Relicensing the Sacramento Municipal Utility District\u2019s 688 MW Upper American River Project moved a small step closer to fruition this week. The muni\u2019s board approved an addendum to the project\u2019s California Environmental Quality Act analysis, allowing a new component--a 400 MW hydro plant, known as Iowa Hill--to go forward. The approval is a technical requirement under state environmental law and does not constitute construction authorization, board member Howard Posner said. Such authorization requires subsequent board action. \u201cThese approvals are required to close out the environmental process associated with relicensing, but in no way authorize construction of Iowa Hill,\u201d Posner explained. \u201cTwo to three years of due diligence work remains to be done before staff makes a recommendation on whether to proceed with the Iowa Hill project.\u201d SMUD made the Iowa Hill project a component of the relicensing application of the Upper American River Project in order to save time and costs, but the bundling has also made the initial licensing and relicensing more complicated. The project, which would draw water from the reservoir and use a new 6,400-acre-foot capacity upper reservoir covering 72 acres atop Iowa Hill, has been in the planning stages since 2003. It has yet to receive Federal Energy Regulatory Commission licensing approval.