Hydropower Project Administrative Rules Update

The Department of Environmental Protection (DEP) Chapter 450 and Land Use Regulation Commission (LUPC) Chapter 11 regulations for hydropower projects have been updated. The new rules eliminate an inconsistency that existed between the license transfer provisions for hydropower and other environmental permits. Specifically, the revised rules apply the same standards and procedures to hydropower projects, including the definition of what constitutes a change in ownership that triggers the requirement to transfer a permit, that govern other DEP and LUPC permits. Under the revised rule and consistent with DEP general administrative rules, a transfer of ownership means a change in the legal entity that owns the project; a sale or exchange of stock or membership interests or a merger is not a transfer of ownership provided the legal entity that owns the project remains the same. Although in 2015, DEP proposed modifying the definition of transfer of ownership to include the sale or exchange of 50% interest in the company, it subsequently withdrew that proposal, which was inconsistent with legislative changes made in 1995 that eliminated the 50% ownership control component of transfer of ownership.

The revised rules also clarify that the DEP is the permitting agency for projects located wholly or partially within an organized municipality, as well as tidal or wave projects regardless of their location. LUPC is the permitting agency for a hydropower project located entirely within the unorganized or deorganized areas and that does not use tidal or wave action as a source of power. Other clarifications and changes were made consistent with the governing statute. The revised rules take effect November 2, 2017.