|February 25, 2014|
Previously published on February 20, 2014
On January 15, 2014, the Federal Energy Regulatory Commission (FERC) approved a stipulation and consent agreement between the FERC's Office of Enforcement (Enforcement), Erie Boulevard Hydropower, L.P. (Erie) and Brookfield Power US Assets Management, LLC (Brookfield).1 The agreement is significant because it demonstrates the FERC's continued enforcement of its hydropower safety regulations2 and the potential hazards that may accompany hydropower facilities. In comparison to its compliance and enforcement activities in the oversight of the natural gas and electric markets, the FERC has rarely taken action of this magnitude with respect to hydropower licensing issues. While the FERC has acted cautiously and modestly in its assessment of civil penalties against hydropower licensees for violations of their hydropower license terms and conditions, it is no stranger to the assessment of civil penalties for violations of environmental or safety provisions.3
The agreement resolves an investigation into violations of the FERC's hydropower safety regulations occurring at the Varick hydroelectric facility in Oswego, New York ("Varick facility"). The facts of the case are stark. On September 28, 2010, an increase in water flow at the Varick facility caused four fishermen near the Varick facility to be swept downstream. Two of the four fisherman were fatally injured. The violations that are the subject of the agreement occurred contemporaneously with the events of September 28, 2010.
The Varick facility and its counterpart, the High Dam hydroelectric facility ("High Dam facility"), which are located one-half mile apart, comprise the Oswego River Project. Erie holds the license to and operates the Oswego River Project. The Varick and High Dam facilities are operated remotely by Brookfield's National System Control Center (NSCC). Brookfield is an affiliate of Erie.
Enforcement identified several violations committed by Erie. First, Erie had failed to timely report and repair a safety camera at the Varick facility, which was used by the NSCC to monitor fishing activities around the facility. Second, Erie had failed to timely report and repair or replace the staggered-height flashboards, which act as a visual signal to alert fishermen of an increase in water flow over the dam, at the Varick facility. Third, the NSCC staff personnel tasked with monitoring the Varick facility had failed to timely sound the rising water level alert siren within a reasonable time period.
Pursuant to the agreement, Erie is obligated to pay a civil penalty of $4 million. Erie and Brookfield have agreed to set aside $1.7 million for certain public safety enhancements at their hydroelectric projects. Brookfield also has agreed to initiate certain other hydroproject and dam safety measures.
Hydropower licensees should be aware that violations of FERC licenses that could affect public safety are taken seriously by the FERC, and they must be alert and committed to prudent compliance with license requirements.