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115th Congress    }                                    {       Report
                        HOUSE OF REPRESENTATIVES
 1st Session      }                                    {      115-154

======================================================================



 
 TO AUTHORIZE THE EXPANSION OF AN EXISTING HYDROELECTRIC PROJECT, AND 
                           FOR OTHER PURPOSES

                                _______
                                

  June 2, 2017.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Bishop of Utah, from the Committee on Natural Resources, submitted 
                             the following

                              R E P O R T

                        [To accompany H.R. 220]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Natural Resources, to whom was referred 
the bill (H.R. 220) to authorize the expansion of an existing 
hydroelectric project, and for other purposes, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. TERROR LAKE HYDROELECTRIC PROJECT UPPER HIDDEN BASIN 
                    DIVERSION AUTHORIZATION.

  (a) Definitions.--In this section:
          (1) Commission.--The term ``Commission'' means the Federal 
        Energy Regulatory Commission.
          (2) Terror lake hydroelectric project.--The term ``Terror 
        Lake Hydroelectric Project'' means the project identified in 
        section 1325 of the Alaska National Interest Lands Conservation 
        Act (16 U.S.C. 3212), and which is Federal Energy Regulatory 
        Commission project number 2743.
          (3) Upper hidden basin diversion expansion.--The term ``Upper 
        Hidden Basin Diversion Expansion'' means the expansion of the 
        Terror Lake Hydroelectric Project as generally described in 
        Exhibit E to the Upper Hidden Basin Grant Application dated 
        July 2, 2014, and submitted to the Alaska Energy Authority 
        Renewable Energy Fund Round VIII by Kodiak Electric 
        Association, Inc.
  (b) Authorization.--The licensee for the Terror Lake Hydroelectric 
Project may occupy not more than 20 acres of Federal land to construct, 
operate, and maintain the Upper Hidden Basin Diversion Expansion 
without further authorization of the Secretary of the Interior or under 
the Alaska National Interest Lands Conservation Act (16 U.S.C. 3101 et 
seq.).
  (c) Savings Clause.--The Upper Hidden Basin Diversion Expansion shall 
be subject to appropriate terms and conditions included in an amendment 
to a license issued by the Commission pursuant to the Federal Power Act 
(16 U.S.C. 791a et seq.), including section 4(e) of that Act (16 U.S.C. 
797(e)), following an environmental review by the Commission under the 
National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).

                          PURPOSE OF THE BILL

    The purpose of H.R. 220 is to authorize the expansion of an 
existing hydroelectric project.

                  BACKGROUND AND NEED FOR LEGISLATION

    H.R. 220, as amended, authorizes the limited expansion of 
the Terror Lake hydroelectric project on Kodiak Island, Alaska.
    According to the Alaska Energy Authority, the Terror Lake 
Hydroelectric Project (Project) on Kodiak Island, Alaska, 
provides 31 Megawatts of hydropower capacity to the Island's 
approximately 13,789 residents and a U.S. Coast Guard (USCG) 
Station. Kodiak Island (Island) is off the North American 
electricity grid and relies solely on electric generation 
within the Island or imported diesel fuel.
    The Project, licensed by the Federal Energy Regulatory 
Commission (FERC) as Project No. 2743 in 1981, was the result 
of an agreement between the federal government, the State of 
Alaska, environmental groups and the Kodiak Electric 
Association (KEA). Since the Project is within the Island's 
National Wildlife Refuge (Refuge), the settlement required the 
following mitigation measures: (1) the Alaska Department of 
Natural Resources agreed to manage 28,000 acres of state-owned 
land contiguous to the Refuge at Kiliuda Bay as though it were 
part of the Refuge; and (2) the State of Alaska agreed that at 
least half of the Shearwater Peninsula would be designated as 
wildlife habitat where grazing would be prohibited. According 
to the U.S. Fish and Wildlife Service (USFWS), the Refuge 
currently comprises 82.6% of the Island.
    KEA, a rural electric cooperative, owns and operates the 
Project. According to KEA, nearly 99.7% of their energy sources 
are renewable, consisting of wind energy and hydropower 
produced at Terror Lake, with the remaining 0.3% consisting of 
diesel generation. One of KEA's largest customers is the USCG 
base on the Island, which includes Air Station Kodiak, USCG 
Cutter Spar, and USCG Cutter Alex Haley. KEA also provides 
electricity for USCG housing and support services.
    In light of growing electricity demand on the Island, there 
is concern that KEA will be unable to meet the needs of the 
residents without acquiring additional energy resources. 
According to KEA, the increased generation capacity must come 
in the form of either an expansion of the Project or increased 
diesel fuel imports. As a result, the utility has proposed a 
Project expansion which would divert a small portion of flows 
in the Upper Hidden Basin into Terror Lake via a 1.2 mile 
underground tunnel. According to KEA, this diversion would 
increase the water resources at Terror Lake by 25%, resulting 
in an additional 33,000 Megawatt-hours (MWh) of generation each 
year, with a total estimated output of approximately 168 
million MWh annually. Without the Project expansion, Alaska's 
Department of Environmental Quality estimates that the diesel 
generation required for heat alone will result in an annual 
release of 140 tons of NOX and 6,500 tons of 
greenhouse gases into the atmosphere.
    H.R. 220, as amended, allows KEA to use not more than 20 
acres of federal land within the Refuge for the proposed 
expansion--which is consistent with KEA's request. The 
legislation specifically requires the expansion to be subject 
to appropriate terms and conditions under the Federal Power 
Act. This would allow USFWS to impose ``mandatory conditions'' 
under Section 4(e) of the Federal Power Act for mitigation.
    The bill seeks to expedite the expansion in light of rising 
costs and a limited construction season. According to KEA, 
delaying construction by just one year would add $11 million in 
additional project costs, which includes $1.3 million in costs 
associated with future supplemental diesel generation that will 
be required to meet electricity demand. All of these costs 
would be borne by the Island's ratepayers, including the USCG.

                      SECTION-BY-SECTION ANALYSIS

    Section 1, as amended, authorizes the licensee for the 
Terror Lake hydroelectric project to occupy not more than 20 
acres of federal land to construct, operate and maintain the 
Upper Hidden Basin Diversion Expansion without further 
authorization of the Secretary of the Interior under the Alaska 
National Interest Lands Conservation Act. This section also 
clarifies that this legislation does not impact any requirement 
to procure a revised license from FERC or impact the ability of 
the USFWS to impose conditions on that license, pursuant to the 
Federal Power Act and in particular section 4(e) of that Act. 
This also in no way impacts any requirement to conduct an 
environmental review pursuant to the National Environmental 
Policy Act of 1969.

                            COMMITTEE ACTION

    H.R. 220 was introduced on January 3, 2017, by Congressman 
Don Young (R-AK). The bill was referred to the Committee on 
Natural Resources, and within the Committee to the 
Subcommittees on Water, Power and Oceans and Federal Lands. On 
April 3, 2017, the Subcommittee on Water, Power and Oceans held 
a hearing on the bill. On April 26, 2017, the Natural Resources 
Committee met to consider the bill. The Subcommittees on Water, 
Power and Oceans and Federal Lands were discharged by unanimous 
consent. Congressman Don Young offered an amendment designated 
#1 to the bill; it was adopted by unanimous consent. No further 
amendments were offered, and the bill, as amended, was ordered 
favorably reported to the House of Representatives by unanimous 
consent on April 27, 2017.

            COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII of the Rules of the House of Representatives, the 
Committee on Natural Resources' oversight findings and 
recommendations are reflected in the body of this report.

      COMPLIANCE WITH HOUSE RULE XIII AND CONGRESSIONAL BUDGET ACT

    1. Cost of Legislation and the Congressional Budget Act. 
With respect to the requirements of clause 3(c)(2) and (3) of 
rule XIII of the Rules of the House of Representatives and 
sections 308(a) and 402 of the Congressional Budget Act of 
1974, the Committee has received the following estimate for the 
bill from the Director of the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                       Washington, DC, May 5, 2017.
Hon. Rob Bishop,
Chairman, Committee on Natural Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 220, a bill to 
authorize the expansion of an existing hydroelectric project, 
and for other purposes.
    If you wish further details of this estimate, we will be 
pleased to provide them. The CBO staff contact is Megan 
Carroll.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

H.R. 220--A bill to authorize the expansion of an existing 
        hydroelectric project, and or other purposes

    H.R. 220 would specify that the licensee of the Terror Lake 
hydroelectric project (number 2743), located within the Kodiak 
National Wildlife Refuge in Alaska, can expand that project to 
occupy not more than 20 acres of additional federal land. Under 
the bill, the proposed expansion would require no further 
approval by the Secretary of the Interior.
    CBO estimates that enacting H.R. 220 would not 
significantly affect the federal budget. The proposed expansion 
could have a minor effect on spending by the Federal Energy 
Regulatory Commission (FERC), which regulates the Terror Lake 
hydroelectric project. Because FERC recovers 100 percent of its 
costs through user fees, however, any change in that agency's 
costs (which are controlled through annual appropriation acts) 
would be offset by an equal change in fees that the commission 
charges, resulting in no net change in federal spending.
    According to the Department of the Interior, the federal 
lands that would be affected by the proposed expansion 
currently generate no significant receipts from programs to 
develop natural resources and are not expected to do so in the 
future. As a result, CBO expects that the proposed expansion 
would not affect offsetting receipts (which are treated as 
reductions in direct spending). Because H.R. 220 would not 
affect direct spending or revenues, pay-as-you-go procedures do 
not apply.
    CBO estimates that enacting H.R. 220 would not increase net 
direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2028.
    H.R. 220 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    On April 6, 2017, CBO transmitted a cost estimate for S. 
214, a bill to authorize the expansion of an existing 
hydroelectric project, as ordered reported by the Senate 
Committee on Energy and Natural Resources on March 30, 2017. 
The two pieces of legislation are similar and CBO's estimate of 
their budgetary effects is the same.
    The CBO staff contact for this estimate is Megan Carroll. 
The estimate was approved by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.
    2. General Performance Goals and Objectives. As required by 
clause 3(c)(4) of rule XIII, the general performance goal or 
objective of this bill is authorize the expansion of an 
existing hydroelectric project.

                           EARMARK STATEMENT

    This bill does not contain any Congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined 
under clause 9(e), 9(f), and 9(g) of rule XXI of the Rules of 
the House of Representatives.

                    COMPLIANCE WITH PUBLIC LAW 104-4

    This bill contains no unfunded mandates.

                       COMPLIANCE WITH H. RES. 5

    Directed Rule Making. This bill does not contain any 
directed rule makings.
    Duplication of Existing Programs. This bill does not 
establish or reauthorize a program of the federal government 
known to be duplicative of another program. Such program was 
not included in any report from the Government Accountability 
Office to Congress pursuant to section 21 of Public Law 111-139 
or identified in the most recent Catalog of Federal Domestic 
Assistance published pursuant to the Federal Program 
Information Act (Public Law 95-220, as amended by Public Law 
98-169) as relating to other programs.

                PREEMPTION OF STATE, LOCAL OR TRIBAL LAW

    This bill is not intended to preempt any State, local or 
tribal law.

                        CHANGES IN EXISTING LAW

    If enacted, this bill would make no changes in existing 
law.

                                  [all]