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ARTICLE · 22 JANUARY 2021

US Energy Regulator Considers Financial Requirements For Hydropower Projects

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Under the Federal Power Act (FPA), the US Federal Energy Regulatory Commission ("FERC" or "Commission") licenses and regulates over 1,600 hydroelectric project dams, diversions, and related...

United StatesEnergy and Natural Resources
Mark C. Williams
Mark C. Williams
J. Paul Forrester
J. Paul Forrester
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Under the Federal Power Act (FPA), the US Federal Energy Regulatory Commission (“FERC” or “Commission”) licenses and regulates over 1,600 hydroelectric project dams, diversions, and related hydropower facilities. At FERC's last formal meeting during the Trump administration, FERC opened a Notice of Inquiry (NOI)1 to determine whether to impose financial assurance requirements on hydropower licensees and, if so, what those financial assurance requirements should be.

FERC hydropower licensing seldom involves any financial assurance component. While the FPA contains provisions that could arguably permit FERC to require hydropower licensees and license applicants to demonstrate their solvency, and to fund operational and potentially project decommissioning expenses upon license expiration or termination, the NOI acknowledges that the actual adoption of such requirements is “rare.” When financial assurance requirements are adopted, they typically apply only to new

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