FERC Confirms No Licensing Requirement For Certain Groundwater-Only Pumped Storage Projects

Three recent FERC staff decisions ("Decisions") confirm that, for purposes of establishing the mandatory licensing requirements under the Federal Power Act ("FPA"), groundwater is not a "non-navigable Commerce Clause stream." Thus, a hydropower project—and particularly a closed-loop pumped storage project—that uses only groundwater as its water source will not require FERC licensing if the project does not trigger other jurisdictional tests under the FPA.

A central challenge to the development of hydropower pumped storage has been the FERC licensing process. The licensing process is a multi-agency effort that can take five and eight years to complete, and which involves significant costs and uncertainties to project developers. The Decisions provide a potential solution to the challenges of FERC licensing. These orders involved projects that propose to use only groundwater for project operations. And in response to separate requests from the developers, FERC