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Coalition Wins Court Case Invalidating Fee Increases on Hydropower Generation Projects

Ruling Saves District Hundreds of Thousands of Dollars

Post Date:01/05/2011 3:00 PM
  • News Release Mast 

 

Contact: Mary Lynn Carlton, (530) 642-4103, mcarlton@eid.org

FOR IMMEDIATE RELEASE

Placerville, Calif. — A coalition of hydroelectric project operators, which includes El Dorado Irrigation District (EID), has won a federal appeals court victory which prevents the Federal Energy Regulatory Commission (FERC) from dramatically increasing its annual land-use fees on hydroelectric projects without a formal “notice-and-comment” rulemaking process. This decision and a prior court ruling spared EID from paying more than $300,000 in excessive fees for the operation of its Project 184 in 2009 and 2010.

“EID joined the coalition in early 2009 when FERC adopted a new method to calculate its fees, which would have more than doubled the amount of money EID pays to operate its El Dorado hydropower system on federal lands,” said Tom Cumpston, EID’s General Counsel. “FERC made this decision unilaterally, without any advance notice or participation by the fee-payers. Even worse, FERC adopted a methodology it had expressly rejected the last time it revised the fee formula,” Cumpston explained. By participating in this litigation, the District saved about $116,000 in 2009 annual fees, and about $186,000 in yet-to-be-invoiced 2010 fees, according to Cumpston.

In January 2009, the EID Board of Directors voted to join the coalition of licensees to challenge the fees both before FERC and in court because FERC adopted the new method to calculate its fees for use of federal lands by hydropower projects without any “rulemaking process, notice, or opportunity to comment whatsoever,” Cumpston explained. “Our coalition succeeded in obtaining an emergency court order staying the new fees temporarily. So FERC billed us under the older, cheaper method, which saved our ratepayers about $116,000 in 2009. This year, FERC again announced its intent to impose the new fees, still without any rulemaking process. Yesterday’s final court ruling thoroughly rejects FERC’s approach and saves us another $186,000 in 2010 fees.” The court’s unanimous opinion rebuked FERC in unusually harsh terms, calling its legal maneuvers “absurd” and “surprisingly cynical.”

“The District achieved this two-year savings of more than $300,000 by investing about $15,000 in legal costs to date,” said Harry Norris, EID’s Board President. “It is worth our time and effort to join in such causes when it is the right thing to do and saves our ratepayers money.”

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EID is a public agency dedicated to providing high quality water, wastewater treatment, recycled water, hydropower, and recreation services in an environmentally and fiscally responsible 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Return to full list >>