Washington — The US Federal Energy Regulatory Commission should tighten the requirements for closed-loop pumped storage projects to qualify for a new two-year hydropower licensing process, and FERC should expand the reasons that a project could be kicked out of the process, other federal agencies said recently.

FERC's proposed expedited licensing process is significant because closed-loop projects could help integrate the growing amount of renewables that are being added to the grid. But some in industry say FERC's process could miss the point if it is too stringent for any closed-loop projects to qualify.

FERC in February launched a rulemaking (RM19-6) to implement a 2018 law that requires that FERC issue licenses for certain hydropower projects within two years. The expedited process would be available to closed-loop pumped storage facilities as well as projects that add hydropower to existing dams.

CLOSED-LOOP DEFINITION

FERC sought input on its definition of a closed-loop pumped storage project, as well as whether the expedited process should apply to projects that need an environmental impact statement under the National Environmental Policy Act. There is currently 23 GW of pumped storage capacity in the US, according to the US Energy Information Administration.

In the past, FERC has defined closed-loop pumped storage as projects that are not continually connected to a naturally flowing water feature. But the US Forest Service said this definition could allow a project that is only disconnected from a flowing water body for short periods to qualify for the expedited process, despite substantial resource impacts, according to comments released Friday.

The USFS suggested defining closed-loop pumped storage as projects whose operation causes little to no change in discharge, flow, water quality, or other hydrologic characteristics of naturally occurring surface or groundwater features, or the species or habitats that depend on these features.

The US Department of Interior suggested a similar definition, but added that such projects also should not change existing recreational access and uses. And DOI suggested that FERC expand the circumstances that warrant removal from the expedited process, including delays in providing information to the Fish and Wildlife Service to complete an Endangered Species Act consultation.

EIS PROJECT ELIGIBILITY

Both DOI and the USFS said the expedited process should only be open to projects that qualify for an environmental assessment under NEPA, not projects going through the more onerous EIS process.

But one hydro developer noted that most closed-loop projects will require an EIS and said that excluding such projects from the expedited process would gut the intent of the law. "This raises our broader concern that FERC may make the eligibility criteria for the expedited process so restrictive that virtually no closed-loop pumped storage project could meet them," Jim Day, CEO of Daybreak Power, said in February comments.

Daybreak Power has conducted initial screening of a batch of sites in Western-state markets where pumped storage could add a combined capacity of more than 9,000 MW of storage, according to the company's website.

-- Kate Winston, kate.winston@spglobal.com

-- Edited by Annie Siebert, newsdesk@spglobal.com