§ 803. — Conditions of license generally.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 16USC803]
TITLE 16--CONSERVATION
CHAPTER 12--FEDERAL REGULATION AND DEVELOPMENT OF POWER
SUBCHAPTER I--REGULATION OF THE DEVELOPMENT OF WATER POWER AND RESOURCES
Sec. 803. Conditions of license generally
All licenses issued under this subchapter shall be on the following
conditions:
(a) Modification of plans; factors considered to secure adaptability of
project; recommendations for proposed terms and conditions
(1) That the project adopted, including the maps, plans, and
specifications, shall be such as in the judgment of the Commission will
be best adapted to a comprehensive plan for improving or developing a
waterway or waterways for the use or benefit of interstate or foreign
commerce, for the improvement and utilization of water-power
development, for the adequate protection, mitigation, and enhancement of
fish and wildlife (including related spawning grounds and habitat), and
for other beneficial public uses, including irrigation, flood control,
water supply, and recreational and other purposes referred to in section
797(e) of this title \1\ if necessary in order to secure such plan the
Commission shall have authority to require the modification of any
project and of the plans and specifications of the project works before
approval.
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\1\ So in original. Probably should be followed by ``; and''.
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(2) In order to ensure that the project adopted will be best adapted
to the comprehensive plan described in paragraph (1), the Commission
shall consider each of the following:
(A) The extent to which the project is consistent with a
comprehensive plan (where one exists) for improving, developing, or
conserving a waterway or waterways affected by the project that is
prepared by--
(i) an agency established pursuant to Federal law that has
the authority to prepare such a plan; or
(ii) the State in which the facility is or will be located.
(B) The recommendations of Federal and State agencies exercising
administration over flood control, navigation, irrigation,
recreation, cultural and other relevant resources of the State in
which the project is located, and the recommendations (including
fish and wildlife recommendations) of Indian tribes affected by the
project.
(C) In the case of a State or municipal applicant, or an
applicant which is primarily engaged in the generation or sale of
electric power (other than electric power solely from cogeneration
facilities or small power production facilities), the electricity
consumption efficiency improvement program of the applicant,
including its plans, performance and capabilities for encouraging or
assisting its customers to conserve electricity cost-effectively,
taking into account the published policies, restrictions, and
requirements of relevant State regulatory authorities applicable to
such applicant.
(3) Upon receipt of an application for a license, the Commission
shall solicit recommendations from the agencies and Indian tribes
identified in subparagraphs (A) and (B) of paragraph (2) for proposed
terms and conditions for the Commission's consideration for inclusion in
the license.
(b) Alterations in project works
That except when emergency shall require for the protection of
navigation, life, health, or property, no substantial alteration or
addition not in conformity with the approved plans shall be made to any
dam or other project works constructed hereunder of an installed
capacity in excess of two thousand horsepower without the prior approval
of the Commission; and any emergency alteration or addition so made
shall thereafter be subject to such modification and change as the
Commission may direct.
(c) Maintenance and repair of project works; liability of licensee for
damages
That the licensee shall maintain the project works in a condition of
repair adequate for the purposes of navigation and for the efficient
operation of said works in the development and transmission of power,
shall make all necessary renewals and replacements, shall establish and
maintain adequate depreciation reserves for such purposes, shall so
maintain, and operate said works as not to impair navigation, and shall
conform to such rules and regulations as the Commission may from time to
time prescribe for the protection of life, health, and property. Each
licensee hereunder shall be liable for all damages occasioned to the
property of others by the construction, maintenance, or operation of the
project works or of the works appurtenant or accessory thereto,
constructed under the license and in no event shall the United States be
liable therefor.
(d) Amortization reserves
That after the first twenty years of operation, out of surplus
earned thereafter, if any, accumulated in excess of a specified
reasonable rate of return upon the net investment of a licensee in any
project or projects under license, the licensee shall establish and
maintain amortization reserves, which reserves shall, in the discretion
of the Commission, be held until the termination of the license or be
applied from time to time in reduction of the net investment. Such
specified rate of return and the proportion of such surplus earnings to
be paid into and held in such reserves shall be set forth in the
license. For any new license issued under section 808 of this title, the
amortization reserves under this subsection shall be maintained on and
after the effective date of such new license.
(e) Annual charges payable by licensees; maximum rates; application;
review and report to Congress
(1) That the licensee shall pay to the United States reasonable
annual charges in an amount to be fixed by the Commission for the
purpose of reimbursing the United States for the costs of the
administration of this subchapter, including any reasonable and
necessary costs incurred by Federal and State fish and wildlife agencies
and other natural and cultural resource agencies in connection with
studies or other reviews carried out by such agencies for purposes of
administering their responsibilities under this subchapter; for
recompensing it for the use, occupancy, and enjoyment of its lands or
other property; and for the expropriation to the Government of excessive
profits until the respective States shall make provision for preventing
excessive profits or for the expropriation thereof to themselves, or
until the period of amortization as herein provided is reached, and in
fixing such charges the Commission shall seek to avoid increasing the
price to the consumers of power by such charges, and any such charges
may be adjusted from time to time by the Commission as conditions may
require: Provided, That, subject to annual appropriations Acts, the
portion of such annual charges imposed by the Commission under this
subsection to cover the reasonable and necessary costs of such agencies
shall be available to such agencies (in addition to other funds
appropriated for such purposes) solely for carrying out such studies and
reviews and shall remain available until expended: Provided, That when
licenses are issued involving the use of Government dams or other
structures owned by the United States or tribal lands embraced within
Indian reservations the Commission shall, subject to the approval of the
Secretary of the Interior in the case of such dams or structures in
reclamation projects and, in the case of such tribal lands, subject to
the approval of the Indian tribe having jurisdiction of such lands as
provided in section 476 of title 25, fix a reasonable annual charge for
the use thereof, and such charges may with like approval be readjusted
by the Commission at the end of twenty years after the project is
available for service and at periods of not less than ten years
thereafter upon notice and opportunity for hearing: Provided further,
That licenses for the development, transmission, or distribution of
power by States or municipalities shall be issued and enjoyed without
charge to the extent such power is sold to the public without profit or
is used by such State or municipality for State or municipal purposes,
except that as to projects constructed or to be constructed by States or
municipalities primarily designed to provide or improve navigation,
licenses therefor shall be issued without charge; and that licenses for
the development, transmission, or distribution of power for domestic,
mining, or other beneficial use in projects of not more than two
thousand horsepower installed capacity may be issued without charge,
except on tribal lands within Indian reservations; but in no case shall
a license be issued free of charge for the development and utilization
of power created by any Government dam and that the amount charged
therefor in any license shall be such as determined by the Commission:
Provided however, That no charge shall be assessed for the use of any
Government dam or structure by any licensee if, before January 1, 1985,
the Secretary of the Interior has entered into a contract with such
licensee that meets each of the following requirements:
(A) The contract covers one or more projects for which a license
was issued by the Commission before January 1, 1985.
(B) The contract contains provisions specifically providing each
of the following:
(i) A powerplant may be built by the licensee utilizing
irrigation facilities constructed by the United States.
(ii) The powerplant shall remain in the exclusive control,
possession, and ownership of the licensee concerned.
(iii) All revenue from the powerplant and from the use,
sale, or disposal of electric energy from the powerplant shall
be, and remain, the property of such licensee.
(C) The contract is an amendatory, supplemental and replacement
contract between the United States and: (i) the Quincy-Columbia
Basin Irrigation District (Contract No. 14-06-100-6418); (ii) the
East Columbia Basin Irrigation District (Contract No. 14-06-100-
6419); or, (iii) the South Columbia Basin Irrigation District
(Contract No. 14-06-100-6420).
This paragraph shall apply to any project covered by a contract referred
to in this paragraph only during the term of such contract unless
otherwise provided by subsequent Act of Congress. In the event an
overpayment of any charge due under this section shall be made by a
licensee, the Commission is authorized to allow a credit for such
overpayment when charges are due for any subsequent period.
(2) In the case of licenses involving the use of Government dams or
other structures owned by the United States, the charges fixed (or
readjusted) by the Commission under paragraph (1) for the use of such
dams or structures shall not exceed 1 mill per kilowatt-hour for the
first 40 gigawatt-hours of energy a project produces in any year, 1\1/2\
mills per kilowatt-hour for over 40 up to and including 80 gigawatt-
hours in any year, and 2 mills per kilowatt-hour for any energy the
project produces over 80 gigawatt-hours in any year. Except as provided
in subsection (f) of this section, such charge shall be the only charge
assessed by any agency of the United States for the use of such dams or
structures.
(3) The provisions of paragraph (2) shall apply with respect to--
(A) all licenses issued after October 16, 1986; and
(B) all licenses issued before October 16, 1986, which--
(i) did not fix a specific charge for the use of the
Government dam or structure involved; and
(ii) did not specify that no charge would be fixed for the
use of such dam or structure.
(4) Every 5 years, the Commission shall review the appropriateness
of the annual charge limitations provided for in this subsection and
report to Congress concerning its recommendations thereon.
(f) Reimbursement by licensee of other licensees, etc.
That whenever any licensee hereunder is directly benefited by the
construction work of another licensee, a permittee, or of the United
States of a storage reservoir or other headwater improvement, the
Commission shall require as a condition of the license that the licensee
so benefited shall reimburse the owner of such reservoir or other
improvements for such part of the annual charges for interest,
maintenance, and depreciation thereon as the Commission may deem
equitable. The proportion of such charges to be paid by any licensee
shall be determined by the Commission. The licensees or permittees
affected shall pay to the United States the cost of making such
determination as fixed by the Commission.
Whenever such reservoir or other improvement is constructed by the
United States the Commission shall assess similar charges against any
licensee directly benefited thereby, and any amount so assessed shall be
paid into the Treasury of the United States, to be reserved and
appropriated as a part of the special fund for headwater improvements as
provided in section 810 of this title.
Whenever any power project not under license is benefited by the
construction work of a licensee or permittee, the United States or any
agency thereof, the Commission, after notice to the owner or owners of
such unlicensed project, shall determine and fix a reasonable and
equitable annual charge to be paid to the licensee or permittee on
account of such benefits, or to the United States if it be the owner of
such headwater improvement.
(g) Conditions in discretion of commission
Such other conditions not inconsistent with the provisions of this
chapter as the commission may require.
(h) Monopolistic combinations; prevention or minimization of
anticompetitive conduct; action by Commission regarding license
and operation and maintenance of project
(1) Combinations, agreements, arrangements, or understandings,
express or implied, to limit the output of electrical energy, to
restrain trade, or to fix, maintain, or increase prices for electrical
energy or service are hereby prohibited.
(2) That conduct under the license that: (A) results in the
contravention of the policies expressed in the antitrust laws; and (B)
is not otherwise justified by the public interest considering regulatory
policies expressed in other applicable law (including but not limited to
those contained in subchapter II of this chapter) shall be prevented or
adequately minimized by means of conditions included in the license
prior to its issuance. In the event it is impossible to prevent or
adequately minimize the contravention, the Commission shall refuse to
issue any license to the applicant for the project and, in the case of
an existing project, shall take appropriate action to provide thereafter
for the operation and maintenance of the affected project and for the
issuing of a new license in accordance with section 808 of this title.
(i) Waiver of conditions
In issuing licenses for a minor part only of a complete project, or
for a complete project of not more than two thousand horsepower
installed capacity, the Commission may in its discretion waive such
conditions, provisions, and requirements of this subchapter, except the
license period of fifty years, as it may deem to be to the public
interest to waive under the circumstances: Provided, That the provisions
hereof shall not apply to annual charges for use of lands within Indian
reservations.
(j) Fish and wildlife protection, mitigation and enhancement;
consideration of recommendations; findings
(1) That in order to adequately and equitably protect, mitigate
damages to, and enhance, fish and wildlife (including related spawning
grounds and habitat) affected by the development, operation, and
management of the project, each license issued under this subchapter
shall include conditions for such protection, mitigation, and
enhancement. Subject to paragraph (2), such conditions shall be based on
recommendations received pursuant to the Fish and Wildlife Coordination
Act (16 U.S.C. 661 et seq.) from the National Marine Fisheries Service,
the United States Fish and Wildlife Service, and State fish and wildlife
agencies.
(2) Whenever the Commission believes that any recommendation
referred to in paragraph (1) may be inconsistent with the purposes and
requirements of this subchapter or other applicable law, the Commission
and the agencies referred to in paragraph (1) shall attempt to resolve
any such inconsistency, giving due weight to the recommendations,
expertise, and statutory responsibilities of such agencies. If, after
such attempt, the Commission does not adopt in whole or in part a
recommendation of any such agency, the Commission shall publish each of
the following findings (together with a statement of the basis for each
of the findings):
(A) A finding that adoption of such recommendation is
inconsistent with the purposes and requirements of this subchapter
or with other applicable provisions of law.
(B) A finding that the conditions selected by the Commission
comply with the requirements of paragraph (1).
Subsection (i) of this section shall not apply to the conditions
required under this subsection.
(June 10, 1920, ch. 285, pt. I, Sec. 10, 41 Stat. 1068; renumbered pt. I
and amended, Aug. 26, 1935, ch. 687, title II, Secs. 206, 212, 49 Stat.
842, 847; Pub. L. 87-647, Sept. 7, 1962, 76 Stat. 447; Pub. L. 90-451,
Sec. 4, Aug. 3, 1968, 82 Stat. 617; Pub. L. 99-495, Secs. 3(b), (c),
9(a), 13, Oct. 16, 1986, 100 Stat. 1243, 1244, 1252, 1257; Pub. L. 99-
546, title IV, Sec. 401, Oct. 27, 1986, 100 Stat. 3056; Pub. L. 102-486,
title XVII, Sec. 1701(a), Oct. 24, 1992, 106 Stat. 3008.)
References in Text
The antitrust laws, referred to in subsec. (h)(2), are classified
generally to chapter 1 (Sec. 1 et seq.) of Title 15, Commerce and Trade.
The Fish and Wildlife Coordination Act, referred to in subsec.
(j)(1), is act Mar. 10, 1934, ch. 55, 48 Stat. 401, as amended, which is
classified generally to sections 661 to 666c of this title. For complete
classification of this Act to the Code, see Short Title note set out
under section 661 of this title and Tables.
Amendments
1992--Subsec. (e)(1). Pub. L. 102-486, in introductory provisions,
substituted ``administration of this subchapter, including any
reasonable and necessary costs incurred by Federal and State fish and
wildlife agencies and other natural and cultural resource agencies in
connection with studies or other reviews carried out by such agencies
for purposes of administering their responsibilities under this
subchapter;'' for ``administration of this subchapter;'' and inserted
``Provided, That, subject to annual appropriations Acts, the portion of
such annual charges imposed by the Commission under this subsection to
cover the reasonable and necessary costs of such agencies shall be
available to such agencies (in addition to other funds appropriated for
such purposes) solely for carrying out such studies and reviews and
shall remain available until expended:'' after ``as conditions may
require:''.
1986--Subsec. (a). Pub. L. 99-495, Sec. 3(b), designated existing
provisions as par. (1), inserted ``for the adequate protection,
mitigation, and enhancement of fish and wildlife (including related
spawning grounds and habitat),'' after ``water-power development'',
inserted ``irrigation, flood control, water supply, and'' after
``including'', which words were inserted after ``public uses,
including'' as the probable intent of Congress, substituted ``and other
purposes referred to in section 797(e) of this title'' for ``purposes;
and'', and added pars. (2) and (3).
Subsec. (e). Pub. L. 99-546 inserted proviso that no charge be
assessed for use of Government dam or structure by licensee if, before
Jan. 1, 1985, licensee and Secretary entered into contract which met
requirements of date of license, powerplant construction, ownership, and
revenue, etc.
Pub. L. 99-495, Sec. 9(a), designated existing provisions as par.
(1) and added pars. (2) to (4).
Subsec. (h). Pub. L. 99-495, Sec. 13, designated existing provisions
as par. (1) and added par. (2).
Subsec. (j). Pub. L. 99-495, Sec. 3(c), added subsec. (j).
1968--Subsec. (d). Pub. L. 90-451 provided for maintenance of
amortization reserves on and after effective date of new licenses.
1962--Subsecs. (b), (e), (i). Pub. L. 87-647 substituted ``two
thousand horsepower'' for ``one hundred horsepower''.
1935--Subsec. (a). Act Aug. 26, 1935, Sec. 206, substituted ``plan
for improving or developing a waterway or waterways for the use or
benefit of interstate or foreign commerce, for the improvement and
utilization of water-power development, and for other beneficial uses,
including recreational purposes'' for ``scheme of improvement and
utilization for the purposes of navigation, of water-power development,
and of other beneficial public uses,'' and ``such plan'' for ``such
scheme''.
Subsec. (b). Act Aug. 26, 1935, Sec. 206, inserted ``installed''
before ``capacity''.
Subsec. (d). Act Aug. 26, 1935, Sec. 206, substituted ``net
investment'' for ``actual, legitimate investment''.
Subsec. (e). Act Aug. 26, 1935, Sec. 206, amended subsec. (e)
generally.
Subsec. (f). Act Aug. 26, 1935, Sec. 206, inserted last sentence to
first par., and inserted last par.
Subsec. (i). Act Aug. 26, 1935, Sec. 206, inserted ``installed''
before ``capacity'', and ``annual charges for use of'' before ``lands''
in proviso.
Effective Date of 1986 Amendment
Amendment by Pub. L. 99-495 effective with respect to each license,
permit, or exemption issued under this chapter after Oct. 16, 1986, see
section 18 of Pub. L. 99-495, set out as a note under section 797 of
this title.
Savings Provision
Section 9(b) of Pub. L. 99-495 provided that: ``Nothing in this Act
[see Short Title of 1986 Amendment note set out under section 791a of
this title] shall affect any annual charge to be paid pursuant to
section 10(e) of the Federal Power Act [16 U.S.C. 803(e)] to Indian
tribes for the use of their lands within Indian reservations.''
Termination of Reporting Requirements
For termination, effective May 15, 2000, of provisions in subsec.
(e)(4) of this section relating to reporting recommendations to Congress
every 5 years, see section 3003 of Pub. L. 104-66, as amended, set out
as a note under section 1113 of Title 31, Money and Finance, and page 91
of House Document No. 103-7.
Transfer of Functions
Federal Power Commission terminated and its functions with regard to
licenses and permits for dams, reservoirs, or other works for
development and improvement of navigation and for development and
utilization of power across, along, from, or in navigable waters under
this subchapter transferred to Federal Energy Regulatory Commission by
sections 7172(a)(1)(A) and 7293 of Title 42, The Public Health and
Welfare.
Section Referred to in Other Sections
This section is referred to in sections 808, 823a, 824a-3 of this
title; title 42 section 7178.
