Posts Tagged ‘FERC Pilot Permit License’

FRANK HARTZELL, Mendocino Beacon, June 24, 2010

The Federal Energy Regulatory Commission (FERC) told the Southern California partnership planning to develop wave energy off Mendocino that the firm’s permit will probably be canceled

Kenneth Hogan of FERC wrote that GreenWave Energy Solutions had failed to file both a required notice of intent and a pre-application document (PAD), in a letter sent Monday.

Both documents were due in early May for GreenWave’s two proposed wave energy farms off San Luis Obispo and Mendocino. Both documents are intended to determine the scale of the projects now being considered and the “probable revocation” applies to both projects.

Earlier this year, GreenWave announced they had entered into an agreement with Ocean Power Technologies (OPT) of New Jersey, one of the world’s top companies in the field to get the two projects going.

GreenWave has so far pushed the biggest wave energy project idea of all, one that would generate a whopping 100 megawatts of power off Mendocino.

GreenWave was granted a preliminary permit in May 2009, after FERC had sent the permit back for more details and deliberated for nearly a year. A preliminary permit is an exclusive right to study an area of the ocean.

At the end of a successful preliminary permit process, that developer gets first right to install wave energy devices, by virtue of being the first to file for the preliminary permit.

The area now claimed by GreenWave had previously been claimed by Chevron.

But GreenWave is now told they will probably lose their claim to that area.

“The failure to timely file a [Notice of Intent] and PAD warrants the cancellation of a preliminary permit,” Hogan wrote. “This letter constitutes notice under section 5 of the Federal Power Act of the probable cancellation of both preliminary permits no less than 30 days from the date of this letter.”

The cancellation would be bad news for Tony Strickland, a Southern California Republican who made his work as one of the four GreenWave Partners a key plank in the campaign with which won his state Senate seat by the narrowest of margins two years ago. He lists “alternative energy executive” as his occupation.

Now, Strickland is using his status as a green energy businessman in his campaign to be state controller. He won the Republican nomination last month by a wide margin.

“Tony serves as Vice President of GreenWave Energy Solutions LLC, a company that seeks to harness the power of ocean waves to provide energy to Californians,” his campaign website states.

GreenWave has never held a single local meeting to introduce or explain its claim of the waters off Mendocino village. Some locals are amazed at how much Strickland makes of a project that exists only on paper.

“GreenWave Energy Solutions was the recipient of the United Chamber of Commerce Small Business Award for 2008 and Tony has been featured on CNBC for his work with the company,” the Controller 2010 campaign website states.

On the other hand, the permit termination would be good news for the Marine Life Protection Act Initiative. According to a California Attorney General opinion, the MLPAI is banned from putting any new marine parks (of any of the three kinds) in areas where there are pre-existing ocean leases, which includes the GreenWave lease off Mendocino and the PG&E lease off Eureka. Thus, a big area of ocean real estate is currently off limits to creation of new protected areas by the MLPAI.

Earlier this year, GreenWave promised FERC several rounds of local meetings for March and April, which failed to materialize. And the company has filed other documents late during its FERC process.

But FERC’s revocation threats may be premature. A review of the FERC lease documents shows GreenWave may have a valid reason why they didn’t file the documents that resulted in this week’s letter from Hogan.

The FERC lease gives GreenWave the option of filing a Notice of Intent and Draft License in two years, instead of the one-year filing requirement for the NOI and PAD. However, to further complicate matters, GreenWave actually promised the NOI and PAD would be done in June 2010. That promise was made in GreenWave’s 45-day filing in June 2009.

GreenWave Energy Solutions is described as a limited liability company with five members, President Wayne Burkamp, Strickland, engineer Bill Bustamante and prominent Southern California housing developers Dean Kunicki and Gary Gorian.

Attempts to reach GreenWave president Burkamp or FERC’s Hogan weren’t successful by press time.

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May 22, 2010

The Federal Energy Regulatory Commission (FERC) and the State of California have signed a Memorandum of Understanding (MOU) to coordinate procedures and schedules for review of hydrokinetic energy projects off the California coast.

This marks the fourth hydrokinetics MOU that FERC has signed with other states, following agreements signed last year with Washington and Maine, and with Oregon in 2008. Today’s agreement ensures that FERC and California will undertake all permitting and licensing efforts in an environmentally sensitive manner, taking into account economic and cultural concerns.

“This agreement with California shows FERC’s continuing commitment to work with the states to ensure American consumers can enjoy the environmental and financial benefits of clean, renewable hydrokinetic energy,” FERC Chairman Jon Wellinghoff said.

“I am delighted the State of California has signed an MOU with the Commission on developing hydrokinetic projects off the California coast,” Commissioner Philip Moeller said. “This completes a sweep of the West Coast which, along with Maine, is showing its commitment to bringing the benefits of clean hydrokinetic energy to the consumers of the United States.”

FERC and California have agreed to the following with respect to hydrokinetics:

  • Each will notify the other when one becomes aware of a potential applicant for a preliminary permit, pilot project license or license;
  • When considering a license application, each will agree as early as possible on a schedule for processing. The schedule will include milestones, and FERC and California will encourage other federal agencies and stakeholders to comply with the schedules;
  • They will coordinate the environmental reviews of any proposed projects in California state waters. FERC and California also will consult with stakeholders, including project developers, on the design of studies and environmental matters; and
  • They will encourage applicants to seek pilot project licenses prior to a full commercial license, to allow for testing of devices before commercial deployment.

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Editors Note:  On June 9, 2009, PG&E filed with the Federal Energy Regulatory Commission (FERC) a petition to release the Mendocino WaveConnect preliminary permit.

wave-ocean-blue-sea-water-white-foam-photoMendoCoastCurrent, May 11, 2009

In early May 2009, PG&E’s WaveConnect team decided to cancel the Mendocino WaveConnect project because the Noyo Harbor didn’t pass muster and was deemed insufficient in several engineering aspects, therefore unable to support PG&E’s Mendocino WaveConnect pilot wave energy program offshore.

PG&E summarily rejected re-situating the launch site to the Fort Bragg Mill Site, only a short distance from the Noyo Harbor, where PG&E could construct a state-of-the-art launch for Mendocino WaveConnect.

PG&E plans to report their decision to the Federal Energy Regulatory Commission and anticipates surrendering the Mendocino WaveConnect FERC pilot wave energy permit. The City of Fort Bragg, County of Mendocino and the FISH Committee were brought up to speed by PG&E on May 11th.

PG&E had raised $6mm in funding from CPUC and DOE for WaveConnect, allocated to both Mendocino and Humboldt projects. This remaining funds will now be directed to only Humboldt WaveConnect.

And PG&E notes that Humboldt WaveConnect, at Humboldt Bay and its harbor, offers WaveConnect the required spaciousness and the industrial infrastructure as well as a welcoming, interested community.

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COLIN SULLIVAN, The New York Times, April 14, 2009

wave-ocean-blue-sea-water-white-foam-photoPalo Alto — Technology for tapping ocean waves, tides and rivers for electricity is far from commercial viability and lagging well behind wind, solar and other fledgling power sectors, a panel of experts said last week during a forum here on climate change and marine ecosystems.

While the potential for marine energy is great, ocean wave and tidal energy projects are still winding their way through an early research and development phase, these experts said.

“It’s basically not commercially financeable yet,” said Edwin Feo, a partner at Milbank, Tweed, Hadley & McCloy, during a conference at Stanford University. “They are still a long ways from getting access to the capital and being deployed, because they are simply immature technologies.”

Ocean and tidal energy are renewable sources that can be used to meet California’s renewable portfolio standard of 10 percent of electricity by 2010. But the industry has been hampered by uncertainty about environmental effects, poor economics, jurisdictional tieups and scattered progress for a handful of entrepreneurs.

Finavera Renewables, based in British Columbia, recently canceled all of its wave projects, bringing to a close what was the first permit for wave power from the Federal Energy Regulatory Commission. And last fall, the California Public Utilities Commission (CPUC) denied Pacific Gas & Electric Co.’s application for a power purchase agreement with Finavera Renewables, citing the technology’s immaturity.

Roger Bedard, head of the Electric Power Research Institute’s wave power research unit, said the United States is at least five and maybe 10 years away from the first commercial project in marine waters. A buoy at a Marine Corps base in Hawaii is the only wave-powered device that has been connected to the power grid so far in the United States. The first pilot tidal project, in New York’s East River, took five years to get a permit from FERC.

Feo, who handles renewable energy project financing at his law firm, says more than 80 ocean, tidal and river technologies are being tested by start-ups that do not have much access to capital or guarantee of long-term access to their resource. That has translated into little interest from the investment community.

“Most of these companies are start-ups,” Feo said. “From a project perspective, that doesn’t work. People who put money into projects expect long-term returns.”

William Douros of the National Oceanic and Atmospheric Administration (NOAA) expressed similar concerns and said agency officials have been trying to sort through early jurisdictional disputes and the development of some technologies that would “take up a lot of space on the sea floor.”

“You would think offshore wave energy projects are a given,” Douros said. “And yet, from our perspective, from within our agency, there are still a lot of questions.”

‘Really exciting times’

But the belief in marine energy is there in some quarters, prompting the Interior Department to clear up jurisdictional disputes with FERC for projects outside 3 miles from state waters. Under an agreement announced last week, Interior will issue leases for offshore wave and current energy development, while FREC will license the projects.

The agreement gives Interior’s Minerals Management Service exclusive jurisdiction over the production, transportation or transmission of energy from offshore wind and solar projects. MMS and FERC will share responsibilities for hydrokinetic projects, such as wave, tidal and ocean current.

Maurice Hill, who works on the leasing program at MMS, said the agency is developing “a comprehensive approach” to offshore energy development. Interior Secretary Ken Salazar himself has been holding regional meetings and will visit San Francisco this week to talk shop as part of that process.

Hill said MMS and the U.S. Geological Survey will issue a report within 45 days on potential development and then go public with its leasing program.

“These next couple of months are really exciting times, especially on the OCS,” he said.

Still, Hill acknowledged that the industry is in an early stage and said federal officials are approaching environmental effects especially with caution.

“We don’t know how they’ll work,” he said. “We’re testing at this stage.”

‘Highly energetic’ West Coast waves

But if projects do lurch forward, the Electric Power Research Institute’s Bedard said, the resource potential is off the charts. He believes it is possible to have 10 gigawatts of ocean wave energy online by 2025, and 3 gigawatts of river and ocean energy up in the same time frame.

The potential is greatest on the West Coast, Bedard said, where “highly energetic” waves pound the long coastline over thousands of miles. Alaska and California have the most to gain, he said, with Oregon, Washington and Hawaii not far behind.

To Feo, a key concern is the length of time MMS chooses to issue leases to developers. He said the typical MMS conditional lease time of two, three or five years won’t work for ocean wave technology because entrepreneurs need longer-term commitments to build projects and show investors the industry is here to say.

“It just won’t work” at two, three or five years, Feo said. “Sooner or later, you have to get beyond pilot projects.”

Hill refused to answer questions about the length of the leases being considered by MMS.

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Publisher’s Note:  Feb 09, 2009 – Not only has Finavera surrendered their Makah Bay license noted below, they also announced surrendering the Humboldt County, California Preliminary Permit to explore wave energy:

“Finavera Renewables has filed applications to surrender its Federal Energy Regulatory Commission license for the Makah Bay Wave Energy Pilot Project in Washington and the Humboldt County Preliminary Permit for a proposed wave energy project in California.”

MendoCoastCurrent readers may recall Finavera’s inability to secure CPUC funding for the Humboldt project; noted below capitalization, financial climate as key reasons in these actions.

MendoCoastCurrent, February 6, 2009

finavera-wavepark-graphicToday Finavera Renewables surrendered their Federal Energy Regulatory Commission (FERC) Makah Bay, Washington wave energy project license, commenting that the Makah Bay Finavera project “never emerged from the planning stages.”

And “due to the current economic climate and the restrictions on capital necessary to continue development of this early-stage experimental Project, the Project has become uneconomic.  Efforts by Finavera to transfer the license were not successful.  Therefore, Finavera respectfully requests that the <FERC> Commission allow it to surrender its license for the Project. ”

Back in early 2007, Finavera’s Makah Bay project looked like it would become the first U.S. and west coast project deployment of wave energy devices.  And this project also had a unique status based on Native American Indian land/coastal waters, so the rules of FERC, MMS were different due to sovereign status.

Then AquaBuoy, Finavera’s premier wave energy device, sank off the Oregon coast due to a bilge pump failure in late October 2007.  

Recently noted was Finavera’s comment that they are currently focusing their renewable energy efforts toward wind energy projects closer to their homebase in British Columbia, Canada and in Ireland.

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FRANK HARTZELL’s article with MendoCoastCurrent edits, January 15, 2009

After nearly two years of local pleas for specifics on the WaveConnect project, PG&E representatives surprised Fort Bragg and Mendocino County representatives with many new details.

Those included the promise by PG&E that all environmental studies would be public, not private information. In the recent past, PG&E had been resisting calls by competitors and ratepayer advocates before the California Public Utilities Commission to make public more information learned during the WaveConnect study.

Another surprise was that PG&E has found about 10 different viable wave energy technologies — far more than first envisioned. The utility will choose the top three or four wave energy devices and test those under a pilot project license.

On Tuesday, the pilot license process became the biggest issue for wave energy officials gathered at Town Hall to hear two top officials explain the roles of the Federal Energy Regulatory Commission, or FERC, and the California Coastal Commission.

Both Tom Luster, who will oversee all wave energy projects for the California Coastal Commission and 23-year FERC veteran Ann Miles, FERC Director of Hydropower Licensing said Fort Bragg has had more interest in wave energy than anywhere else in California.

Miles said PG&E would need to file for a conventional license by this March under FERC rules. Using the “faster” pilot license gives them until March 2010 to get started.

Miles provided lengthy and knowledgeable explanations of convoluted FERC processes during the three-hour meeting. But PG&E’s new announcements, which came in private meetings last week, overshadowed the presentations by the top state and federal officials.

Luster explained how the California Coastal Commission would work with the State Lands Commission to review any wave energy project within three miles of shore.

PG&E is now saying their 40-megawatt powerplant will be located “well beyond” that three-mile state limit. The powerplant would likely come after the five-year pilot project license.

That announcement unexpectedly changed the game for the state.

Luster said the big power cable that extends to shore would be regulated by the Coastal Commission, but development beyond three miles would be regulated only for “federal consistency.”

While planning for an eventual project many miles from shore, PG&E will give up on areas more than three miles from shore for now, they have told FERC.

PG&E told Fort Bragg they would site the pilot project much closer to shore, to avoid the jurisdictional conflict between FERC and fellow federal agency Minerals Management Service, or MMS.

FERC claims the authority to be the regulatory authority for all water energy projects in the United States. MMS claims authority for ocean federal waters, which are those more than three miles from shore.

PG&E’s 68-square-mile preliminary permit area, which runs from Point Cabrillo to Cleone and to more than three miles offshore, will be trimmed down to eliminate areas beyond the federal-state jurisdiction line.

PG&E representatives are now promising significant help to local governments.

It was reported that all of the power generated by the 40 megawatt WaveConnect would be consumed in Mendocino County and would provide for nearly all of Fort Bragg’s electric demand when WaveConnect is generating.

Additionally, PG&E intends to pay their expenses, including reviewing, permitting and the community process for public participation.

Miles said FERC has no requirements in place to determine that a developer be able to pay for removal of devices in case of bankruptcy or disaster.

Luster said the State Lands Commission handles financial arrangements, such as bonding of projects.

Miles was making her first ever visit to Northern California. She was set to answer questions from the general public at a Town Hall forum Tuesday night.

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The Federal Energy Regulatory Commission (FERC) recently devised two additional licenses for hydrokinetic projects: 1) Conditioned License; and 2) Pilot Project License. Below you’ll find FAQ’s on the new FERC Conditioned License which also defines the role of the Pilot Project License.

What is a conditioned license?

A conditioned license authorizes the construction, operation, and maintenance of an original (i.e., unconstructed) hydrokinetic project with the proviso that the licensee may not begin on-site construction or installation until further Commission order after the licensee has received all other authorizations required by federal law.

What is the difference between a conditioned license and a pilot project license?

A pilot project license authorizes the construction, operation, and maintenance of an original (i.e., unconstructed) hydrokinetic project that is: (1)small (5 megawatts or less); (2) easily removed or shut down quickly; (3) located in a non-sensitive area; and (4) has the primary purpose of testing new technologies or locating suitable generation sites.

A conditioned license is different from a pilot project license in that a conditioned license could be issued for either a pilot or non-pilot hydrokinetic project, and a conditioned license contains the proviso that the licensee may not begin on-site construction or installation until further Commission action after the licensee has received all other authorizations required by federal law. Once the authorizations have been received, the formerly conditioned license will be just like any other license.

How is a conditioned license different from a preliminary permit in terms of providing a “first-in-time, first-in-right” benefit?

The purpose of a preliminary permit is to maintain priority of application for a license during the term of the permit while the permittee conducts investigations and gathers data necessary for it to determine the feasibility of the proposed project, and if the project is found to be feasible, while the permittee prepares an acceptable license application. The permit does not allow construction, operation, or maintenance of a project. A conditioned license, issued only after the Commission has developed a complete record regarding a license application, authorizes the construction, operation, and maintenance of a hydrokinetic project, thereby giving a licensee the exclusive right to develop the site for purposes of hydrokinetic generation in accordance with the terms of the license.

To what types of projects does a conditioned license apply?

A conditioned license could apply to any license application for a proposed hydrokinetic project using any of the Commission’s licensing processes.

Who will determine whether a project should be issued a conditioned license?

The Commission will determine whether it is appropriate to issue a conditioned license in a given case. In doing so, the Commission would consider any filed comments on the issue. Under Commission staff’s proposal, staff would expedite processing of license applications for hydrokinetic pilot projects that would meet the four criteria. A license issued for a hydrokinetic pilot project processed under the expedited procedures would be called a pilot project license.

Under what circumstances would the Commission deem a conditioned license to be “appropriate” (ref. paragraphs 1 and 8 of the Policy Statement)?

Commission staff interprets the use of the word “appropriate” in the Policy Statement to mean that the decision to issue a conditioned license will be made on a case-by-case basis after considering the specific circumstances of the case.

Would a prospective licensee’s need for a conditioned license for purposes of securing project financing qualify as an “appropriate” circumstance?

The decision to issue a conditioned license will be made on a case-by-case basis after considering the circumstances of the case. Project financing could be one of the factors that the Commission considers.

Would a prospective licensee for a hydrokinetic project have the option of requesting a non-conditioned license?

Yes. A license applicant may propose that the Commission issue a nonconditioned license; however, the final decision whether to issue a conditioned license would rest with the Commission after considering the circumstances of the case.


How will the Commission ensure that it meets its obligations with respect to the requirements of the Endangered Species Act, Federal Power Act, National Marine Sanctuaries Act, Magnuson-Fishery Conservation and Management Act, and the National Environmental Policy Act?

Under a conditioned license, a licensee may not begin on-site construction and installation of a hydrokinetic project until the Commission has determined that the requirements of all applicable federal laws are satisfied.

How will the Commission ensure that the licensee has received the other required federal and state authorizations or waivers after issuance of the conditioned license? What should a licensee do after the Commission or licensee, as applicable, receives the other required federal and state authorizations or waivers?

A conditioned license will require that the licensee file with the Commission written notification along with copies of all applicable authorizations or waivers under federal law. Therefore, upon receiving the federal and state authorizations or waivers, the licensee should file with the Commission written notification and copies of the authorizations. The Commission will then review the filing and take action to authorize the commencement of on-site construction after making a finding that the licensee has satisfied the requirements of the applicable federal laws. Where appropriate, the Commission will incorporate additional conditions received with the federal and state authorizations into the license.

What steps will the Commission take to ensure that a prospective licensee, upon receiving a conditioned license, does not stall the process of obtaining the required federal and state authorizations with the express purpose of banking the licensed site until such time as the technology is either fully developed or the site is economically prime for development?

Upon receiving any license from the Commission, including a conditioned license, a licensee is required under section 13 of the Federal Power Act to begin on-site construction or installation of the project works within two years from the effective date of the license. With good reason, the Commission can extend the initial two-year period by up to an additional two years.

The Commission is required by section 13 to terminate a license if there is failure to begin actual construction of the project works within the time prescribed by the license, or as extended by the Commission.

How will the Commission secure the cooperation and encourage the expeditious action of the federal and state agencies and Indian tribes responsible for authorizations after issuance of a conditioned license?

As is currently Commission staff’s practice, staff will periodically contact the applicable federal and state agencies and Indian tribes to inquire on the agencies’ and tribes’ progress and, where appropriate, offer assistance to the agencies and tribes to help expedite the process.


Will the scope of the Commission’s NEPA analysis be different for a conditioned license as compared to a non-conditioned license?

No. The decision to issue a conditioned versus a non-conditioned license will have no bearing on the scope of Commission staff’s NEPA analysis. All prefiling (of the license application) and post-filing processes will remain the same, including pre-filing consultation; issue and study identification; solicitation of comments, recommendations, terms, conditions, and prescriptions; and NEPA review.

Will the Commission consider agency recommendations submitted pursuant to FPA sections 10(a) and 10(j) differently for a conditioned license as compared to a non-conditioned license?

No. The decision to issue a conditioned versus a non-conditioned license will have no bearing on the consideration of agency recommendations submitted pursuant to section 10(a) or section 10(j) of the FPA.


Would the Commission consider suspending or extending the period for rehearing or staying the effective date of the license at the request of a prospective licensee until some or all of the required federal and state authorizations have been completed or waived?

Commission staff does not anticipate the need for such actions.

Can a conditioned license be transferred prior to a licensee receiving all required federal and state authorizations, and if so, what steps will the Commission take to limit the ability of licensees to “flip” the licensed sites to other entities?

Yes. A licensee and transferee may jointly file an application to transfer the license at any time after a license has been issued by the Commission. The Commission’s decision to approve the transfer would be made on a case-by-case basis and would be contingent upon, among other things, the showing that such a transfer is in the public interest. Upon approval and acceptance of the transfer, the transferee would be subject to all of the conditions of the license and to all of the provisions and conditions of the FPA, as though the transferee were the original licensee.

Under a conditioned license, when does the “two-year-clock” for commencing construction begin – after all required federal and state authorizations or waivers have been received or on the effective date of the conditioned license?

The “clock” begins on the effective date of the conditioned license.

What are some examples of the types of non-construction activities that a licensee may conduct under a conditioned license prior to receiving all other authorizations? What are some examples of the types of activities that are prohibited?

Examples of activities that would be allowed by a conditioned license prior to obtaining all other authorizations required by federal law would be development of plans and drawings in consultation with the federal and state agencies, Indian tribes, and others pursuant to the terms of the license and fabrication of project related equipment (e.g., generation equipment). Examples of prohibited activities would be any actual on-site construction and installation activities, including construction and equipment staging.

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