Federal Power Act of 1920, as Amended

Legislation

By: United States Congress

Date: 1920

Source: U.S. Congress. Federal Power Act of 1920, Section 797. Washington, D.C.: 1920.

About the Author: The Congress of the United States was established by Article 1 of the U.S. Constitution of 1787. It is the legislative arm of the U.S. Federal Government.

INTRODUCTION

The United States has used hydroelectric power for meeting its energy demands since the late nineteenth century. Earlier, hydropower was used largely for pumping and milling corn and grain. The first hydroelectric plant in the United States generated electricity on July 24, 1880, to power sixteen Brush arc lamps used to provide theater and storefront illumination in Grand Rapids, Michigan. Subsequently, hydroelectric projects gained rapid popularity, and around 1,500 hydroelectric projects were set up in a short span, producing around one-third of the United States' energy requirements.

By the early twentieth century, the Federal Power Commission was established under the Federal Power Act of 1920. The primary task of the commission was to license and oversee the commissioning of hydroelectric power projects in the United States. It performed various other tasks such as investigating and collecting data regarding water utilization in areas marked for hydroelectric power development, cooperation with other national and regional agencies, publishing relevant information with regard to the status and development of hydroelectric projects, and other such information.

The jurisdiction of the Commission continued to expand over the coming years keeping in mind the technological development in the field of energy. Throughout the twentieth century, many hydroelectric plants were set up under the guidance and jurisdiction of the Federal Power Commission. In 1997, the U.S. Congress reorganized the Federal Power Commission and named it as the Federal Energy Regulatory Commission (FERC).

Thanks to a high number of hydroelectric projects, the United States in the early twenty-first century has high hydroelectric capacity. According to the National Hydropower Association, the total installed hydroelectric capacity in the United States stands at around 103.8 gigawatts. In 2003, facilities in the United States developed around 96,000 megawatts of hydroelectricity—equivalent to around 500 million barrels of oil.

Consequently, the United States produces nearly 10 percent of its electricity from hydropower, making it one of the largest producers of hydroelectricity in the world. Nearly half of the hydroelectric power produced worldwide is generated in the United States.

The primary source details Section 797 of the Federal Power Act of 1920, which mentions various powers and authorities including licensing rights the commission availed under the said Act.

PRIMARY SOURCE

The Commission is authorized and empowered—

(a) Investigations and data To make investigations and to collect and record data concerning the utilization of the water resources of any region to be developed, the water-power industry and its relation to other industries and to interstate or foreign commerce, and concerning the location, capacity, development costs, and relation to markets of power sites, and whether the power from Government dams can be advantageously used by the United States for its public purposes, and what is a fair value of such power, to the extent the Commission may deem necessary or useful for the purposes of this chapter.

(b) Statements as to investment of licenses in projects; access to projects, maps, etc. To determine the actual legitimate original cost of and the net investment in a licensed project, and to aid the Commission in such determinations, each licensee shall, upon oath, within a reasonable period of time to be fixed by the Commission, after the construction of the original project or any addition thereto or betterment thereof, file with the Commission in such detail as the Commission may require, a statement in duplicate showing the actual legitimate original cost of construction of such project addition, or betterment, and of the price paid for water rights, rights-of-way, lands, or interest in lands. The licensee shall grant to the Commission or to its duly authorized agent or agents, at all reasonable times, free access to such project, addition, or betterment, and to all maps, profiles, contracts, reports of engineers, accounts, books, records, and all other papers and documents relating thereto. The statement of actual legitimate original cost of said project, and revisions thereof as determined by the Commission, shall be filed with the Secretary of the Treasury.

(c) Cooperation with executive departments; information and aid furnished Commission To cooperate with the executive departments and other agencies of State or National Governments in such investigations; and for such purpose the several departments and agencies of the National Government are authorized and directed upon the request of the Commission, to furnish such records, papers, and information in their possession as may be requested by the Commission, and temporarily to detail to the Commission such officers or experts as may be necessary in such investigations.

(d) Publication of information, etc.; reports to Congress To make public from time to time the information secured hereunder, and to provide for the publication of its reports and investigations in such form and manner as may be best adapted for public information and use. The Commission, on or before the 3d day of January of each year, shall submit to Congress for the fiscal year preceding a classified report showing the permits and licenses issued under this subchapter, and in each case the parties thereto, the terms prescribed, and the moneys received if any, or account thereof.

(e) Issue of licenses for construction, etc., of dams, conduits, reservoirs, etc. To issue licenses to citizens of the United States, or to any association of such citizens, or to any corporation organized under the laws of the United States or any State thereof, or to any State or municipality for the purpose of constructing, operating, and maintaining dams, water conduits, reservoirs, power houses, transmission lines, or other project works necessary or convenient for the development and improvement of navigation and for the development, transmission, and utilization of power across, along, from, or in any of the streams or other bodies of water over which Congress has jurisdiction under its authority to regulate commerce with foreign nations and among the several States, or upon any part of the public lands and reservations of the United States (including the Territories), or for the purpose of utilizing the surplus water or water power from any Government dam, except as herein provided: Provided, That licenses shall be issued within any reservation only after a finding by the Commission that the license will not interfere or be inconsistent with the purpose for which such reservation was created or acquired, and shall be subject to and contain such conditions as the Secretary of the department under whose supervision such reservation falls shall deem necessary for the adequate protection and utilization of such reservations: Provided further, That no license affecting the navigable capacity of any navigable waters of the United States shall be issued until the plans of the dam or other structures affecting the navigation have been approved by the Chief of Engineers and the Secretary of the Army. Whenever the contemplated improvement is, in the judgment of the Commission, desirable and justified in the public interest for the purpose of improving or developing a waterway or waterways for the use or benefit of interstate or foreign commerce, a finding to that effect shall be made by the Commission and shall become a part of the records of the Commission: Provided further, That in case the Commission shall find that any Government dam may be advantageously used by the United States for public purposes in addition to navigation, no license therefor shall be issued until two years after it shall have reported to Congress the facts and conditions relating thereto, except that this provision shall not apply to any Government dam constructed prior to June 10, 1920: And provided further, That upon the filing of any application for a license which has not been preceded by a preliminary permit under subsection (f) of this section, notice shall be given and published as required by the proviso of said subsection. In deciding whether to issue any license under this subchapter for any project, the Commission, in addition to the power and development purposes for which licenses are issued, shall give equal consideration to the purposes of energy conservation, the protection, mitigation of damage to, and enhancement of, fish and wildlife (including related spawning grounds and habitat), the protection of recreational opportunities, and the preservation of other aspects of environmental quality.

(f) Preliminary permits; notice of application To issue preliminary permits for the purpose of enabling applicants for a license hereunder to secure the data and to perform the acts required by section 802 of this title: Provided, however, That upon the filing of any application for a preliminary permit by any person, association, or corporation the Commission, before granting such application, shall at once give notice of such application in writing to any State or municipality likely to be interested in or affected by such application; and shall also publish notice of such application once each week for four weeks in a daily or weekly newspaper published in the county or counties in which the project or any part hereof or the lands affected thereby are situated.

(g) Investigation of occupancy for developing power; orders Upon its own motion to order an investigation of any occupancy of, or evidenced intention to occupy, for the purpose of developing electric power, public lands, reservations, or streams or other bodies of water over which Congress has jurisdiction under its authority to regulate commerce with foreign nations and among the several States by any person, corporation, State, or municipality and to issue such order as it may find appropriate, expedient, and in the public interest to conserve and utilize the navigation and water-power resources of the region.

SIGNIFICANCE

There is an ongoing debate in the United States about the use of fossil fuels and conventional resources for meeting its energy requirements. The United States consumes nearly 25 percent of the global oil production. Until 1970, it was able to meet its oil demands internally. However in the decades that have followed, the country has become overly dependent on external sources for oil. In 2004, it imported nearly 57 percent of its total needs. It is predicted that the United States will need to import nearly two-thirds of its oil and gas by 2025.

Various studies have proved that the excessive use of conventional oil-based technology is detrimental to the environment. The United States is one of the very few countries in the world that has not ratified the Kyoto protocol—a treaty aimed at reducing greenhouse gas emissions. There are renewed concerns that greenhouse gas emissions are a major contributor to global warming.

Subsequently, several alternative energy resourcing methods have been proposed. Among the favorites are hydroelectric power projects. Hydroelectric projects in the United States deliver around 90 percent of the energy exploitable from non-conventional resources. Experts maintain that all this can be attributed to the Federal Energy Regulatory Commission.

There are many benefits of using hydroelectric power. According to the National Hydropower Association, the use of hydropower provides a cleaner and safer alternative for generating electricity. Additionally, in 1999, the use of hydropower prevented the burning of a combined asset of nearly 121 million tons (110 metric tons) of coal, 27 million barrels of oil, and 741 billion cubic feet (21 billion cubic meters) of natural gas.

Modern hydroelectric plants are capable of operating at nearly 90 percent energy efficiency levels, meaning thereby that nearly 90 percent of the hydro-energy is converted into electricity. In contrast, the best fossil fuel plants can operate at around only 50 percent efficiency levels.

As a result, hydroelectric power projects have gained tremendous popularity. As of 2006, there are around 2,500 hydroelectric plants in operation in the United States. However, this represents only around 3 percent of the nearly seventy thousand dams being currently utilized for hydroelectric generation.

Though there are a significant number of advantages of utilizing hydropower, the procedure for licensing of hydroelectric projects takes between eight and ten years due to a complex web of legislations and court rules. This is in stark contrast to the licensing of conventional fossil-fuel-based power plants, which takes around eighteen months.

There is a growing opinion in the United States that the government and the FERC should simplify the legislation for licensing hydropower projects in view of significant benefits to the environment compared to fossil fuel resources.

FURTHER RESOURCES

Web sites

"Clean Energy: How Hydroelectric Energy Works." Union of Concerned Scientists. 〈http://www.ucsusa.org/clean_energy/renewable_energy_basics/how-hydroelectric-energyworks.html〉 (accessed March 8, 2006).

"An Energy Summary of the United States of America." Carbon Sequestration Leadership Forum. 〈http://www.cslforum.org/usa.htm〉 (accessed March 8, 2006).

"Federal Energy Regulatory Commission's Student's Corner." Federal Energy Regulatory Commission. 〈http://ferc.gov/students/index.htm〉 (accessed March 8, 2006).

Hodgson, Godfrey. "Oil and American Politics." Open-Democracy March 10, 2005. 〈http://www.opendemocracy.net/debates/article.jsp?id=3&debateId=77&articleId=2887〉 (accessed March 8, 2006).

"Hydro Facts: A Clean Energy Source For Our Future." National Hydropower Association. 〈http://www.hydro.org/hydrofacts/future.asp〉 (accessed March 8, 2006).

"Hydro Facts: Facts You Should Know About Hydropower." National Hydropower Association. 〈http://www.hydro.org/hydrofacts/facts.asp〉 (accessed March 8, 2006).

"Hydropower Today." Hydro Research Foundation. 〈http://www.hydrofoundation.org/hydropower/index.html〉 (accessed March 8, 2006).

"Reclamation's Role in Hydropower." U.S. Department of the Interior, Bureau of Reclamation. 〈http://www.usbr.gov/power/data/role_rpt.html〉 (accessed March 8, 2006).