FERC Issues Policy Statement Extending License Terms For Hydro Projects

FERC released a policy statement on October 19, 2017, revising its longstanding approach to setting the license terms for hydroelectric projects.  The new policy establishes a default term of 40 years for non-federal projects, which can be shortened or extended in certain identified circumstances.  According to Section 6 of the Federal Power Act, the term of a license may not exceed 50 years — the Act sets no minimum license term.  It has been FERC's policy to set a 50-year term for licenses issued to federal projects and to base the license term for non-federal projects on the level of redevelopment, new construction, or environmental mitigation and enhancement slated for the project.  For projects involving little to no activity, FERC has set a 30-year term, for a moderate amount of activity, a 40-year term, and for extensive activity, a 50-year term.