Murkowski: Unfair for FERC to Continue Collecting Land-Use Fees on Non-Federally Owned Lands

WASHINGTON, D.C. – U.S. Sen. Lisa Murkowski, R-Alaska, today questioned administration witness on her legislation to prohibit the Federal Energy Regulatory Commission (FERC) from collecting land-use fees from hydropower projects on land that the federal government no longer owns during a Water and Power Subcommittee hearing in the Senate Energy and Natural Resources Committee.

Under the Federal Power Act, FERC is authorized to collect reasonable annual fees from project owners for the “use, enjoyment and occupancy” of federal lands. The federal government is, in some sense, a landlord for these types of projects and can collect just and reasonable rent from its tenants.

However, because of the way the law is written and interpreted by FERC, the commission has continued to collect user fees even after the federal government has sold or transferred the land underneath a hydropower project.

“I was surprised to learn that even if the land in question is no longer owned by the federal government because it’s been sold or transferred, FERC may still collect these land-use fees,” Murkowski said. “To me, this appears inherently unfair. It’s like a landlord continuing to collect rent from a tenant even after the tenant has bought the house. FERC, however, is authorized to continue to collect these fees as long as the land retains something called a “power site classification.” 

Murkowski introduced S. 3265 in June to stop FERC from collecting the fees. Wednesday’s meeting of the Senate Energy and Natural Resources Water and Power Subcommittee was the first hearing held on the bill in the Senate.

FERC officials testified on Wednesday that the commission would not oppose the bill. 

“My legislation would simply halt the collection of federal land-use fees when the federal government no longer owns the land,” Murkowski said. “While many of the approximately 15 projects my office has identified are located in Alaska, there are other projects in Oregon, Washington and Colorado that are caught in the same situation.”

Nationally, this practice effects about 15 hydropower projects – 11 of which are in Alaska – in the amount of $240,000 in land-use fees to FERC every year. In Alaska, FERC collected $166,000 in fees in the past year from hydropower projects at Swan Lake, Tyee Lake, Blind Slough, Black Bear Lake, Cooper Lake, Skagway-Dewey lakes, Beaver Falls, Bradley Lake, Green Lake and Blue Lake, even though the land those projects are located on are no longer federally owned. 

The attached PDF lists the hydroelectric projects across the country that we believe are impacted by the land-use fees and the amount they paid to FERC last year.