FERC Ruling Fast Tracks PG&E Wave Energy Projects

One of three wave energy projects proposed off the Northern California coast was derailed last week. Two others appear to be on the fast track. These dramatic developments for the nascent renewable energy technology stem from both state and federal decisions. The rulings also highlight continuing conflicts between municipalities, investor-owned utilities, the California Public Utilities Commission, federal regulators, and fish. The CPUC October 16 nixed a Pacific Gas & Electric power purchase agreement for wave energy with British Columbia-based Finavera. The Canadian firm planned to construct a 2 MW wave energy project off the Humboldt County coast. The same day in Washington, the Federal Energy Regulatory Commission asserted primary jurisdiction over two wave energy projects that PG&E itself hopes to develop, one off Fort Bragg in Mendocino County and the other off the Humboldt County coast. In the decision, federal regulators asserted jurisdiction over all hydroelectric projects located in ocean waters on the outer continental shelf. They based their decision on the 1919 Federal Power Act, which gave FERC control over construction and operation of hydroelectric dams on rivers. The ruling by FERC attempts to settle a jurisdictional dispute with the Interior Department’s Minerals Management Service over wave energy projects proposed by PG&E and other companies on the outer continental shelf. The shelf starts three miles from landfall. MMS had maintained that it had lead authority over such projects under the Energy Policy Act of 2005. Federal regulators ruled Minerals Management would continue to play a role on wave energy projects under a memorandum of understanding it plans to enter with the agency. The ruling “puts to rest any questions about FERC’s jurisdiction” said its chair Joe Kelliher. “This will allow applicants, local, state, and federal agencies, and other interested groups to work together more effectively and expeditiously.” However, federal regulator’s decision concerns the Northern California fishing industry. Calling the federal commission’s move “absolutely stunning in its audacity,” Beth Mitchell, an attorney for Fishermen Interested in Safe Hydrokinetics, said it would limit public participation in potential wave and tidal energy projects. Already, she noted, the commission turned down the fishing industry’s bid to intervene in the study phase for the projects because it found out about federal regulator’s preliminary permit proceeding after the intervention deadline. She said the denial forecloses the legal standing of the industry to challenge any of the studies in court should they prove flawed. The industry is not necessarily opposed to the projects, she added, but is concerned about their scale and how they could affect marine life and fishing in the area. It wants to make sure the studies are thorough so that the impacts are fully known when any construction permit is issued. Particularly worrisome to the industry, Mitchell said, is that unlike Minerals Management, FERC has no duty to consider impacts on fisheries. Also unlike Minerals Management, she said, federal energy regulators would not charge the utility royalties for using the public waters. “FERC needs to just get out of the picture,” she said, and allow Minerals Management to develop a regional wave energy resource plan. After doing that Minerals Management could open the area to competing bids from prospective project developers, just like it does with oil and gas development. In the California regulatory rejection of Pacific Gas & Electric’s plan for wave power with co-developer Finavera, both companies promoted the agreement late last year. Neither company now has much to say. PG&E referred calls to Finavera. An executive for that company could not be reached for comment due to business travel, according to the Finavera. The CPUC’s ruling denying the project found “Finavera’s wave technology is pre-commercial.” In its decision, the CPUC noted that a prototype Finavera wave energy buoy deployed in a test off the Oregon coast in 2007 sank before completing a six week test period. The commission also found that the project cost was above the market price referent and “unreasonable” to finance with ratepayer money. (The market price referent is a regulatory benchmark--anything at that price or below is considered economic--anything above, the proponents have to justify the cost.) According to FERC, PG&E’s proposed project off Fort Bragg would cover 68 square miles of water. Its project off Eureka and the Samoa Peninsula would cover 136 square miles. Each would have a 40 MW capacity and consist of anywhere from 8 to 200 buoys, a sub-sea transmission line, and appurtenant facilities. PG&E spokesperson Jana Morris said the utility does not yet know what kind of technology it would use to convert wave energy into power. It plans to conduct detailed studies of the feasibility of various technologies and their environmental impacts under a federal Department of Energy grant. It also hopes the CPUC will authorize additional funding next month to carry out the studies. The city of San Francisco has also been looking into harnessing wave and tidal power at the Golden Gate for years.

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FERC Ruling Fast Tracks PG&E Wave Energy Projects

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