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Federal regulators proposed updating dam safety requirements in response to the 2017 failure of the spillway at the Oroville Dam and two recent collapses in Michigan. The partial crumbling of Oroville’s spillway, the nation’s highest dam, forced the evacuation of 180,000 people. The California Department of Water Resources is responsible for the spillway.

The Federal Energy Regulatory Commission during its July 16 meeting also updated rules for non-fossil fueled qualifying facilities, giving states more control over what the plants charge. It agreed to revisions to the Public Utility Regulatory Policies Act of 1978, backing off on some proposed changes in response to solar and other renewable energy complaints.

“The engineering aspects of the dam safety arena are ever-changing, so this is an important and necessary step as we move forward,” FERC Chair Neil Chatterjee said of the updated rules.

Oroville Spillway Collapse

The revision would create two tiers of dam safety inspections by independent consultants, updates public safety incident reporting, and requires some dam owners to develop public safety plans. Dams still will only have to be inspected every five years, but now every ten years, the inspection must be comprehensive.

A large majority of the nation’s dams are at least half a century old. The group American Rivers noted earlier this year that the variability of weather associated with climate change lends urgency to dam oversight.

The Commission also approved PacifiCorp's partial transfer of its licenses for four aging hydroelectric dams it operates on the Klamath River to a non-profit tasked with removing them. The goal is to recreate free passage for native salmon, steelhead, and other fish that have been blocked from migrating. The arrangement has been in the works for several years, involving many public, private, and nonprofit groups.

The cost of upgrading the quartet of facilities, which would have been required as part of relicensing, would have exceeded revenue generated. The decommissioning cost, estimated at $450 million, is to be split between California and Oregon, with $200 million from ratepayers and another $250 million from California’s water bond.

The removal of four dams will be the largest U.S. river restoration project to date, “opening up over 300 miles of spawning and rearing habitat," according to California Trout.

The unanimous approval of revisions to the more than 40-year old PURPA give state regulators more leeway in setting rates for energy and capacity sales from small producers. The cost is based on the how much money purchasing utilities avoid spending by not having to produce the amount of power at issue, known as "avoided costs." In place of fixed rates, the revisions allow states to require energy rates to vary during the life of a Qualifying Facility contract.

Those changes spell uncertainty for facility developers.

“[T]he rule changes approved today will undermine the stated intention of the PURPA statute and stifle competition, allowing utilities to strengthen their monopolies and raise costs for customers,” the Solar Energy Industry Association Vice President of Regulatory Affairs, Katherine Gensler, warned.

But advocates of the change asserted it will lower costs. Edison Electric Institute President Tom Kuhn said that “renewable energy can continue to grow without forcing electricity customers to pay a premium to the developers that learned how to game the system.”

The changes to the nation’s bedrock power law also lower the threshold for who can get financing–operators of 5MW plants are now eligible, down from 20MW. They must demonstrate commercial viability and financial commitment.

The Commission also dismissed the New England Ratepayers Association’s petition challenging net metering on procedural grounds.

“This decision is a victory for state regulators and for anyone with a vested interest in net metering policy,” the National Association of Regulatory Utility Commissioners stated.

The challenge from New England asserted full net metering rates across the country were inequitable and inefficient. That includes causing higher income ratepayers in New England to pay hundreds of millions of dollars because of costs shifted from lower income customers.