In the Notice of Inquiry, the FERC noted that there are projects that are either out of compliance with their license conditions or non-operational. Licensees have also mentioned instances where they were not able to afford the operation or maintenance of their projects, while some were unable to carry out the mandated safety or environmental measures. Projects like these can cause risks to public safety should a dam failure or breach occur, like the May 19, 2020 failures of the Edenville dam and the Sanford dam, both a short distance from Midland, Michigan.

Concerning safety and environmental issues, the FERC is considering taking further action to guarantee that licensees have the funds to operate and maintain their projects, even under unforeseen circumstances.

The FERC has initiated the conversation by outlining three possible options for instituting financial assurance mechanisms in hydroelectric licenses:

• requiring licensees to obtain insurance policies for dam failures or sudden safety hazards
• requiring licensees to obtain bonds to cover the expenses for safety measures as well as project operation and maintenance
• requiring licensees to maintain individual remediation funds, trust, or escrow, or establishing a remediation fund or an industry-wide trust

Comments or questions related to the three options or the Notice of Inquiry are due 60 days following publication in the Federal Register. For more information, contact Celeste Miller (Hydropower) by phone at (202) 502-8680 or via email at MediaDL@ferc.gov.

Sources:

FERC Seeks Comment on Financial Assurance Measures for Hydroelectric Projects (ferc.gov)

Staff Presentation on Financial Assurance Measures for Hydroelectric Projects (RM21-9-000) (ferc.gov)