[62,439]
Montana Light and Power
Company, Project No. 2594-001
Order Issuing License (Major)
(Issued
December 16, 1981)
William W. Lindsay, Director,
Office of Electric Power Regulation
Montana Light and Power
Company (Applicant) filed on November 25, 1980, an application for a license
under Part I of the Federal Power Act (Act) for its constructed Lake Creek
Project, FERC No. 2594 located on Lake Creek, in Lincoln County, Montana.1
Notice of the
application has been published and comments have been received from Federal, state,
and local agencies. No protests or petitions to intervene have been filed, and
none of the commenting agencies objected to issuance of this license.2
Project Description and History
The constructed Lake
Creek Project consists of a 34-foot high dam, a 150-acre-foot reservoir, water
conduits, two powerhouses with a total rated capacity of 4.5 MW , and
associated transmission facilities. The project is more fully described in
Ordering Paragraph (B) of this order. A major portion of the project,
including one of the powerhouses with an installed capacity of 1 MW, was built
in 1916-1917 and was acquired by the Applicant in 1922. A second powerhouse
with an installed capacity of 3.5 MW and its appurtenant facilities were built
in 1948-1949. The Applicant originally filed an application for license for the
project on May 3, 1966, with a disclaimer of jurisdiction and requested that
the Commission issue a declaratory order finding it has no jurisdiction over
the project. Staff found the application deficient and requested the Applicant
to correct the deficiencies. The Applicant did not correct the deficiencies and
on May 30, 1980, the application was rejected. The Applicant, however, was
afforded another opportunity to file a license application under the new
regulations governing applications for license for Major Projects at Existing
Dam (Order No.59, issued November 19, 1979). It was also determined that if a
license application which conforms to the new regulations were filed within 6
months from May 30, 1980, the Commission would grant a 30-year term license for
the project instead of the normal 2O-year term and would relieve the Applicant
of approximately one-half of the back annual charges that otherwise would be
due for the project. Articles 26 and 27 require payment of back annual charges.
Jurisdiction
Staff has found that
the Lake Creek Project is connected with Pacific Power and Light Company's
(PP&L) Libby system at a tie point near Libby, Montana. PP&L's power
requirements for the Libby system, excluding dump power purchases from the
Applicant, are transmitted into Montana from Idaho over facilities of the Bonneville
Power Administration. It is determined, therefore, that the power generated at
Lake Creek Project affects interstate commerce within the meaning of Section
23(b) of the Act by virtue of its inter-connection with PP&L's system.
Applicant states that
the oldest and major portion of the project was built in 1916-17 and was
acquired by the Applicant in 1922. The second powerhouse, with an installed
capacity of 3,500 kW, and an associated penstock were built in 1948-49. It is,
therefore, concluded that there has been substantial post-1935 construction at
the project.
In accordance with
the Supreme Court's interpretation of the Act in the Taum Sauk3 and
Farmington4 decisions, it is concluded that The Montana Light and
Power Company's Lake Creek Project is subject to the Commission's licensing
authority under the Federal Power Act.
Safety and Adequacy
Stability of project
structures under normal and extreme loading conditions has been analyzed. The
Lake Creek Dam is considered safe under normal loading conditions. The dam is
not safe under Probable Maximum Flood conditions, but failure of the structure
during such an extreme event would not present a hazard to downstream life or
cause significant property damage due to the project's negligible storage
capacity (150 acre-feet) and its remote location.5 Therefore, no
remedial work is required. It is concluded that the project, under the
conditions of this license, is safe and adequate.
Recreation Resources
No recreational
facilities have been constructed, for reasons of safety, small reservoir size,
low recreational value, and because there are considerably more desirable
recreational opportunities available in the vicinity. However, fishing is permitted.
The application includes letters from both (1) the Montana Department of Fish,
Wildlife, and Parks and (2) the Heritage Conservation and Recreation Service
indicating that the installation of recreational facilities is not warranted at
this time. Should recreational facilities be required in the future, Article
17 of the Standard Form L-10, included in this license, requires the licensee
to provide appropriate recreational facilities.
Water Quality
Montana Department of
Health and Environmental Sciences certified that pursuant to Section 401 of the
Federal Water Pollution Control Act, the continued operation of the Lake Creek
Project would not violate Montana's water quality standards.
Spoil Area
The Applicant has
started a program of silt removal from the reservoir which should be completed
in the near future. The silt is being deposited on land within the project
boundary. The U.S. Department of the Interior (Interior) indicated that the
spoil should be graded and seeded with native forest plant species when the
silt-removal program is completed. Applicant concurs with Interior and stated
that silt removed from the reservoir will be landscaped in a manner consistent
with recommendations contained in letters from the Soil Conservation Service
and the U.S. Fish and Wildlife Service.
Cultural Resources
No properties on or
eligible for the National Register of Historic Places would be impacted by
continued operation of the project or by silt removal activities. In accordance
with standard Commission practice,6 Article 29 is being included in
the license to ensure that cultural resources protection measures would be
implemented in the event of any future construction or ground-disturbing
activity at the project.
Environmental Impacts
The project has been
in continuous operation for over 50 years. Any adverse effects associated with
its construction have stabilized. Applicant does not propose any new
construction or changes in the project's operation. Any adverse environmental
impacts resulting from completion of the silt removal program would be of
short-term duration. The spoil area would be landscaped and seeded with native
forest plant species. For these reasons, it is concluded that
approval of the license application would not constitute a major Federal action
significantly affecting the quality of the human environment.
Comprehensive Development
The run-of-the-river
project makes efficient use of water flow and fall of the creek and is not in
conflict with any existing or planned development in the river basin. Continued
operation of this project provides 4500 kW of installed capacity capable of an
average annual generation of 23.4 million kWhs, and uses a renewable resource
that saves the equivalent of approximately 38,400 barrels of oil or 11,000 tons
of coal per year.
It is concluded that,
as conditioned in this license, Project No. 2594 is best adapted to a comprehensive
plan for development of Lake Creek basin for beneficial public uses and that
issuance of this license is in the public interest.
License Term and Annual
Charges
Under the
Commission's policy and as explained previously under "Project Description
and History", this license would have been made effective January 1, 1948, the year that post-1935 construction first occurred. Because of the
50-year maximum statutory license period, however; and the Commission's incentive
program resulting in the issuance of a license for 30 years this license will be
made effective December 1, 1961. Payment of one- half of back annual charges
will be based upon that effective date, but this license will also be
conditioned upon payment of an amount equivalent to one-half the annual charges
that would otherwise have been due for the period from January 1, 1948 to
November 30, 1961.
It is ordered that:
(A) This license is
issued to Montana Light and Power Company (Licensee) of Libby, Montana, under
Part I of the Federal Power Act for a period effective December 1, 1961, and
terminating November 30, 2011, for the continued operation and maintenance of
Lake Creek Project No.2594, located in Lincoln County, Montana, on Lake Creek
and affecting the interests of interstate commerce. This license is subject to
the terms and conditions of the Act, which is incorporated by reference as part
of this license, and subject to the regulations the Commission issues under the
provisions of the Act.
(B) The Lake Creek project
No.2594 consists of:
(1) All lands, to the
extent of the Licensee's interests in those lands, constituting the project
area and enclosed by the project boundary .The project area and boundary are shown
and described by certain exhibits that form part of the application for license
and that are designated and described as: .
Exhibit
FERC No. Showing
G-1 2594-9 General
Map
G-2 2594-10 General Map
(2) Project works
consisting of: (1) a 268-foot long, 34-foot high concrete gravity dam
creating; (2) a reservoir with a storage capacity of 150 acre-feet; (3) a
reinforced concrete intake structure; (4) a 1,694-foot long, 10-foot diameter
flume leading to; (5) a forebay created by a reinforced concrete structure with
wood superstructure; (6) a 297-foot long, 5-foot diameter penstock leading to;
(7) Powerhouse #1 containing a Francis- type, turbine-generating Unit with a
rated capacity of 1 MW; (8) a second penstock 441 feet long with a diameter of
8.5 feet leading to: (9) Powerhouse #2 containing a Francis-type, turbine-generating
unit with a rated capacity of 3.5 MW; and (10) a 2,4-kV generator lead, a 7.2-kV
generator lead, a 7.2/34.5-kV step-up transformer at Powerhouse #2, a 150-foot
long, 7.2-kV transmission line, a l00 foot long, 34.5-kV transmission line and
appurtenant facilities.
The location, nature,
and character of these project works are generally shown and described by the
exhibits cited above and more specifically shown and described by certain
other, exhibits that also form a part of the application for license and that
are designated and described as:
Exhibits FERC
No. Showing
F-1 2594-7 Powerplants
and Forebay
F-2 2594-8 Lake
Creek Dam
(3) All of these
structures, fixtures, equipment, or facilities used or useful in the operation
or maintenance of the project and located within the project boundary, all
portable property that may be employed in connection with the project, located within
or outside the project boundary, as approved by the Commission, and all
riparian or other rights that are necessary or appropriate in the operation or
maintenance of the project.
(C) Exhibits F and G
designated in ordering paragraph (B) above are approved and made a part of the
license.
(D) This license is
also subject to the terms and conditions set forth in Form L-10 (revised
October, 1975), entitled "Terms and Conditions of License for Constructed
Major Project Affecting the Interests of Interstate or Foreign Commerce,"
attached to (See 54 FPC 1858) and made a part of this license. The license is also subject to the
following additional articles:
Article 24.
(a) In accordance with the provisions of this article, the Licensee shall have
the authority to grant permission for certain types of use and occupancy of
project lands and waters and to convey certain interests in project lands and
waters for certain other types of use and occupancy, without prior Commission
approval. The Licensee may exercise the authority only if the proposed use and
occupancy is consistent with the purposes of protecting and enhancing the
scenic recreational, and other environmental values of the project. For those
purposes, the Licensee shall also have continuing responsibility to supervise
and control the uses and occupancies for which it grants permission, and to
monitor the use of, and ensure compliance with the covenants of the instrument
of conveyance for, any interests that it has conveyed, under this article. If a
permitted use and occupancy violates any condition of this article or any other
condition imposed by the Licensee for protection and enhancement of the
project's scenic, recreational, or other environmental values, or if a covenant
of a conveyance made under the authority of this article is violated, the Licensee
shall take any lawful action necessary to correct the violation. For a
permitted use or occupancy, that action includes, if necessary, canceling the
permission to use and occupy the project lands and waters and requiring the
removal of any non-complying structures and facilities.
(b) The types of use
and occupancy of project lands and waters for which the Licensee may grant
permission without prior Commission approval are: (1) landscape plantings; (2)
non-commercial piers, landings, boat docks, or similar structures and
facilities; and (3) embankments, bulkheads, retaining walls, or similar
structures for erosion control to protect the existing shoreline. To the extent
feasible and desirable to protect and enhance the project's scenic,
recreational, and other environmental values, the Licensee shall require
multiple use and occupancy of facilities for access to project lands or waters.
The Licensee shall also ensure, to the satisfaction of the Commission's
authorized representative, that the uses and occupancies for which it grants
permission are maintained in good repair and comply with applicable State and
local health and safety requirements. Before granting permission for
construction of bulkheads or retaining walls, the Licensee shall: (1) inspect
the site of the proposed construction, (2) consider whether the planting of
vegetation or the use of riprap would be adequate to control erosion at the
site, and (3) determine that the proposed construction is needed and would not
change the basic contour of the reservoir shoreline. To implement this
paragraph (b), the Licensee may, among other things, establish a program for
issuing permits for the specified types of use and occupancy of project lands
and waters, which may be subject to the payment of a reasonable fee to cover
the Licensee's costs of administering the permit program. The Commission
reserves the right to require the Licensee to file a description of its
standards, guidelines, and procedures for implementing this paragraph (b) and
to require modifications of those standards, guidelines, or procedures.
(c) The Licensee may
convey easements or rights-of-way across, or leases of, project lands for: (1)
replacement, expansion, realignment, or maintenance of bridges and roads for
which all necessary State and Federal approvals have been obtained; (2) storm
drains and water mains; (3) sewers that do not discharge into project waters;
(4) minor access roads; (5) telephone, gas, and electric utility distribution
lines; (6) non-project overhead electric transmission lines that do not require
erection of support structures within the project boundary; (7) submarine,
overhead, or underground major telephone distribution cables or major electric distribution
lines (69-kV or less); and (8) water intake or pumping facilities that do not
extract more than one million gallons per day from a project reservoir. No
later than January 31 of each year, the Licensee shall file three copies of a
report briefly describing each conveyance made under this paragraph (c) during
the prior calendar year, the type of interest conveyed, the location of the
lands subject to the conveyance, and the nature of the use for which the
interest was conveyed.
(d) The Licensee may
convey fee title to, easements or rights-of-way across, or teases of project
lands for: (1) construction of new bridges or roads for which all necessary
State and Federal approvals have been obtained; (2) sewer or effluent lines
that discharge into project waters, for which all necessary Federal and State
water quality certificates or permits have been obtained; (3) other pipelines
that cross project lands or waters but do not discharge into project waters;
(4) non-project overhead electric transmission lines that require erection of
support structures within the project boundary, for which all necessary Federal
and State approvals have been obtained; {5) private or public marinas that can
accommodate no more than 10 watercraft at a time and are located at least one-half
mile from any other private or public marina; (6) recreational development
consistent with an approved Exhibit R or approved report on recreational resources
of an Exhibit E; and (7) other uses, if: (i) the amount of
land conveyed for a particular use is five acres or less; (ii) all of the land
conveyed is located at least 75 feet, measured horizontally, from the edge of
the project reservoir at normal maximum surface elevation: and (iii) no more
than 50 total acres of project lands for each project development are conveyed
under this clause (d) (7) in any calendar year. At least 45 days before
conveying any interest in project lands under this paragraph (d), the Licensee
must file a letter to the Director, Office of Electric Power Regulation,
stating its intent to convey the interest and briefly describing the type of
interest and location of the lands to be conveyed (a marked Exhibit G or K map
may be used). the nature of the proposed use, the identity of any Federal or
State agency official consulted, and any Federal or State approvals required
for the proposed use. Unless the Director, within 45 days from the filing date,
requires the Licensee to file an application for prior approval, the Licensee
may convey the intended interest at the end of that period.
(e) The following
additional conditions apply to any intended conveyance under paragraphs (c) or
(d) of this article:
(1) Before conveying
the interest, the Licensee shall consult with Federal and state fish and wildlife
or recreation agencies, as appropriate, and the State Historic Preservation
Officer.
(2) Before conveying
the interest, the Licensee shall determine that the proposed use of the lands
to be conveyed is not inconsistent with any approved Exhibit R or approved
report on recreational resources of an Exhibit E; or, if the project does not
have an approved Exhibit R or approved report on recreational resources, that
the lands to be conveyed do not have recreational value.
(3) The instrument of
conveyance must include covenants running with the land adequate to ensure
that: (i) the use of the lands conveyed shall not endanger health, create a
nuisance, or otherwise be incompatible with overall project recreational use;
and (ii) the grantee shall take all reasonable precautions to ensure that the
construction, operation, and maintenance of structures or facilities on the
conveyed lands will occur in, a manner that will protect the scenic, recreational,
and environmental values of the project.
(4) The Commission
reserves the right to require the Licensee to take reasonable remedial action
to correct any violation of the terms and conditions of this article, for the
protection and enhancement of the project's scenic, recreational, and other
environmental values.
(f) The conveyance of
an interest in project lands under this article does not in itself change the
project boundaries. The project boundaries may be changed to exclude land
conveyed under this article only upon approval of revised Exhibit G or K
drawings (project boundary maps) reflecting exclusion of' that land. Lands
conveyed under this article will be excluded from the project only upon a
determination that the lands are not necessary for project purposes, such as operation
and maintenance, flowage, recreation, public access, protection of environmental
resources, and shoreline control, including shoreline aesthetic values. Absent extraordinary
circumstances, proposals to exclude lands conveyed under this article from the
project shall be consolidated for consideration when revised Exhibit G or K drawings
would be filed for approval for other purposes.
Article 25.
The Licensee shall pay the United States the following annual charge, effective
the first day of the month following issuance of this license:
For the purpose of
reimbursing the United States for the cost of administration of Part I of the
Act, a reasonable amount as determined in accordance with the provisions of the
Commission's regulations in effect from time to time. The authorized installed
capacity for that purpose is 6,000 horsepower .
Article 26.
The Licensee shall pay, the Untied States an amount equal to one-half of the
following annual charge that would have been applied for the period December 1,
1961, to the last day of the month in which this license is issued:
For the purpose of
reimbursing the United States for the cost of administration of Part I of the
Act, a reasonable annual charge as determined by the Commission in accordance
with the applicable provisions of its regulations. The authorized installed
capacity for such purposes is 6,000 horsepower.
Article 27.
The Licensee shall pay the United States an amount equal to one-half of the
following annual charge that would have been applied for the period January 1, 1948, to November 30, 1961, if the project had been licensed during that
period:
For the purpose of
reimbursing the United States for the cost of administration of Part 1 of the
Act, a reasonable annual charge as determined by the Commission in accordance
with the applicable provisions of its regulations. The authorized installed
capacity for such purposes is 6,000 horsepower.
Article 28.
Pursuant to Section 10(d) of the Act, after the first20 years of operation of
the project under license, a specified reasonable rate of return upon
the net investment in the project shall be used for determining surplus
earnings of the project for the establishment and maintenance of amortization
reserves. One half of the project surplus earnings, if any, accumulated after
the first 20 years of operation under the license, in excess of the specified
rate of return per annum on the net investment, shall be set aside in a project
amortization reserve account at the end of each fiscal year. To the extent that
there is a deficiency of project earnings below the specified rate of return
per annum for any fiscal year after the first 20 years of operation under the
license, the amount of that deficiency shall be deducted from the amount of any
surplus earnings subsequently accumulated, until absorbed. One-half of the
remaining surplus earnings, if any, cumulatively computed, shall be set aside
in the project amortization reserve account. The amounts established in the
project amortization reserve account shall be maintained until further order of
the Commission.
The annual specified
reasonable rate of return shall be the sum of the annual weighted costs of
long-term debt, preferred stock, and common equity, as defined below. The
annual weighted cost for each component of the reasonable rate of return is the
product of its capital ratio and cost rate. The annual capital ratio for each
component of the rate of return shall be calculated based on an average of 13
monthly balances of amounts properly includable in the Licensee's long-term
debt and proprietary capital accounts as listed in the Commission's Uniform
System of Accounts. The cost rates for long-term debt and preferred stock shall
be their respective weighted average costs 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).
Article 29.
Prior to commencement of any construction or development of any project works
or other facilities at the project, the Licensee shall consult and cooperate
with the Montana Historic Preservation Officer (SHPO) to determine the need
for, and extent of, any archeological or historic resource surveys and any
mitigative measures that may be necessary .The Licensee shall provide funds in
a reasonable amount for such activity. If any previously unrecorded
archeological or historic sites are discovered during the course of
construction, construction activity in the vicinity shall be halted, a qualified
archeologist shall be consulted to determine the significance of the sites, and
the Licensee shall consult with the SHPO to develop a mitigation plan for the protection
of significant archeological or historic resources. If the Licensee and the
SHPO cannot agree on the amount of money to be expended on archeological or
historic work related to the project, the Commission reserves the right to
require the Licensee to conduct, at its own expense, any such work found
necessary.
(E) Within 90 days
from the date of acceptance of this license, the Licensee shall file a
statement under oath showing the gross amount of power generation for the
project in kilowatt-hours for each calendar year commencing January 1, 1948, in
accordance with the provisions of Section 11.20(a)(4) of the Commission's
regulations.
(F) This order is
final unless a petition appealing it to the Commission is filed within 30 days
from the date of its issuance, as provided in § 1.7(d) of the Commission's
regulations, 18 C.F.R. 1,7(d) (1980). The filing of a petition appealing this
order to the Commission or an application for rehearing does not operate as a
stay of the effective date of this license or of any other date specified in
this order, except as specifically ordered by the Commission. Failure of the
Licensee to file an application for rehearing shall constitute acceptance of
this license. In acknowledgment of acceptance of this license, the license
shall be signed for the Licensee and returned to the Commission within 60 days
from the date of issuance of this order.
–Footnotes–
1 Authority to act on
this matter is delegated to the Director, Office of Electric Power Regulation,
under 18 C.F.R § 375.308 (1980), as amended by 46 Fed. Reg. 14119(1981).
2 The U.S. Department
of Agriculture, by letter of comment dated September 10, 1981, raised potential problems concerning a transmission line associated with this project. That
line, however, is not a primary line and is not included as a project work in
this license. Agriculture can take up its concerns directly with Licensee in
the context of whatever special use permits are required to be obtained for the
transmission line.
3 FPC v. Union
Electric Company (Taum Sauk), 381 U.S. 90 (1965). .
4Farmington River
Power Company v. FPC, 455 F. 2d 86 (2nd Cir. 1972).
5 Inspection, by the
staff of the Commission, of the area between the dam and the Town of Troy
confirms a low potential hazard as the topography provides a natural protection
for the Town.
6See S.D. Warren,
Project No.2897, Order Denying Rehearing (issued February 19. 1980).
