In June Public Utility District No. 1 of Chelan County in Washington filed a​ ​request for determination​ that “project investments over the term of the existing license” met the criteria in subsection 36(b)(2) of the Federal Power Act, to ensure “that the investments will be considered when the Commission sets the term for the next license for the project.” This is for the Rock Island Project on the Columbia River, near Wenatchee.

Chelan PUD predicts that by 2029 there will be a “total investment during the current license term of over $710 million. Specifically, Chelan PUD requests that the Commission determine whether the following project investments meet the criteria under FPA section 36(b)(2): (a) rehabilitation of Powerhouses 1 and 2; (b) design and construction of new office, warehouse, and storage facilities; (c) replacement of two spillway gate hoists; and (d) implementation of an Anadromous Fish Agreement and Habitat Conservation Plan (HCP).”

They noted that the Federal Energy Regulatory Commission (FERC) “has not issued any order extending the existing license term,” which was issued in 1989. “Therefore, Chelan PUD maintains that the Commission must consider, at the time it determines the next license term, any investment meeting FPA section 36(b)(2)(A) criteria that was not a requirement of the 1989 license order.”

Chelan PUD has requested that FERC “consider the ‘significant’ investments it has made and is proposing to make to rehabilitate the two Rock Island Project powerhouses. Powerhouse 1 contains 10 turbine-generator units (B1 through B10); Powerhouse 2 contains eight
turbine-generator units (U1 through U8). In 2003 and 2017, Chelan PUD notified the Commission of its intent to rehabilitate 9 of the 10 generating units at Powerhouse 1.” Chelan PUD says that those units ““were reaching the end of their remaining useful lives,” and that
“rehabilitation was necessary to keep the project ‘in an adequate condition of repair.'”

Only three Powerhouse 1 units have been rehabilitated: “Unit B10 completed in 2008, Unit B9 completed in 2012, and Unit B6 completed in 2018.” They plan to have the remaining units rehabilitated by 2022. “By 2029, Chelan PUD plans to rehabilitate eight bulb turbine-generator units at Powerhouse 2. Chelan PUD anticipates that the rehabilitation of Powerhouse 2 will provide an additional 40 years of reliable and efficient power generation capability for the units. Chelan PUD estimates that it will cost approximately $270 million to rehabilitate Powerhouse 1, and approximately $352 million to rehabilitate Powerhouse 2.”

“Chelan PUD’s turbine and generator improvements will enhance the efficiency and reliability of the Rock Island Project. These improvements were not considered by the Commission as contributing to the existing 40-year license term. Therefore, we find that the Powerhouse 1 and Powerhouse 2 rehabilitation projects qualify as ‘rehabilitation or replacement of major equipment,’ meeting the criteria under FPA section 36(b)(2).”

“Chelan PUD intends to implement a long-term Rock Island facilities master plan that will include constructing or updating multiple office, warehouse, and storage facilities at the Rock Island Project, estimated at $40 million.” FERC noted that Chelan PUD’s request for determination had “limited information on this investment, such that it is unclear whether it would qualify as a ‘project-related’ investment under the criteria of section 36(b)(2)(A).” FERC is also uncertain if “Congress intended for us to consider ancillary facilities, such as office buildings, that do not have a demonstrated direct hydropower purpose, may not be necessary for project operation, and may have other uses. Therefore, based on the information before us, we cannot determine whether these investments meet the criteria under section 36(b)(2).” They noted that Chelan PUD was welcome to ” file further information on these matters during the relicensing process.”

Chelan PUD also said it ” plans to replace two spillway bay gate hoists to improve the safety and reliability of the spillway operation. In March 2020, Chelan PUD plans to replace the existing manually-operated hoists with automatic hoists, increasing the spillway gate capacity. Chelan PUD anticipates that these improvements will cost an estimated $4 million.”
“Chelan PUD’s planned replacement of manual spillway gate hoists with auto hoists will allow remote gate operation and increase gate capacity, improving the safety and reliability of the spillway. These improvements were not considered by the Commission as contributing to the existing 40-year license term. Therefore, we find that this planned investment meets the section 36(b)(2) criteria.”

In June 2004, FERC approved “a project-specific HCP for the Rock Island Project,” for which they amended “the license to incorporate the provisions of the plan as special articles. The Rock Island Project HCP is a comprehensive and long-term management plan for salmonid species affected by the project.” In order “To achieve the objective of the HCP – achieving and maintaining a ‘no net impact’ for each plan species – Chelan PUD explains that it has spent more than $44 million on fish passage survival studies, hatchery construction, operation and maintenance, annual funding for tributary protection and restoration projects, fish predator control programs, and ongoing passage facilities operations and maintenance.”

FERC found those measures applicable to FPA section 36(b)(2) criteria, but recommended that “during the licensing process, Chelan PUD may wish to provide additional information to clarify the nature of these measures, such as explanations of the extent to which the measures arise from HCP obligations, as opposed to the requirements of the 1987 settlement agreement regarding the project.”

FERC’s final determinations were:
“(A) that Chelan PUD’s investments made to rehabilitate the two Rock Island powerhouses, improve the project spillway, and implement its HCP appear to meet the criteria set forth in section 36(b)(2) of the Federal Power Act.

“(B) that it is unable to find whether Chelan PUD’s construction investments in new office, warehouse, and storage facilities meet the criteria set forth in section 36(b)(2) of the Federal Power Act.”

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