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Frequently Asked Questions (FAQs)
Hydrokinetic Projects - Conditioned License - General
On November 30, 2007, the Commission issued its Policy Statement on Conditioned Licenses for Hydrokinetic Projects. In the Policy Statement, the Commission concluded that, in appropriate cases, where the Commission has completed its processing of license applications for hydrokinetic projects, but where other authorizations required under federal law have not yet been received, it may issue conditioned licenses for hydrokinetic projects. Under such licenses, the licensee would be precluded from commencing construction until receiving the necessary federal authorizations. Although the Commission may issue a conditioned license, its preference is to have all federal authorizations completed by the time it is ready to issue the licensing decision.
1. What is a conditioned license?
A conditioned license authorizes the construction, operation, and maintenance of an original (i.e., unconstructed) hydrokinetic project with the proviso that the licensee may not begin on-site construction or installation until further Commission order after the licensee has received all other authorizations required by federal law.
2. What is the difference between a conditioned license and a pilot project license?
A pilot project license authorizes the construction, operation, and maintenance of an original (i.e., unconstructed) hydrokinetic project that is:
Commission staff envisions that because the primary purpose of a pilot hydrokinetic project would be to test new technologies or locate suitable generation sites, a pilot project license would have a term of no more than 5 years.
A conditioned license is different from a pilot project license in that a conditioned license could be issued for either a pilot or non-pilot hydrokinetic project, and a conditioned license contains the proviso that the licensee may not begin on-site construction or installation until further Commission action after the licensee has received all other authorizations required by federal law. Once the authorizations have been received, the formerly conditioned license will be just like any other license.
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(1) small (5 megawatts or less);
(2) easily removed or shut down quickly;
(3) located in a non-sensitive area; and
(4) has the primary purpose of testing new technologies or locating suitable generation sites.1
Commission staff envisions that because the primary purpose of a pilot hydrokinetic project would be to test new technologies or locate suitable generation sites, a pilot project license would have a term of no more than 5 years.
A conditioned license is different from a pilot project license in that a conditioned license could be issued for either a pilot or non-pilot hydrokinetic project, and a conditioned license contains the proviso that the licensee may not begin on-site construction or installation until further Commission action after the licensee has received all other authorizations required by federal law. Once the authorizations have been received, the formerly conditioned license will be just like any other license.
3. How is a conditioned license different from a preliminary permit in terms of providing a "first-in-time, first-in-right" benefit?
The purpose of a preliminary permit is to maintain priority of application for a license during the term of the permit while the permittee conducts investigations and gathers data necessary for it to determine the feasibility of the proposed project, and if the project is found to be feasible, while the permittee prepares an acceptable license application. The permit does not allow construction, operation, or maintenance of a project.
A conditioned license, issued only after the Commission has developed a complete record regarding a license application, authorizes the construction, operation, and maintenance of a hydrokinetic project, thereby giving a licensee the exclusive right to develop the site for purposes of hydrokinetic generation in accordance with the terms of the license.
A conditioned license, issued only after the Commission has developed a complete record regarding a license application, authorizes the construction, operation, and maintenance of a hydrokinetic project, thereby giving a licensee the exclusive right to develop the site for purposes of hydrokinetic generation in accordance with the terms of the license.
4. To what types of projects does a conditioned license apply?
A conditioned license could apply to any license application for a proposed hydrokinetic project using any of the Commission's licensing processes.
5. Who will determine whether a project should be issued a conditioned license?
The Commission will determine whether it is appropriate to issue a conditioned license in a given case. In doing so, the Commission would consider any filed comments on the issue.
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Under Commission staff's proposal, staff would expedite processing of license applications for hydrokinetic pilot projects that would meet the four criteria. A license issued for a hydrokinetic pilot project processed under the expedited procedures would be called a pilot project license.
6. Under what circumstances would the Commission deem a conditioned license to be "appropriate" (ref. paragraphs 1 and 8 of the Policy Statement)?
Commission staff interprets the use of the word "appropriate" in the Policy Statement to mean that the decision to issue a conditioned license will be made on a case-by-case basis after considering the specific circumstances of the case.
7. Would a prospective licensee's need for a conditioned license for purposes of securing project financing qualify as an "appropriate" circumstance?
The decision to issue a conditioned license will be made on a case-by-case basis after considering the circumstances of the case. Project financing could be one of the factors that the Commission considers.
8. Would a prospective licensee for a hydrokinetic project have the option of requesting a non-conditioned license?
Yes. A license applicant may propose that the Commission issue a non-conditioned license; however, the final decision whether to issue a conditioned license would rest with the Commission after considering the circumstances of the case.
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[1] The term "pilot project license" was introduced by Commission staff at a Technical Conference in Portland, Oregon, on October 2, 2007 (AD07-14-000).
