any license or exemption order becomes effective by reason of 
the expiration of a stay.
    (d) The Commission's order granting the license or exemption will 
automatically become effective:
    (1) Thirty days after issuance, if no request for stay is filed, 
provided that no appeal or rehearing is filed;
    (2) When the period of the stay expires; or
    (3) When the stay is terminated under paragraph (b)(2) of this 
section.



Sec. 16.17  Procedures upon Congressional authorization of takeover.

    If Congress authorizes the takeover of a hydroelectric power project 
as provided under section 14 of the Federal Power Act:
    (a) The Commission or the Director of the Office of Hydropower 
Licensing will notify the existing licensee in

[[Page 191]]

writing of the authorization at least two years before the takeover 
occurs; and
    (b) The licensee must present any claim for compensation to the 
Commission:
    (1) Within six months of issuance of the notice of takeover; and
    (2) As provided in section 14 of the Federal Power Act.



Subpart D--Annual Licenses for Projects Subject to Sections 14 and 15 of 
                          the Federal Power Act



Sec. 16.18  Annual licenses for projects subject to sections 14 and 15 of the Federal Power Act.

    (a) This section applies to projects with licenses subject to 
sections 14 and 15 of the Federal Power Act.
    (b) The Commission will issue an annual license to an existing 
licensee under the terms and conditions of the existing license upon 
expiration of its existing license to allow:
    (1) The licensee to continue to operate the project while the 
Commission reviews any applications for a new license, a nonpower 
license, an exemption, or a surrender;
    (2) The orderly removal of a project, if the United States does not 
take over a project and no new power or nonpower license or exemption 
will be issued; or
    (3) The orderly transfer of a project to:
    (i) The United States, if takeover is elected; or
    (ii) A new licensee, if a new power or nonpower license is issued to 
that licensee.
    (c) An annual license issued under this section will be considered 
renewed automatically without further order of the Commission, unless 
the Commission orders otherwise.
    (d) In issuing an annual license, the Commission may incorporate 
additional or revised interim conditions if necessary and practical to 
limit adverse impacts on the environment.

[Order 513, 54 FR 23806, June 2, 1989, as amended by Order 513-A, 55 FR 
18, Jan. 2, 1990; Order 540, 57 FR 21738, May 22, 1992]



 Subpart E--Projects With Minor and Minor Part Licenses Not Subject to 
               Sections 14 and 15 of the Federal Power Act



Sec. 16.19  Procedures for an existing licensee of a minor hydroelectric power project or of a minor part of a hydroelectric power project with a license not 
          subject to sections 14 and 15 of the Federal Power Act.

    (a) Applicability. This section applies to an existing licensee of a 
minor hydroelectric power project or of a minor part of a hydroelectric 
power project that is not subject to sections 14 and 15 of the Federal 
Power Act.
    (b) Notification procedures. (1) An existing licensee with a minor 
license or a license for a minor part of a hydroelectric project must 
file a notice of intent pursuant to Sec. 16.6(b).
    (2) If the license of an existing licensee expires on or after 
October 17, 1994, the licensee must notify the Commission as required 
under Sec. 16.6(b) at least five years before the expiration of the 
existing license.
    (3) Except as provided in paragraph (b)(4) of this section, if the 
license of an existing licensee expires before October 17, 1994, the 
licensee must notify the Commission as required under Sec. 16.6(b) no 
later than September 1, 1989.
    (4) The requirement in paragraph (b)(3) of this section does not 
apply if an applicant filed a notice of intent as required by 
Sec. 16.6(b) or an application for a subsequent license on or before 
July 3, 1989.
    (5) The Commission will give notice of a licensee's intent to file 
or not to file an application for a subsequent license in accordance 
with Sec. 16.6(d).
    (c) Requirement to make information available. (1) Except as 
provided in paragraph (c)(2) of this section, a licensee must make the 
information described in Sec. 16.7 available to the public for 
inspection and reproduction when it gives notice to the Commission under 
paragraph (b).
    (2) The requirement of paragraph (c)(1) of this section does not 
apply if an applicant filed an application for a subsequent license on 
or before [insert the effective date of the rule].

[[Page 192]]



Sec. 16.20  Applications for subsequent license for a project with an expiring license not subject to sections 14 and 15 of the Federal Power Act.

    (a) Applicability. This section applies to an application for 
subsequent license for a project with an expiring license that is not 
subject to sections 14 and 15 of the Federal Power Act.
    (b) Licensing proceeding. (1) An applicant for a license for a 
project with an expiring license not subject to sections 14 and 15 of 
the Federal Power Act must file its application under Part I of the 
Federal Power Act.
    (2) The provisions of section 7(a) of the Federal Power Act do not 
apply to licensing proceedings involving an application described in 
paragraph (b)(1).
    (c) Requirement to file. (1) Except as provided in paragraphs (c)(2) 
and (c)(3) of this section, an applicant must file an application for 
subsequent license at least 24 months before the expiration of the 
existing license.
    (2) The requirement in paragraph (c)(1) does not apply if the 
license is due to expire within three years of July 3, 1989.
    (3) An applicant intending to file an application for subsequent 
license for a project whose license is due to expire within four years 
of July 3, 1989, must file an application at least 12 months before the 
date on which the existing license expires.
    (d) Requirements for and processing of applications. An application 
for subsequent license must meet the requirements of, and will be 
processed in accordance with, Secs. 16.5, 16.8, 16.9(b)(2), 16.9(b)(3), 
16.9(b)(4), 16.9(c), and 16.9(d).
    (e) Applicant notice. An applicant for subsequent license or 
exemption that proposes to expand an existing project to encompass 
additional lands must include in its application a statement that the 
applicant has notified, by certified mail, property owners on the 
additional lands to be encompassed by the project and governmental 
agencies and subdivisions likely to be interested in or affected by the 
proposed expansion.



Sec. 16.21  Operation of projects with a minor or minor part license not subject to sections 14 and 15 of the Federal Power Act after expiration of a license.

    (a) A licensee of a minor or minor part project not subject to 
sections 14 and 15 of the Federal Power Act that has filed an 
application for a subsequent license or exemption may continue to 
operate the project in accordance with the terms and conditions of the 
license after the minor or minor part license expires until the 
Commission acts on its application.
    (b) If the licensee of a minor or minor part project not subject to 
sections 14 and 15 of the Federal Power Act has not filed an application 
for a subsequent license or exemption, the Commission may issue an order 
requiring the licensee to continue to operate its project in accordance 
with the terms and conditions of the license until the Commission either 
acts on any applications for subsequent license timely filed by another 
entity or takes action pursuant to Secs. 16.25 or 16.26.



Sec. 16.22  Application for an exemption by a licensee with a minor or minor part license for a project not subject to sections 14 and 15 of the Federal Power 
          Act.

    (a) Applicability. This section applies to an existing licensee with 
a license for a project not subject to sections 14 and 15 of the Federal 
Power Act.
    (b) Information requirements. An applicant for an exemption must 
meet the requirements of, and will be processed in accordance with, 
subpart K or subpart J of part 4 of this chapter, and Secs. 16.5, 16.8, 
16.9(b)(2) (except the requirement to comply with Secs. 4.41, 4.51, or 
4.61 of this chapter), Secs. 16.9(b)(3), 16.9(b)(4), 16.9(c), 16.9(d), 
and 16.20(c).
    (c) Standard of comparison. If an application for subsequent license 
is filed in competition with an application for exemption by an existing 
licensee, the Commission will decide among competing applications in 
accordance with the standards of Sec. 16.13 and not in accordance with 
the provisions of Sec. 4.37(d)(2) of this chapter.

[[Page 193]]



                      Subpart F--Procedural Matters



Sec. 16.23  Failure to file timely notices of intent.

    (a) An existing licensee of a water power project with a license 
subject to sections 14 and 15 of the Federal Power Act that fails to 
file a notice of intent pursuant to Sec. 16.6(b) by the deadlines 
specified in Sec. l6.6(c) shall be deemed to have filed a notice of 
intent indicating that it does not intend to file an application for new 
license, nonpower license, or exemption.
    (b) An existing licensee of a water power project with a license not 
subject to sections 14 and 15 of the Federal Power Act that fails to 
file a notice of intent pursuant to Sec. 16.6(b) by the deadlines 
specified in Sec. 16.20(c) shall be deemed to have filed a notice of 
intent indicating that it does not intend to file an application for 
subsequent license or exemption.



Sec. 16.24  Prohibitions against filing applications for new license, nonpower license, exemption, or subsequent license.

    (a) Licenses subject to sections 14 and 15 of the Federal Power Act. 
(1) An existing licensee with a license subject to sections 14 and 15 of 
the Federal Power Act that informs the Commission that it does not 
intend to file an application for new license, nonpower license, or 
exemption for a project, as required by Sec. 16.6, may not file an 
application for new license, nonpower license, or exemption for the 
project, either individually or in conjunction with an entity or 
entities that are not currently licensees of the project.
    (2) An existing licensee with a license subject to sections 14 and 
15 of the Federal Power Act that fails to file an application for new 
license, nonpower license, or exemption for a project at least 24 months 
before the expiration of the existing license for the project may not 
file an application for new license, nonpower license, or exemption for 
the project, either individually or in conjunction with an entity or 
entities that are not currently licensees of the project.
    (b) Licenses not subject to sections 14 and 15 of the Federal Power 
Act. (1) An existing licensee with a license not subject to sections 14 
and 15 of the Federal Power Act that informs the Commission that it does 
not intend to file an application for subsequent license or exemption 
for a project, as required by Sec. 16.6, may not file an application for 
subsequent license or exemption for the project, either individually or 
in conjunction with an entity or entities that are not currently 
licensees of the project.
    (2) An existing licensee with a license not subject to sections 14 
and 15 of the Federal Power Act that fails to file an application for 
subsequent license or exemption for a project by the deadlines specified 
in Sec. 16.20(c) may not file an application for subsequent license or 
exemption for the project, either individually or in conjunction with an 
entity or entities that are not currently licensees of the project.



Sec. 16.25  Disposition of a project for which no timely application is filed following a notice of intent to file.

    (a) If an existing licensee that indicates in the notice filed 
pursuant to Sec. 16.6 that it will file an application for new license, 
nonpower license, subsequent license, or an exemption does not file its 
application individually or in conjunction with an entity or entities 
that are not currently licensees of the project at least 24 months 
before its existing license expires in the case of licenses subject to 
sections 14 and 15 of the Federal Power Act, or by the deadlines 
specified in Sec. 16.20(c) in the case of licenses not subject to 
sections 14 and 15 of the Federal Power Act, and no other applicant 
files an application within the appropriate time or all pending 
applications filed before the applicable filing deadline are 
subsequently rejected or dismissed pursuant to Sec. 4.32 of this 
chapter, the Commission will publish in the Federal Register and once in 
a daily or weekly newspaper published in the county or counties in which 
the project or any part thereof or the lands affected thereby are 
situated, notice soliciting applications from potential applicants other 
than the existing licensee.
    (b) A potential applicant that files a notice of intent within 90 
days from the date of the public notice issued pursuant to paragraph 
(a):

[[Page 194]]

    (1) May apply for a license under Part I of the Federal Power Act 
and part 4 of this chapter (except Sec. 4.38) within 18 months of the 
date on which it files its notice; and
    (2) Must comply with the requirements of Sec. 16.8 and, if the 
project would have a total installed capacity of over 2,000 horsepower, 
Sec. 16.10.
    (c) The existing licensee must file a schedule for the filing of a 
surrender application for the project, for the approval of the Director 
of the Office of Hydropower Licensing, 90 days:
    (1) After the due date established for any notice of intent issued 
under paragraph (a), if no notices of intent were received; or
    (2) After the due date for any application filed under paragraph 
(b)(1), if no application has been filed.
    (d) Any application for surrender must be filed according to the 
approved schedule, must comply with the requirements of Sec. 16.8 and 
part 6 of this chapter, and must provide for disposition of any project 
facility.



Sec. 16.26  Disposition of a project for which no timely application is filed following a notice of intent not to file.

    (a) If an existing licensee indicates in the notice filed pursuant 
to Sec. 16.6 that it will not file an application for new license, 
nonpower license, subsequent license, or exemption and no other 
applicant files an application at least 24 months before the existing 
license expires in the case of licenses subject to sections 14 and 15 of 
the Federal Power Act, or by the deadlines specified in Sec. 16.20(c) in 
the case of licenses not subject to sections 14 and 15 of the Federal 
Power Act, the Director of the Office of Hydropower Licensing will 
provide the existing licensee with written notice that no timely 
applications for the project have been filed.
    (b) The existing licensee, within 90 days from the date of the 
written notice provided in paragraph (a), must file a schedule for the 
filing of a surrender application for the project for the approval of 
the Director of the Office of Hydropower Licensing.
    (c) Any application for surrender must be filed according to the 
approved schedule, must comply with the requirements of Sec. 16.8 and 
part 6 of this chapter, and must provide for disposition of any project 
facility.



PART 20--AUTHORIZATION OF THE ISSUANCE OF SECURITIES BY LICENSEES AND COMPANIES SUBJECT TO SECTIONS 19 AND 20 OF THE FEDERAL POWER ACT--Table of Contents




Sec.
20.1  Applicability.
20.2  Regulation of issuance of securities.

    Authority: Secs. 3(16), 19, 20, 41 Stat. 1063, 1073; secs. 201, 309, 
49 Stat. 838, 858; 16 U.S.C. 796 (16), 812, 813, 825k.

    Source: Order 170, 19 FR 2013, Apr. 8, 1954, unless otherwise noted.



Sec. 20.1  Applicability.

    (a) Without special proceeding for regulation. Every security issue 
within the scope of the jurisdiction conferred upon the Commission by 
sections 19 and 20 of the Federal Power Act shall be subject to the 
provisions of Sec. 20.2, except a security issue by a person organized 
and operating in a State under the laws of which its security issues are 
regulated by a State commission, or by any one described in subsection 
201(f) of the act. No other security issue within the scope of sections 
19 and 20 shall be subject to Sec. 20.2 except as provided in paragraph 
(b) of this section.
    (b) Reservation of possibility of regulation in other cases. Not 
later than 10 days prior to any proposed security issuance which is 
within the scope of section 19 or section 20 of the act, but excepted by 
paragraph (a) of this section, any person or state entitled to do so 
under section 19 or section 20, may file a complaint or request in 
accordance with the applicable rules of the Commission, or the 
Commission upon its own motion may by order initiate a proceeding, 
raising the question whether issuance of such security should be 
subjected by Commission order to the provisions of Sec. 20.2. After 
notice of such filing or order, and until such request or complaint is 
denied or dismissed or the proceeding initiated by such order is 
terminated without subjecting the issuance of the security to the 
provisions of Sec. 20.2, the security in question shall not be issued 
except it be issued

[[Page 195]]

subject to and in compliance with Sec. 20.2.



Sec. 20.2  Regulation of issuance of securities.

    The licensee or other person issuing or proposing to issue any 
security subjected to this section by or pursuant to Sec. 20.1, shall be 
subject to and shall comply with the same requirements as the Commission 
would administer to it if it were a public utility issuing the security 
within the meaning and subject to the requirements of section 204 of the 
Act and part 34 of this subchapter.

    Cross Reference: For applications for authorization of the issuance 
of securities or the assumption of liabilities, see part 34 of this 
chapter.



PART 24--DECLARATION OF INTENTION--Table of Contents




    Authority: 16 U.S.C. 791a-825r; 44 U.S.C. 3501 et seq.; 42 U.S.C. 
7101-7352.



Sec. 24.1  Filing.

    An original and eight conformed copies of each declaration of 
intention under the provisions of section 23(b) of the Act shall be 
filed. The declaration shall give the name and post office address of 
the person to whom correspondence in regard to it shall be addressed, 
and shall be accompanied by:
    (a) A brief description of the proposed project and its purposes, 
including such data as maximum height of the dams, a storage capacity 
curve of the reservoir or reservoirs showing the maximum, average, and 
minimum operating pool levels, the initial and ultimate installed 
capacity of the project, the rated horsepower and head on the turbines, 
and a curve of turbine discharge versus output at average and minimum 
operating heads.
    (b)(1) A general map (one tracing and three prints) of any 
convenient size and scale, showing the stream or streams to be utilized 
and the approximate location and the general plan of the project.
    (2) Also a detailed map of the proposed project area showing all 
Federal lands, and lands owned by States, if any, occupied by the 
project.
    (3) A profile of the river within the vicinity of the project 
showing the location of the proposed project and any existing 
improvements in the river.
    (4) A duration curve and hydrograph for the natural and proposed 
regulated flows at the dam site. Furnish references to the published 
stream flow records used and submit copies of any unpublished records 
used in preparation of these curves.
    (c) (1) A definite statement of the proposed method of utilizing 
storage or pondage seasonally, weekly and daily, during periods of low 
and normal flows after the plant is in operation and the system load has 
grown to the extent that the capacity of the plant is required to meet 
the load. For example, furnish:
    (i) Hydrographs covering a 10-day low water period showing the 
natural flow of the stream and the effect thereon caused by operations 
of the proposed power plant:
    (ii) Similar hydrographs covering a 10-day period during which the 
discharge of the stream approximates average recorded yearly flow, and
    (iii) Similar hydrographs covering a low water year using average 
monthly flows.
    (2) A system load curve, both daily and monthly, and the position on 
the load curve that the proposed project would have occupied had it been 
in operation.
    (3) A proposed annual rule of operation for the storage reservoir or 
reservoirs.

[Order 175, 19 FR 5217, Aug. 18, 1954, as amended by Order 260, 28 FR 
315, Jan. 11, 1963; Order 540, 57 FR 21738, May 22, 1992]



PART 25--APPLICATION FOR VACATION OF WITHDRAWAL AND FOR DETERMINATION PERMITTING RESTORATION TO ENTRY--Table of Contents




Sec.
25.1  Contents of application.
25.2  Hearings.



Sec. 25.1  Contents of application.

    Any application for vacation of a reservation effected by the filing 
of an application for preliminary permit or license, or for a 
determination under the

[[Page 196]]

provisions of section 24 of the Act permitting restoration for location, 
entry, or selection under the public lands laws, or such lands reserved 
or classified as power sites shall, unless the subject lands are 
National Forest Lands, be filed with the Bureau of Land Management, 
Department of the Interior, at the Bureau's office in Washington, DC or 
at the appropriate regional or field office of the Bureau. If the lands 
included in such application are National Forest Lands, the application 
shall be filed with the U.S. Forest Service, Department of Agriculture 
at the Forest Service's office in Washington, DC, or at the appropriate 
regional office of the U.S. Forest Service. Such application shall 
contain the following data: (a) Full name of applicant; (b) post-office 
address; (c) description of land by legal subdivisions, including 
section, township, range, meridian, county, State, and river basin (both 
main and tributary) in which the land is located; (d) public land act 
under which entry is intended to be made if land is restored to entry; 
(e) the use to which it is proposed to put the land, and a statement as 
to its suitability for the intended use.

(Secs. 24, 309, 41 Stat. 1075, as amended; 49 Stat. 858; 16 USC. 818, 
825h)

[Order 175, 19 FR 5218, Aug. 18, 1954, as amended by Order 346, 32 FR 
7495, May 20, 1967]

    Cross Reference: For entries subject to section 24 of the Federal 
Power Act, see also 43 CFR subpart 2320.



Sec. 25.2  Hearings.

    A hearing upon such an application may be ordered by the Commission 
in its discretion and shall be in accordance with the provisions of 
subpart E of part 385 of this chapter.
    Note 1: On April 17, 1922, the Commission made the following general 
determination:
    (a) That where lands of the United States have heretofore been, or 
hereafter may be, reserved or classified as power sites, such 
reservation or classification being made solely because such lands are 
either occupied by power transmission lines or their occupancy and use 
for such purposes has been applied for or authorized under appropriate 
laws of the United States, and such lands have otherwise no value for 
power purposes, and are not occupied in trespass, the Commission 
determines that the value of such lands so reserved or classified, or so 
applied for or authorized, will not be injured or destroyed for the 
purposes of power development by location, entry, or selection under the 
public land laws, subject to the reservation of section 24 of the 
Federal Water Power Act (41 Stat. 1075; 16 U.S.C. 818).
    (b) That when notice is given to the Secretary of the Interior of 
reservations made under the provisions of section 24 of the Federal 
Water Power Act, such notice shall indicate what lands so reserved, if 
any, may, in accordance with the determination of the preceding 
paragraph, be declared open to location, entry, or selection, subject to 
the reservation of said section 24. Second Annual Report, page 128.
    Note 2: On February 16, 1937, the Commission took the following 
action:
    Consent To Establishment of Grazing Districts, Issuance of Grazing 
Permits, and Leasing for Grazing Purposes Under the Act of June 28, 
1934, as Amended, Government Lands Reserved for Power Purposes
    Upon request under date of November 2, 1936, by the acting director, 
Division of Grazing, Department of the Interior, for consent of the 
Commission, pursuant to the act of June 28, 1934 (48 Stat. 1269), to the 
establishment of grazing districts and the issuance of grazing permits 
on lands of the United States withdrawn, classified, or otherwise 
reserved for power purposes, except in those instances where grazing 
will interfere with such purposes; and
    Upon request under date of December 7, 1936, by the Acting Secretary 
of the Interior for consent of the Commission, pursuant to the Act of 
June 28, 1934 (48 Stat. 1269), as amended by the Act of June 26, 1936 
(49 Stat. 1976), to the leasing under section 15 of said Act as amended, 
of isolated tracts of lands of the United States, withdrawn for power 
purposes:
    The Commission upon consideration of the matter finds and 
determines: That the establishment of grazing districts, the issuance of 
grazing permits, and the leasing for grazing purposes, under said Act as 
amended, of lands of

[[Page 197]]

the United States theretofore or thereafter withdrawn, classified or 
otherwise reserved for power purposes, but not including lands embraced 
within the project area of any power project theretofore licensed by the 
Commission or otherwise authorized by the United States, will not injure 
or destroy the value of such lands for the purposes of power development 
nor otherwise abridge the jurisdiction of the Commission; Provided, That 
such grazing districts shall be established and such permits and leases 
for grazing permits issued subject to the following conditions:
    (1) That the establishment of the grazing district or the issuance 
of the grazing permit or lease for grazing purposes shall in no wise 
diminish or affect the jurisdiction of the Commission at any time to 
issue permits or licenses pursuant to the provisions of the Federal 
Power Act (49 Stat. 838; 16 U.S.C., Sup., 791-819); and that the 
issuance by the Commission of a license shall immediately and 
automatically terminate such grazing district, permit, or lease for 
grazing purposes as to all lands within the project area described in 
such license;
    (2) That the establishment of the grazing district or the issuance 
of the grazing permit or lease for grazing purposes involving lands 
withdrawn for power purposes shall in no wise disminish or affect the 
jurisdiction of the Commission at any time to make further 
determinations that the value of any such lands for the purposes of 
power development will not be injured or destroyed by location entry or 
selection, as provided by section 24 of the Act and none of such lands 
shall be declared open, otherwise than as hereinbefore provided, to 
location, entry or selection except upon such further determination by 
the Commission; and any such further determination shall immediately and 
automatically terminate such grazing district, permit, or lease for 
grazing purposes as to any lands involved in such further determination.
    Now, therefore, the Commission consents to the estabishment of such 
grazing districts and the issuance of grazing permits and leases for 
grazing purposes of lands of the United States reserved for power 
purposes subject to the conditions hereinabove set out;
    Provided, however, That this determination and consent shall be 
effective for lands embraced within grazing districts, as of the date of 
the establishment of such districts, and for isolated tracts of lands 
leased for grazing purposes, it shall be in effect when such leases are 
issued, provided that notice thereof is received by this Commission from 
the Bureau of Land Management, Department of the Interior, within 30 
days thereafter, such notice to include full legal description of the 
lands, withdrawn for power purposes which are involved.

(Secs. 24, 308, 39, 41 Stat. 1075, as amended, 40 Stat. 858; 16 U.S.C. 
818, 825g, 825h)

[Order 141, 12 FR 8493, Dec. 19, 1947, as amended by Order 225, 47 FR 
19056, May 3, 1982]

    Cross Reference: For regulations of the Bureau of Land Management, 
relating to grazing, see the Index to title 43 CFR part 4000-End.



PART 32--INTERCONNECTION OF FACILITIES--Table of Contents




    Application for an Order Directing the Establishment of Physical 
                        Connection of Facilities

Sec.
32.1  Contents of application; filing fee.
32.2  Required exhibits.
32.3  Other information.
32.4  Form and style; number of copies.

    Authority: Department of Energy Organization Act, 42 U.S.C. 7101-
7352 (1982); E.O. No. 12,009, 3 CFR 1978 Comp., p. 142; Independent 
Offices Appropriations Act, 31 U.S.C. 9701 (1982); Federal Power Act, 16 
U.S.C. 791a-825r (1988); Public Utility Regulatory Policies Act, 16 
U.S.C. 2601-2645 (1988).

    Source: Order 141, 12 FR 8494, Dec. 19, 1947, unless otherwise 
noted.

    Application for an Order Directing the Establishment of Physical 
                        Connection of Facilities



Sec. 32.1  Contents of application; filing fee.

    Every application under section 202(b) of the Act shall be 
accompanied by the fee prescribed in part 381 of this chapter and shall 
set forth the following information:

[[Page 198]]

    (a) The exact legal name of the applicant and of all persons named 
as parties in the application.
    (b) The name, title, and post office address of the person to whom 
correspondence in regard to the application shall be addressed.
    (c) The person named in the application who is a public utility 
subject to the act.
    (d) The State or States in which each electric utility named in the 
application operates, together with a brief description of the business 
of and territory, by counties and States, served by such utility.
    (e) Description of the proposed interconnection, showing proposed 
location, capacity and type of construction.
    (f) Reasons why the proposed connection, of facilities will be in 
the public interest.
    (g) What steps, if any, have been taken to secure voluntary 
interconnection under the provisions of section 202(a) of the Act.

[Order 141, 12 FR 8494, Dec. 19, 1947, as amended by Order 427, 36 FR 
5596, Mar. 25, 1971; Order 435, 50 FR 40357, Oct. 3, 1985]



Sec. 32.2  Required exhibits.

    There shall be filed with the application and as a part thereof the 
following exhibits:

    Exhibit A. Statement of the estimated capital cost of all facilities 
required to establish the connection, and the estimated annual cost of 
operating such facilities.
    Exhibit B. A general or key map on a scale not greater than 20 miles 
to the inch showing, in separate colors, the territory served by each 
utility, and the location of the facilities used for the generation and 
transmission of electric energy, indicating on said map the points 
between which connection may be established most economically.



Sec. 32.3  Other information.

    The Commission may require additional information when it appears to 
be pertinent in a particular case.



Sec. 32.4  Form and style; number of copies.

    An original and six conformed copies of an application under 
Secs. 32.1 to 32.4 must be filed.

[Order 342, 32 FR 6622, Apr. 29, 1967, as amended by Order 225, 47 FR 
19056, May 3, 1982]



PART 33--APPLICATION FOR ACQUISITION, SALE, LEASE, OR OTHER DISPOSITION, MERGER OR CONSOLIDATION OF FACILITIES, OR FOR PURCHASE OR ACQUISITION OF SECURITIES OF 
A PUBLIC UTILITY--Table of Contents




Sec.
33.1  Applicability.
33.2  Contents of application--general information requirements.
33.3  Additional information requirements for applications involving 
          horizontal competitive impacts.
33.4  Additional information requirements for applications involving 
          vertical competitive impacts.
33.5  Proposed accounting entries.
33.6  Form of notice.
33.7  Verification.
33.8  Number of copies.
33.9  Protective order.
33.10  Additional information.

    Authority: 16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42 U.S.C. 
7101-7352.

    Source: Order 642, 65 FR 71014, Nov. 28, 2000, unless otherwise 
noted.



Sec. 33.1  Applicability.

    (a) The requirements of this part will apply to any public utility 
seeking authority under section 203 of the Federal Power Act to:
    (1) Dispose by sale, lease or otherwise of the whole of its 
facilities subject to Commission jurisdiction or any part thereof of a 
value in excess of $50,000;
    (2) Merge or consolidate, directly or indirectly, facilities subject 
to Commission jurisdiction with those of any other person, if such 
facilities are of a value in excess of $50,000, including the 
acquisition of electric facilities used for the transmission or sale at 
wholesale of electric energy in interstate commerce which, except for 
ownership, would be subject to the Commission's jurisdiction; or
    (3) Purchase, acquire or take any security of any other public 
utility.
    (b) Value in excess of $50,000 as used in section 203 of the Federal 
Power Act (16 U.S.C. 824b) will be the original cost undepreciated as 
defined in the Commission's Uniform System of Accounts prescribed for 
public utilities and licensees in part 101 of this chapter.

[[Page 199]]



Sec. 33.2  Contents of application--general information requirements.

    Each applicant must include in its application, in the manner and 
form and in the order indicated, the following general information with 
respect to the applicant and each entity whose jurisdictional facilities 
or securities are involved:
    (a) The exact name of the applicant and its principal business 
address.
    (b) The name and address of the person authorized to receive notices 
and communications regarding the application, including phone and fax 
numbers, and E-mail addresses.
    (c) A description of the applicant, including:
    (1) All business activities of the applicant, including 
authorizations by charter or regulatory approval (to be identified as 
Exhibit A to the application);
    (2) A list of all energy subsidiaries and energy affiliates, 
percentage ownership interest in such subsidiaries and affiliates, and a 
description of the primary business in which each energy subsidiary and 
affiliate is engaged (to be identified as Exhibit B to the application);
    (3) Organizational charts depicting the applicant's current and 
proposed post-transaction corporate structures (including any pending 
authorized but not implemented changes) indicating all parent companies, 
energy subsidiaries and energy affiliates unless the applicant 
demonstrates that the proposed transaction does not affect the corporate 
structure of any party to the transaction (to be identified as Exhibit C 
to the application);
    (4) A description of all joint ventures, strategic alliances, 
tolling arrangements or other business arrangements, including transfers 
of operational control of transmission facilities to Commission approved 
Regional Transmission Organizations, both current, and planned to occur 
within a year from the date of filing, to which the applicant or its 
parent companies, energy subsidiaries, and energy affiliates is a party, 
unless the applicant demonstrates that the proposed transaction does not 
affect any of its business interests (to be identified as Exhibit D to 
the application);
    (5) The identity of common officers or directors of parties to the 
proposed transaction (to be identified as Exhibit E to the application); 
and
    (6) A description and location of wholesale power sales customers 
and unbundled transmission services customers served by the applicant or 
its parent companies, subsidiaries, affiliates and associate companies 
(to be identified as Exhibit F to the application).
    (d) A description of jurisdictional facilities owned, operated, or 
controlled by the applicant or its parent companies, subsidiaries, 
affiliates, and associate companies (to be identified as Exhibit G to 
the application).
    (e) A narrative description of the proposed transaction for which 
Commission authorization is requested, including:
    (1) The identity of all parties involved in the transaction;
    (2) All jurisdictional facilities and securities associated with or 
affected by the transaction (to be identified as Exhibit H to the 
application);
    (3) The consideration for the transaction; and
    (4) The effect of the transaction on such jurisdictional facilities 
and securities.
    (f) All contracts related to the proposed transaction together with 
copies of all other written instruments entered into or proposed to be 
entered into by the parties to the transaction (to be identified as 
Exhibit I to the application).
    (g) A statement explaining the facts relied upon to demonstrate that 
the proposed transaction is consistent with the public interest. The 
applicant must include a general explanation of the effect of the 
transaction on competition, rates and regulation of the applicant by the 
Commission and state commissions with jurisdiction over any party to the 
transaction. The applicant should also file any other information it 
believes relevant to the Commission's consideration of the transaction. 
The applicant must supplement its application promptly to reflect in its 
analysis material changes that occur after the date a filing is made 
with the

[[Page 200]]

Commission, but before final Commission action. Such changes must be 
described and their effect on the analysis explained (to be identified 
as Exhibit J to the application).
    (h) If the proposed transaction involves physical property of any 
party, the applicant must provide a general or key map showing in 
different colors the properties of each party to the transaction (to be 
identified as Exhibit K to the application).
    (i) If the applicant is required to obtain licenses, orders, or 
other approvals from other regulatory bodies in connection with the 
proposed transaction, the applicant must identify the regulatory bodies 
and indicate the status of other regulatory actions, and provide a copy 
of each order of those regulatory bodies that relates to the proposed 
transaction (to be identified as Exhibit L to the application). If the 
regulatory bodies issue orders pertaining to the proposed transaction 
after the date of filing with the Commission, and before the date of 
final Commission action, the applicant must supplement its Commission 
application promptly with a copy of these orders.



Sec. 33.3  Additional information requirements for applications involving horizontal competitive impacts.

    (a)(1) The applicant must file the horizontal Competitive Analysis 
Screen described in paragraphs (b) through (f) of this section if, as a 
result of the proposed transaction, a single corporate entity obtains 
ownership or control over the generating facilities of previously 
unaffiliated merging entities (for purposes of this section, merging 
entities means any party to the proposed transaction or its parent 
companies, energy subsidiaries or energy affiliates).
    (2) A horizontal Competitive Analysis Screen need not be filed if 
the applicant:
    (i) Affirmatively demonstrates that the merging entities do not 
currently conduct business in the same geographic markets or that the 
extent of the business transactions in the same geographic markets is de 
minimis; and
    (ii) No intervenor has alleged that one of the merging entities is a 
perceived potential competitor in the same geographic market as the 
other.
    (b) All data, assumptions, techniques and conclusions in the 
horizontal Competitive Analysis Screen must be accompanied by 
appropriate documentation and support.
    (1) If the applicant is unable to provide any specific data required 
in this section, it must identify and explain how the data requirement 
was satisfied and the suitability of the substitute data.
    (2) The applicant may provide other analyses for defining relevant 
markets (e.g. the Hypothetical Monopolist Test with or without the 
assumption of price discrimination) in addition to the delivered price 
test under the horizontal Competitive Analysis Screen.
    (3) The applicant may use a computer model to complete one or more 
steps in the horizontal Competitive Analysis Screen. The applicant must 
fully explain, justify and document any model used and provide 
descriptions of model formulation, mathematical specifications, solution 
algorithms, as well as the annotated model code in executable form, and 
specify the software needed to execute the model. The applicant must 
explain and document how inputs were developed, the assumptions 
underlying such inputs and any adjustments made to published data that 
are used as inputs. The applicant must also explain how it tested the 
predictive value of the model, for example, using historical data.
    (c) The horizontal Competitive Analysis Screen must be completed 
using the following steps:
    (1) Define relevant products. Identify and define all wholesale 
electricity products sold by the merging entities during the two years 
prior to the date of the application, including, but not limited to, 
non-firm energy, short-term capacity (or firm energy), long-term 
capacity (a contractual commitment of more than one year), and ancillary 
services (specifically spinning reserves, non-spinning reserves, and 
imbalance energy, identified and defined separately). Because demand and 
supply conditions for a product can vary substantially over the year, 
periods corresponding to those distinct conditions

[[Page 201]]

must be identified by load level, and analyzed as separate products.
    (2) Identify destination markets. Identify each wholesale power 
sales customer or set of customers (destination market) affected by the 
proposed transaction. Affected customers are, at a minimum, those 
entities directly interconnected to any of the merging entities and 
entities that have purchased electricity at wholesale from any of the 
merging entities during the two years prior to the date of the 
application. If the applicant does not identify an entity to whom the 
merging entities have sold electricity during the last two years as an 
affected customer, the applicant must provide a full explanation for 
each exclusion.
    (3) Identify potential suppliers. The applicant must identify 
potential suppliers to each destination market using the delivered price 
test described in paragraph (c)(4) of this section. A seller may be 
included in a geographic market to the extent that it can economically 
and physically deliver generation services to the destination market.
    (4) Perform delivered price test. For each destination market, the 
applicant must calculate the amount of relevant product a potential 
supplier could deliver to the destination market from owned or 
controlled capacity at a price, including applicable transmission 
prices, loss factors and ancillary services costs, that is no more than 
five (5) percent above the pre-transaction market clearing price in the 
destination market.
    (i) Supplier's presence. The applicant must measure each potential 
supplier's presence in the destination market in terms of generating 
capacity, using economic capacity and available economic capacity 
measures. Additional adjustments to supplier presence may be presented; 
applicants must support any such adjustment.
    (A) Economic capacity means the amount of generating capacity owned 
or controlled by a potential supplier with variable costs low enough 
that energy from such capacity could be economically delivered to the 
destination market. Prior to applying the delivered price test, the 
generating capacity meeting this definition must be adjusted by 
subtracting capacity committed under long-term firm sales contracts and 
adding capacity acquired under long-term firm purchase contracts (i.e., 
contracts with a remaining commitment of more than one year). The 
capacity associated with any such adjustments must be attributed to the 
party that has authority to decide when generating resources are 
available for operation. Other generating capacity may also be 
attributed to another supplier based on operational control criteria as 
deemed necessary, but the applicant must explain the reasons for doing 
so.
    (B) Available economic capacity means the amount of generating 
capacity meeting the definition of economic capacity less the amount of 
generating capacity needed to serve the potential supplier's native load 
commitments, as described in paragraph (d)(4)(i) of this section.
    (C) Available transmission capacity. Each potential supplier's 
economic capacity and available economic capacity (and any other measure 
used to determine the amount of relevant product that could be delivered 
to a destination market) must be adjusted to reflect available 
transmission capability to deliver each relevant product. The allocation 
to a potential supplier of limited capability of constrained 
transmission paths internal to the merging entities' systems or 
interconnecting the systems with other control areas must recognize both 
the transmission capability not subject to firm reservations by others 
and any firm transmission rights held by the potential supplier that are 
not committed to long-term transactions. For each such instance where 
limited transmission capability must be allocated among potential 
suppliers, the applicant must explain the method used and show the 
results of such allocation.
    (D) Internal interface. If the proposed transaction would cause an 
interface that interconnects the transmission systems of the merging 
entities to become transmission facilities for which the merging 
entities would have a ``native load'' priority under their open access 
transmission tariff (i.e., where the merging entities may reserve 
existing transmission capacity needed for

[[Page 202]]

native load growth and network transmission customer load growth 
reasonable forecasted within the utility's current planning horizon), 
all of the unreserved capability of the interface must be allocated to 
the merging entities for purposes of the horizontal Competitive Analysis 
Screen, unless the applicant demonstrates one of the following:
    (1) The merging entities would not have adequate economic capacity 
to fully use such unreserved transmission capability;
    (2) The merging entities have committed a portion of the interface 
capability to third parties; or
    (3) Suppliers other than the merging entities have purchased a 
portion of the interface capability.
    (ii) [Reserved]
    (5) Calculate market concentration. The applicant must calculate the 
market share, both pre- and post-merger, for each potential supplier, 
the Herfindahl-Hirschman Index (HHI) statistic for the market, and the 
change in the HHI statistic. (The HHI statistic is a measure of market 
concentration and is a function of the number of firms in a market and 
their respective market shares. The HHI statistic is calculated by 
summing the squares of the individual market shares, expressed as 
percentages, of all potential suppliers to the destination market.) To 
make these calculations, the applicant must use the amounts of 
generating capacity (i.e., economic capacity and available economic 
capacity, and any other relevant measure) determined in paragraph 
(c)(4)(i) of this section, for each product in each destination market.
    (6) Provide historical transaction data. The applicant must provide 
historical trade data and historical transmission data to corroborate 
the results of the horizontal Competitive Analysis Screen. The data must 
cover the two-year period preceding the filing of the application. The 
applicant may adjust the results of the horizontal Competitive Analysis 
Screen, if supported by historical trade data or historical transmission 
service data. Any adjusted results must be shown separately, along with 
an explanation of all adjustments to the results of the horizontal 
Competitive Analysis Screen. The applicant must also provide an 
explanation of any significant differences between results obtained by 
the horizontal Competitive Analysis Screen and trade patterns in the 
last two years.
    (d) In support of the delivered price test required by paragraph 
(c)(4) of this section, the applicant must provide the following data 
and information used in calculating the economic capacity and available 
economic capacity that a potential supplier could deliver to a 
destination market. The transmission data required by paragraphs (d)(7) 
through (d)(9) of this section must be supplied for the merging 
entities' systems. The transmission data must also be supplied for other 
relevant systems, to the extent data are publicly available.
    (1) Generation capacity. For each generating plant or unit owned or 
controlled by each potential supplier, the applicant must provide:
    (i) Supplier name;
    (ii) Name of the plant or unit;
    (iii) Primary and secondary fuel-types;
    (iv) Nameplate capacity;
    (v) Summer and winter total capacity; and
    (vi) Summer and winter capacity adjusted to reflect planned and 
forced outages and other factors, such as fuel supply and environmental 
restrictions.
    (2) Variable cost. For each generating plant or unit owned or 
controlled by each potential supplier, the applicant must also provide 
variable cost components.
    (i) These cost components must include at a minimum:
    (A) Variable operation and maintenance, including both fuel and non-
fuel operation and maintenance; and
    (B) Environmental compliance.
    (ii) To the extent costs described in paragraph (d)(2)(i) of this 
section are allocated among units at the same plant, allocation methods 
must be fully described.
    (3) Long-term purchase and sales data. For each sale and purchase of 
capacity, the applicant must provide the following information:
    (i) Purchasing entity name;
    (ii) Selling entity name;
    (iii) Duration of the contract;

[[Page 203]]

    (iv) Remaining contract term and any evergreen provisions;
    (v) Provisions regarding renewal of the contract;
    (vi) Priority or degree of interruptibility;
    (vii) FERC rate schedule number, if applicable;
    (viii) Quantity and price of capacity and/or energy purchased or 
sold under the contract; and
    (ix) Information on provisions of contracts which confer operational 
control over generation resources to the purchaser.
    (4) Native load commitments.
    (i) Native load commitments are commitments to serve wholesale and 
retail power customers on whose behalf the potential supplier, by 
statute, franchise, regulatory requirement, or contract, has undertaken 
an obligation to construct and operate its system to meet their reliable 
electricity needs.
    (ii) The applicant must provide supplier name and hourly native load 
commitments for the most recent two years. In addition, the applicant 
must provide this information for each load level, if load-
differentiated relevant products are analyzed.
    (iii) If data on native load commitments are not available, the 
applicant must fully explain and justify any estimates of these 
commitments.
    (5) Transmission and ancillary service prices, and loss factors.
    (i) The applicant must use in the horizontal Competitive Analysis 
Screen the maximum rates stated in the transmission providers' tariffs. 
If necessary, those rates should be converted to a dollars-per-megawatt 
hour basis and the conversion method explained.
    (ii) If a regional transmission pricing regime is in effect that 
departs from system-specific transmission rates, the horizontal 
Competitive Analysis Screen must reflect the regional pricing regime.
    (iii) The following data must be provided for each transmission 
system that would be used to deliver energy from each potential supplier 
to a destination market:
    (A) Supplier name;
    (B) Name of transmission system;
    (C) Firm point-to-point rate;
    (D) Non-firm point-to-point rate;
    (E) Scheduling, system control and dispatch rate;
    (F) Reactive power/voltage control rate;
    (G) Transmission loss factor; and
    (H) Estimated cost of supplying energy losses.
    (iv) The applicant may present additional alternative analysis using 
discount prices if the applicant can support it with evidence that 
discounting is and will be available.
    (6) Destination market price. The applicant must provide, for each 
relevant product and destination market, market prices for the most 
recent two years. The applicant may provide suitable proxies for market 
prices if actual market prices are unavailable. Estimated prices or 
price ranges must be supported and the data and approach used to 
estimate the prices must be included with the application. If the 
applicant relies on price ranges in the analysis, such ranges must be 
reconciled with any actual market prices that are supplied in the 
application. Applicants must demonstrate that the results of the 
analysis do not vary significantly in response to small variations in 
actual and/or estimated prices.
    (7) Transmission capability.
    (i) The applicant must provide simultaneous transfer capability 
data, if available, for each of the transmission paths, interfaces, or 
other facilities used by suppliers to deliver to the destination markets 
on an hourly basis for the most recent two years.
    (ii) Transmission capability data must include the following 
information:
    (A) Transmission path, interface, or facility name;
    (B) Total transfer capability (TTC); and
    (C) Firm available transmission capability (ATC).
    (iii) Any estimated transmission capability must be supported and 
the data and approach used to make the estimates must be included with 
the application.
    (8) Transmission constraints.
    (i) For each existing transmission facility that affects supplies to 
the destination markets and that has been constrained during the most 
recent two

[[Page 204]]

years or is expected to be constrained within the planning horizon, the 
applicant must provide the following information:
    (A) Name of all paths, interfaces, or facilities affected by the 
constraint;
    (B) Locations of the constraint and all paths, interfaces, or 
facilities affected by the constraint;
    (C) Hours of the year when the transmission constraint is binding; 
and
    (D) The system conditions under which the constraint is binding.
    (ii) The applicant must include information regarding expected 
changes in loadings on transmission facilities due to the proposed 
transaction and the consequent effect on transfer capability.
    (iii) To the extent possible, the applicant must provide system maps 
showing the location of transmission facilities where binding 
constraints have been known or are expected to occur.
    (9) Firm transmission rights (Physical and Financial). For each 
potential supplier to a destination market that holds firm transmission 
rights necessary to directly or indirectly deliver energy to that 
market, or that holds transmission congestion contracts, the applicant 
must provide the following information:
    (i) Supplier name;
    (ii) Name of transmission path interface, or facility;
    (iii) The FERC rate schedule number, if applicable, under which 
transmission service is provided; and
    (iv) A description of the firm transmission rights held (including, 
at a minimum, quantity and remaining time the rights will be held, and 
any relevant time restrictions on transmission use, such as peak or off-
peak rights).
    (10) Summary table of potential suppliers' presence.
    (i) The applicant must provide a summary table with the following 
information for each potential supplier for each destination market:
    (A) Potential supplier name;
    (B) The potential supplier's total amount of economic capacity (not 
subject to transmission constraints); and
    (C) The potential supplier's amount of economic capacity from which 
energy can be delivered to the destination market (after adjusting for 
transmission availability).
    (ii) A similar table must be provided for available economic 
capacity, and for any other generating capacity measure used by the 
applicant.
    (11) Historical trade data.
    (i) The applicant must provide data identifying all of the merging 
entities' wholesale sales and purchases of electric energy for the most 
recent two years.
    (ii) The applicant must include the following information for each 
transition:
    (A) Type of transaction (such as non-firm, short-term firm, long-
term firm, peak, off-peak, etc.);
    (B) Name of purchaser;
    (C) Name of seller;
    (D) Date, duration and time period of the transaction;
    (E) Quantity of energy purchased or sold;
    (F) Energy charge per unit;
    (G) Megawatt hours purchased or sold;
    (H) Price; and
    (I) The delivery points used to effect the sale or purchase.
    (12) Historical transmission data. The applicant must provide 
information concerning any transmission service denials, interruptions 
and curtailments on the merging entities' systems, for the most recent 
two years, to the extent the information is available from OASIS data, 
including the following information:
    (i) Name of the customer denied, interrupted or curtailed;
    (ii) Type, quantity and duration of service at issue;
    (iii) The date and period of time involved;
    (iv) Reason given for the denial, interruption or curtailment;
    (v) The transmission path; and
    (vi) The reservations or other use anticipated on the affected 
transmission path at the time of the service denial, curtailment or 
interruption.
    (e) Mitigation. Any mitigation measures proposed by the applicant 
(including, for example, divestiture or participation in a regional 
transmission organization) which are intended to mitigate the adverse 
effect of the proposed

[[Page 205]]

transaction must, to the extent possible, be factored into the 
horizontal Competitive Analysis Screen as an additional post-transaction 
analysis. Any mitigation commitments that involve facilities (e.g., in 
connection with divestiture of generation) must identify the facilities 
affected by the commitment, along with a timetable for implementing the 
commitments.
    (f) Additional factors. If the applicant does not propose 
mitigation, the applicant must address:
    (1) The potential adverse competitive effects of the transaction.
    (2) The potential for entry in the market and the role that entry 
could play in mitigating adverse competitive effects of the transaction;
    (3) The efficiency gains that reasonably could not be achieved by 
other means; and
    (4) Whether, but for the transaction, one or more of the merging 
entities would be likely to fail, causing its assets to exit the market.

[65 FR 71014, Nov. 28, 2000; 65 FR 76005, Dec. 5, 2000]



Sec. 33.4  Additional information requirements for applications involving vertical competitive impacts.

    (a)(1) The applicant must file the vertical Competitive Analysis 
described in paragraphs (b) through (e) of this section if, as a result 
of the proposed transaction, a single corporate entity has ownership or 
control over one or more merging entities that provides inputs to 
electricity products and one or more merging entities that provides 
electric generation products (for purposes of this section, merging 
entities means any party to the proposed transaction or its parent 
companies, energy subsidiaries or energy affiliates).
    (2) A vertical Competitive Analysis need not be filed if the 
applicant can affirmatively demonstrate that:
    (i) The merging entities currently do not provide inputs to 
electricity products (i.e., upstream relevant products) and electricity 
products (i.e., downstream relevant products) in the same geographic 
markets or that the extent of the business transactions in the same 
geographic market is de minimis; and no intervenor has alleged that one 
of the merging entities is a perceived potential competitor in the same 
geographic market as the other.
    (ii) The extent of the upstream relevant products currently provided 
by the merging entities is used to produce a de minimis amount of the 
relevant downstream products in the relevant destination markets, as 
defined in paragraph (c)(2) of Sec. 33.3.
    (b) All data, assumptions, techniques and conclusions in the 
vertical Competitive Analysis must be accompanied by appropriate 
documentation and support.
    (c) The vertical Competitive Analysis must be completed using the 
following steps:
    (1) Define relevant products--(i) Downstream relevant products. The 
applicant must identify and define as downstream relevant products all 
products sold by merging entities in relevant downstream geographic 
markets, as outlined in paragraph (c)(1) of Sec. 33.3.
    (ii) Upstream relevant products. The applicant must identify and 
define as upstream relevant products all inputs to electricity products 
provided by upstream merging entities in the most recent two years.
    (2) Define geographic markets--(i) Downstream geographic markets. 
The applicant must identify all geographic markets in which it or any 
merging entities sell the downstream relevant products, as outlined in 
paragraphs (c)(2) and (c)(3) of Sec. 33.3.
    (ii) Upstream geographic markets The applicant must identify all 
geographic markets in which it or any merging entities provide the 
upstream relevant products.
    (3) Analyze competitive conditions--(i) Downstream geographic 
market.
    (A) The applicant must compute market share for each supplier in 
each relevant downstream geographic market and the HHI statistic for the 
downstream market. The applicant must provide a summary table with the 
following information for each relevant downstream geographic market:
    (1) The economic capacity of each downstream supplier (specify the 
amount of such capacity served by each upstream supplier);

[[Page 206]]

    (2) The total amount of economic capacity in the downstream market 
served by each upstream supplier;
    (3) The market share of economic capacity served by each upstream 
supplier; and
    (4) The HHI statistic for the downstream market.
    (B) A similar table must be provided for available economic capacity 
and for any other measure used by the applicant.
    (ii) Upstream geographic market. The applicant must provide a 
summary table with the following information for each upstream relevant 
product in each relevant upstream geographic market:
    (A) The amount of relevant product provided by each upstream 
supplier;
    (B) The total amount of relevant product in the market;
    (C) The market share of each upstream supplier; and
    (D) The HHI statistic for the upstream market.
    (d) Mitigation. Any mitigation measures proposed by the applicant 
(including, for example, divestiture or participation in an Regional 
Transmission Organization) which are intended to mitigate the adverse 
effect of the proposed transaction must, to the extent possible, be 
factored into the vertical competitive analysis as an additional post-
transaction analysis. Any mitigation measures that involve facilities 
must identify the facilities affected by the commitment.
    (e) Additional factors.
    (1) If the applicant does not propose mitigation measures, the 
applicant must address:
    (i) The potential adverse competitive effects of the transaction.
    (ii) The potential for entry in the market and the role that entry 
could play in mitigating adverse competitive effects of the transaction;
    (iii) The efficiency gains that reasonably could not be achieved by 
other means; and
    (iv) Whether, but for the proposed transaction, one or more of the 
parties to the transaction would be likely to fail, causing its assets 
to exit the market.
    (2) The applicant must address each of the additional factors in the 
context of whether the proposed transaction is likely to present 
concerns about raising rivals' costs or anticompetitive coordination.



Sec. 33.5  Proposed accounting entries.

    If the applicant is required to maintain its books of account in 
accordance with the Commission's Uniform System of Accounts in part 101 
of this chapter, the applicant must present proposed accounting entries 
showing the effect of the transaction with sufficient detail to indicate 
the effects on all account balances (including amounts transferred on an 
interim basis), the effect on the income statement, and the effects on 
other relevant financial statements. The applicant must also explain how 
the amount of each entry was determined.



Sec. 33.6  Form of notice.

    The applicant must file a form of notice of the application suitable 
for issuance in the Federal Register, as well as a copy of the same 
notice in electronic format in WordPerfect 6.1 (or other electronic 
format the Commission may designate) on a 3\1/2\ diskette 
marked with the name of the applicant and the words ``Notice of 
Application.'' The Notice of Filing must appear in the following form:

                        UNITED STATES OF AMERICA

                  FEDERAL ENERGY REGULATORY COMMISSION

                       [Full Name of Applicant(s)]

                         Docket No. XXXX-XXX-XXX

                            NOTICE OF FILING

    Take notice that on [Date of filing], [Applicant(s)] filed with the 
Federal Energy Regulatory Commission an application pursuant to section 
203 of the Federal Power Act for authorization of a disposition of 
jurisdictional facilities whereby [describe the transaction for which 
authorization is sought, clearly identifying the jurisdictional 
facilities being disposed of, the entity(s) disposing of the facilities, 
the entity(s) acquiring/leasing the facilities and (briefly) how the 
disposition will be accomplished (e.g., by stock transfer or a cash 
sale)]. [If the disposition of jurisdictional facilities is directly 
related to the disposition of generation assets, identify those 
generation assets and their total nameplate generation capacity in 
Megawatts. If authorization is needed for

[[Page 207]]

both the sale and the purchase of the jurisdictional facilities, this 
should be clearly stated in this paragraph of the notice. If the 
application involves a merger, the applicant should clearly indicate 
this in the draft notice. If the application contained a request for 
privileged treatment by the Commission, state this fact in this 
paragraph of the notice.]
    Any person desiring to be heard or to protest such filing should 
file a motion to intervene or protest with the Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426, in accordance 
with Rules 211 and 214 of the Commission's Rules of Practice and 
Procedure (18 CFR 385.211 and 385.214). All such motions and protests 
should be filed on or before ----------. Protests will be considered by 
the Commission to determine the appropriate action to be taken, but will 
not serve to make protestants parties to the proceedings. Any person 
wishing to become a party must file a motion to intervene. Copies of 
this filing are on file with the Commission and are available for public 
inspection. This filing may also be viewed on the Internet at http://
www.ferc.fed.us/online/rims.htm (call 202-208-2222 for assistance).

Secretary

    The Commission may require the applicant to give such local notice 
by publication as the Commission in its discretion may deem proper.



Sec. 33.7  Verification.

    The original application must be signed by a person or persons 
having authority with respect thereto and having knowledge of the 
matters therein set forth, and must be verified under oath.



Sec. 33.8  Number of copies.

    An original and eight copies of the application under this part must 
be submitted. If the applicant submits a public and a non-public version 
(containing information filed under a request for privileged treatment), 
the original and at least three of the eight copies must be of the non-
public version of the filing, pursuant to Sec. 388.112(b)(ii). If the 
applicant must submit information specified in paragraphs (b), (c), (d), 
(e) and (f) of Sec. 33.3 or paragraphs (b), (c), (d) and (e) of 
Sec. 33.4, the applicant must submit all such information in electronic 
format (e.g., on computer diskette or on CD) along with a printed 
description and summary. The electronic version must be submitted in 
accordance with Sec. 385.2011 of the Commission's regulations. The 
printed portion of the applicant's submission must include documentation 
for the electronic submission, including all file names and a summary of 
the data contained in each file. Each column (or data item) in each 
separate data table or chart must be clearly labeled in accordance with 
the requirements of Sec. 33.3 and Sec. 33.4. Any units of measurement 
associated with numeric entries must also be included.



Sec. 33.9  Protective order.

    If the applicant seeks to protect any portion of the application, or 
any attachment thereto, from public disclosure pursuant to Sec. 388.112 
of this chapter, the applicant must include with its request for 
privileged treatment a proposed protective order under which the parties 
to the proceeding will be able to review any of the data, information, 
analysis or other documentation relied upon by the applicant for which 
privileged treatment is sought.



Sec. 33.10  Additional information.

    The Director of the Office of Markets, Tariffs and Rates, or his 
designee, may, by letter, require the applicant to submit additional 
information as is needed for analysis of an application filed under this 
part.



PART 34--APPLICATION FOR AUTHORIZATION OF THE ISSUANCE OF SECURITIES OR THE ASSUMPTION OF LIABILITIES--Table of Contents




Sec.
34.1  Applicability; definitions; exemptions in case of certain State 
          regulation, certain short-term issuances and certain 
          qualifying facilities.
34.2  Placement of securities.
34.3  Contents of application for issuance of securities.
34.4  Required exhibits.
34.5  Additional information.
34.6  Form and style.
34.7  Number of copies to be filed.
34.8  Verification.
34.9  Filing fee.
34.10  Reports.

    Authority: 16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42 U.S.C. 
7101-7352.

    Source: Order 182, 46 FR 50514, Oct. 14, 1981, unless otherwise 
noted.

[[Page 208]]


    Cross References: For rules of practice and procedure, see part 385 
of this chapter. For Approved Forms, Federal Power Act, see part 131 of 
this chapter.

    OMB Reference: ``FERC Filing No. 523'' is the identification number 
used by the Commission and the Office of Management and Budget to 
reference the filing requirements in part 34.



Sec. 34.1  Applicability; definitions; exemptions in case of certain State regulation, certain short-term issuances and certain qualifying facilities.

    (a) Applicability. This part applies to applications for 
authorization from the Commission to issue securities or assume an 
obligation or liability which are filed by:
    (1) Licensees and other entities pursuant to sections 19 and 20 of 
the Federal Power Act (41 Stat. 1073, 16 U.S.C. 812, 813) and part 20 of 
the Commission's regulations; and
    (2) Public utilities pursuant to section 204 of the Federal Power 
Act (49 Stat. 850, 16 U.S.C. 824c).
    (b) Definitions. For the purpose of this part:
    (1) The term utility means a licensee, public utility or other 
entity seeking authorization under sections 19, 20 or 204 of the Federal 
Power Act;
    (2) The term securities includes any note, stock, treasury stock, 
bond, or debenture or other evidence of interest in or indebtedness of a 
utility;
    (3) The term issuance or placement of securities means issuance or 
placement of securities, or assumption of obligation or liability; and
    (4) The term State means a State admitted to the Union, the District 
of Columbia, and any organized Territory of the United States.
    (c) Exemptions. (1) If an agency of the State in which the utility 
is organized and operating approves or authorizes, in writing, the 
issuance of securities prior to their issuance, the utility is exempt 
from the provisions of sections 19, 20 and 204 of the Federal Power Act 
and the regulations under this part, with respect to such securities.
    (2) This part does not apply to the issue or renewal of, or 
assumption of liability on, a note or draft maturing one year or less 
after the date of such issue, renewal, or assumption of liability, if 
the aggregate of such note or draft and all other then-outstanding notes 
and drafts of a maturity of one year or less on which the utility is 
primarily or secondarily liable, is not more than 5 percent of the par 
value of the other then-outstanding securities of the utility as of the 
date of issue or renewal of, or assumption of liability on, the note or 
draft. In the case of securities having no par value, the par value for 
the purpose of this part is the fair market value, as of the date of 
issue or renewal of, or assumption of liability on, the note or draft.
    (3) For certain qualifying facilities. Any cogeneration or small 
power production facility which is exempt from sections 19, 20 and 204 
of the Federal Power Act pursuant to Sec. 292.601 of this chapter shall 
be exempt from the provisions of this part.

[Order 182, 46 FR 50514, Oct. 14, 1981, as amended at 48 FR 9851, Mar. 
9, 1983; Order 575, 60 FR 4852, Jan. 25, 1995]



Sec. 34.2  Placement of securities.

    (a) Method of issuance. Upon obtaining authorization from the 
Commission, utilities may issue securities by either a competitive bid 
or negotiated placement, provided that:
    (1) Competitive bids are obtained from at least two prospective 
dealers, purchasers or underwriters; or
    (2) Negotiated offers are obtained from at least three prospective 
dealers, purchasers or underwriters; and
    (3) The utility:
    (i) Accepts the bid or offer that provides the utility with the 
lowest cost of money for securities with fixed or variable interest or 
dividend rates, or
    (ii) Accepts the bid or offer that provides the utility with the 
greatest net proceeds for securities with no specified interest or 
dividend rates, or
    (iii) The utility has filed for and obtained authorization from the 
Commission to accept bids or offers other than those specified in 
paragraphs (a)(3)(i) or (a)(3)(ii) of this section.
    (b) Exemptions. The provisions of paragraph (a) of this section do 
not apply where:
    (1) The securities are to be issued to existing holders of 
securities on a pro rata basis;

[[Page 209]]

    (2) The utility receives an unsolicited offer to purchase the 
securities;
    (3) The securities have a maturity of one year or less; or
    (4) The securities are to be issued in support of or to guarantee 
securities issued by governmental or quasi-governmental bodies for the 
benefit of the utility.
    (c) Prohibitions. No securities will be placed with any person who:
    (1) Has performed any service or accepted any fee or compensation 
with respect to the proposed issuance of securities prior to submission 
of bids or entry into negotiations for placement of such securities; or
    (2) Would be in violation of section 305(a) of the Federal Power Act 
with respect to the issuance.

[Order 575, 60 FR 4853, Jan. 25, 1995]



Sec. 34.3  Contents of application for issuance of securities.

    Each application to the Commission for authority to issue securities 
shall contain the information specified in this section. In lieu of 
filing the information required in paragraphs (e), (i) and (j) of this 
section, a specific reference may be made to the portion of the 
registration statement filed under Sec. 34.4(f), which includes the 
information required in these paragraphs.
    (a) The official name of the applicant and address of its principal 
business office.
    (b) The State in which the utility is incorporated, the date of 
incorporation, and each State in which it operates.
    (c) The name, address and telephone number of a person within the 
utility authorized to receive notices and communications with respect to 
the application.
    (d) The date by which Commission action is requested.
    (e) A full description of the securities proposed to be issued, 
including:
    (1) Type and nature of securities;
    (2) Amount of securities (par or stated value and number of units);
    (3) Interest or dividend rate, if any;
    (4) Dates of issuance and maturity;
    (5) Institutional rating of the securities--or if the securities are 
not rated, an explanation as to why they are not rated, and if the 
securities will be rated, an estimate of the rating; and
    (6) Any stock exchange on which the securities will be listed.
    (f) The purpose for which the securities for which application is 
made are to be issued:
    (1) If the purpose of such issuance is the construction, completion, 
extension, or improvement of facilities, describe in reasonable detail 
the construction program for which the funds were or are to be used.
    (2) If the purpose for such issuance is for the refunding of 
obligations, describe in detail the obligations to be refunded, 
including the character, principal amounts, applicable discount or 
premium, dates of issuance and maturity, and all other material facts 
concerning such obligations.
    (3) If the purpose for such issuance is for other than construction 
or refunding, explain such other purpose(s) in detail.
    (g) A statement as to whether or not any application with respect to 
the transaction or any part thereof is required to be filed with any 
State regulatory body.
    (h) A detailed statement of the facts relied upon by the applicant 
to show that the issuance:
    (1) Is for some lawful object, within the corporate purposes of the 
applicant and compatible with the public interest, is necessary or 
appropriate for or consistent with the proper performances by the 
applicant of service as a public utility and will not impair its ability 
to perform that service, and
    (2) Is reasonably necessary or appropriate for such purposes.
    (i) A detailed statement of the bond indenture(s) or other 
limitations on interest and dividend coverage, and the effects of such 
limitations on the issuance of additional debt or equity securities.
    (j) A brief summary of any rate changes which were made effective 
during the period for which financial statements are submitted or which 
became or will become effective after the period for which statements 
are submitted.
    (k) A form of notice suitable for publication in the Federal 
Register, as well as a copy of the same notice in

[[Page 210]]

electronic format (in either ASCII text, WordPerfect 5.1 for DOS or 
WordPerfect 5.2 for Windows format) on a 3\1/2\ diskette 
marked with the name of the applicant and the words ``Notice of 
Filing,'' setting forth:
    (1) The legal name of the applicant;
    (2) The securities offered for issuance including the proposed issue 
date; and
    (3) The comment procedure.
    (l) Any applicable exhibits as required under Sec. 34.4.

[Order 182, 46 FR 50514, Oct. 14, 1981, as amended by Order 390, 49 FR 
32505, Aug. 14, 1984; Order 575, 60 FR 4853, Jan. 25, 1995; Order 593, 
62 FR 1283, Jan. 9, 1997]



Sec. 34.4  Required exhibits.

    (a) Exhibit A. The applicant must file the statement of corporate 
purposes from its articles of incorporation.
    (b) Exhibit B. A copy of all resolutions of the applicant's 
directors authorizing the issuance of securities for which the 
application is made; and copies of the resolution of the stockholders 
approving such issuance if approval of the stockholders has been 
obtained.
    (c) Exhibit C. The Balance Sheet and attached notes for the most 
recent 12-month period for which financial statements have been 
published, provided that the 12-month period ended no more than 4 months 
prior to the date of the filing of the application, on both an actual 
basis and a pro forma basis in the form prescribed for the ``Comparative 
Balance Sheet'' of FERC Form No. 1, ``Annual Report for major electric 
utilities, licensees and others.'' Each adjustment made in determining 
the pro forma basis must be clearly identified.
    (d) Exhibit D. The Income Statement and attached notes for the most 
recent 12-month period for which financial statements have been 
published, provided that the 12-month period ended no more than 4 months 
prior to the date of the filing of the application, on both an actual 
basis and a pro forma basis in the form prescribed for the ``Statement 
of Income for the Year'' of FERC Form No. 1, ``Annual Report for major 
electric utilities, licensees and others.'' Each adjustment made in 
determining the pro forma basis must be clearly identified.
    (e) Exhibit E. A Statement of Cash Flows and Computation of Interest 
Coverage on an actual basis and a pro forma basis for the most recent 
12-month period for which financial statements have been published, 
provided that the 12-month period ended no more than 4 months prior to 
the date of the filing of the application. The Statement of Cash Flows 
must be in the form prescribed for the ``Statement of Cash Flows'' of 
the FERC Form No. 1, Annual Report for major electric utilities, 
licensees and others,'' followed by a computation of interest coverage, 
in the form of the following worksheet:

------------------------------------------------------------------------
                                                                  OMB
                                                                control
                                                      Actual   No. 1902-
Federal Energy Regulatory Commission worksheet for   for the   0043, pro
         computation of interest coverage              year    forma for
                                                    ended mm-   the year
                                                      dd-yy    ended mm-
                                                                 dd-yy
------------------------------------------------------------------------
Net income
Add: Interest on Long-Term Debt, Interest on Short-
 Term Debt, Other Interest Expense, Total Interest
 Expense
  Federal and State Income Taxes
Income Before Interest and Income Taxes
 
         Computation of Interest Coverage
 
Income Before Interest and Income Taxes / Total
 Interest Expense = Interest Coverage
------------------------------------------------------------------------


    (f) Exhibit F. A copy of registration statement and exhibits which 
are filed with the Securities and Exchange Commission for the proposed 
security issuance.

[Order 182, 46 FR 50514, Oct. 14, 1981, as amended by Order 390, 49 FR 
32505, Aug. 14, 1984; Order 575, 60 FR 4853, Jan. 25, 1995; 60 FR 27882, 
May 26, 1995]



Sec. 34.5  Additional information.

    The Commission may, in its discretion, require the filing of 
additional information which appears necessary to reach a determination 
on any particular application.

[[Page 211]]



Sec. 34.6  Form and style.

    Each application pursuant to this part 34 shall conform to the 
requirements of subpart T of part 385 of this chapter.

[Order 182, 46 FR 50514, Oct. 14, 1981, as amended by Order 225, 47 FR 
19056, May 3, 1982]



Sec. 34.7  Number of copies to be filed.

    Each applicant shall submit to this Commission an original and four 
copies of each application pursuant to this part 34.



Sec. 34.8  Verification.

    The original application shall be signed by an authorized 
representative of the applicant, who has knowledge of the matters set 
forth therein, and it shall be verified under oath.



Sec. 34.9  Filing fee.

    Each application shall be accompanied by a fee as prescribed in part 
381 of this chapter.

[Order 182, 46 FR 50514, Oct. 14, 1981, by Order 435, amended at 50 FR 
40357, Oct. 3, 1985]



Sec. 34.10  Reports.

    The applicant must file reports under Sec. 131.43 and Sec. 131.50 of 
this chapter no later than 30 days after the sale or placement of long-
term debt or equity securities or the entry into guarantees or 
assumptions of liabilities pursuant to authority granted under this 
part.

[Order 575, 60 FR 4853, Jan. 25, 1995]



PART 35--FILING OF RATE SCHEDULES AND TARIFFS--Table of Contents




                         Subpart A--Application

Sec.
35.0  Filing fees.
35.1  Application; obligation to file rate schedules and tariffs.
35.2  Definitions.
35.3  Notice requirements.
35.4  Permission to become effective is not approval.
35.5  Rejection of material submitted for filing.
35.6  Submission for staff suggestions.
35.7  Number of copies to be supplied.
35.8  Protests and interventions by interested parties and form for 
          Federal Register notice.
35.9  Identification and numbering of tariffs and rate schedules 
          (including service agreements).
35.10  Form and style of rate schedules.
35.10a  Forms of service agreements.
35.10b  Electric Quarterly Reports.
35.11  Waiver of notice requirement.

           Subpart B--Documents To Be Submitted With a Filing

35.12  Filing of initial rate schedules.
35.13  Filing of changes in rate schedules.

                  Subpart C--Other Filing Requirements

35.14  Fuel cost and purchased economic power adjustment clauses.
35.15  Notices of cancellation or termination.
35.16  Notice of succession.
35.17  Changes relating to suspended rate schedules or parts thereof.
35.18  [Reserved]
35.19  Submission of information by reference.
35.19a  Refund requirements under suspension orders.
35.21  Applicability to licensees and others subject to section 19 or 20 
          of the Federal Power Act.
35.22  Limits for percentage adders in rates for transmission services; 
          revision of rate schedules.
35.23  General provisions.
35.24  Tax normalization for public utilities.
35.25  Construction work in progress.
35.26  Recovery of stranded costs by public utilities and transmitting 
          utilities.
35.27  Power sales at market-based rates.
35.28  Non-discriminatory open access transmission tariff.
35.29  Treatment of special assessments levied under the Atomic Energy 
          Act of 1954, as amended by Title XI of the Energy Policy Act 
          of 1992.

Subpart D--Procedures and Requirements for Public Utility Sales of Power 
      to Bonneville Power Administration Under Northwest Power Act

35.30  General provisions.
35.31  Commission review.

  Subpart E--Regulations Governing Nuclear Plant Decommissioning Trust 
                                  Funds

35.32  General provisions.
35.33  Specific provisions.

 Subpart F--Procedures and Requirements Regarding Regional Transmission 
                              Organizations

35.34  Regional Transmission Organizations.


[[Page 212]]


    Authority: 16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42 U.S.C. 
7101-7352.

    Source: Order 271, 28 FR 10573, Oct. 2, 1963, unless otherwise 
noted.



                         Subpart A--Application



Sec. 35.0  Filing fees.

    Every filing made under this part shall be accompanied by the fee 
described in part 381 of this chapter.

[Order 427, 36 FR 5597, Mar. 25, 1971, as amended by Order 435, 50 FR 
40357, Oct. 3, 1985]



Sec. 35.1  Application; obligation to file rate schedules and tariffs.

    (a) Every public utility shall file with the Commission and post, in 
conformity with the requirements of this part, full and complete rate 
schedules, as defined in Sec. 35.2(b), clearly and specifically setting 
forth all rates and charges for any transmission or sale of electric 
energy subject to the jurisdiction of this Commission, the 
classifications, practices, rules and regulations affecting such rates 
and charges and all contracts which in any manner affect or relate to 
such rates, charges, classifications, services, rules, regulations or 
practices, as required by section 205(c) of the Federal Power Act (49 
Stat. 851; 16 U.S.C. 824d(c)). Where two or more public utilities are 
parties to the same rate schedule, each public utility transmitting or 
selling electric energy subject to the jurisdiction of this Commission 
shall post and file such rate schedule, or the rate schedule may be 
filed by one such public utility and all other parties having an 
obligation to file may post and file a certificate of concurrence on the 
form indicated in Sec. 131.52 of this chapter: Provided, however, In 
cases where two or more public utilities are required to file rate 
schedules or certificates of concurrence such public utilities may 
authorize a designated representative to file upon behalf of all parties 
if upon written request such parties have been granted Commission 
authorization therefor.
    (b) A rate schedule applicable to a transmission or sale of electric 
energy, other than that which proposes to supersede, supplement, cancel 
or otherwise change the provisions of a rate schedule required to be on 
file with this Commission, shall be filed as an initial rate in 
accordance with Sec. 35.12.
    (c) A rate schedule applicable to a transmission or sale of electric 
energy which proposes to supersede, supplement, cancel or otherwise 
change any of the provisions of a rate schedule required to be on file 
with this Commission (such as providing for other or additional rates, 
charges, classifications or services, or rules, regulations, practices 
or contracts for a particular customer or customers) shall be filed as a 
change in rate in accordance with Sec. 35.13, except Notices of 
Cancellation or Termination which shall be filed as a change in 
accordance with Sec. 35.15.
    (d)(1) The provisions of this paragraph (d) shall apply to rate 
schedules tendered for filing on or after August 1, 1976, which are 
applicable to the transmission or sale of firm power for resale to an 
all-requirements customer, whether tendered pursuant to Sec. 35.12 as an 
initial rate schedule or tendered pursuant to Sec. 35.13 as a change in 
an existing rate schedule whose term has expired or whose term is to be 
extended.
    (2) Rate schedules covered by the terms of paragraph (d)(1) of this 
section shall contain the following provision when it is the intent of 
the contracting parties to give the party furnishing service the 
unrestricted right to file unilateral rate changes under section 205 of 
the Federal Power Act:

    Nothing contained herein shall be construed as affecting in any way 
the right of the party furnishing service under this rate schedule to 
unilaterally make application to the Federal Energy Regulatory 
Commission for a change in rates under section 205 of the Federal Power 
Act and pursuant to the Commission's Rules and Regulations promulgated 
thereunder.

    (3) Rate schedules covered by the terms of paragraph (d)(1) of this 
section shall contain the following provision when it is the intent of 
the contracting parties to withhold from the party furnishing service 
the right to file any unilateral rate changes under section 205 of the 
Federal Power Act:

    The rates for service specified herein shall remain in effect for 
the term of ---------- or until ----------, and shall not be subject to 
change through application to the Federal Energy Regulatory Commission 
pursuant to the provisions of Section 205 of the Federal

[[Page 213]]

Power Act absent the agreement of all parties thereto.

    (4) Rate schedules covered by the terms of paragraph (d)(1) of this 
section, but which are not covered by paragraphs (d)(2) or (d)(3) of 
this section, are not required to contain either of the boilerplate 
provisions set forth in paragraph (d)(2) or (d)(3) of this section.
    (e) No public utility shall, directly or indirectly, demand, charge, 
collect or receive any rate, charge or compensation for or in connection 
with electric service subject to the jurisdiction of the Commission, or 
impose any classification, practice, rule, regulation or contract with 
respect thereto, which is different from that provided in a rate 
schedule required to be on file with this Commission unless otherwise 
specifically provided by order of the Commission for good cause shown.
    (f) A rate schedule applicable to the sale of electric power by a 
public utility to the Bonneville Power Administration under section 5(c) 
of the Pacific Northwest Electric Power Planning and Conservation Act 
(Pub. L. No. 96-501 (1980)) shall be filed in accordance with subpart D 
of this part.
    (g) For the purposes of paragraph (a) of this section, any agreement 
that conforms to the form of service agreement that is part of the 
public utility's approved tariff pursuant to Sec. 35.10a of this chapter 
and any market-based rate agreement pursuant to a tariff shall not be 
filed with the Commission. All agreements must, however, be retained and 
be made available for public inspection and copying at the public 
utility's business office during regular business hours and provided to 
the Commission or members of the public upon request. Any individually 
executed service agreement for transmission, cost-based power sales, or 
other generally applicable services that deviates in any material 
respect from the applicable form of service agreement contained in the 
public utility's tariff and all unexecuted agreements under which 
service will commence at the request of the customer, are subject to the 
filing requirements of this part.

[Order 271, 28 FR 10573, Oct. 2, 1963, as amended by Order 541, 40 FR 
56425, Dec. 3, 1975; Order 541-A, 41 FR 27831, July 7, 1976; 46 FR 
50520, Oct. 14, 1981; Order 337, 48 FR 46976, Oct. 17, 1983; Order 541, 
57 FR 21734, May 22, 1992; Order 2001, 67 FR 31069, May 8, 2002]



Sec. 35.2  Definitions.

    (a) Electric service. The term electric service as used herein shall 
mean the transmission of electric energy in interstate commerce or the 
sale of electric energy at wholesale for resale in interstate commerce, 
and may be comprised of various classes of capacity and energy sales 
and/or transmission services. Electric service shall include the 
utilization of facilities owned or operated by any public utility to 
effect any of the foregoing sales or services whether by leasing or 
other arrangements. As defined herein, electric service is without 
regard to the form of payment or compensation for the sales or services 
rendered whether by purchase and sale, interchange, exchange, wheeling 
charge, facilities charge, rental or otherwise.
    (b) Rate schedule. The term rate schedule as used herein shall mean 
a statement of (1) electric service as defined in paragraph (a) of this 
section, (2) rates and charges for or in connection with that service, 
and (3) all classifications, practices, rules, regulations or contracts 
which in any manner affect or relate to the aforementioned service, 
rates, and charges. This statement shall be in writing and may take the 
physical form of a contractual document, purchase or sale agreement, 
lease of facilities, tariff \1\ or other writing. Any oral agreement or 
understanding forming a part of such statement shall be reduced to 
writing and made a part thereof.
---------------------------------------------------------------------------

    \1\ The term tariff means a compilation, in book form, of rate 
schedules of a particular public utility, effective under the Federal 
Power Act, and a copy of each form of service agreement. In connection 
herewith, attention is invited to part 154 of this chapter, i.e., the 
Commission's regulations under the Natural Gas Act, as a guide to the 
form and composition of a tariff.

---------------------------------------------------------------------------

[[Page 214]]

    (c) Filing date. The term filing date as used herein shall mean the 
date on which a rate schedule filing is completed by the receipt in the 
office of the Secretary of all supporting cost and other data required 
to be filed in compliance with the requirements of this part, unless 
such rate schedule is rejected as provided in Sec. 35.5. If the material 
submitted is found to be incomplete, the Director of the Office of 
Electric Power Regulation will so notify the filing utility within 60 
days of the receipt of the submittal.
    (d) Posting. The term posting as used herein shall mean, (1) keeping 
a copy of every rate schedule of a public utility as currently on file, 
or as tendered for filing, with the Commission open and available during 
regular business hours for public inspection in a convenient form and 
place at the public utility's principal and district or division offices 
in the territory served, and (2) mailing to each purchaser under a rate 
schedule a copy of such rate schedule on the date it is sent to this 
Commission for filing. Posting shall include, in the event of the filing 
of increased rates or charges, the mailing to each purchaser under a 
rate schedule or schedules proposed to be changed and to each State 
Commission within whose jurisdiction such purchaser or purchasers 
distribute and sell electric energy at retail, a copy of the rate 
schedule showing such increased rates or charges, comparative billing 
data as required under this part, and, if requested by a purchaser or 
State Commission, a copy of the supporting data required to be submitted 
to this Commission under this part. Upon direction of the Secretary, the 
public utility shall serve copies of rate schedules and supplementary 
data upon designated parties other than those specified herein.
    (e) Effective date. As used herein the effective date of a rate 
schedule shall mean the date on which a rate schedule filed and posted 
pursuant to the requirements of this part is permitted by the Commission 
to become effective as a filed rate schedule. The effective date shall 
be 60 days after the filing date, or such other date as may be specified 
by the Commission.

(16 U.S.C. 284(d), 792 et seq.; Pub. L. 95-617; Pub. L. 95-91; E.O. 
12009, 42 FR 46267)

[Order 271, 28 FR 10573, Oct. 2, 1963, as amended at 28 FR 11404, Oct. 
24, 1963; 43 FR 36437, Aug. 17, 1978; 44 FR 16372, Mar. 19, 1979; 44 FR 
20077, Apr. 4, 1979; Order 39, 44 FR 46454, Aug. 8, 1979]



Sec. 35.3  Notice requirements.

    (a) Rate schedules. All rate schedules or any part thereof shall be 
tendered for filing with the Commission and posted not less than sixty 
days nor more than one hundred-twenty days prior to the date on which 
the electric service is to commence and become effective under an 
initial rate schedule or the date on which the filing party proposes to 
make any change in electric service and/or rate, charge, classification, 
practice, rule, regulation, or contract effective as a change in rate 
schedule, except as provided in paragraph (b) of this section, or unless 
a different period of time is permitted by the Commission. Nothing 
herein shall be construed as in any way precluding a public utility from 
entering into agreements which, under this section, may not be filed at 
the time of execution thereof by reason of the aforementioned sixty to 
one hundred-twenty day prior filing requirements. The proposed effective 
date of any rate schedule filing having a filing date in accordance with 
Sec. 35.2(c) may be deferred at the written request of the filing public 
utility submitted to the Secretary prior to its acceptance by the 
Commission.
    (b) Construction of facilities. Rate schedules predicated on the 
construction of facilities may be tendered for filing and posted no more 
than one hundred-twenty days prior to the date set by the parties for 
the contract to go into effect. The Commission, upon request, may permit 
a rate schedule or part thereof to be tendered for filing and posted 
more than one hundred-twenty days before it is to become effective.

(16 U.S.C. 284(d); Pub. L. 95-617; Pub. L. 95-91; E.O. 12009, 42 FR 
46267)

[44 FR 16372, Mar. 19, 1979; 44 FR 20077, Apr. 4, 1979]

[[Page 215]]



Sec. 35.4  Permission to become effective is not approval.

    The fact that the Commission permits a rate schedule or any part 
thereof or any notice of cancellation to become effective shall not 
constitute approval by the Commission of such rate schedule or part 
thereof or notice of cancellation.



Sec. 35.5  Rejection of material submitted for filing.

    (a) The Secretary, pursuant to the Commission's rules of practice 
and procedure and delegation of Commission authority, shall reject any 
material submitted for filing with the Commission which patently fails 
to substantially comply with the applicable requirements set forth in 
this part, or the Commission's rules of practice and procedure.
    (b) A rate filing that fails to comply with this Part may be 
rejected by the Director of the Office of Markets, Tariffs, and Rates 
pursuant to the authority delegated to the Director in 
Sec. 375.307(k)(3) of this chapter.

[Order 271, 28 FR 10573, Oct. 2, 1963, as amended by Order 614, 65 FR 
18227, Apr. 7, 2000]



Sec. 35.6  Submission for staff suggestions.

    Any public utility may submit a rate schedule or any part thereof or 
any material relating thereto for the purpose of receiving staff 
suggestions and comments thereon prior to filing with the Commission.



Sec. 35.7  Number of copies to be supplied.

    All tariffs, rate schedules and contracts, or parts thereof, and 
material related thereto including any change in rates, certificates of 
concurrence, notices of cancellation or termination, and notices of 
succession, shall be supplied to the Commission for filing in six 
copies. All copies are to be included in one package, together with six 
copies of the letter of transmittal and all other materials and 
information required by these regulations, and addressed to the Federal 
Energy Regulatory Commission, Washington, DC 20426.

[Order 525, 40 FR 8947, Mar. 4, 1975, as amended by Order 541, 57 FR 
21734, May 22, 1992]



Sec. 35.8  Protests and interventions by interested parties and form for Federal Register notice.

    (a) Protests or interventions. Unless the notice issued by the 
Commission provides otherwise, any protest or intervention to a rate 
filing made pursuant to this part must be filed in accordance with 
Secs. 385.211 and 385.214 of this chapter, on or before 21 days after 
the subject rate filing. A protest must state the basis for the 
objection. A protest will be considered by the Commission in determining 
the appropriate action to be taken, but will not serve to make the 
protestant a party to the proceeding. A person wishing to become a party 
to the proceeding must file a motion to intervene.
    (b) Form of notice for Federal Register. The public utility must 
file a form of notice suitable for publication in the Federal Register, 
as well as a copy of the same notice in electronic format (in ASCII text 
or WordPerfect 8.0 format) on a 3\1/2\ diskette 
marked with the name of the applicant and the words ``Notice of 
Filing,'' which must be in the following form:

                        United States of America

                  Federal Energy Regulatory Commission

                     (Name of Utility)    Docket No.

                            notice of filing

    Take notice that (name of public utility), on (date), tendered for 
filing proposed changes in its FERC Electric Service Tariff, (Volume 
Nos.), [The following language in the first paragraph applies only to 
increased rate filings.] The proposed changes would increase revenues 
from jurisdictional sales and service by (amount) based on the 12-month 
period ending (date). [If changes other than increased rates and charges 
are proposed, the public utility must concisely state the nature of 
these changes.]
    [The public utility must briefly describe the reasons for the 
proposed changes in the second paragraph.]
    Copies of the filing were served upon the public utility's 
jurisdictional customers, (other parties the public utility served, 
inter alia, state public service commissions, other government agencies, 
etc.).
    Any person desiring to be heard or to protest the filing should file 
a motion to intervene or protest with the Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426, in accordance 
with Rules 211 and 214 of the Commission's Rules

[[Page 216]]

of Practice and Procedure (18 CFR 385.211 and 385.214). All such motions 
or protests must be filed in accordance with Sec. 35.8 of the 
Commission's regulations. Protests will be considered by the Commission 
in determining the appropriate action to be taken, but will not serve to 
make protestants parties to the proceeding. Any person wishing to become 
a party must file a motion to intervene. Copies of this filing are on 
file with the Commission and are available for public inspection in the 
Public Reference Room. This filing may also be viewed on the Internet at 
http://www.ferc.fed.us/online/rims.htm (call 202-208-2222 for 
assistance).

[Order 612, 64 FR 72537, Dec. 28, 1999; 65 FR 18229, Apr. 7, 2000]



Sec. 35.9  Identification and numbering of tariffs and rate schedules (including service agreements).

    (a) All tariffs and rate schedules (including service agreements) 
must be numbered sequentially from the beginning of that tariff or rate 
schedule (or service agreement). Revised service agreements must be 
replaced in their entirety.
    (b) All tariffs and rate schedules (not including service 
agreements, except as noted in paragraphs (b)(4) and (5) of this 
section) must have the following information placed in the margins of 
each sheet:
    (1) Identification. At the top left of each page, the exact name of 
the company must be shown, under which must be set forth the words 
``FERC Electric Tariff'' or ``Rate Schedule FERC No. ----'' together 
with volume identification, as appropriate.
    (2) Numbering of sheets. Except for the title page, at the top 
right, the sheet number must appear as ``(Original or Revised) Sheet No. 
(number).'' All sheets must be numbered in the manner set forth in the 
Tariff, Rate Schedule and Service Agreement Pagination Guidelines, as 
modified from time to time.
    (3) Issuing officer and issue date. On the lower left must be placed 
``Issued by:'' followed by the name and title of the person authorized 
to issue the sheet. Immediately below must be placed ``Issued on'' 
followed by the date of issue.
    (4) Effective date. On the lower right must be placed ``Effective:'' 
followed by the specific effective date proposed by the company. Service 
agreements must include this data on the same sheet containing the 
service agreement designation.
    (5) Filings made to comply with Commission orders. Tariffs and rate 
schedules (including service agreements) filed to comply with Commission 
orders must carry the following notation in the bottom margin: ``Filed 
to comply with order of the Federal Energy Regulatory Commission, Docket 
No. (number), issued (date), (FERC Reports citation).'' Service 
agreements must include this data on the same sheet containing the 
service agreement designation.

[Order 614, 65 FR 18227, Apr. 7, 2000]



Sec. 35.10  Form and style of rate schedules.

    (a) Every rate schedule offered for filing with the Commission under 
this part, shall show on a title page, which shall be otherwise blank, 
(1) the name of the filing public utility, (2) the names of other 
utilities rendering or receiving service under the rate schedule; and 
(3) a brief description of the service to be provided under the rate 
schedule.
    (b) All rate schedules tendered for filing under this part must be 
printed or otherwise reproduced on 8\1/2\ inches wide by 11 inches long 
white, durable paper so as to result in a clear and permanent record. 
All copies must be clear, legible, complete, and must show the name(s) 
of all signatories to executed documents.
    (c) At the time a public utility files with the Commission and posts 
under this part to supersede, supplement, or otherwise change the 
provisions of a rate schedule previously filed with the Commission under 
this part, in addition to the other requirements of this part, it must 
file and post a marked version of the pages to be changed showing 
additions and deletions. The new language must be marked by either 
highlight, background shading, bold text, or underlined text. Deleted 
language must be marked by strike-through. A marked version of the pages 
to be changed must be included in each

[[Page 217]]

copy of the filing required to be filed or posted by this part.

[Order 271, 28 FR 10573, Oct. 2, 1963, as amended by Order 568, 59 FR 
40240, Aug. 8, 1994]



Sec. 35.10a  Forms of service agreements.

    (a) To the extent a public utility adopts a standard form of service 
agreement for a service other than market-based power sales, the public 
utility shall include as part of its applicable tariff(s) an unexecuted 
standard service agreement approved by the Commission for each category 
of generally applicable service offered by the public utility under its 
tariff(s). The standard format for each generally applicable service 
must reference the service to be rendered and where it is located in its 
tariff(s). The standard format must provide spaces for insertion of the 
name of the customer, effective date, expiration date, and term. Spaces 
may be provided for the insertion of receipt and delivery points, 
contract quantity, and other specifics of each transaction, as 
appropriate.
    (b) Forms of service agreement submitted under this section shall be 
in the same format prescribed in Sec. 35.10(b) for the filing of rate 
schedules.

[Order 2001, 67 FR 31069, May 8, 2002]



Sec. 35.10b  Electric Quarterly Reports.

    Each public utility shall file an updated Electric Quarterly Report 
with the Commission covering all services it provides pursuant to this 
part, for each of the four calendar quarters of each year, in accordance 
with the following schedule: for the period from January 1 through March 
31, file by April 30; for the period from April 1 through June 30, file 
by July 31; for the period July 1 through September 30, file by October 
31; and for the period October 1 through December 31, file by January 
31. Electric Quarterly Reports must be prepared in conformance with the 
Commission's software and guidance posted and available for downloading 
from the FERC Web site (http://www.ferc.gov).

[Order 2001, 67 FR 31069, May 8, 2002]



Sec. 35.11  Waiver of notice requirement.

    Upon application and for good cause shown, the Commission may, by 
order, provide that a rate schedule, or part thereof, shall be effective 
as of a date prior to the date of filing or prior to the date the rate 
schedule would become effective in accordance with these rules. 
Application for waiver of the prior notice requirement shall show (a) 
how and the extent to which the filing public utility and pur- chaser(s) 
under such rate schedule, or part thereof, would be affected if the 
notice requirement is not waived, and (b) the effects of the waiver, if 
granted, upon purchasers under other rate schedules. The filing public 
utility requesting such waiver of notice shall serve copies of its 
request therefor upon all purchasers.



           Subpart B--Documents To Be Submitted With a Filing



Sec. 35.12  Filing of initial rate schedules.

    (a) The letter of a public utility transmitting to the Commission 
for filing an initial rate schedule shall list the documents submitted 
with the filing; give the date on which the service under that schedule 
is expected to commence; state the names and addresses of those to whom 
the rate schedule has been mailed; contain a brief description of the 
kinds of services to be furnished at the rates specified therein; and 
summarize the circumstances which show that all requisite agreement to 
the rate schedule or the filing thereof, including any contract embodied 
therein, has in fact been obtained. In the case of coordination and 
interchange arrangements in the nature of power pooling transactions, 
all supporting data required to be submitted in support of a rate 
schedule filing shall also be submitted by parties filing certificates 
of concurrence, or a representative to file supporting data on behalf of 
all parties may be designated as provided in Sec. 35.1.
    (b) In addition, the following material shall be submitted:
    (1) Estimates of the transactions and revenues under an initial rate 
schedule. This shall include estimates, by months and for the year, of 
the quantities of services to be rendered and of the revenues to be 
derived therefrom during the 12 months immediately following the month 
in which those services will commence. Such estimates

[[Page 218]]

should be subdivided by classes of service, customers, and delivery 
points and shall show all billing determinants, e.g., kw, kwh, fuel 
adjustment, power factor adjustment. These estimates will not be 
required where they cannot be made with relative accuracy as, for 
example, in cases of interconnection arrangements containing schedules 
of rates for emergency energy, spinning reserve or economy energy or in 
cases of coordination and integration of hydroelectric generating 
resources whose output cannot be predicted quantitatively due to water 
conditions.
    (2)(i) Basis of the rate or charge proposed in an initial rate 
schedule and an explanation of how the proposed rate or charge was 
derived. For example, is it a standard rate of the filing public 
utility; is it a special rate arrived at through negotiations and, if 
so, were unusual customer requirements or competitive factors involved; 
and is it designed to produce a return substantially equal to the filing 
public utility's overall rate of return or is it essentially an 
increment cost plus a share of the savings rate? Were special cost of 
service studies prepared in connection with the derivation of the rate?
    (ii) A summary statement of all cost (whether fully distributed, 
incremental or other) computations involved in arriving at the 
derivation of the level of the rate, in sufficient detail to justify the 
rate, shall be submitted with the filing, except that if the filing 
includes nothing more than service to one or more added customers under 
an established rate of the utility for a particular class of service, 
such summary statement of cost computations is not required. In all 
cases, the Secretary is authorized to require the submission of the 
complete cost studies as part of the filing and each filing public 
utility shall submit the same upon request by the Secretary in such form 
as he shall direct.
    (3) A comparison of the proposed initial rate with other rates of 
the filing public utility for similar wholesale for resale and 
transmission services.
    (4) If any facilities are installed or modified in order to supply 
the service to be furnished under the proposed rate schedule, the filing 
public utility shall show on an appropriate available map (or sketch) 
and single line diagram the additions or changes to be made.
    (5) In support of the design of the proposed rate, the filing public 
utility shall submit the same material required to be furnished pursuant 
to Sec. 35.13(h)(37) Statement BL. In addition to the summary cost 
analysis required by Statement BL, the public utility shall also submit 
a complete explanation as to the method used in arriving at the cost of 
service allocated to the sales and service for which the rate or charge 
is proposed, and showing the principal determinants used for allocation 
purposes. In connection therewith, the following data should be 
submitted:
    (i) In the event the filing public utility considers certain special 
facilities as being devoted entirely to the service involved, it shall 
show the cost of service related to such special facilities.
    (ii) Computations showing the energy responsibility of the service, 
based upon considerations of energy sales under the proposed rate 
schedule and the kWh delivered from the filing public utility's supply 
system.
    (iii) Computations showing the demand responsibility of the service, 
and explaining the considerations upon which such responsibility was 
determined (e.g., coincident or non-coincident peak demands, etc.).

(Federal Power Act, 16 U.S.C. 792-828c; Department of Energy 
Organization Act, 42 U.S.C. 7101-7352; E.O. 12009, 42 FR 46267; Pub. L. 
96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.))

[Order 271, 28 FR 10573, Oct. 2, 1963, as amended at 28 FR 11404, Oct. 
24, 1963; Order 537, 40 FR 48674, Oct. 17, 1975; Order 91, 45 FR 46363, 
July 10, 1980]



Sec. 35.13  Filing of changes in rate schedules.

                                Contents

(a) General rule.
    (1) Filing for any rate schedule change not otherwise excepted.
    (2) Abbreviated filing requirements.
    (3) Cost of service data required by letter.
(b) General information.
(c) Information relating to the effect of the rate schedule change.
(d) Cost of service information.
    (1) Filing of Period I data.
    (2) Filing of Period II data.
    (3) Definitions.
    (4) Test period.
    (5) Work papers.

[[Page 219]]

    (6) Additional information.
    (7) Attestation.
(e) Testimony and exhibits.
    (1) Filing requirements.
    (2) Case in chief.
    (3) Burden of proof.
(f) Filing by parties concurring in coordination and interchange 
          arrangements.
(g) Commission precedents and policy.
(h) Cost of service statements.
    (1) AA--Balance sheets.
    (2) AB--Income statements.
    (3) AC--Retained earnings statements.
    (4) AD--Cost of plant.
    (5) AE--Accumulated depreciation and amortization.
    (6) AF--Specified deferred credits.
    (7) AG--Specified plant accounts (other than plant in service) and 
deferred debits.
    (8) AH--Operation and maintenance expenses.
    (9) AI--Wages and salaries.
    (10) AJ--Depreciation and amortization expenses.
    (11) AK--Taxes other than income taxes.
    (12) AL--Working capital.
    (13) AM--Construction work in progress.
    (14) AN--Notes payable.
    (15) AO--Rate for allowance for funds used during construction.
    (16) AP--Federal income tax deductions--interest.
    (17) AQ--Federal income tax deductions--other than interest.
    (18) AR--Federal tax adjustments.
    (19) AS--Additional state income tax deductions.
    (20) AT--State tax adjustments.
    (21) AU--Revenue credits.
    (22) AV--Rate of return.
    (23) AW--Cost of short-term debt.
    (24) AX--Other recent and pending rate changes.
    (25) AY--Income and revenue tax rate data.
    (26) BA--Wholesale customer rate groups.
    (27) BB--Allocation demand and capability data.
    (28) BC--Reliability data.
    (29) BD--Allocation energy and supporting data.
    (30) BE--Specific assignment data.
    (31) BF--Exclusive-use commitments of major power supply facilities.
    (32) BG--Revenue data to reflect changed rates.
    (33) BH--Revenue data to reflect present rates.
    (34) BI--Fuel cost adjustment factors.
    (35) BJ--Summary data tables.
    (36) BK--Electric utility department cost of service, total and as 
allocated.
    (37) BL--Rate design information.
    (38) Statement BM--Construction program statement.

    (a) General rule. Every public utility shall file the information 
required by this section, as applicable, at the time it files with the 
Commission under Sec. 35.1 of this part all or part of a rate schedule 
to supersede, supplement, or otherwise change the provisions of a rate 
schedule filed with the Commission under Sec. 35.1. Any petition filed 
under Sec. 385.207 of this chapter for waiver of any provision of this 
section shall specifically identify the requirement that the applicant 
wishes the Commission to waive.
    (1) Filing for any rate schedule change not otherwise excepted. 
Except as provided in paragraph (a)(2) of this section, any utility that 
files a rate schedule change shall submit with its filing the 
information specified in paragraphs (b), (c), (d), (e), and (h) of this 
section, in accordance with paragraph (g) of this section.
    (2) Abbreviated filing requirements--(i) For certain small rate 
increases. Any utility that files a rate increase for power or 
transmission services not covered by paragraph (a)(2)(ii) of this 
section may elect to file under this paragraph instead of paragraph 
(a)(1) of this section, if the proposed increase for the Test Period, as 
defined in paragraph (a)(2)(i)(A) of this section, is equal to or less 
than $200,000, regardless of customer consent, or equal to or less than 
$1 million if all wholesale customers that belong to the affected rate 
class consent.
    (A) Definition: The Test Period, for purposes of paragraph (a)(2)(i) 
of this section, means the most recent calendar year for which actual 
data are available, the last day of which is no more than fifteen months 
before the date of tender for filing under Sec. 35.1 of the notice of 
rate schedule.
    (B) Any utility that elects to file under this subparagraph must 
file the following information, conforming its submission to any rule of 
general applicability and to any Commission order specifically 
applicable to such utility:
    (1) A complete cost of service analysis for the Test Period, 
consistent with the requirements of paragraph (h)(36), Statement BK, of 
this section.
    (2) A complete derivation and explanation of all allocation factors 
and special assignments, consistent with the information required in 
Sec. 35.12(b)(5).

[[Page 220]]

    (3) A complete calculation of revenues for the Test Period and for 
the first 12 months after the proposed effective date, consistent with 
the requirements of paragraph (c)(1) of this section.
    (4) If the proposed rates contain a fuel cost or purchased economic 
power adjustment clause, as defined in Sec. 35.14, the company must 
provide the derivation of its base cost of fuel (Fb) and its monthly 
fuel factors (Fm) for the Test Period and the resulting fuel adjustment 
clause revenues. If any pro forma adjustments affect the fuel clause in 
any way, the company must show the impact on Fm, kWh sales in the base 
period (Sm), Fb and kWh sales in the current period (Sb), as well as on 
fuel adjustment clause revenues.
    (5) Rate design calculations and narrative consistent with the 
information required in paragraph (h)(37) of this section and in 
Sec. 35.12(b)(5).
    (6) The information required in paragraphs (b), (c)(2) and (c)(3) of 
this section and in Sec. 35.12(b)(2).
    (C) Data shall be reconciled with the utility's most recent FERC 
Form 1. If the utility has not yet submitted Form 1 for the Test Period, 
the utility shall submit the relevant Form 1 pages in draft form.
    (D) The utility may make pro forma adjustments for post-Test Period 
changes that occur before the proposed effective date and that are known 
and measurable at the time of filing. The utility shall provide a 
narrative statement explaining all pro forma adjustments.
    (E) If the utility models its filing in whole or in part on retail 
rate decisions or settlements, the utility must provide detailed 
calculations and a narrative statement showing how all retail rate 
treatments are factored into the cost of service.
    (F) If the Commission sets the filing for hearing, the Commission 
will allow the company a specific time period in which to file 
testimony, exhibits, and supplemental workpapers to complete its case-
in-chief. While not required under this subpart, a utility may elect to 
submit Statements AA through BM for the Test Period in accord with the 
requirements of paragraphs (d), (g) and (h) of this section.
    (ii) Rate increases for service of short duration or for interchange 
or coordination service. Any utility that files a rate increase for any 
service of short duration and of a type for which the need and usage 
cannot be reasonably forecasted (such as emergency or short-term power), 
or for service that is an integral part of a coordination and 
interchange arrangement, may submit with its filing only the information 
required in paragraphs (b), (c) and (h)(37) of this section and in 
Sec. 35.12(b)(2) and (b)(5), conforming its submission to any rule of 
general applicability and to any Commission order specifically 
applicable to such utility.
    (iii) For rate schedule changes other than rate increases. Any 
utility that files a rate schedule change that does not provide for a 
rate increase or that provides for a rate increase that is based solely 
on a change in delivery points, a change in delivery voltage, or a 
similar change in service, must submit with its filing only the 
information required in paragraphs (b) and (c) of this section.
    (iv) Computing rate increases. For purposes of this subparagraph and 
paragraph (d)(2)(ii) of this section, the amount of any rate increase 
shall be the difference between the total revenues to be recovered under 
the rate schedule change and the total revenues recovered or recoverable 
under the rate schedule to be superseded or supplemented and shall be 
determined by:
    (A) applying the components of the rate schedule to be superseded or 
supplemented to the billing determinants for the twelve months of Period 
I;
    (B) Applying the components of the rate schedule change to the 
billing determinants for the twelve months of Period I; and
    (C) Subtracting the total revenues under subclause (A) from the 
total revenues under subclause (B).
    (3) Cost of service data required by letter. The Director of the 
Office of Electric Power Regulation may, by letter, require a utility 
that is not required under paragraph (a)(1) of this section to submit 
cost of service data to submit such specified cost of service data as 
are needed for Commission analysis of the rate schedule change.

[[Page 221]]

    (b) General information. Any utility subject to paragraph (a) of 
this section shall file the following general information:
    (1) A list of documents submitted with the rate schedule change;
    (2) The date on which the utility proposes to make the rate schedule 
change effective;
    (3) The names and addresses of persons to whom a copy of the rate 
schedule change has been mailed;
    (4) A brief description of the rate schedule change;
    (5) A statement of the reasons for the rate schedule change;
    (6) A showing that all requisite agreement to the rate schedule 
change, or to the filing of the rate schedule change, including any 
agreement required by contract, has in fact been obtained;
    (7) A statement showing any expenses or costs included in the cost 
of service statements for Period I or Period II, as defined in paragraph 
(d)(3) of this section, that have been alleged or judged in any 
administrative or judicial proceeding to be illegal, duplicative, or 
unnecessary costs that are demonstrably the product of discriminatory 
employment practices; and
    (8) A form of notice suitable for publication in the Federal 
Register in accordance with Sec. 35.8 of this part.
    (c) Information relating to the effect of the rate schedule change. 
Any utility subject to paragraph (a) of this section shall also file the 
following information or materials:
    (1) A table or statement comparing sales and services and revenues 
from sales and services under the rate schedule to be superseded or 
supplemented and under the rate schedule change, by applying the 
components of each such rate schedule to the billing determinants for 
each class of service, for each customer, and for each delivery point or 
set of delivery points that constitutes a billing unit:
    (i) Except as provided in clause (ii), for each of the twelve months 
immediately before and each of the twelve months immediately after the 
proposed effective date of the rate schedule change, and the total for 
each of the two twelve month periods; or
    (ii) At the election of the utility:
    (A) If the utility files Statements BG and BH under paragraph (h) 
for Period I, for each of the twelve months of Period I instead of for 
the twelve months immediately before the proposed effective date of the 
rate schedule change; and
    (B) If Period II is the test period, for each of the twelve months 
of Period II instead of for the twelve months immediately after the 
proposed effective date of the rate schedule change;
    (2) A comparison of the rate schedule change and the utility's other 
rates for similar wholesale for resale and transmission services; and
    (3) If any specifically assignable facilities have been or will be 
installed or modified in order to supply service under the rate schedule 
change, an appropriate map or sketch and single line diagram showing the 
additions or changes to be made.
    (d) Cost of service information--(1) Filing of Period I data. Any 
utility that is required under paragraph (a)(1) of this section to 
submit cost of service information, or that is subject to the exceptions 
in paragraphs (a)(2)(i) and (a)(2)(ii) of this section but elects to 
file such information, shall submit Statements AA through BM under 
paragraph (h) of this section using:
    (i) Unadjusted Period I data; or
    (ii) Period I data adjusted to reflect changes that affect revenues 
and costs prior to the proposed effective date of the rate schedule 
change and that are known and measurable with reasonable accuracy at the 
time the rate schedule change is filed, if such utility:
    (A) Is not required to and does not file Period II data;
    (B) Adjusts all Period I data to reflect such changes; and
    (C) Fully supports the adjustments in the appropriate cost of 
service statements.
    (2) Filing of Period II data. (i) Except as provided in clause (ii) 
of this subparagraph, any utility that is required under paragraph 
(a)(1) of this section to submit cost of service information shall 
submit Statements AA through BM described in paragraph (h) using 
estimated costs and revenues for Period II;
    (ii) A utility may elect not to file Period II data if:

[[Page 222]]

    (A) The utility files a rate increase that is less than one million 
dollars for Period I; or
    (B) All wholesale customers that belong to the affected rate class 
have consented to the rate increase.
    (3) Definitions. For purposes of this section:
    (i) Period I means the most recent twelve consecutive months, or the 
most recent calendar year, for which actual data are available, the last 
day of which is no more than fifteen months before the date of tender 
for filing under Sec. 35.1 of the notice of rate schedule change;
    (ii) Period II means any period of twelve consecutive months after 
the end of Period I that begins:
    (A) No earlier than nine months before the date on which the rate 
schedule change is proposed to become effective; and
    (B) No later than three months after the date on which the rate 
schedule change is proposed to become effective.
    (4) Test period. If Period II data are not submitted for Statements 
AA through BM, Period I shall be the test period. If Period II data are 
submitted for Statements AA through BM, Period II shall be the test 
period.
    (5) Work papers. A utility that files adjusted Period I data or that 
files Period II data shall submit all work papers relating to such data. 
The utility shall provide a comprehensive explanation of the bases for 
the adjustments or estimates and, if such adjustments or estimates are 
based on a regularly prepared corporate budget, shall include relevant 
excerpts from such budget. Work papers and documents containing 
additional explanatory material shall be cut or folded to letter size, 
shall be assigned page numbers, and shall be marked, organized and 
indexed according to:
    (A) Subject matter;
    (B) The cost of service statements to which they apply; and
    (C) Witness.
    (6) Attestation. A utility shall include in its filing an 
attestation by its chief accounting officer or another of its officers 
that, to the best of that officer's knowledge, information, and belief, 
the cost of service statements and supporting data submitted under this 
paragraph are true, accurate, and current representations of the 
utility's books, budgets, or other corporate documents.
    (e) Testimony and exhibits--(1) Filing requirements. (i) A utility 
subject to paragraph (a)(1) of this section shall file Statements AA 
through BM under paragraph (h) as exhibits with its rate schedule change 
and may file any other exhibits in support of its rate schedule change.
    (ii) A utility subject to paragraph (a)(1) of this section shall 
file prepared testimony. Such testimony shall include an explanation of 
all exhibits, inlcuding Statements AA through BM, and shall include 
support for all adjustments to book or budgeted data relied on in 
preparing the exhibits.
    (iii) To the extent that testimony and exhibits other than 
Statements AA through BM duplicate information required to be submitted 
in such statements, the testimony and exhibits may incorporate such 
information by referencing the specific statement containing such 
material.
    (2) Case in chief. In order to avoid delay in processing rate 
filings, such cost of service statements, testimony, and other exhibits 
described in paragraph (e)(1) of this section shall be the utility's 
case in chief in the event the matter is set for hearing.
    (3) Burden of proof. Any utility that files a rate increase shall be 
prepared to go forward at a hearing on reasonable notice on the data 
submitted under this section, to sustain the burden of proof under the 
Federal Power Act of establishing that the rate increase is just and 
reasonable and not unduly discriminatory or preferential or otherwise 
unlawful within the meaning of the Act.
    (f) Filing by parties concurring in coordination and interchange 
arrangements. For coordination and interchange arrangements in the 
nature of power pooling transactions, all information required to be 
submitted in support of a rate schedule change under paragraphs (a)(1), 
(2), and (3) of this section shall be submitted by each party filing a 
certificate of concurrence under Sec. 35.1. If a representative is 
designated and authorized in accordance with Sec. 35.1

[[Page 223]]

to file supporting information on behalf of all parties to a rate 
schedule change, such filing shall fulfill the requirement in this 
paragraph for individual submittals by each party.
    (g) Commission precedents and policy. If a utility submits cost of 
service data under paragraph (d) of this section, it shall conform all 
such submissions to any rule of general applicability and to any 
Commission order specifically applicable to such utility.
    (h) Cost of service statements. Any utility subject to paragraph 
(a)(1) of this section shall submit the following Statements AA through 
BM in accordance with the requirements of paragraphs (d) and (g) of this 
section.
    (1) Statement AA--Balance sheets. Statement AA consists of balance 
sheets as of the beginning and the end of both Period I and Period II, 
and the most recently available balance sheet, including any applicable 
notes, and an explanation of any significant accounting changes since 
the most recent filing by the utility under this section that involves 
the same wholesale customer rate class. Balance sheets shall be 
constructed in accordance with the annual report form for electric 
utilities specified in part 141.
    (2) Statement AB--Income statements. Statement AB consists of income 
statements for both Period I and Period II, and the most recently 
available income statement, including any applicable notes, and an 
explanation of any significant accounting changes since the most recent 
filing by the utility under this section that involves the same 
wholesale customer rate class. Income statements shall be prepared in 
accordance with the annual report form for electric utilities specified 
in part 141.
    (3) Statement AC--Retained earnings statements. Statement AC 
consists of retained earnings statements for both Period I and Period 
II, and the most recently available retained earnings statement, 
including any notes applicable thereto. Retained earnings statements 
shall be prepared in accordance with the annual report form for electric 
utilities specified in part 141.
    (4) Statement AD--Cost of plant. Statement AD is a statement of the 
original cost of total electric plant in service according to functional 
classification for Period I and Period II. If the plant functions and 
subfunctions for Period I and Period II are different, the utility shall 
explain and justify the differences.
    (i) For each separately identified function and subfunction of 
production plant or transmission plant, the utility shall state the 
original cost as of the beginning of the first month and the end of each 
month of both Period I and Period II, with an average of the thirteen 
balances for each period. If any of the Period I or Period II thirteen 
monthly balances is not available or is unrepresentative of the current 
plan of the utility for plant in service, the utility shall provide an 
explanation of the relevant circumstances.
    (ii) For each separately identified function and subfunction of 
plant other than production or transmission, the utility shall state the 
original cost as of the beginning and the end of both Period I and 
Period II, with an average of the beginning and end balances for each 
period. If any of the Period I or Period II balances is not available or 
is unrepresentative of the current plan of the utility for plant in 
service, the utility shall provide an explanation of the relevant 
circumstances.
    (iii) The utility shall show the electric plant in service in 
accordance with each of the following five major functional 
classifications:
    (A) Production;
    (B) Transmission;
    (C) Distribution;
    (D) General and Intangible; and
    (E) Common and Other.
    (iv) To the extent feasible, the utility shall show completed 
construction not classified in accordance with clause (iii) in 
accordance with tentative classification to major functional accounts. 
If this is not feasible, the utility shall describe such facilities as 
other plant under clause (iii)(E).
    (v) If a utility designs its rate change so that subdivision of the 
major functional classifications is necessary to support the changed 
rate, the utility shall supply the original cost information for any of 
the five major functional plant classifications in clause (iii) that are 
divided into subfunctional categories. If subfunctional original

[[Page 224]]

cost information is provided, the utility shall explain the importance 
of providing such information to support the changed rate. The utility 
shall describe each subfunctional category in substantive terms, such as 
steam electric production or high voltage transmission.
    (vi) The utility shall select any subfunctional categories, as 
appropriate, under the following criteria:
    (A) Production plant categories shall be established as necessary to 
segregate costs for production services with special characteristics, 
such as base, intermediate or peaking load. The utility shall provide a 
description of each such service and shall list a brief descriptive 
title for each corresponding subfunctional category.
    (B) Transmission plant categories shall be chosen to reflect the 
extent to which the facilities are proposed to be allocated on a common 
basis among all or specific segments of utility services. For 
descriptive purposes, plant may also be categorized according to 
accounting or engineering terminology, such as high voltage overhead 
lines. The utility shall provide brief descriptive transmission category 
titles and explain the basis for the titles. If a utility allocates all 
transmission plant among utility services on the basis of a single set 
of allocation data, the utility may show original cost in total without 
subfunctionalization.
    (C) Distribution plant categories shall be selected according to 
engineering or use characteristics meaningful for allocations or 
assignments to wholesale services such as substations, overhead lines, 
meters, or non-wholesale. The utility shall provide brief descriptive 
distribution category titles and shall explain the basis for the titles.
    (D) If the utility divides any general, intangible, common, and 
other plant functional classifications into subfunctional categories, 
the subfunctional categories shall be chosen to group together 
facilities that share a common basis for allocation between wholesale 
and other electric services. The utility shall provide a brief 
descriptive title for each general and intangible subfunctional 
category, and for each common and other subfunctional category, with an 
explanation of the basis of each category selection. A utility need not 
divide the functional classifications of plant into subfunctional 
categories if these functions of plant are allocated in Statement BK on 
the basis of utility labor expenses.
    (E) A separate category shall be provided for each specific 
assignment of plant reported in Statement BE. Such assignments are 
applicable principally but not necessarily exclusively to distribution 
facilities. The utility shall provide brief descriptive titles 
consistent with Statement BE.
    (F) A separate category shall be provided for each exclusive-use 
commitment of major power supply facilities as required to be reported 
at Statement BF. The utility shall provide brief descriptive titles 
consistent with Statement BF.
    (5) Statement AE--Accumulated depreciation and amortization. 
Statement AE is a statement of the accumulated provision for 
depreciation and amortization of electric plant for Period I and Period 
II, provided according to major functional classifications selected by 
the utility in Statement AD under paragraph (h)(4) and divided into the 
subfunctional categories selected by the utility in Statement AD, to the 
extent that subfunctionalized data are available.
    (i) For each function and subfunction of electric production and 
transmission plant in service identified in Statement AD, the utility 
shall set forth the accumulated depreciation and amortization as of the 
beginning of the first month and the end of each month of both Period I 
and Period II. The utility shall state an average for each period 
computed as the average of the thirteen balances.
    (ii) For each function and subfunction of electric plant in service 
other than production or transmission, identified in Statement AD, the 
utility shall state the accumulated depreciation and amortization as of 
the beginning and the end of Period I and Period II, with an average of 
the beginning and end balances for each period.
    (iii) If any of the Period I or Period II balances is not available 
or is unrepresentative of the current plan of the utility for 
depreciation reserves, the

[[Page 225]]

utility shall provide an explanation of the relevant circumstances.
    (iv) If accumulated depreciation and amortization data are not 
available for any subfunction selected in Statement AD, the utility 
shall:
    (A) Provide a comparison of the current depreciation rate of the 
major functional classification and the depreciation rate estimated to 
be appropriate to the subfunctional category; and
    (B) State and explain the estimation techniques which the utility 
proposes to utilize in the absence of subfunctional data, such as the 
proration of accumulated depreciation and amortization data among the 
subfunctional categories according to the data for electric plant in 
service in Statement AD. If any of the proposed estimation techniques 
require data that are not provided elsewhere in the cost of service 
statements in paragraph (h) of this section, the utility shall supply 
the necessary data in Statement AE.
    (6) Statement AF--Specified deferred credits. Statement AF consists 
of balances of specified accounts and items which are to be considered 
in the determination of the net original cost rate base. All required 
balances are to be stated as of the beginning and end of both Period I 
and Period II, with an average of the beginning and end balances for 
each period. If any of the Period I and Period II balances is not 
available or is unrepresentative of the current operating plan of the 
utility, the utility shall include an explanation of the relevant 
circumstances. If subaccounts are maintained to reflect differences in 
ratemaking treatment among regulatory authorities that have 
jurisdiction, balances shall be provided in accordance with such 
subaccounts, with detailed explanations of the bases upon which the 
subaccounts were established and are maintained. The balances of 
deferred credits required to be filed in this statement are described in 
paragraph (h)(6) (i) through (v) of this section. All references to 
numbered accounts refer to the Commission's Uniform System of Accounts, 
18 CFR part 101.
    (i) The utility shall state total electric balances for accumulated 
deferred investment tax credits Account 255, and shall separate the 
credits into balances applicable to pre-1971 and post-1970 qualifying 
property additions. If the utility maintains records to show Account 255 
component balances according to the major functional classifications 
identified in Statement AD under paragraph (h)(4), the utility shall 
provide the component balances by function. If the data are not 
available by function, the utility shall describe the procedure by which 
the utility believes it can reasonably estimate the portion of the total 
electric balances for each major functional classification. The utility 
may show by function the component balances obtained by applying the 
procedure. If such estimation requires data that are not provided 
elsewhere in the cost of service statements in this paragraph, the 
utility shall supply in Statement AF the necessary data, such as 
historical functional patterns of plant additions eligible for the tax 
credits. The utility shall state whether the Internal Revenue Code 
General Rule, Sec. 46(f)(1), is applicable with respect to restrictions 
on credit treatment for ratemaking purposes. If the General Rule is not 
applicable, the utility shall state which election it has made with 
respect to special rules for ratable or immediate flow-through for 
ratemaking purposes.
    (ii) The utility shall state the total electric component balances 
for accumulated deferred income tax Account 281 pertaining to 
accelerated amortization property. The utility shall show separate 
components for defense, pollution control, and other facilities. The 
utility shall show balances for each component and totaled for the 
electric utility department. If the utility maintains records to show 
Account 281 component balances according to the major functional 
classifications identified in Statement AD under paragraph (h)(4), the 
utility shall provide such component balances. If data are not available 
by function, the utility shall describe the procedure by which the 
utility believes it can reasonably estimate the portion of the total 
electric balances for each major functional classification. The utility 
may show by function the component balances obtained by

[[Page 226]]

applying the procedure. If such estimation requires data that are not 
provided elsewhere in the cost of service statements in this paragraph, 
the utility shall supply in Statement AF the necessary data.
    (iii) The utility shall state the total electric component balances 
for accumulated deferred income tax Account 282 pertaining to electric 
utility property other than accelerated amortization property. The 
utility shall itemize the balances in Account 282, to the extent data 
are available, in detail sufficient to identify the specific major 
properties involved and shall list the balances according to the 
accounting entries, such as liberalized depreciation, for which 
interperiod tax allocation was used and included in this account. 
Component balances shall be shown individually and in total for the 
electric utility department. If the utility maintains records to show 
account 282 component balances according to the major functional 
classifications identified in Statement AD under paragraph (h)(4), the 
utility shall provide such component balances by function. If the data 
are not available by function, the utility shall describe the procedure 
by which the utility believes it can reasonably estimate the portion of 
the total electric balances for each major functional classification. 
The utility may show by function the component balances obtained by 
applying the procedure. If such estimation requires data that are not 
provided elsewhere in the cost of service statements in this paragraph, 
the utility shall supply in Statement AF the necessary data, such as 
historical functional patterns of plant additions.
    (iv) The utility shall state the total electric component balances 
for accumulated deferred income tax Account 283 pertaining to 
interperiod income tax allocations not related to property. The utility 
shall itemize in detail balances in Account 283, to the extent data are 
available, and shall list the balances according to the accounting 
entries for which interperiod tax allocation was used and included in 
this account. Component balances shall be shown individually and in 
total for the electric utility department. If the utility maintains 
records to show Account 283 component balances according to the major 
functional classifications identified in Statement AD under paragraph 
(h)(4), the utility shall provide such component balances by function. 
If the data are not available by function, the utility shall describe 
the procedure by which the utility believes it can reasonably estimate 
the portion of the total electric balances for each major functional 
classification. The utility may show by function the component balances 
obtained by applying the procedure. If such estimation requires data 
that are not provided elsewhere in the cost of service statements in 
this paragraph, the filing shall supply in Statement AF the necessary 
data.
    (v) The utility shall show electric utility balances for every other 
item that the utility believes should be included in Statement AF. The 
utility shall explain the reasons for inclusion of each item.
    (7) Statement AG--Specified plant accounts (other than plant in 
service) and deferred debits. Statement AG is a statement of balances of 
specified accounts and items that are to be considered in the 
determination of the net original cost rate base. Except as prescribed 
in clause (ii), the utility shall state all required balances as of the 
beginning and the end of Period I and Period II, with an average of the 
beginning and end balances for each period. If any of the Period I or 
Period II balances is not available or is unrepresentative of the 
current operating plan of the utility, the utility shall provide a full 
explanation of the relevant circumstances. If subaccounts are maintained 
to reflect differences in ratemaking treatment among regulatory 
authorities having jurisdiction, the utility shall provide balances in 
accordance with such subaccounts, with detailed explanations of the 
bases upon which the subaccounts were established and are maintained. 
The balances required to be submitted under Statement AG are described 
in clauses (7)(i) through (vi).
    (i) For each separately identified major functional classification 
selected by the utility in Statement AD, the utility shall state the 
electric utility

[[Page 227]]

land and land rights balances for electric plant held for future use in 
account 105. If itemized in detail, balances shall be totaled for each 
major functional classification.
    (ii) The utility shall state the electric utility component balances 
in Accounts 107 and 120.1, individually and in total, for each item of 
construction work in progress for pollution control facilities, fuel 
conversion facilities, or any other facilities that qualify for 
inclusion in rate base under Sec. 35.26. The utility shall state such 
balances for each major functional and subfunctional classification 
under Statement AD as of the beginning of the first month and the end of 
each month of Period I and Period II with an average of the 13 balances 
for each period.
    (iii) For each major functional classification under Statement AD 
and with respect to property otherwise includable in plant in service, 
the utility shall state the balances for extraordinary property losses 
Account 182. If itemized in detail, balances shall be totaled for each 
major functional classification. The utility shall provide information 
about Commission authorization for any loss included in Account 182 and 
shall state when the loss was claimed for tax purposes.
    (iv) The utility shall state the total electric component balances 
for accumulated deferred income taxes Account 190. The component 
balances in Account 190 shall be itemized in detail and listed according 
to the accounting entries for which interperiod tax allocation was used. 
Component balances shall be shown individually and in total for the 
electric utility department. If the utility maintains records to show 
Account 190 component balances according to the major functional 
classifications identified in Statement AD under paragraph (h)(4), the 
utility shall provide such component balances by function. If the data 
are not available by function, the filing utility shall describe the 
procedure by which the utility believes it can reasonably estimate the 
portion of the total electric balances for each major functional 
classification. The utility may show by function the component balances 
obtained by applying the procedure. If such estimation requires data 
that are not provided elsewhere in the cost of service statements in 
this paragraph, the utility shall supply in Statement AG the necessary 
data.
    (v) Balances shall be shown for every other item that the utility 
believes should be included in Statement AG. The utility shall provide 
support for inclusion of each item, and a brief descriptive title for 
each such item.
    (8) Statement AH--Operation and maintenance expenses. Statement AH 
is a statement of electric utility operation and maintenance expenses 
for Period I and Period II provided according to the accounts prescribed 
by the Commission's Uniform System of Accounts, 18 CFR part 101.
    (i) For Period I and Period II, the utility shall itemize and 
subtotal all operation and maintenance expenses according to the major 
functional classifications of Statement AD in paragraph (h)(4) and the 
subfunctional categories of those classifications. The utility shall 
further divide the operation and maintenance expenses itemized under the 
production classification and each of its subfunctional categories to 
reflect expenses relating to the energy component (list each item by 
account number and compute fuel costs on an as-burned basis), the demand 
component, and any other production expenses.
    (ii) For Period I and Period II, the utility shall report production 
operation and maintenance expenses according to appropriate account 
numbers. The utility shall apply the following principles in developing 
Period I and Period II production operation and maintenance data for 
this statement:
    (A) Total production operation and maintenance expenses shall be 
segregated into energy, demand, and other components. The utility shall 
specifically state and support its criteria for classifications between 
energy and demand, and for use of the production other classification, 
such as specific assignments related to sales from particular generating 
units.
    (B) Fuel expense for cost of service purposes shall be the total as-
burned expense incurred. If the utility defers a portion of such expense 
for accounting purposes, the deferral amount shall be

[[Page 228]]

separately stated and accompanied by material that shows computational 
detail in support of such amount. If claimed nuclear fuel expense 
reflects a change in the estimated net salvage value of nuclear fuel, 
the utility shall show the amounts involved and explain the relevant 
circumstances.
    (C) If the amount of production fuel expense is significantly 
affected by abnormal Period I water availability for hydroelectric 
generation, the utility shall explain how water availability was taken 
into account in developing projected Period II production fuel expenses.
    (iii) For Period I and Period II, the utility shall report operation 
and maintenance expenses attributable to the transmission and 
distribution functions according to appropriate account numbers. If 
Period II transmission and distribution plant data are not provided by 
subfunctional category in Statement AD, the utility need only provide 
for Period II total operation and maintenance expenses for each 
function.
    (iv) For Period I and Period II, the utility shall report in total 
for each period, operation and maintenance expenses incurred under each 
of the categories of customer accounting, customer service and 
information, and sales.
    (v) For Period I and Period II, the utility shall itemize 
administrative and general expenses by groups that are directly 
assignable, such as regulatory Commission expenses, or that are related 
to selected plant or expense items for which an allocation to wholesale 
services is independently determinable, such as items related to labor 
expense or to a category of production plant in service. Administrative 
and general expenses shall include a detailed itemization of the general 
advertising Account 930.1 and the miscellaneous general expenses Account 
930.2. If Account 930 data are not projected on a detailed basis for 
Period II, the utility shall provide its best estimate of the Account 
930.1 expense items and a descriptive list of expense items anticipated 
as miscellaneous general expenses in Account 930.2. Where applicable, 
separate items shall be shown for general plant maintenance, and for 
common and other plant maintenance.
    (vi) In addition to annual production data for Period I and Period 
II, the utility shall provide monthly expense data by accounts for fuel 
in Accounts 501, 518, and 547 and purchased power in Account 555. For 
each type of transaction, such as firm power or economy interchange 
power, monthly purchased power expense data shall be subtotaled 
separately for interchange receipts and deliveries. For monthly fuel 
Accounts 501, 518, and 547, and for each type of purchased power 
transaction, the monthly data shall identify components to be claimed 
under the fuel adjustment clause of the utility.
    (9) Statement AI--Wages and salaries. Statement AI consists of 
statements of the electric utility wages and salaries, for Period I and 
Period II, that are included in operation and maintenance expenses 
reported in Statement AH.
    (i) For Period I and Period II, the utility shall show the 
distribution of wages and salaries by function according to the form 
prescribed for operation and maintenance expenses by the Commission's 
Uniform System of Accounts, 18 CFR part 101. The statement shall also 
include by function additional wages and salaries attributable to common 
and other plant classifications identified in Statement AD in paragraph 
(h)(4).
    (ii) For Period I and Period II, the utility shall show total 
production wages and salaries, itemized and subtotaled into energy and 
demand related components in accordance with classifications of 
Statement AH operation and maintenance production expenses of which 
production wages and salaries are a part.
    (10) Statement AJ--Depreciation and amortization expenses. Statement 
AJ consists of statements of depreciation and amortization expenses for 
Period I and Period II.
    (i) For Period I and Period II, the utility shall show the 
depreciation and amortization expenses and the depreciable plant 
balances of the filing utility, in accordance with major functional 
classifications selected by the utility in Statement AD under paragraph 
(h)(4).

[[Page 229]]

    (ii) The utility shall divide the major functional classifications 
of depreciation and amortization expenses shown in clause (i) into the 
subfunctional categories selected by the utility for electric plant in 
service in Statement AD, to the extent such data are available.
    (iii) If depreciation and amortization expense data are not 
available for any subfunctional category selected in Statement AD, the 
utility shall:
    (A) Provide a comparison of the current depreciation rate of the 
major functional classification and the depreciation rate estimated to 
be appropriate to the subfunctional category; and
    (B) State and explain the estimation techniques that the utility 
utilized in developing each estimated subfunctional depreciation rate. 
If utilization of such estimation techniques requires data that are not 
provided elsewhere in the cost of service statements in this paragraph, 
the utility shall supply such data in Statement AJ.
    (iv) For Period I and Period II, the utility shall show the annual 
depreciation rate applicable to each function and subfunction for which 
depreciation expense is reported. The utility shall indicate the bases 
upon which the depreciation rates were established. If the depreciation 
rates used for Period I or Period II data differ from those employed to 
support the utility's prior approved jurisdictional electric rate, the 
utility shall include in or append to Statement AJ detailed studies in 
support of such changes. These detailed studies shall include:
    (A) Copies of any reports or analyses prepared by any independent 
consultant or utility personnel to support the proposed depreciation 
rates; and
    (B) A detailed capital recovery study showing by primary account the 
depreciation base, accumulated provision for depreciation, cost of 
removal, net salvage, estimated service life, attained age of survivors, 
accrual rate, and annual depreciation expense.
    (11) Statement AK--Taxes other than income taxes. Statement AK 
consists of statements of taxes other than income taxes for Period I and 
Period II.
    (i) For Period I and Period II, the utility shall itemize and total 
any taxes other than income taxes according to clauses (i) (A) through 
(D).
    (A) Revenue taxes. The utility shall show total revenue taxes levied 
by each taxing authority and identify the revenue taxes, under both the 
present and changed rate, applicable to wholesale services for which a 
rate change is filed. The utility shall identify revenue taxes 
associated with each revenue credit item reported in Statement AU under 
paragraph (h)(21).
    (B) Real estate and property taxes. The utility shall itemize and 
total all real estate and property taxes. If the utility maintains 
records to show tax component balances according to the major functional 
classifications identified in Statement AD under paragraph (h)(4), the 
utility shall supply the component balances by function. If the data are 
not available by function, the utility shall describe the procedure by 
which the utility believes it can reasonably estimate the portion of the 
total electric balances for each major functional classification. The 
utility may show by function the component balances obtained by applying 
the procedure. If such estimation requires data that are not provided 
elsewhere in the cost of service statements in this paragraph, the 
utility shall supply the necessary data in Statement AK.
    (C) Payroll taxes. The utility shall itemize and total all payroll 
taxes. If the utility maintains records to show tax component balances 
according to the major functional classifications identified in 
Statement AD in paragraph (h)(4), the utility shall provide the 
component balances by function. If the data are not available by 
function, the utility shall describe the procedure by which the utility 
believes it can reasonably estimate the portion of the total electric 
balances for each major functional classification. The utility may show 
by function the component balances obtained by applying the procedure. 
If such estimation requires data that are not provided elsewhere in the 
cost of service statements in this paragraph, the utility shall provide 
the necessary data in Statement AK.

[[Page 230]]

    (D) Miscellaneous taxes. The utility shall itemize and total all 
miscellaneous taxes which are directly assignable or which are related 
to any selected plant or expense item for which an allocation to 
wholesale services is independently determinable, such as items related 
to transmission plant in service or to net distribution plant.
    (ii) If any of the taxes itemized under clause (11)(i) are levied by 
a taxing authority that is a customer, or is related to a customer, 
whose services would be affected by the changed rate schedule, the 
utility shall show amounts of such taxes according to the taxing 
authority, identify the related customer, and provide an explanation of 
the relevant circumstances.
    (12) Statement AL--Working capital. Statement AL consists of 
statements for Period I and Period II designed to establish the need for 
working capital to maintain adequate levels of operating supplies, to 
meet required prepayments, and to meet ongoing cash disbursements that 
must be made at a time different than related revenue receipts for 
utility services rendered.
    (i) Supplies and prepayments. The utility shall supply statements to 
show monthly balances of operating supplies and prepayments itemized 
under clauses (i) (A) through (C). The utility shall state all required 
balances as of the beginning of the first month and the end of each 
month of both Period I and Period II, with an average of the thirteen 
balances for each period. If any of the Period I or Period II balances 
is not available or is unrepresentative of the current operating plan of 
the utility for supplies or prepayments, the utility shall include an 
explanation of the relevant circumstances. Operating supply and 
prepayment balances shall be itemized under the following categories:
    (A) Fuel supplies. The utility shall state the fuel supply balances 
for each type of electric utility production plant, except hydraulic. 
The utility shall describe its overall fossil fuel supply objectives for 
Period I and Period II, in terms of projected average days of burn for 
major fossil fuel generating stations, if feasible. The utility shall 
explain substantial differences, if any, between actual Period I 
inventories and the target objectives, or between Period II objectives 
and Period I objectives. Nuclear fuel balances shall include fuel in 
stock, fuel in the reactor and spent fuel in the process of cooling in 
Accounts 120.2, 120.3, 120.4, less accumulated provisions for 
amortization of nuclear fuel assemblies in Account 120.5.
    (B) Plant materials and operating supplies. The utility shall state 
materials and operating supply balances for each of the major electric 
utility operating functions of production, transmission, and 
distribution, and for each significant type of miscellaneous operating 
supplies. Miscellaneous supplies shall be grouped to facilitate suitable 
allocations or assignments among utility services.
    (C) Prepayments. The utility shall indicate prepayment balances for 
each major prepayment item, with a brief description of the item. 
Balances shall be grouped and subtotaled to facilitate suitable 
allocations or assignments among utility services.
    (ii) Cash working capital. The utility shall indicate average 
monthly working cash requirements that reflect the extent to which day-
to-day operational utility service revenues are received later or 
earlier than cash disbursements necessary to provide the services, with 
an explanation of how such requirements are derived.
    (13) Statement AM--Construction work in progress. Statement AM is a 
statement of the amount of construction work in progress described 
according to functional classification for Period I and Period II. For 
production plant and transmission plant, the utility shall state the 
balances as of the beginning of the first month and the end of each 
month of both Period I and Period II, with an average of the 13 balances 
for each period. For each function of plant identified in Statement AD 
other than production or transmission, the utility shall state the 
balances as of the beginning and the end of both Period I and Period II, 
with an average of the beginning and end balances for each period. If 
any Period I or Period II balance is not available, the utility shall 
include monthly estimates and an explanation of the relevant 
circumstances. Pollution control facilities, fuel conversion

[[Page 231]]

facilities, or other construction amounts reported in Statement AG shall 
be excluded from amounts reported in this Statement.
    (14) Statement AN--Notes payable. Statement AN is a statement of the 
electric utility portion of average notes payable for Period I and 
Period II. The utility shall indicate balances as of the beginning of 
the first month and the end of each month of both Period I and Period 
II, with an average of the thirteen balances for each period. If any of 
the Period I or Period II balances is not available or is 
unrepresentative of the current financing plan of the utility, the 
utility shall provide an explanation of the relevant circumstances. If a 
utility has operations other than electric, the utility shall also show 
allocations between electric and other utility departments on an 
appropriate basis, such as the average amount of construction work in 
progress and net plant.
    (15) Statement AO--Rate for allowance for funds used during 
construction. Statement AO is a statement of the basis of the rate for 
computing the allowance for funds used during construction (AFUDC) for 
Period I and Period II.
    (i) The utility shall show the computations of the maximum rates for 
the construction allowances computed in accordance with plant 
instructions of the Commission's Uniform System of Accounts, 18 CFR part 
101. The utility shall show the rates computed annually, and shall 
provide the rates for each annual period that includes any part of 
Period I or Period II. If the utility proposes to use a net-of-tax rate, 
the utility shall show the derivation for both the gross-of-tax and net-
of-tax rates.
    (ii) If the book allowance amounts of AFUDC do not reflect the 
maximum rates for allowances for funds computed in accordance with 
clause (i), the utility shall show the derivation for the actual rates 
utilized in computing AFUDC, including derivation of any net-of-tax rate 
utilized by the utility.
    (16) Statement AP--Federal income tax deductions--interest. 
Statement AP is a statement of electric utility interest charges for 
Period I and Period II. For each period, the utility shall state the 
total electric utility interest in terms of three or more component 
items described in clauses (i) through (iv).
    (i) The utility shall state the allowance for borrowed funds used 
for electric utility construction Account 432 as a separate component. 
The utility shall show supporting detail, including computation of the 
amounts on the basis of AFUDC rates claimed in Statement AO.
    (ii) The utility shall state interest for borrowed funds used for 
electric utility construction Account 431 as a separate component. If 
applicable, the utility shall also show all elements of Account 431 
related to purposes other than electric utility construction, with 
detailed supporting material, such as a computation of allocations 
between electric and other utility departments with explanatory material 
to support the bases of such allocations.
    (iii) The utility shall state the interest on long-term debt 
required for electric rate base investment as a separate component. The 
interest amount shall be consistent with that shown and utilized in 
Statement BK under paragraph (h)(36) of this section.
    (iv) The utility shall show other interest items appropriate in the 
determination of net taxable income allocable to the wholesale services 
at issue. The utility shall describe and support each item and shall 
accompany each item with a statement of the basis on which the item is 
allocable to the wholesale services. The utility shall also list a short 
descriptive title for each item.
    (17) Statement AQ--Federal income tax deductions--other than 
interest. Statement AQ is a statement of other deductions from net 
operating income before Federal income taxes, for Period I and Period 
II, which deductions are appropriate in determining the net taxable 
income allocable to the wholesale services subject to the changed rate. 
The utility shall show unallowable deductions as negative entries in 
this statement. The utility shall itemize deductions in accordance with 
clause (i) through (iii) and individually identify each by a brief 
descriptive title.
    (i) The utility shall report, as a separate component of this 
statement, the

[[Page 232]]

difference between tax and book depreciation, in total, or in individual 
amounts based on the Internal Revenue Code provisions that permit the 
utility to use various methods of computing depreciation for tax 
purposes, such as liberalized depreciation or the asset depreciation 
range. If the utility reports the differences in total only, it shall 
list the specific Internal Revenue Code provisions that result in the 
difference.
    (ii) The utility shall state taxes and pensions capitalized as a 
separate component.
    (iii) The utility shall describe and support other deduction items 
appropriate in the determination of net taxable income allocable to the 
wholesale services. Each item shall be accompanied by a brief 
explanation of the basis on which the item is allocable to the wholesale 
services.
    (18) Statement AR--Federal tax adjustments. Statement AR is a 
statement of adjustments to Federal income taxes for Period I and Period 
II. If subaccounts are maintained to reflect differences in ratemaking 
treatment among regulatory authorities having jurisdiction, the utility 
shall provide adjustment amounts in accordance with such subaccounts. 
The utility shall report detailed explanations of the bases upon which 
the subaccounts were established and are maintained.
    (i) For each major function of plant identified in Statement AD 
under paragraph (h)(4), the utility shall state the electric utility 
component adjustment for the Federal portions of the provision for 
deferred income tax Account 410.1. If the data are not available by 
function, the utility shall state the amounts for the total electric 
utility and shall describe the procedure by which the utility believes 
it can reasonably estimate the portion of the total electric balances 
for each major functional classification. The utility may show by 
function the component balances obtained by applying the procedure. If 
such estimation requires data that are not provided elsewhere in the 
cost of service statements in this paragraph, the utility shall supply 
in Statement AR the necessary data. The utility shall provide the 
adjustment amounts for total electric and, to the extent available for 
each such major functional component, accompanied by summary totals 
segregated in accordance with related balance sheet Accounts 281, 282, 
283, and 190 [see Statements AF and AG]. Account 190 items require a 
negative sign for entries in Statement AR. The utility shall identify 
the summarized items by account number.
    (ii) The utility shall provide for the Federal portions of the 
provision for deferred income tax-credit Account 411.1 the data required 
by clause (i) for Account 410.1.
    (iii) For each major functional classification of plant identified 
in Statement AD under paragraph (h)(4), the utility shall provide the 
electric utility component for investment tax credits generated for 
Period I and Period II, credits utilized for each period, and the 
allocations to current income for each period. If the data are not 
available by function, the utility shall state the amounts for total 
electric utility and shall describe the procedure by which the utility 
believes it can reasonably estimate the portion of the total electric 
balances for each major functional classification. The utility may show 
by function the component balance obtained by applying the procedure. If 
such estimation requires data that are not provided elsewhere in the 
cost of service statements in this paragraph, the utility shall supply 
in Statement AR the necessary data. If itemized in detail, balances 
shall be subtotaled for each major function, and totaled for the 
electric utility department. Detailed data shall be consistent with that 
provided in Statement AF under paragraph (h)(6) of this section.
    (iv) The utility shall list and designate as other adjustment items 
any additional Federal income tax adjustments and shall provide a brief 
descriptive title for each item. The utility shall explain the reasons 
for inclusion of each item, and shall indicate the basis on which each 
will be assigned or allocated to the wholesale services subject to the 
changed rate and to the other electric utility services.
    (19) Statement AS--Additional state income tax deductions. Statement 
AS is a listing of state income tax deductions for Period I and Period 
II, in addition to those listed at Statements AP and

[[Page 233]]

AQ for Federal tax purposes. The utility shall explain the reasons for 
inclusion of each item. The utility shall indicate the basis on which 
each item is to be assigned or allocated to the wholesale services at 
issue and to the other electric utility services. If applicable, the 
utility shall show unallowable deductions as negative entries in this 
statement. The utility shall provide the percentage of Federal income 
tax payable which is deductible for state income tax purposes, if 
applicable. [See also Statement AY, dealing with tax rate data.]
    (20) Statement AT--State tax adjustments. Statement AT is a 
statement of adjustments to state income taxes for Period I and Period 
II. The utility shall prepare and present the data in statement AT as 
prescribed for Federal tax adjustments in Statement AR. The utility 
shall annotate Statement At data as necessary to identify state tax 
adjustments that are not properly deductible for Federal tax purposes.
    (21) Statement AU--Revenue credits. Statement AU is, for Period I 
and Period II, a statement of the operating revenue balances in Accounts 
450 through 456, and other revenue items, such as short-term sales in 
Account 447, that are appropriately credited to the cost of service for 
determinations of costs allocable to the wholesale services subject to 
the changed rate. The utility shall include revenue credits proposed for 
exclusive-use commitment of major power supply facilities according to 
instructions for preparation of Statement BF under paragraph (h)(31) of 
this section. When applicable, the utility shall state revenue taxes for 
each revenue credit item. The utility shall explain the reasons for 
inclusion of each item, and shall indicate the basis for assigning or 
allocating each item to the wholesale services subject to the changed 
rate and to the other electric utility services.
    (22) Statement AV--Rate of return. Statement AV is a statement and 
explanation of the percentage rate of return requested by the utility. 
The utility shall provide the complete capital structure, including 
ratios, component costs and weighted component costs claimed by the 
utility. The utility shall submit additional data where any component of 
the capital of the utility is not primarily obtained through its own 
financing, but is primarily obtained from a company by which the utility 
is controlled, as defined in the Commission's Uniform System of 
Accounts, 18 CFR part 101. The utility shall submit the additional data, 
if required with respect to the debt capital, preferred stock capital 
and common stock capital of such controlling company or any intermediate 
company through which such funds have been secured.
    (i) General. The utility shall show, based on the capitalization of 
the utility, the cost of debt capital and preferred stock capital, the 
claimed rate of return on the common equity of the utility and the 
resulting overall rate of return requested.
    (A) For Period I and, if applicable, Period II, the utility shall 
show in tabular form the following:
    (1) Cost of each capital element, including claimed rate of return 
on equity capital;
    (2) Capitalization amounts and ratios;
    (3) Weighted cost of each capital element; and
    (4) Overall claimed rate of return.
    (B) When a Period II filing is submitted the utility shall provide:
    (1) A full explanation of, and supporting work papers for, the pro 
forma adjustments to the actual capitalization data to arrive at the 
Period II capitalization; and
    (2) The pro forma adjustment to Period I data to arrive at the 
Period II amount for unappropriated undistributed subsidiary earnings in 
Account 216.1.
    (C) If not included elsewhere in the filing, the utility shall 
submit the amount for Account 216.1 for Period I as part of this 
statement.
    (ii) Debt capital. (A) The utility shall show the weighted cost for 
all issues of long-term debt capital as of the end of Period I, as 
expected on the date the changed rate is filed, and, if applicable, as 
estimated for the end of Period II. The weighted cost is calculated by: 
(1) Multiplying the cost of money for each issue under clause (B)(6) 
below by the principal amount outstanding for each issue, which yields 
the annualized cost

[[Page 234]]

for each issue; and (2) adding the annual cost of each issue to obtain 
the total for all issues, which is divided by the total principal amount 
outstanding for all issues to obtain the weighted cost for all issues.
    (B) The utility shall show the following for each class and series 
of long-term debt outstanding as of the end of Period I, as expected on 
the date the changed rate is filed, and, if applicable, as estimated to 
be outstanding as of the end of Period II.
    (1) Title;
    (2) Date of offering and date of maturity;
    (3) Interest rate;
    (4) Principal amount of issue;
    (5) Net proceeds to the utility;
    (6) Cost of money, which is the yield to maturity at issuance based 
on the interest rate and net proceeds to the utility determined by 
reference to any generally accepted table of bond yields;
    (7) Principal amount outstanding;
    (8) Name and relationship of issuer and if the debt issue was issued 
by an affiliate; and
    (9) If the utility has acquired at a discount or premium some part 
of the outstanding debt which could be used in meeting sinking fund 
requirements, or for some other reason, the annual amortization of the 
discount or premium for each issue of debt from the date of the 
reacquisition over the remaining life of the debt being retired. The 
utility shall show separately the total discount and premium to be 
amortized, and the amortized amount applicable to Period I and, if 
applicable, Period II.
    (C) The utility shall show the before-tax interest coverage, for the 
twelve months of Period I based on the indenture requirements. The 
utility shall provide a copy of the work papers used to make the 
calculations, with explanations appropriate to understand the 
calculations.
    (iii) Preferred stock and preference stock capital. (A) This 
statement shall show the weighted cost for all issues of preferred and 
preference stock capital as of the end of Period I, as expected on the 
date the changed rate is filed, and, if applicable, as estimated for the 
end of Period II. The weighted cost is calculated by: (1) Multiplying 
the cost of money for each issue under clause (B)(9) by the par amount 
outstanding for each issue, which yields the annualized cost for each 
issue; and (2) adding the annual cost of each issue to obtain the total 
for all issues, which is divided by the total par amount outstanding for 
all issues to obtain the weighted cost for all issues.
    (B) The statement shall show for each class and issue of preferred 
and preference stock outstanding as of the end of Period I, as expected 
on the date the changed rate is filed, and, if applicable, as estimated 
to be outstanding as of the end of Period II:
    (1) Title;
    (2) Date of offering;
    (3) If callable, call price;
    (4) If convertible, terms of conversion;
    (5) Dividend rate;
    (6) Par or stated amount of issue;
    (7) Net proceeds to the filing utility;
    (8) Ratio of net proceeds to gross proceeds received by the filing 
utility;
    (9) Cost of money (dividend rate divided by the ratio of net 
proceeds to gross proceeds for each issue);
    (10) Par or stated amount outstanding; and
    (11) If issue is owned by an affiliate, name and relationship of 
owner.
    (iv) Common stock capital. This statement shall show the following 
information for each sale of common stock during the five-year period 
preceding the date of the balance sheet for the end of Period I and for 
each sale of common stock between the end of Period I and the date that 
the changed rate is filed:
    (A) Number of shares offered;
    (B) Date of offering;
    (C) Gross proceeds at offering price;
    (D) Underwriters' commissions;
    (E) Dividends per share;
    (F) Net proceeds to company;
    (G) Issuance expenses; and
    (H) Whether issue was offered to stockholders through subscription 
rights or to the public and whether common stock was issued for property 
or for capital stock of others.
    (v) Supplementary financial data. The utility shall submit a 
statement indicating the sources and uses of funds for Period I and as 
estimated for Period II and a copy of the utility's most recent

[[Page 235]]

annual report to the stockholders. The utility shall also supply a 
prospectus for its most recent issue of securities and a copy of the 
latest prospectus issued by any subsidiary of the filing utility or by 
any holding company of which the filing utility is a subsidiary.
    (23) Statement AW--Cost of short-term debt. In Statement AW, the 
utility shall provide a statement of the cost of capital rate for short-
term debt of the utility as of the end of Period I, as expected on the 
date the proposed rate is filed, and, if applicable, as estimated for 
the end of Period II, with details supporting each stated cost. The 
short-term debt rate shown in Statement AW shall include only the short-
term debt that appears on the income statement as interest expense and 
shall not include nominal forms of financing, such as trust agreements.
    (24) Statement AX--Other recent and pending rate changes. Statement 
AX is a statement describing the extent to which operating revenues are 
subject to refund for Period I and, if applicable, Period II, for each 
rate change filed with any Federal, state, or other regulatory body that 
has jurisidiction. The utility shall list and submit any orders in which 
applications for a rate increase have been acted on by any regulatory 
body during Period I, Period II, or the interval between Period I and 
Period II, and a copy of each transmittal letter or equivalent written 
document by which a utility summarized and submitted any pending 
applications that have not been acted on. Statement AX shall reflect 
information available at the time of submittal under this paragraph. 
Notwithstanding any other provision of this section, Statement AX is 
required to be filed only if the proposed rate design tracks retail 
rates.
    (25) Statement AY--Income and revenue tax rate data.
    (i) Statement AY is a statement of tax rate data for Period I and 
Period II arranged as follows:
    (A) Nominal Federal income tax rate;
    (B) Nominal state income tax rate;
    (C) Proportion of Federal income taxes payable which is deductible 
for state income tax purposes. If an allowable deduction is stated in 
other terms, the utility shall provide an estimate of the effective 
deduction as a percentage of Federal tax payable; and
    (D) Revenue tax rate. If the revenue tax rate is scaled, the utility 
shall show approximate weighted average rates for relevant revenue 
levels and full supporting data.
    (ii) If the utility serves in more than one jurisdiction for revenue 
or state income tax purposes, the utility shall state the appropriate 
tax rates for each wholesale customer group at issue and for all other 
customers as a composite group. [See, Statement BA under paragraph 
(h)(26) for wholesale customer grouping criteria.] If there are any 
changes in tax rates that occur in Period I or that may occur in Period 
II, the utility shall describe such changes and the effective date of 
the changes.
    (26) Statement BA--Wholesale customer rate groups. (i) Statement BA 
is a list of wholesale customers by group for the purpose of:
    (A) Allocating the allowable costs of the utility to such customer 
groups on the basis of electric utility services rendered; and
    (B) Comparing proposed revenues from each customer group with the 
cost of service as allocated to that group.
    (ii) The utility shall limit the number of wholesale customer groups 
listed to the minimum required under the following criteria:
    (A) At least one customer group shall be specified for each separate 
wholesale rate subject to the changed rate filing.
    (B) In general, all customers proposed to be served on the same rate 
shall be included in a common group. If the utility believes that there 
are significant differences in services provided under the same rate, 
the utility shall subdivide the common group served by the same rate 
into separate customer groups characterized by the type of service 
provided each group and shall demonstrate whether the common rate is 
cost-based by means of cost-justification for each service group. 
Certain customer groupings, such as cooperatives or municipals, may also 
be utilized to facilitate purchaser evaluations of the changed rate.
    (C) In all cases, the utility shall select customer groupings on a 
basis consistent with rate design information

[[Page 236]]

provided in Statement BL under paragraph (h)(37) of this section.
    (iii) The utility shall enumerate all wholesale customer rate 
groups, together with a brief descriptive title for each group. For 
example:
    Group 1. Full Requirements Tariff

FR-1.
    Group 2. Partial Requirements Tariff PR-1.
    (27) Statement BB--Allocation demand and capability data. Statement 
BB is a statement of electric utility demand and capability data for 
Period I and Period II to be considered as a basis for allocating 
related costs to the wholesale services subject to the changed rate.
    (i) For each month of Period I and Period II, with an average for 
each period, the utility shall show the maximum peak firm kilowatt 
demand on the power supply system of the utility, and the kilowatt 
demands of the wholesale services that coincide with the system monthly 
maximum power supply demand, including for Period I the date and hour 
for such coincidental peak demands. The utility shall state these 
kilowatt demands in terms of 60-minute intervals or other intervals 
adjusted to the equivalent of 60 minutes. The utility shall not include 
in the data the demands associated with interruptible power supply 
services, firm or nonfirm transmission wheeling services, or demands 
associated with other services the revenues from which are shown as 
revenue credits in Statement AU under paragraph (h)(21). The utility 
shall provide wholesale service demand data as follows:
    (A) The wholesale service data for each individual customer delivery 
point or set of delivery points that constitutes an individual wholesale 
customer billing unit shall include demands at delivery. The individual 
customer wholesale service data shall be summarized and subtotaled in 
accordance with Statement BA customer groupings.
    (B) The data supplied for each wholesale customer group under clause 
(A) shall be adjusted for losses to reflect demand at the power supply 
level. The data shall be totaled to show total customer group demand at 
power supply level for each month of Period I and Period II.
    (ii) To the extent such data are available, the utility shall state 
Period I and Period II monthly maximum demand data for interruptible 
power supply services, firm wheeling services, and nonfirm wheeling 
services. The utility shall also provide, to the extent data are 
available, firm wheeling demand data for any of the 60-minute periods 
that coincide with the times of power supply peak demands shown under 
clause (i). The utility shall indicate the basis of all demands, such as 
metered demands or contract demands, reported under this clause. For 
interruptible services, the utility shall provide a description of the 
conditions under which service may be interrupted or curtailed. The 
utility shall include available information on actual interruptions or 
curtailments during a three-year period that includes Period I. If any 
of the wholesale rates at issue are for interruptible or curtailable 
service, the utility shall provide any demand data specifically relevant 
to such service.
    (iii) If a utility establishes plant categories in Statement AD 
under paragraph (h)(4) of this section for the purpose of supporting 
wholesale rates for firm power supply services with special 
characteristics, such as base load, intermediate, or peaking, the 
utility shall provide in Statement BB the demand data required by clause 
(i) in total and in separate corresponding demand values consistent with 
the service characteristics. Corresponding values shall be stated for 
the system demand of the utility, and for each applicable wholesale 
service group.
    (iv) If a utility establishes plant categories in Statement AD under 
paragraph (h)(4) of this section for the purpose of supporting wholesale 
rates for nonfirm power supply services, such as capacity sales, the 
utility shall include in Statement BB for each month of Period I and 
Period II the monthly capability data relied on by the utility in 
developing costs allocable to such rates, with an explanation of the 
underlying cost allocation rationale.
    (v) If a utility establishes production plant categories in 
Statement AD under paragraph (h)(4) of this section

[[Page 237]]

for the purpose of supporting wholesale rates based on specialized 
ratemaking theories such as marginal cost pricing, time-of-day pricing, 
or base, intermediate, and peaking characteristics, the utility shall 
include in Statement BB all demand and capability data relied on by the 
utility in developing support on a cost of service basis, with 
appropriate explanatory material.
    (vi) For each month of Period I and Period II, the utility shall 
provide any additional demand data that the utility believes to be 
relevant to the allocation of electric utility costs to the wholesale 
services at issue. The utility shall fully support all such data and 
shall explain the rationale and the specific application proposed.
    (vii) Based upon information reported in Statements BB and BC, the 
utility shall list selected months that are normally the months of 
greatest significance in determining the need of the utility for power 
supply capability throughout the year. All twelve months may be 
selected, if appropriate. In its selection, the utility shall take into 
account any effects of local weather seasons and, particularly, the 
extent to which peak demands may tend to be similar in magnitude in two 
or more months of a weather season. The utility shall explain the 
reasons for the selections and describe the significance for the 
selections of seasonal variations in the weather.
    (28) Statement BC--Reliability data. Statement BC is a statement 
relating to reference standards of the filing utility for electric power 
supply reliability, and to information designed to reflect monthly 
availability of generating capacity reserves.
    (i) For Period II, Period I, and each of the three calendar years 
preceding Period I, the utility shall state and briefly explain its 
objective reference standard of production power supply reliability and 
the rationale underlying its choice of a reliability standard, including 
whether it participates with other electric utilities in the selection 
of a common standard on an area or pool basis. The utility shall 
identify any such participating utilities, and provide a general 
explanation of the basis upon which the reliability standard was jointly 
developed.
    (ii) The utility shall describe how its objective standard for 
production power supply reliability affects its electric generating 
facility construction planning and purchased power planning.
    (iii) For the peak day of each month of Period II, Period I, and, to 
the extent data are available, for the peak day of each month of the 
three calendar years preceding Period I, the utility shall include 
tabular schedules designed to show the following:
    (A) Net peak load in megawatts, itemized to show:
    (1) Gross peak firm load, including all firm sales assured available 
by the reserve capacity of the utility;
    (2) All firm purchases assured available by the reserve capacity of 
the supplier; and
    (3) Net peak load, computed as gross peak load under clause (1) 
minus all firm purchases under clause (2).
    (B) Net available dependable capacity, that is, the load-carrying 
ability of the electric production facilities determined for the purpose 
of scheduling capacity in day-to-day operations, provided in megawatts 
and itemized to show:
    (1) The owned dependable capacity of the utility for each production 
plant category selected in Statement AD under paragraph (h)(4);
    (2) Scheduled maintenance of owned dependable capacity of the 
utility;
    (3) Purchased dependable capacity of the utility;
    (4) Scheduled maintenance of purchased dependable capacity of the 
utility; and
    (5) Net available dependable capacity, computed as the owned 
dependable capacity under clause (1), minus scheduled maintenance of 
owned capacity under clause (2), plus purchased dependable capacity 
under clause (3), minus scheduled maintenance of purchased capacity 
under clause (4).
    (C) Available reserves in megawatts, which is the net available 
dependable capacity under clause (iii)(B) minus net peak load under 
clause (iii)(A).
    (D) Available reserves as a percent of peak load, which is the 
available reserves under clause (iii)(C) divided by net peak load under 
clause (iii)(A).

[[Page 238]]

    (29) Statement BD--Allocation energy and supporting data. Statement 
BD is a statement of electric utility energy data for Period I and 
Period II to be considered as bases for allocating related costs to the 
wholesale services subject to the changed rate.
    (i) For each month of Period I and Period II, and as totaled for the 
twelve months of each period, the utility shall show the megawatt-hours 
of firm power supply energy required by the system of the utility and 
the magawatt-hour energy requirements of the wholesale customer groups 
whose services will be subject to the changed rate. The wholesale 
service data for each individual customer delivery point or set of 
delivery points that constitutes an individual wholesale customer 
billing unit shall include megawatt-hours at delivery. The utility shall 
summarize and subtotal these individual customer data in accordance with 
Statement BA customer groupings under paragraph (h)(26). The utility 
shall show a loss adjustment for each wholesale customer group to 
reflect energy at the power supply level. The utility shall total the 
data to show total customer group energy requirements at power supply 
level for each month of Period I and Period II.
    (ii) Data provided under clause (i) shall not include energy 
associated with interruptible or curtailable services, or energy 
associated with other services, the revenues from which are shown as 
revenue credits in Statement AU under paragraph (h)(21) of this section. 
The utility shall separately state Period I and Period II monthly and 
total energy data for any such services provided by the utility. If any 
of the proposed wholesale rates at issue are for interruptible or 
curtailable service, the utility shall provide descriptive material and 
energy data specifically relevant to such services.
    (iii) If a utility selects subfunctional categories in Statement AD 
under paragraph (h)(4) of this section for the purpose of supporting any 
changed wholesale rate for firm power supply services with special 
characteristics, such as base load, intermediate, and peaking services, 
the utility shall separate the energy data required by clause (i) into 
corresponding energy values consistent with the service characteristics 
and consistent with energy-related expense categories utilized in 
Statement AH under paragraph (h)(8) of this section. The utility shall 
state the corresponding values for the utility's system energy and for 
each applicable wholesale service group.
    (iv) If a utility establishes plant categories in Statement AD under 
paragraph (h)(4) of this section for the purpose of supporting any 
changed wholesale rate for nonfirm production services, or the changed 
wholesale rate based on specialized ratemaking theories [see paragraph 
(h)(27)(v) of this section], the utility shall include in Statement BD 
all energy data relied on by the utility in developing the support on a 
cost of service basis and relevant explanatory material. Energy data 
provided under this clause shall be consistent with related expense 
categories utilized in Statement AH under paragraph (h)(8) of this 
section.
    (v) For each month of Period I and Period II, and as totaled for the 
twelve months of each period, the utility shall show the megawatt-hours 
generated, itemized in accordance with Statement AD production 
subfunctional categories, and the megawatt-hours purchased or 
interchanged, itemized to show each type of transaction, such as firm 
energy or economy interchanged energy. The utility shall quantitatively 
reconcile such data with the system allocation energy reported in this 
statement, and with energy data underlying the fuel and purchased power 
expense reported in Statement AH.
    (30) Statement BE--Specific assignment data. (i) Statement BE is a 
statement of specific components of the electric costs of service of the 
utility for Period I and Period II. Statement BE costs of service are 
those apportioned among wholesale services subject to the rate change 
and other utility services, on a basis other than:
    (A) Demand, capability, or energy data provided in Statements BB and 
BD;
    (B) A proportional relationship based on a selected plant category 
or expense item for which an allocation to wholesale services is to be 
independently determined; or

[[Page 239]]

    (C) Exclusive-use commitment in Statement BF under paragraph (h)(31) 
of this section.
    (ii) The utility shall include specific assignments considered 
appropriate by the utility. Typical cost of service components that 
could be specifically assigned are distribution plant [see examples 
listed in Statement AD under paragraph (h)(4) of this section], certain 
total electric wages and salaries provided in Statement AI under 
paragraph (h)(9) of this section, such as wages and salaries for 
customer accounting and for customer service and information, and 
certain administrative and general expense items. [See examples listed 
in Statement AH under paragraph (h)(8) of this section.]
    (iii) The utility shall limit specific assignments to the minimum 
required to adequately provide for costs not otherwise appropriately 
allocable.
    (iv) For each specific assignment, the utility shall include at 
least the following information:
    (A) Brief descriptive component title, such as distribution 
substations or rate case expenses;
    (B) Total electric amount in dollars;
    (C) Wholesale customer group dollar amounts stated individually for 
each wholesale customer rate group identified in Statement BA under 
paragraph (h)(26), and stated in total for all such groups; and
    (D) Explanation of the basis on which assignments were made, 
accompanied by supporting detailed computations.
    (31) Statement BF--Exclusive-use commitments of major power supply 
facilities. Statement BF is a statement describing and justifying the 
commitment to exclusive-use for particular services of all or a stated 
portion of electric utility generation units or plants, or major 
transmission facilities.
    (i) For Period I and Period II, the utility shall list each 
transaction in which all or a stated portion of the output of a 
specified filing utility-owned generating unit or group of units was 
committed exclusively to a particular customer or group of customers, or 
to a power pool or similar power supply entity. For each such 
transaction, the utility shall provide the following information:
    (A) Brief descriptive title for each commitment;
    (B) Name of plant and unit designation;
    (C) Name of the purchaser or power pool or other similar power 
supply entity;
    (D) Duration of the transaction;
    (E) Basis of rates or charges, stated in terms of whether a 
transaction reflects marginal, incremental, or fully distributed costs, 
the specific overall and common equity rates of return included in 
costs, provided on both a claimed and earned basis to the extent such 
information is available, the approximate date of the cost analysis on 
which the rates and charges were based, and any other considerations 
significant to the transaction;
    (F) Revenue received for each month of Period I and Period II or, if 
applicable, monthly quantities of power and energy received or available 
from power pools as consideration for commitment to a pool; and
    (G) Proposed treatment in the cost of service determinations for the 
wholesale services at issue. For example, a credit of revenue to the 
total electric cost of service, in Statement AU under paragraph (h)(21), 
could be proposed to account for unit capacity sales based upon 
incremental capital costs. The utility shall include explanatory 
material and support for the proposed procedures.
    (ii) For Period I and Period II, the utility shall list each 
transaction in which all, or a portion, of a major transmission facility 
owned by the filing utility was committed exclusively to a particular 
customer or group of customers. For each such transaction, the utility 
shall provide information similar to that required by clause (i).
    (32) Statement BG--Revenue data to reflect changed rates. Statement 
BG is a statement of revenues for Period I and Period II, including 
those under the changed rate for the wholesale services at issue.
    (i) For each month of Period I and Period II, and in total for each 
of the two periods, the utility shall show all billing determinants and 
metered quantities for each delivery point or set of delivery points 
that constitutes

[[Page 240]]

an individual wholesale customer billing unit, and the result of 
applying each specific rate component to the billing determinants for 
each billing unit stated with the total of the computed monthly bill for 
the customer. If the rates include a fuel clause, the utility shall 
compute and total the revenues under the fuel clause to reflect fuel 
costs incurred during each month of Period I and Period II. That is, the 
fuel clause revenues for the first month of Period I shall reflect fuel 
costs incurred for that month, and so on for each month of Period I and 
Period II. In computing fuel clause revenues, the utility shall 
determine fuel cost according to Sec. 35.14 of this chapter.
    (ii) If the form of the proposed fuel clause would produce revenues 
different from those computed in accordance with clause (i), the utility 
shall separately compute and state such fuel clause revenues for each 
customer for each month of Period I and Period II.
    (iii) The utility shall summarize separately revenue data computed 
in accordance with clauses (i) and (ii) above for each month and in 
total for Period I and Period II, in accordance with wholesale rate 
groups specified in Statement BA under paragraph (h)(26) of this 
section. The utility shall show total electric department revenues for 
each period to include revenues under the changed rate for all such 
wholesale customer rate groups.
    (iv) For Period I and as estimated for Period II, the utility shall 
summarize all billing determinants and revenues received from 
interruptible or curtailable services. Billing determinants and revenue 
data shall be consistent with interruptible demand and energy data in 
Statements BB and BD. The utility shall include an explanation of the 
extent to which interruptible or curtailable service revenues are or are 
not included in revenue credits in Statement AU under paragraph (h)(21) 
of this section.
    (33) Statement BH--Revenue data to reflect present rates. Statement 
BH is a statement of revenues for Period I and Period II, including 
those under present rates for wholesale services at issue, and for total 
electric service to reflect such revenues for wholesale services. The 
utility shall prepare this statement to include data consistent with 
criteria specified for presentation of revenue under the changed rate in 
Statement BG under paragraph (h)(32) of this section.
    (34) Statement BI--Fuel cost adjustment factors. Statement BI is a 
statement of monthly fuel cost adjustment factors under the changed rate 
and under the present rates, for Period I and Period II.
    (i) If the changed rate schedule embodies a fuel cost adjustment 
clause, the utility shall show detailed derivations of fuel cost 
adjustment factors computed to reflect fuel cost incurred during each 
month of Period I and Period II. Fuel cost adjustment factors are those 
required for revenue determinations in accordance with paragraph 
(h)(32)(i) of Statement BG.
    (ii) If additional proposed fuel clause revenue data are reported in 
accordance with paragraph (h)(32)(ii) of Statement BG, the utility shall 
show detailed derivation of applicable monthly fuel adjustment factors.
    (iii) If the present rate includes a fuel cost adjustment change, 
the utility shall show detailed derivations of fuel cost adjustment 
factors for each month of Period I and Period II. The utility shall 
include in Statement BI derivations for all monthly factors required in 
the computation of present fuel clause revenues reported in Statement 
BH. The utility shall provide an explanation of the differences between 
the present and proposed fuel clauses.
    (iv) All fuel cost adjustment factors shall be cost-based. The 
utility shall make a computational showing that shall develop adjustment 
factors in a manner consistent with the requirements of Sec. 35.14 of 
this chapter. The utility shall provide supporting detail on cost by 
type of fuel, and shall show separately the allowable fuel clause cost 
component of purchased or interchanged energy. All fuel cost data shall 
be consistent with that included in operation and maintenance expenses 
in Statement AH under paragraph (h)(8) of this section.
    (35) Statement BJ--Summary data tables. Statement BJ is a tabular 
summary of portions of Period I and Period II data from specific cost of 
service

[[Page 241]]

statements in this paragraph. The utility shall summarize under 
descriptive titles the Period I and Period II data from the cost of 
service provisions listed in this subparagraph. The utility shall supply 
the data in the manner described for each cost of service statement and 
in this subparagraph.
    (i) If a utility provides in Statement BK information that is 
substantially equivalent to the information required in this statement, 
the utility may fulfill the requirements of this statement by 
specifically referring to the location in Statement BK of the 
information required in this subparagraph.
    (ii) The utility shall provide the information in the following 
statements as average total electric department monthly balances for 
each function and subfunction of plant:
    (A) Statement AD--(h)(4)(i) and (ii);
    (B) Statement AE--(h)(5)(i) and (ii);
    (C) Statement AF--(h)(6)(i) through (v);
    (D) Statement AG--(h)(7)(i) through (vi);
    (E) Statement AL--(h)(12)(i) and (ii);
    (F) Statement AM--(h)(13); and
    (G) Statement AN--(h)(14).
    (iii) The utility shall provide the information in the following 
statements as total electric department annual revenue and expense 
amounts:
    (A) Statement AH--(h)(8)(i), (iv) and (v);
    (B) Statement AI--(h)(9)(i) and (ii);
    (C) Statement AJ--(h)(10)(i);
    (D) Statement AK--(h)(11)(i);
    (E) Statement AP--(h)(16)(i) through (iv);
    (F) Statement AQ--(h)(17)(i) through (iii);
    (G) Statement AR--(h)(18)(i) through (iv);
    (H) Statement AS--(h)(19);
    (I) Statement AT--(h)(20); and
    (J) Statement AU--(h)(21).
    (iv) The utility shall provide all cost of capital amounts in the 
following statements.
    (A) Statement AV--(h)(22)(i)(A); and
    (B) Statement AW--(h)(23);
    (v) The utility shall provide all tax rate data in Statement AY, 
paragraph (h)(25)(i) of this section.
    (vi) The utility shall provide the information in the following 
statements as appropriate, for total electric department values and 
individual customer group values:
    (A) Statement BB--(h)(27)(i) through (vi);
    (B) Statement BD--(h)(29)(i) through (iv);
    (C) Statement BE--(h)(30)(iv) (A), (B), and (C);
    (D) Statement BG--(h)(32)(iii); and
    (E) Statement BH--(h)(33).
    (36) Statement BK--Electric utility department cost of service, 
total and as allocated. Statement BK is a statement of the claimed fully 
allocated cost of service of the utility developed and shown for Period 
I and Period II. The utility shall include analytical support for each 
rate proposed to be differentiated on a time-of-use basis. The utility 
shall also provide any marginal or incremental cost information that is 
required to support the changed rate developed on a marginal or 
incremental cost basis. The utility shall show allocations of fully 
distributed costs to the wholesale services subject to the changed rate 
accompanied by a comparison of allocated costs with revenues under the 
changed rate. Nothing in this subparagraph shall preclude use by any 
utility of any cost of service technique it believes reasonable and that 
is consistent with the requirements of paragraph (g) of this section.
    (i) The utility shall base the fully distributed cost of service and 
the allocations thereof upon data provided in the accompanying detailed 
statements required under this section and additional data which the 
utility may submit and support in connection with this statement. The 
cost of service data of the utility shall conform to the following 
requirements:
    (A) The total electric rate base and cost of service shall be 
itemized and summarized by major functions and in a format designed to 
facilitate review and analysis.
    (B) Based on the total electric rate base and cost of service, and 
on allocated or assigned component elements, the cost of service for 
each Statement BA wholesale customer rate group under paragraph (h)(26) 
shall be itemized and summarized by major functions in a format 
consistent with that shown for total electric.

[[Page 242]]

    (C) The costs of service data for total electric and for each of the 
wholesale customer groups shall include data that show the return and 
the income taxes by components and in total, based upon the rate of 
return claimed by the utility in Statement AV under paragraph (h)(22). 
Individual components of income taxes shall include income taxes 
payable, provision for deferred income tax--debits and deferred income 
tax--credits, investment tax credits, or other adjustments.
    (D) The fully distributed cost of service study of the utility shall 
disclose the principal determinants for allocation of total electric 
costs among the wholesale customer groups, including but not limited to 
the following:
    (1) Computations showing the energy responsibilities of the 
wholesale services, with supporting detail;
    (2) Computations showing the demand responsibilities of the 
wholesale services, with supporting detail; and
    (3) Computations showing the specific assignment responsibilities of 
the wholesale services, with supporting detail.
    (ii) For the total electric service and for each wholesale customer 
rate group, the utility shall compare the fully distributed cost of 
service with the revenues under the changed rate. Based on the 
comparison, the utility shall show the revenue excess or deficiency and 
the earned rate of return computed for the total electric service and 
for each wholesale customer rate group.
    (iii) For any filing that contains Period II data, the utility shall 
supply any work papers and additional explanatory material necessary to 
support Statement BK, indexed, referenced and paginated as provided in 
paragraph (d)(5) of this section.
    (iv) The utility shall provide a tabular comparison of Period II 
total electric fully distributed cost items with those of Period I. The 
comparisons shall show item amounts for each of the two periods, and 
also shall show Period II item amounts as percentages of equivalent 
items for Period I. Comparisons shall include at least the following 
items, accompanied by explanatory notes with respect to significant 
variations among the comparative percentages:
    (A) Rate base;
    (B) Production expenses;
    (C) Transmission expenses;
    (D) Customer accounting, customer service and information, and sales 
expenses;
    (E) Depreciation expenses;
    (F) Taxes except income and revenue;
    (G) Income taxes;
    (H) Revenue taxes; and
    (I) Return claimed.
    (37) Statement BL--Rate design information. In support of the design 
of the changed rate, the utility shall submit the following material:
    (i) A narrative statement describing and justifying the objectives 
of the design of the changed rate. If the purpose of the rate design is 
to reflect costs, the utility shall state how that objective is 
achieved, and shall accompany it with a summary cost analysis that would 
justify the rate design, including any discounts or surcharges based on 
delivery voltage level or other specific considerations. Such summary 
cost analysis shall be consistent with, derived from, and cross-
referenced to the data in cost of service Statement BK. If the rate 
design is not intended to reflect costs, whether fully distributed, 
marginal, incremental, or other, the utility shall provide a statement 
to justify the departure from cost-based rates.
    (ii) If the billing determinants, such as quantities of demand, 
energy, or delivery points, are on different bases than the cost 
allocation determinants supporting such charges, the utility shall 
submit an explanation setting forth the economic or other considerations 
that warrant such departure. The information shall include at least the 
following:
    (A) If the individual rate for the demand, energy and customer 
charges do not correspond to the comparable cost classifications 
supporting such charges, a detailed explanation stating the reasons for 
the differences.
    (B) If the changed rate contains more than one demand or energy 
block, a detailed explanation indicating the rationale for the blocking 
and the considerations upon which such blocking is

[[Page 243]]

based, including adequate cost support for the specified blocking.
    (38) Statement BM--Construction program statement. Statement BM is a 
summary of data and supporting assumptions relating to the economics of 
any construction program to replace or expand the utility's power supply 
that shall be filed if the utility is filing for construction work in 
progress in rate base under Sec. 35.26(c)(3) of this chapter. The filing 
utility shall describe generally its program for providing reliable and 
economic power for the period beginning with the date of the filing and 
ending with the tenth year after the test period. The statement shall 
include an assessment of the relative costs of adopting alternative 
strategies including an analysis of alternative production plant, e.g., 
cogeneration, small power production, heightened load management and 
conservation efforts, additions to transmission plant or increased 
purchases of power, and an explanation of why the program adopted is 
prudent and consistent with a least-cost energy supply program.

(Federal Power Act, 16 U.S.C. 791-828c; Dept. of Energy Organization 
Act, 42 U.S.C. 7101-7352; E.O. 12009, 42 FR 46267, 3 CFR 142 (1978); 
Pub. L. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.))

[Order 91, 45 FR 46363, July 10, 1980, as amended at 47 FR 6826, Feb. 
17, 1982; Order 225, 47 FR 19056, May 3, 1982; Order 298, 48 FR 24354, 
June 1, 1983; 51 FR 7782, Mar. 6, 1986; Order 475, 52 FR 24993, July 2, 
1987; Order 545, 57 FR 53990, Nov. 16, 1992; Order 575, 60 FR 4854, Jan. 
25, 1995]



                  Subpart C--Other Filing Requirements



Sec. 35.14  Fuel cost and purchased economic power adjustment clauses.

    (a) Fuel adjustment clauses which are not in conformity with the 
principles set out below are not in the public interest. These 
regulations contemplate that the filing of proposed rate schedules which 
embody fuel clauses failing to conform to the following principles may 
result in suspension of those parts of such rate schedules:
    (1) The fuel clause shall be of the form that provides for periodic 
adjustments per kWh of sales equal to the difference between the fuel 
and purchased economic power costs per kWh of sales in the base period 
and in the current period:

Adjustment Factor =Fm/Sm-Fb/Sb
Where: F is the expense of fossil and nuclear fuel and purchased 
economic power in the base (b) and current (m) periods; and S is the kWh 
sales in the base and current periods, all as defined below.

    (2) Fuel and purchased economic power costs (F) shall be the cost 
of:
    (i) Fossil and nuclear fuel consumed in the utility's own plants, 
and the utility's share of fossil and nuclear fuel consumed in jointly 
owned or leased plants.
    (ii) The actual identifiable fossil and nuclear fuel costs 
associated with energy purchased for reasons other than identified in 
paragraph (a)(2)(iii) of this section.
    (iii) The total cost of the purchase of economic power, as defined 
in paragraph (a)(11) of this section, if the reserve capacity of the 
buyer is adequate independent of all other purchases where non-fuel 
charges are included in either Fb or Fm;
    (iv) Energy charges for any purchase if the total amount of energy 
charges incurred for the purchase is less than the buyer's total avoided 
variable cost;
    (v) And less the cost of fossil and nuclear fuel recovered through 
all inter-system sales.
    (3) Sales (S) must be all kWh's sold, excluding inter-system sales. 
Where for any reason, billed system sales cannot be coordinated with 
fuel costs for the billing period, sales may be equated to the sum of: 
(i) Generation, (ii) purchases, (iii) exchange received, less (iv) 
energy associated with pumped storage operations, less (v) inter-system 
sales referred to in paragraph (a)(2)(iv) of this section, less (vi) 
total system losses.
    (4) The adjustment factor developed according to this procedure 
shall be modified to properly allow for losses (estimated if necessary) 
associated only with wholesale sales for resale.
    (5) The adjustment factor developed according to this procedure may 
be further modified to allow the recovery of

[[Page 244]]

gross receipts and other similar revenue based tax charges occasioned by 
the fuel adjustment revenues.
    (6) The cost of fossil fuel shall include no items other than those 
listed in Account 151 of the Commission's Uniform System of Accounts for 
Public Utilities and Licensees. The cost of nuclear fuel shall be that 
as shown in Account 518, except that if Account 518 also contains any 
expense for fossil fuel which has already been included in the cost of 
fossil fuel, it shall be deducted from this account. (Paragraph C of 
Account 518 includes the cost of other fuels used for ancillary steam 
facilities.)
    (7) Where the cost of fuel includes fuel from company-owned or 
controlled \1\ sources, that fact shall be noted and described as part 
of any filing. Where the utility purchases fuel from a company-owned or 
controlled source, the price of which is subject to the jurisdiction of 
a regulatory body, and where the price of such fuel has been approved by 
that regulatory body, such costs shall be presumed, subject to rebuttal, 
to be reasonable and includable in the adjustment clause. If the current 
price, however, is in litigation and is being collected subject to 
refund, the utility shall so advise the Commission and shall keep a 
separate account of such amounts paid which are subject to refund, and 
shall advise the Commission of the final disposition of such matter by 
the regulatory body having jurisdiction. With respect to the price of 
fuel purchases from company-owned or controlled sources pursuant to 
contracts which are not subject to regulatory authority, the utility 
company shall file such contracts and amendments thereto with the 
Commission for its acceptance at the time it files its fuel clause or 
modification thereof. Any subsequent amendment to such contracts shall 
likewise be filed with the Commission as a rate schedule change and may 
be subject to suspension under section 205 of the Federal Power Act. 
Fuel charges by affiliated companies which do not appear to be 
reasonable may result in the suspension of the fuel adjustment clause or 
cause an investigation thereof to be made by the Commission on its own 
motion under section 206 of the Federal Power Act.
---------------------------------------------------------------------------

    \1\ As defined in the Commission's Uniform System of Accounts 18 CFR 
part 101, Definitions 5B.
---------------------------------------------------------------------------

    (8) All rate filings which contain a proposed new fuel clause or a 
change in an existing fuel clause shall conform such clauses with the 
regulations. Within one year of the effectiveness of this rulemaking, 
all public utilities with rate schedules that contain a fuel clause 
should conform such clauses with the regulations. Recognizing that 
individual public utilities may have special operating characteristics 
that may warrant granting temporary delays in the implementation of the 
regulations, the Commission may, upon showing of good cause, waive the 
requirements of this section of the regulations for an additional one-
year period so as to permit the public utilities sufficient time to 
adjust to the requirements.
    (9) All rate filings containing a proposed new fuel clause or change 
in an existing fuel clause shall include:
    (i) A description of the fuel clause with detailed cost support for 
the base cost of fuel and purchased economic power or energy.
    (ii) Full cost of service data unless the utility has had the rate 
approved by the Commission within a year, provided that such cost of 
service may not be required when an existing fuel cost adjustment clause 
is being modified to conform to the Commission's regulations.
    (10) Whenever particular circumstances prevent the use of the 
standards provided for herein, or the use thereof would result in an 
undue burden, the Commission may, upon application under Sec. 385.207 of 
this chapter and for good cause shown, permit deviation from these 
regulations.
    (11) For the purpose of paragraph (a)(2)(iii) of this section, the 
following definitions apply:
    (i) Economic power is power or energy purchased over a period of 
twelve months or less where the total cost of the purchase is less than 
the buyer's total avoided variable cost.
    (ii) Total cost of the purchase is all charges incurred in buying 
economic power and having such power delivered

[[Page 245]]

to the buyer's system. The total cost includes, but is not limited to, 
capacity or reservation charges, energy charges, adders, and any 
transmission or wheeling charges associated with the purchase.
    (iii) Total avoided variable cost is all identified and documented 
variable costs that would have been incurred by the buyer had a 
particular purchase not been made. Such costs include, but are not 
limited to, those associated with fuel, start-up, shut-down or any 
purchases that would have been made in lieu of the purchase made.
    (12) For the purpose of paragraph (a)(2)(iii) of this section, the 
following procedures and instructions apply:
    (i) A utility proposing to include purchase charges other than those 
for fuel or energy in fuel and purchased economic power costs (F) under 
paragraph (a)(2)(iii) of this section shall amend its fuel cost 
adjustment clause so that it is consistent with paragraphs (a)(1) and 
(a)(2)(iii) of this section. Such amendment shall state the system 
reserve capacity criteria by which the system operator decides whether a 
reliability purchase is required. Where the utility filing the statement 
is required by a State or local regulatory body (including a plant site 
licensing board) to file a capacity criteria statement with that body, 
the system reserve capacity criteria in the statement filed with the 
Commission shall be identical to those contained in the statement filed 
with the State or local regulatory body. Any utility that changes its 
reserve capacity criteria shall, within 45 days of such change, file an 
amended fuel cost and purchased economic power adjustment clause to 
incorporate the new criteria.
    (ii) Reserve capacity shall be deemed adequate if, at the time a 
purchase was initiated, the buyer's system reserve capacity criteria 
were projected to be satisfied for the duration of the purchase without 
the purchase at issue.
    (iii) The total cost of the purchase must be projected to be less 
than total avoided variable cost, at the time a purchase was initiated, 
before any non-fuel purchase charge may be included in Fm.
    (iv) The