By Robert Mullin

An agreement between FERC and the U.S. Army Corps of Engineers could help spur the development of privately run hydroelectric resources at the Corps’ unpowered dams.

The two agencies on Thursday signed a memorandum of understanding (MOU) to synchronize their processes to shorten permitting times, provide more certainty in regulatory outcomes and reduce financial risk for nonfederal project developers.

“The potential for hydropower development in this country is significant, particularly at existing Corps facilities,” FERC Chairman Norman Bay said. “Today’s MOU is a positive step toward the development of these resources.”

A 2012 Department of Energy study identifying 6,900 MW of potential hydroelectric capacity at the Corps’ unpowered dams sparked interest in development at the agency’s water projects, according to Tim Welch, the department’s hydropower program manager.

The Corps is authorized to allow nonfederal entities to develop hydroelectric projects at its facilities provided that the project’s operation is deemed compatible with the purposes of the facility and the federal government has no competing development interest.

“This synchronized approach will shorten the time it takes the private sector to develop and construct new hydropower and will help us more efficiently use our existing infrastructure,” said Jo-Ellen Darcy, the Army’s assistant secretary for civil works. “It is also advancing our efforts to find alternative ways to finance new infrastructure.”

The synchronized process consists of two overlapping phases in which the Corps’ environmental and engineering reviews occur simultaneously with the commission’s processing of the hydropower license application. The agencies had been conducting their permitting processes sequentially.

During the first phase focused on environmental impact, FERC and Corps staff will collaborate with a project developer to understand the proposal and communicate the agencies’ permitting requirements.

As the lead agency under the National Environmental Policy Act responsible for licensing hydroelectric projects, FERC will direct preparation of the environmental permit for a proposed project, coordinating with its sister agency to ensure that a final document is consistent with the Corps’ statutory obligations. Once the joint environmental impact review is complete, FERC will issue a license.

The second phase will entail a technical, engineering and safety review after the developer has submitted a final project design. The developer will coordinate with the Corps to ensure construction won’t compromise the structural integrity of the agency’s facility. Once those requirements are met and communicated to FERC, the commission will authorize the project’s construction.

The MOU makes explicit that, as a cooperating agency in the process, the Corps is prohibited from later intervening in any FERC proceeding related to a project’s approval.

The commission has licensed nearly 30 nonfederal hydroelectric projects with a combined capacity of 400 MW at Corps facilities since 2007, said Nick Jayjack, deputy director of FERC’s Division of Hydropower Licensing. Five projects rated at about 133 MW are currently under construction, while 18 license applications representing another 500 MW are in the commission’s review pipeline.