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February 21, 2007

Federal Regulators Seek Comments on Wave and Tidal Energy Permits

Facing a growing interest in wave and tidal energy facilities, the Federal Energy Regulatory Commission (FERC) announced on February 15th that it is seeking comments on how to process preliminary permit applications for these technologies. For now, FERC has decided to apply stricter scrutiny toward these projects by setting deadlines for proceeding with a project and by requiring progress reports for companies to demonstrate their efforts to meet those milestones. This approach is meant to avoid "site banking," in which a company files a permit application on a site to shut out a competitor, but does not take action on that project. Based on public comments, FERC could also revert to the standard preliminary permit process, or decline to issue preliminary permits for these new technologies altogether. Comments on the notice are due 60 days after its publication in the Federal Register.

FERC has already decided to apply its "stricter scrutiny" approach to a 50-megawatt (MW) wave energy facility that Ocean Power Technologies, Inc. (OPT) proposes to build off the coast of Reedsport, Oregon. FERC is requiring OPT to submit a schedule of activities within 45 days. If progress on the project is not evident in the company's progress reports, FERC will cancel the permit. A preliminary permit preserves the right of the permit holder to have first priority in applying for a license for the project being studied, and is typically in effect for three years. See the FERC press release, the chairman's statement, the FERC Tidal Energy Permits Web page, and the full 7-page order (PDF 27 KB). Download Adobe Reader.

OPT applied for the Reedsport wave energy project in July 2006, at which time it also embarked on building a 1.25-MW wave power station off the northern coast of Spain. In late January, OPT applied to FERC for permits for two additional 100-MW wave power projects off the coast of Oregon—one near Coos Bay and the other near Newport. The company was also awarded the operation and maintenance contract for the Spain power plant in January. See the OPT press releases.

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