Most non-Federal hydroelectric projects in the United States are operated under licenses issued by the Federal Energy Regulatory Commission (FERC). The Federal Power Act (FPA) gives FERC the exclusive authority to issue licenses to construct, operate, and maintain certain non-Federal hydropower projects. The relicensing process addresses not only the generation of electricity, but also the human and natural environments that may be affected—both positively and negatively—by a project's operation. FERC is required by federal law to consider both power and non-power issues in relicensing hydroelectric facilities. Through the course of the relicensing FERC (and the licensee) work with other agencies in compliance with other state and federal laws and regulations. Several of the regulations that are considered in relicensing include: The Endangered Species Act (ESA), The National Historic Preservation Act (NHPA) and the Clean Water Act (CWA), among others.

The Lake Creek Relicensing will be undertaken using FERC's Integrated Licensing Process (ILP) regulations. (For more information on the ILP, visit FERC's web site at www.FERC.gov.) The ILP provides numerous opportunities for the public, Tribes and governmental agencies to participate in the process and provide information to NLI; however, the entire process is strictly regulated as to time periods for the various parts of the process. The Process Plan for the Lake Creek relicensing details the necessary timelines for the ILP. Under the ILP, NLI must file a Notice of Intent (NOI) to file a license application no less than five years and no earlier than 5 ½ years before the current license expires on November 30, 2011. At that time, NLI must also submit a Pre-Application Document (PAD) to FERC and the resource agencies. The PAD contains existing, relevant, and reasonably available information describing the existing environment and the potential effects of NLI's continued operation of the Project.

After the PAD is filed, NLI will, as necessary, develop a study plan to collect additional information that may be needed to assess the effects of the Project's continued operation on the environment. Once the study plan is approved, NLI will conduct the necessary studies over the following two years and will report the results of those studies to FERC and other governmental agencies.

Two years before the expiration of the current FERC license NLI will file a draft License Application, for review by FERC and all other interested parties. Following the review, FERC will issue a new license on or before the expiration of the old license.