HomeMy WebLinkAboutBPMC Memorandum ATERWYNNE LLP 12.21.2009ATERWYNNEuw>
MEMORANDUM
TO: Bradley Lake Project Management Company
FROM: Kirk H. Gibson
DATE: December 21, 2009
RE: Update on FERC Land Use Fees
There has been some action in the past few weeks by FERC on the land use fees issues.
The following is a summary of where we are and how we got there.
Background
As you will recall, a number of entities that have hydroelectric protested the significant
increase in land use fees charged by FERC. The participants in this group have been working the
issue at FERC and the D.C. Circuit Court (Group). The Group initially filed a request for a
rehearing at FERC regarding FERC's process for picking the methodology it used for assessing
the land use fees. The Group also filed for and received a stay with the D.C. Circuit Court (while
the request for rehearing was being heard by FERC). As part of the order granting the stay, the
D.C. Court ordered FERC to provided progress reports on its progress concerning the
participants’ rehearing request. BPMC (and some others) joined the Group later, so the Group
also filed an appeal on behalf of BPMC (and the others) of the charges invoiced by FERC, and
requested a hearing regarding its fees. BPMC paid the fees invoiced by FERC under protest.
Recent Activities
Le On October 30, 2009, FERC issued its order denying the rehearing request of the
participants. This was not a surprise.
2. FERC later submitted a report to the D.C. Circuit providing a copy of its
rehearing order with a statement that FERC does not intend to file a motion to dissolve the stay
at the present time. FERC appears content to allow the stay to continue, at least until it knows
whether the participants’ group will seek judicial review.
at On December 18, 2009, the Group filed a Petition for Review of FERC’s denial
of a request for rehearing with the D.C. Circuit Court.
840066/1/KHG/103918-0000
Memorandum to Bradley Lake Project Management Company
(Re: Update on FERC Land Use Fees)
December 21, 2009
Page 2
Analysis
If the Group had decided not to seek judicial review, the Group would have been
precluded from raising an objection to a motion by FERC to lift the stay. FERC did, however,
reserve its ability to issue revised bills when issuing "interim" bills in 2009 to Group members
under the old fee schedule. So, if the Group decided not to pursue judicial review, it is expected
that the court would have lifted the stay, and FERC would have issued revised 2009 bills to
Group members seeking the full amounts under the new fee schedule.
As noted at Recent Activity #3 above, the Group filed a Petition with the D.C. Circuit.
FERC may seek to dissolve the currently effective stay, although it may decide not to do so.
Because the court imposed a 15-day deadline for filing such a motion, the court could view such
motion as untimely and a means of punishing Group members for seeking judicial review. So,
since the Group decided to pursue judicial review, it is likely that FERC will not seek to lift the
stay (and bill Group members for the increased 2009 charges) unless and until it prevails at the
conclusion of the judicial review process.
With regard to BPMC/Bradley Lake (and other Group members that filed an appeal of
their 2009 bills), FERC's signal that it does not intend to lift the stay does not affect the posture
of those cases. If previous experience in appealing the administrative annual charges at FERC is
any indication of how FERC will handle the appeal of BPMC, FERC Staff is unlikely to take any
action on these appeals until the conclusion of judicial proceedings. Please be advised that if
FERC Staff does deny the appeals, however, the Group, including BPMC, would need to file for
rehearing at that time.
Next Steps
The Group's next move will be influenced by the briefing schedule issued by the
D.C. Circuit Court, as well as any action taken by FERC. If, for example, FERC seeks to lift the
stay, we would need to provide a response. If FERC issues a new fee schedule for 2010 based
on the new BLM/USFS methodology, we would need to decide whether to seek another stay
from the court, or pay under protest. At this point, we expect the court to issue a preliminary
order requiring us to prepare a docketing statement and preliminary statement of the issues. In
addition, interested parties may seek intervention. FERC could decide to file one or more
preliminary motions, and at some point, the court will issue a briefing schedule.
We believe that once the court sets our case for briefing, our chances of FERC or the
court staying the 2010 fee schedule and bills could increase.
2) 840066/1/KHG/103918-0000
Memorandum to Bradley Lake Project Management Company
(Re: Update on FERC Land Use Fees)
December 21, 2009
Page 3
Budget Issues
So far, the BPMC has been invoiced $10,000 for its share of costs of participating with
the Group’s efforts. Counsel for the Group has estimated that it will cost approximately $50,000
for the next phase of work. BPMC pays approximately 10 percent of the total costs of the Group
based on size of federal land surrounding its facility. The BPMC had budgeted a total of
$30,000 for BPMC’s participation in these efforts. I will keep you informed regarding the fees
as we move forward.
3 840066/1/KHG/1039 18-0000