
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 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.
