Ref: http://ferris.ferc.gov/idmws/common/downloadOpen.asp?downloadfile=176237%2Etxt http://ferris.ferc.gov/idmws/common/opennat.asp?fileID=3076324 (Text) http://ferris.ferc.gov/idmws/common/opennat.asp?fileID=3076323 (WordPerfect) http://ferris.ferc.gov/idmws/common/opennat.asp?fileID=9062122 (Image) Issuance: 19970408-3051 P-2323-000 Issuance: 19970411-0271 P-2323-012 UNITED STATES OF AMERICA79 FERC 61,006 FEDERAL ENERGY REGULATORY COMMISSION Before Commissioners: Elizabeth Anne Moler, Chair; Vicky A. Bailey, James J. Hoecker, William L. Massey, and Donald F. Santa, Jr. New England Power Company ) Project No. 2323-012 ORDER APPROVING OFFER OF SETTLEMENT AND ISSUING NEW LICENSE (Issued April 4, 1997) I. INTRODUCTION On December 27, 1991, New England Power Company filed an application pursuant to Sections 4(e) and 15 of the Federal Power Act (FPA) 1/ for a new license authorizing the continued operation and maintenance of the 76.9-megawatt (MW) Deerfield River Project, consisting of eight developments located on the Deerfield River, a navigable waterway of the United States, in Windham and Bennington Counties, Vermont, and Franklin and Berkshire Counties, Massachusetts. The Commission issued the original license for the project on October 29, 1963. 2/ The license expired on December 31, 1993, and since then New England Power has operated the project under successive annual licenses pending the disposition of its application for a new license. For the reasons discussed below, we will issue a new license to New England Power for the Deerfield River Project. 3/ New England Power and twelve parties to the proceeding, including federal and state resource agencies and citizens groups representing various environmental and recreational interests, negotiated an Offer of Settlement (Settlement), to resolve the / 16 U.S.C. 797(e), 808. / New England Power Company, 30 FPC 1120 (1963). / Concurrently with this order, we are issuing an order amending the license for New England Power s Bear Swamp Project No. 2669. Our approval of the Settlement and our issuance of the new license are premised on implementation of the changes in the operation of the Bear Swamp Project through acceptance by New England Power of the amendment to the Bear Swamp license. Project No. 2323-012 -2- issues in this proceeding. 4/ On October 6, 1994, New England Power filed the Settlement with the Commission. II. BACKGROUND Notice of the application has been published. Pursuant to that notice, timely motions to intervene were filed by the Deerfield River Watershed Association, the Deerfield River Compact, the Vermont Agency of Natural Resources (Vermont ANR), the United States Environmental Protection Agency, the United States Department of the Interior (Interior), the Town of Whitingham, Vermont, the Windham Regional Commission, the Town of Wilmington, Vermont, the Town of Wardsboro, Vermont, the Town of Readsboro, Vermont, the Commonwealth of Massachusetts (Massachusetts), and the Conservation Law Foundation. Motions to intervene in opposition were filed by Trout Unlimited and jointly by the Appalachian Mountain Club, New England Flow, American Rivers, Inc., and American Whitewater Affiliation (jointly, Appalachian); these motions were superseded by support of the Settlement filed October 6, 1994. The Vermont Natural Resources Council and the Vermont Federation of Sportsmen's Clubs (jointly, Vermont NRC) filed a joint motion to intervene in opposition to relicensing the project. 5/ In addition, a late-filed motion to intervene was filed by North American Whitewater Expeditions. / The parties to the Settlement are: New England Power, the United States Environmental Protection Agency, the National Park Service, the United States Fish and Wildlife Service, the Massachusetts Division of Fisheries and Wildlife, American Rivers, Inc., American Whitewater Affiliation, the Appalachian Mountain Club, the Conservation Law Foundation, the Deerfield River Compact, the Deerfield River Watershed Association, New England FLOW, and Trout Unlimited. The Vermont Agency of Natural Resources is not a party to the Settlement and has not indicated opposition to the Settlement. As discussed below, the water quality certification it issued contains conditions which conflict with the Settlement, but not significantly. / Vermont NRC opposes relicensing unless the license is conditioned to eliminate annual peaking and includes what it considers appropriate limitations on reservoir draw-downs at the Somerset, Searsburg, and Harriman developments, and Vermont NRC has proposed minimum flows for those developments. Vermont NRC also recommends upstream and downstream fish passage facilities at Searsburg. These issues were addressed in the Vermont Section 401 water certification proceeding, as discussed below. Project No. 2323-012 -3- Notice of the Settlement was issued October 19, 1994. The following state and federal agencies and citizens groups filed comments on the Settlement: Massachusetts, Interior, Appalachian, and the Windham Regional Commission. A final Environmental Impact Statement (EIS), prepared by the Commission s staff for this project, was issued on August 23, 1996. The EIS is incorporated by reference in this order. The staff also prepared a Safety and Design Assessment for this project, which is available in the Commission's public file. We have fully considered the motions and comments received from interested agencies and individuals in determining whether, and under what conditions, to issue this license. III. PROJECT DESCRIPTION The Deerfield Project No. 2323 consists of three developments in Vermont (Somerset, Searsburg, and Harriman) and five in Massachusetts (Sherman, Deerfield No. 5, Deerfield No. 4, Deerfield No. 3, and Deerfield No. 2), located between river miles 13.2 and 66 on the Deerfield River. The eight individual developments are as follows, from the most upstream to the most downstream: 6/ The Somerset facility, which has no power generating units, consists of a dam, and an impoundment 5.6 miles long with a gross surface area of 1,514 acres. The Searsburg development consists of a dam; an impoundment, about 0.9 miles long, with a surface area of 30 acres; and a powerhouse containing one generating unit with a capacity of 4.16 MW. Harriman, the most downstream development in Vermont, consists of a dam; a storage reservoir, nine miles long, with a surface area of 2,039 acres; a 12,812- foot-long tunnel conveying water from the reservoir; and a powerhouse containing three generating units with a total capacity of 33.6 MW. Sherman, the most upstream development in Massachusetts, consists of a dam; an impoundment, two miles long, having a surface area of about 218 acres; and a powerhouse containing one / Western Massachusetts Electric Company's (WMEC) Gardner Falls Project No. 2334 is located on the Deerfield River between the Deerfield No. 3 and Deerfield No. 2 developments of the Deerfield River Project. WMEC filed an application for a new license for the Gardner Falls Project on December 23, 1991. The Gardner Falls Project is analyzed in the same EIS as the Deerfield River Project. The Settlement, however, does not include the Gardners Falls Project, and WMEC is not a signatory to the Settlement. Project No. 2323-012 -4- generating unit with a capacity of 7.2 MW. Deerfield No. 5 consists of a dam; an impoundment, 0.75 miles long, with a surface area of 38 acres; conveyance sections of tunnel, conduit, and canal totaling 14,941 feet; and a powerhouse containing one generating unit with a capacity of 17.55 MW. 7/ Deerfield No. 4 consists of a dam; an impoundment, two miles long, with a surface area of 75 acres; a 1,514-foot-long power tunnel; and a powerhouse containing three generating units with a total capacity of 4.8 MW. Deerfield No. 3 consists of a dam; an impoundment, 1.3 miles long, with a surface area of 42 acres; a 677-foot-long power tunnel; and a powerhouse containing three generating units with a total capacity of 4.8 MW. 8/ Deerfield No. 2 consists of a dam; an impoundment, 1.5 miles long, with a surface area of 63.5 acres; 9/ and a powerhouse containing three generating units with a total capacity of 4.8 MW. A more detailed description of the project is set forth in ordering paragraph B(2). New England Power proposes no new capacity and no new construction. IV. SUMMARY OF THE OFFER OF SETTLEMENT A. General Provisions The Settlement names the parties to the agreement and states the purpose of the Settlement: to provide the terms and conditions for the resolution of the issues regarding fisheries, fish passage, wildlife, water quality, project lands management and control, recreation, and aesthetic resources raised by the applicant s proposal for a new license for the Deerfield River Project. Section I of the Settlement lists the eight Deerfield River developments, their respective generation capacities, and the state in which each development is located. Section I also gives a brief procedural history of the Project No. 2323 relicensing proceeding. / Deerfield No. 5 discharges directly into the Fife Brook impoundment, which is the lower reservoir for New England Power s Bear Swamp Pumped Storage Project. / The Deerfield No. 3 powerhouse discharges into a section of the Deerfield River that is impounded by WMEC s Gardners Falls Project. / Flow into the Deerfield No. 2 reservoir is from WMEC s Gardners Falls Project. Project No. 2323-012 -5- Section II states that New England Power agrees to implement the various obligations and requirements of the Settlement, and that the resource agencies and citizens groups agree to support a new license for the project for a term of 40 years. For those issues addressed in the Settlement, the parties have agreed not to propose or otherwise communicate to the Commission any license conditions other than those in the Settlement. Section II further provides that the Settlement shall become effective upon the later of issuance by this Commission of a new license consistent with the Settlement, or the expiration of any appeal period for water quality certification issued by Vermont and Massachusetts. If water quality certification issued by either state results in license terms inconsistent with the Settlement, any party may withdraw pursuant to Section VII of the Settlement. Any party may also withdraw if the environmental analysis leads to the addition of any license conditions inconsistent with the Settlement. B. Fisheries and Wildlife Section III of the Settlement sets forth minimum flow releases and related conditions, such as flows guaranteed from storage, for the Deerfield River developments and from Fife Brook Dam, which provides the lower reservoir for New England Power's Bear Swamp Pumped Storage Project No. 2669. 10/ The Settlement requires New England Power to maintain a stable elevation for the Somerset reservoir to facilitate loon nesting during the period May 1 through July 31 each year, and to manage the reservoir level at Harriman to support rainbow smelt and small mouth bass spawning and early life stages. Section III provides for New England Power to develop a plan for monitoring the minimum flows and reservoir operations required by the Settlement, and lists examples of the type of emergency conditions during which New England Power could vary the operational restrictions set out in the Settlement. Section III also requires New England Power to provide downstream fish passage facilities at the Deerfield Nos. 2, 3, and 4 developments, and upstream passage at Deerfield No. 2. The fish passage facilities at Deerfield No. 2 would be implemented in phases, determined by the number of adult Atlantic salmon / The Deerfield No. 5 powerhouse discharges directly into the Fife Brook Impoundment, which is the lower reservoir for the Bear Swamp Project. Because of Bear Swamp's alternating pumping and generating operation, fluctuations in water levels in the Fife Brook Impoundment are dependent upon Bear Swamp's operations as well as the releases from the Deerfield No. 5 powerhouse. Project No. 2323-012 -6- returning to the Deerfield River. The parties to the Settlement also agree to support a reservation of authority for Interior to prescribe upstream fish passage construction. Pursuant to Section III, New England Power would implement a program of wildlife enhancements as detailed in response to the Commission staff s Additional Information Request No. 19, filed October 1, 1993, to protect and enhance the wildlife resources affected by the project. The program includes provisions for maintaining active beaver flowages; establishing nesting structures for a combination of wood ducks, black ducks, and ospreys; and constructing and maintaining loon nesting platforms. C. Recreation and Aesthetic Issues Under Section IV of the Settlement, New England Power would implement a comprehensive recreational plan 11/ to install, operate, and maintain existing and proposed recreational facilities, primarily for picnicking, boating, and hiking. New England Power would provide 50 weekend and 56 weekday whitewater releases annually from Fife Brook Dam, and 26 weekend or holiday, and six Friday releases annually from the Deerfield No. 5 dam, in accordance with the monthly schedule set forth in Appendix A to the Settlement. Section IV also provides for New England Power to establish a Deerfield River Basin Environmental Enhancement Trust Fund (Fund), funded by the applicant, in the amount of $100,000, to finance watershed conservation, development of low-impact recreational and educational projects and facilities, and planning, design, maintenance and monitoring of such facilities and projects. The Fund would not be used to carry out the various obligations set forth in the other provisions of the Settlement. D. Project Lands Pursuant to Section V of the Settlement, New England Power agrees to grant conservation easements to qualified government or non-government land management organizations to provide for the continued preservation in a natural state of the lands within Project No. 2323 owned by New England Power in fee, and certain other non-project lands along the river downstream of Fife Brook Dam and the Deerfield No. 2 development owned by New England / The plan was submitted to the Commission as part of Exhibit E of New England Power s application for new license and New England Power's October 1, 1993 Response to Additional Information Request No. 25 of the Commission staff. Project No. 2323-012 -7- Power in fee. Those easements would run for the term of the new license. The conservation easements on non-project lands are conditioned on the Commission's approval that those lands be added to the project lands and be treated as land in utility use for accounting purposes in electric rate filings. New England Power also agrees to grant a similar conservation easement for the lands within its Bear Swamp Project No. 2669 for the remaining term of the Bear Swamp license. New England Power agrees to conduct its timber management programs in accordance with the guidelines attached as Appendix C to the Settlement, with the goals of protecting riparian zones along rivers and lakes, protecting visual quality within important public view sheds and along trail corridors, limiting use of clear cutting, minimizing interference with low impact recreational use and enjoyment, and preserving wildlife habitat. E. Project Retirement Under Section VI of the Settlement, New England Power agrees to perform a study, in consultation with the other parties to the Settlement, to identify and estimate the cost of various options for retirement of the project in the event of a surrender or implied surrender of the license, a denial by the Commission of a subsequent new license, permanent non-power operation, or partial or complete removal of the project. New England Power proposes to seek to recover in rate filings, after the study has been completed and submitted to the Commission for approval, expenditures (by the end of the license term) of sufficient funds to implement a project retirement plan. F. Approval of Settlement and Post-Settlement Matters Section VII is concerned with Commission approval of the Settlement, compliance with the terms and conditions of the Settlement, and reopener clauses. The parties submitted the Settlement to the Commission with the express condition that the Commission approve and accept all provisions therein and issue a new license consistent with the terms of the Settlement. In the event that the Commission changes, conditions, or modifies any provision, either through its own action or through incorporation of conditions of a Section 401 water quality certification, Section VII provides that the Settlement shall be considered modified to conform to the Commission's order unless any party to the Settlement provides written notice to the other parties within 30 days of the Commission's action that it is withdrawing from the Settlement because of the modification, change, or condition. Upon such notification, the Settlement shall be deemed withdrawn. Project No. 2323-012 -8- In the event that the Commission issues a new license that does not include conditions consistent with the Trust Fund or the project lands Section V of the Settlement, New England Power agrees to comply with and implement the terms of those parts of the Settlement as long as it receives a new license for the project with operational terms and conditions and financial impacts consistent with the Settlement. In the event that any dispute arises over compliance with the terms and conditions of the Settlement, the parties agree to engage in good faith negotiations for a period of at least 60 days, if necessary, in an effort to resolve the dispute. If resolution cannot be reached, then the parties may refer the dispute to the Commission pursuant to the Commission's Rules of Practice and Procedure (18 C.F.R. Part 385). The Settlement does not limit or restrict any party's authority to seek different or modified license conditions through a proceeding to reopen the license pursuant to the Commission s reserved authority. However, before any party asks the Commission to invoke any reopener clause, that party must request all parties to negotiate for a period of at least 90 days in an attempt to resolve the relevant issues. V. APPLICANT S PLANS AND CAPABILITIES In accordance with Sections 10(a)(2)(C) and 15 of the FPA, 12/ we have evaluated New England Power's record as a licensee, with respect to the following areas: (A) consumption improvement program; (B) compliance history and ability to comply with the new license; (C) safe management, operation, and maintenance of the project; (D) ability to provide efficient and reliable electric service; (E) need for power; (F) transmission service; (G) cost effectiveness of plans; and (H) actions affecting the public. A. Consumption Improvement Program Exhibit H of the New England Power application for the new license contains a detailed description of the load management and conservation programs undertaken since 1987. As of 1991, New England Power was pursuing about 13 different demand-side load management and conservation programs aimed towards its commercial, industrial and residential customers. New England Power has estimated that these programs and others will significantly affect future customer demand. It estimates that in the year 2000 these programs will reduce normal annual energy demand by 1,765 Gwh, the equivalent of about 6.4 percent. We / 16 U.S.C. 803(a)(2)(C) and 808(a). Project No. 2323-012 -9- conclude that New England Power has in place an adequate electricity consumption improvement program. B. Compliance History and Ability to Comply with a New License We have reviewed New England Power's license application in order to judge its ability to comply with the conditions of any license issued, and with applicable provisions of Part I of the FPA. We have also reviewed New England Power's record of compliance with Commission requirements under its prior license. Our review shows that New England Power has a satisfactory record of filing submissions in a timely manner and of generally complying with the terms of its existing license. Therefore, we conclude that New England Power has acquired or can acquire the resources and expertise necessary to carry out its plans and to comply with all conditions of a new license and of orders issued thereunder. C. Safe Management, Operation, and Maintenance of the Project New England Power owns and operates the Deerfield River Project No. 2323. The project dams and appurtenant facilities are subject to Part 12 of the Commission's Regulations concerning project safety. We have reviewed New England Power's management, operation, and maintenance of the project pursuant to the requirements of Part 12 and the associated Engineering Guidelines, including all applicable safety requirements such as warning signs and boat barriers, Emergency Action Plan, and Independent Consultant's Safety Inspection Report. We conclude that the project is being safely managed, operated, and maintained. D. Ability to Provide Efficient and Reliable Service New England Power reports that it plans to operate and maintain the project to provide efficient and reliable service (if granted a new license) by operating the facility in the same manner as in the past. Coordination and management of generation dispatch of all the Deerfield River hydroelectric facilities (including the Deerfield River Project) is performed by the New England Power Exchange (NEPEX). NEPEX is a region-wide electricity coordinating body which dispatches regional facilities in the manner that will provide regional consumers with the lowest-cost capacity and energy. We conclude that New England Power s plans and abilities are adequate to operate and maintain the project in a manner that will continue to provide efficient and reliable electric service in the future. Project No. 2323-012 -10- E. Need for Power The area served by New England Power, including its Deerfield River Project, is located in the New England Power Pool (NEPOOL) Sub-Region of the Northeast Power Coordinating Council (NPCC). NPCC annually forecasts electrical supply and demand in the nation and in the region for a ten-year period. These reports are mandated by the United States Department of Energy (DOE) and are referred to as DOE Form OE-411 Reports. NPCC s 1995 OE-411 Report forecasts a continued demand growth rate during the ten-year period in the NEPOOL area and little or no net resource additions, resulting in decreased reserve margins. The Deerfield River Project, which generates about 289 gigawatt-hours annually, is included in this forecast as part of the existing resource mix. The electricity generated from the project would benefit the region by providing a portion of the needed regional power. We conclude that present and future use of the project s power, its displacement of non-renewable fossil-fired generation, and its contribution to a diversified generation mix, support a finding that the power from the Deerfield River Project will help meet a need for power in the NEPOOL area in the short and long terms. F. Transmission Services The existing transmission services consist of lines from the respective powerhouses to New England Power s transmission system. G. Cost Effectiveness of Plans New England Power has no plans for additional facilities or project modifications, other than recreational and environmental enhancements. We conclude that the project, as presently configured and as operated according to this order consistent with environmental considerations, fully develops the economical hydropower potential of the site in a cost-effective manner. H. Actions Affecting the Public Environmental enhancement measures included in this license will result in beneficial changes to the environmental quality of the project area, including aquatic resources, and to public recreation. Project No. 2323-012 -11- VI. WATER QUALITY CERTIFICATION Under Section 401(a)(1) of the Clean Water Act (CWA), 13/ an applicant for a federal license or permit to conduct any activity that may result in any discharge into navigable waters must obtain from the state in which the discharge originates certification that any such discharge will comply with applicable water quality standards. The Commission may therefore not issue a license for a hydropower project unless the relevant state agency either has issued a water quality certification for the project or has waived certification by failing to act on a request for certification within a reasonable period of time, not to exceed one year. 14/ The Massachusetts Department of Environmental Protection, on December 14, 1994, issued a Section 401 certification for the five developments located in Massachusetts. 15/ The certification contains eleven conditions, labeled A to K. The Vermont ANR, on January 30, 1995, issued a water quality certification for the three developments located in Vermont. 16/ The certification contains conditions labeled A to X. All the certification conditions are included in the new license, except for those discussed next, which we conclude are beyond the scope of CWA Section 401. Condition I of the Massachusetts certification provides that any modification of project operation that would affect states certification conditions must be approved by Massachusetts, and Condition J reserves Massachusetts right to review, and modify if necessary, the certification conditions if the Vermont certification results in non-compliance with the Massachusetts certification. Similarly, Condition W of the Vermont certification provides that any changes to the project that would have a significant or material effect on the certification, must be submitted to Vermont ANR for prior review and approval. These conditions in effect give the respective states the opportunity to revisit their certifications. Section 401(a)(3) of the CWA sets out the exclusive manner in which state certifications may be modified and makes clear that the process is to be initiated / 33 U.S.C. 1341(a)(1). / Id. / See Appendix A to this order. / See Appendix B to this order. Project No. 2323-012 -12- by the federal licensing agency, not the state. 17/ Thus, the Commission determines whether proposed license amendments require new water quality certification. 18/ Massachusetts certification Conditions I and J and Vermont s certification Condition W are therefore beyond the scope of their authority under Section 401 and will not be included in the license. Condition O provides that any proposals for project maintenance or repair work involving the river must be submitted to Vermont ANR for prior review and approval. Vermont ANR has no authority to halt or order maintenance and repair of the Deerfield Project. A certification becomes a license condition; once the license is issued, Section 401 gives the state no further role in the administration of the license. Condition O, which would give the state the ability to control the timing of activities under a federal license, is thus beyond the scope of Section 401 and will not become part of the license. VII. SECTION 18 FISHWAY PRESCRIPTIONS Section 18 of the FPA 19/ provides that the Commission shall require construction, operation, and maintenance by a licensee of such fishways as may be prescribed by the Secretary of Commerce or the Interior. Interior, on October 5, 1994, submitted the following measures under FPA Section 18, which are consistent with the fish passage measures agreed to in Section III.F. of the Settlement: permanent downstream fish passage measures at the Deerfield Nos. 2, 3 and 4 developments and upstream fish passage facilities at Deerfield No. 2, in accordance with plans filed by New England Power in its relicense application. Interior further requests reservation of its authority to prescribe fishways in the future. Aspects of Interior s prescription are beyond the scope of its authority under Section 18. 20/ We will, however, follow the / See, e.g., Great Northern Paper, Inc., 77 FERC 61,068 at pp. 61,271-73 (1996). / The Commission s regulations, 18 C.F.R. 4.38(7)(iii), provide that, if an applicant seeks to amend its application or license, it must make a new request for water quality certification if the amendment would have a material adverse impact on the discharge from the project. / 16 U.S.C. 811. / Interior would require that the facilities be constructed and operational within two years of the issuance of the (continued...) Project No. 2323-012 -13- recommendations of the EIS, and require the substance of the prescription, pursuant to our Section 10(a)(1) authority. Articles 408, 409, and 410 of the new license require New England Power to file plans for fish passage measures. We recognize that future fish passage needs cannot always be determined at the time of project licensing. The Commission s practice has been to include a license article that reserves the Secretary s authority to prescribe facilities for fish passage. 21/ Therefore, Article 407 reserves the Commission s authority to require fishways that the Secretary of the Interior may prescribe in the future. VIII. RECOMMENDATIONS OF FEDERAL AND STATE FISH AND WILDLIFE AGENCIES AND THE SECTION 10(J) PROCESS Section 10(j)(1) of the FPA 22/ requires the Commission, when issuing a license, to include license conditions, based on recommendations of federal and state fish and wildlife agencies submitted pursuant to the Fish and Wildlife Coordination Act, to "adequately and equitably protect, mitigate damages to, and enhance, fish and wildlife (including related spawning grounds and habitat)" affected by the project. By letter of October 5, 1994, Massachusetts, on behalf of its Department of Environmental Management, Department of Environmental Protection, and Division of Fisheries and Wildlife and Environmental Law Enforcement, submitted, as Section 10(j) recommendations, the terms and conditions set forth in the Settlement. Interior's October 5, 1994 filing submits recommendations pursuant to Section 10(j) concerning minimum flows, reservoir levels, and conservation easements, which are consistent with Sections III and V of the Settlement. The license contains conditions consistent with those recommendations. (...continued) license. However, only the Commission has the authority to control the timing of activities under its license. / The Commission has specifically sanctioned the reservation of fishway prescription authority at relicensing. See Wisconsin Public Service Corporation, 62 FERC 61,095 (1993), aff d, Wisconsin Public Service Corporation v. FERC, 32 F.3d 1165 (7th Cir. 1994). / 16 U.S.C. 803(j)(1)(A). Project No. 2323-012 -14- IX. OTHER AGENCY RECOMMENDATIONS Massachusetts' October 5, 1994 letter also stated that its Section 10(a) recommendations are the terms and conditions set forth in the Settlement. Interior states that its Section 10(a) recommendations are the provisions of the Settlement relative to recreational facilities, whitewater boating releases, the establishment of an environmental enhancement fund, and provisions for the future decommissioning of the project. The license contains conditions consistent with those recommendations. X. COMPREHENSIVE PLANS Section 10(a)(2)(A) of the FPA requires the Commission to consider the extent to which a project is consistent with federal or state comprehensive plans for improving, developing, or conserving a waterway or waterways affected by the project. 23/ Of the comprehensive plans filed with the Commission, the Commission staff identified 18 plans (four in Massachusetts, ten in Vermont, and four federal plans) relevant to the hydroelectric projects on the Deerfield River and reviewed those plans. 24/ / 16 U.S.C. 803(a)(2). Comprehensive plans are defined at 18 C.F.R. 2.19 (1996). / The Massachusetts plans are: (1) Deerfield River comprehensive management plan, Franklin County Planning Department, June 1990; (2) Massachusetts outdoors for our common good: open space and outdoor recreation in Massachusetts, Massachusetts Department of Environmental Management, Division of Planning and Development, December 1988; (3) Connecticut River Basin water quality management plan, Massachusetts Department of Environmental Quality Engineering, Division of Water Pollution Control, June 1983; and (4) Connecticut River Basin fish passage, flow, and habitat alteration considerations in relation to anadromous fish restoration, Technical Committee for Fisheries Management of the Connecticut River, October 1981. The Vermont plans are: (1) The waterfalls, cascades, and gorges of Vermont, Jenkins, J. and P. Zika, Vermont Agency of Natural Resources, May 1986; (2) Vermont state comprehensive outdoor recreation plan, 1983-1988, Vermont Agency of Environmental Conservation, June 1983; (3) Vermont Rivers Study, Vermont Agency of Environmental Conservation, 1986; (4) Hydropower in Vermont: an assessment of environmental problems and opportunities, Vermont Agency of Natural Resources, Department of Environmental Conservation, (continued...) Project No. 2323-012 -15- The Commission staff also reviewed another plan that addresses resource concerns for the area but is not designated as a Commission approved comprehensive plan. 25/ The project does not conflict with any of these plans. XI. COMPREHENSIVE DEVELOPMENT Sections 4(e) and 10(a)(1) of the FPA, respectively, require the Commission, in acting on applications for license, to give equal consideration to the power and development purposes and to the purposes of energy conservation, the protection, mitigation of damage to, and enhancement of fish and wildlife, the protection of recreational opportunities, and the preservation of other aspects of environmental quality; and require that any license issued shall be such as in the Commission's judgment will be best adapted to a comprehensive plan for improving or developing a waterway or waterways for all beneficial public (...continued) May 1988; (5) Preliminary comprehensive rivers plan for the Deerfield River, Vermont: an inventory of uses, values, and goals, Vermont Agency of Natural Resources, Department of Environmental Conservation, Windham Regional Commission, July 1991; (6) Comprehensive river plan for the Deerfield River watershed, Vermont Department of Environmental Conservation, November 1992; (7) 1988 Vermont recreation plan, Vermont Agency of Natural Resources, Department of Forests, Parks and Recreation, 1988; (8) Wetlands component of the 1988 Vermont recreation plan, Vermont Agency of Natural Resources, Department of Forests, Parks and Recreation, Wetlands Steering Committee, July 1988; (9) Vermont's lake trout management plan for inland waters, Vermont Agency of Natural Resources, Department of Fish and Wildlife, May and July, 1990; and (10) A strategic plan for the restoration of Atlantic salmon to the Connecticut River Basin, Policy Committee for Fisheries Management of the Connecticut River, September 1982. The federal plans are: (1) North American waterfowl management plan, U.S. Fish and Wildlife Service, May 1986;(2) Fisheries USA: the recreational fisheries policy of the U.S. Fish and Wildlife Service, U.S. Fish and Wildlife Service, undated; (3) Final environmental impact statement - restoration of Atlantic salmon to New England rivers, Department of the Interior, May 1989; and (4) The Nationwide rivers inventory, National Park Service, January 1982. / Green Mountain National Forest Land and Resource Management Plan, U.S. Forest Service 1986. Project No. 2323-012 -16- uses. The decision to license this project, and the terms and conditions included herein, reflect such consideration. The project as proposed in the Settlement, and based on current economic conditions without future escalation or inflation, would cost about $10,871,000 annually (42.8 mills/kWh) and would produce about 254.0 GWh of energy annually having a current value of about $13,002,000 (51.2 mills/kWh) for a current net annual power benefit of about $2,131,000 (8.4 mills/kWh). As licensed with the added requirements of the two state water quality certifications and our recommendations, the project will produce about 247.8 GWh of energy annually, at a current net annual benefit of about $1,898,000. The EIS analyzed the effects associated with the issuance of a new license for the Deerfield Project and recommends a variety of measures to protect and enhance the environment resources, which, as discussed above, we adopt. XII. DISCUSSION A. The Settlement Generally It has long been recognized that an agency's authority to approve settlements is an essential regulatory tool, 26/ and that the wide discretion afforded in this area is supported by the broad public interest favoring the settlement of complex matters. 27/ Settlement procedures provide the opportunity to eliminate the need for more lengthy proceedings, either formal or informal, when the parties reach an agreement on the issues and if that agreement is compatible with the public interest. 28/ If a proposed settlement is uncontested by the parties to the proceeding, it may be approved by the Commission upon a finding that the settlement appears to be fair and reasonable and in the public interest. 29/ The Commission's finding in this / Pennsylvania Gas & Water Co. v. FPC, 463 F.2d 1242, 1246 (D.C. Cir. 1972). / Southern Union Gas Co. v. FERC, 840 F.2d 964, 971 (D.C. Cir. 1988). / Pennsylvania, 463 F.2d at 1247. / 18 C.F.R. 385.602 (g)(3). See also City of Seattle, Washington, 71 FERC 61,159 (1995), reh g 75 FERC 61,319 (1996); Consumers Power Company, 68 FERC 61,077 (1994); Public Utility District No. 2 of Grant County, Washington, (continued...) Project No. 2323-012 -17- regard must be based on its independent determination that the settlement merits approval, regardless of whether support or opposition to the settlement has been expressed. 30/ In considering a settlement proposal, the Commission's decision may impose such terms as it deems fair from the evidence before it. 31/ The Commission may determine that modification or total rejection of the settlement proposal is appropriate. In the instant proceeding, the Settlement specifies that if the Commission issues orders "accepting the Settlement with modifications or conditions," the Settlement would automatically be modified to conform to the terms of the orders unless at least one party objects. Thus, the parties understood that the Commission may adopt those provisions of the Settlement it finds appropriate and modify or reject those which the Commission believes conflict with the public interest. B. Environmental Analysis The environmental analysis of New England Power's license application, as amended by the Settlement, included an examination of water quality, the maintenance of minimum flows, fisheries and fish passage, vegetation and wildlife, geological resources, visual resources, cultural resources, aesthetic resources, and recreation. New England Power's proposed project conditions will have many beneficial effects. The minimum flows provided in the nearly 12 miles of bypassed reaches of the project will improve the fisheries. Fish passage facilities will be installed at certain developments. Recreational enhancements, including whitewater releases and improved facilities, will be developed to better serve the public. C. Land Management In Section V of the Settlement, New England Power proposed to grant conservation easements to qualified government or non-government land management organizations to provide for continued preservation in a natural state of lands within the (...continued) et al., 45 FERC 61,401 (1988); Long Lake Energy Corporation, 34 FERC 61,225 (1986). / Michigan Consolidated Gas Co. v. FPC, supra, 283 F.2d at 224-266. See also Mobil Oil Corporation v. FPC, 427 U.S. 283 (1973). / Consolidated Gas Supply v. FERC, 606 F.2d 323, 330 (1979). Project No. 2323-012 -18- project owned by New England Power, 32/ and certain non-project lands owned by New England Power located downriver of Fife Brook Dam and the Deerfield No. 2 development and along the river corridor. The grant of conservation easements on the non-project lands is conditioned on the Commission s adding those lands to the project lands and treating such as Land in Utility Use for accounting purposes in electric rates proceedings. Article 427 provides for the requested conservation easements, all of which are to be included within the project boundary. D. Enhancement Fund In Section IV.C of the Settlement, New England Power agrees to establish the Deerfield River Basin Environmental Enhancement Trust Fund (Fund) in the amount of $100,000, to finance its development, maintenance, and monitoring of watershed conservation and low-impact recreational and educational projects and facilities. 33/ The Fund will be administered by a three- member committee, which will decide the appropriate distribution of available money each year. The committee will consist of representatives from New England Power, Vermont ANR, and Massachusetts. The committee will annually submit to the Commission for approval a list of activities selected for funding. Eligible fund recipients include non-profit organizations, educational institutions, and units of government within Vermont and Massachusetts. To be eligible for funding, a proposed activity must provide a clear public benefit and contribute to the goals of enhancing low-impact recreational, environmental education, or environmental protection opportunities directly related to the Deerfield River watershed, and must be located within the Deerfield River Basin or in towns with some portion falling within the basin. Article 429 provides for the establishment of the requested Fund. / See Niagara Mohawk Power Corporation, 76 FERC 61,152 (1996) at p. 61,833. New England Power is required, under the terms of Articles 5 and 430 of the new license we issue today, to obtain prior Commission approval for the conveyance of certain interests in project property. Thus, prior to making the conveyances required by the Settlement, New England Power must obtain Commission approval of the transfer instruments. / New England Power requested that the new license include all provisions of the Settlement, including the Fund. See pages 21 and 22 of the Settlement. Project No. 2323-012 -19- E. Project Retirement New England Power agrees, as part of the Settlement, to perform a study, in consultation with the other parties to the Settlement, to identify and estimate the cost of various options for retirement of the project in the event of a surrender or implied surrender of the license, a denial by the Commission of a subsequent new license, permanent non-power operation, or partial or complete removal of the project. The project retirement options will be developed in conjunction with an independent licensed professional engineer approved by the Commission. New England Power will submit the results of the study to the Commission and the parties to the Settlement for comment, and seek from the Commission approval of the most appropriate likely option for eventual retirement (the "Project Retirement Plan"). New England Power proposes to seek to recover in rate filings with the Commission the appropriate amounts during the remaining license term, to accumulate by the end of the new license term sufficient funds to implement project retirement under the approved plan. License Article 204 implements the project retirement provisions described above. The Commission will accept the approach outlined in the Settlement, as a preliminary step toward the eventual goal of establishing a trust fund to be used for project retirement by New England Power, subject to the same general directions we gave in Consumers Power regarding establishment and implementation of trust funds under this Commission s jurisdiction. 34/ XIII. REQUEST FOR STAY OF THE LICENSE New England Power submitted on August 14, 1996, a request to defer relicensing action by the Commission, based on uncertainty regarding provisions of the Settlement that allow any party to void the Settlement if the water quality certification issued by either state results in license terms inconsistent with the Settlement. Vermont NRC had filed an appeal of the Vermont certification, challenging findings, conclusions, and conditions contained in the certification; New England Power had also filed an appeal of the Vermont certification. On February 24, 1997, New England Power, Vermont NRC and the Vermont Agency of Natural Resources jointly filed a motion to dismiss the appeals of the water quality certification. The Vermont Water Resources Board granted the motion on March 17, 1997. Accordingly, we conclude that New England Power s request to defer action on its application for a new license is moot. / See our discussion of project retirement funds in Consumers Power Company, 68 FERC 61,077 at pp. 61,380-83 (1994). Project No. 2323-012 -20- XIV. LICENSE TERM Pursuant to Section 15(e) of the FPA, 35/ relicense terms shall be not less than 30 years nor more than 50 years. According to the Settlement filed in this proceeding, the parties contemplate a 40-year license for the Deerfield River Project. Because the term of the new license was an important element in the negotiations which led to the Settlement, and because New England Power is proposing substantial environmental enhancement measures for the Deerfield River Project, we will issue the license for a 40-year term. XV. SUMMARY The EIS issued for this project includes background information, analysis of impacts, and support for related license articles. The design of this project is consistent with engineering safety standards. The project will be safe if operated and maintained in accordance with the requirements of this license. We provide analysis of related issues in the Safety and Design Assessment prepared for this project. The Commission orders: (A) This license is issued to the New England Power Company (New England Power or Licensee) for a period of 40 years, effective the first day of the month in which it is issued, to operate and maintain the Deerfield River Project. This license is subject to the terms and conditions of the Federal Power Act (FPA), which is incorporated by reference as part of this license, and to the regulations the Commission issues under the provisions of the FPA. (B) The project consists of: (1) All lands, to the extent of New England Power's interests in those lands, as shown on Exhibits K-2 through K-8 (Sheet 2) (FERC Drawing Numbers 2323-2033 through 2323-2043) of the application. / 16 U.S.C. 808(e). Project No. 2323-012 -21- Exhibit G FERC No. Showing K-2 2323-2033 Index Map K(1)-2 2323-2034 Deerfield No.2 Project Map K(2)-2 2323-2035 Deerfield No.3 Project Map K(3)-2 2323-2036 Deerfield No.4 Project Map K(4)-2 2323-2037 Deerfield No.5 Project Map K(5)-2 2323-2038 Sherman Project Map K(6)-2 2323-2039 Harriman Project Map Sheet 1 of 2 K(6)-2 2323-2040 Harriman Project Map Sheet 2 of 2 K(7)-2 2323-2041 Searsburg Project Map K(8)-2 2323-2042 Somerset Project Map Sheet 1 of 2 K(8)-2 2323-2043 Somerset Project Map Sheet 2 of 2 (2) Project works of the Deerfield project consists of eight developments as follows: Somerset consists of: (1) an earthfill dam structure about 110 feet high and 2,101 feet long with a crest elevation of 2133.58 feet (MSL); (2) main outlet works located at the eastern end of the dam which consists of two gated, 48 inch diameter pipes that are used to control reservoir discharge; (3) a side channel spillway, about 800 feet long, 45 feet wide, and from six to 30 feet deep, located at the western end of the dam with a crest elevation of 2133.58 feet mean sea level (MSL); (4) an impoundment, about 5.6 miles long, with a gross surface area of about 1,514 acres (AC), a gross storage capacity of 57,345 acre-feet (AF), a usable storage capacity of 20,614 AF, and a normal pool headwater elevation range of 2,113.10 to 2,128.10 feet msl. Searsburg consists of: (1) an earthfill dam structure about 50 feet high and 475 feet long with a 137 foot long concrete gravity spillway, with a crest elevation of 1749.66 feet msl, topped with 5-foot flashboards (from May 1 to October 31); (2) an intake and penstock with (a) a wood stave conduit 8 feet in diameter and 18,412 feet long, (b) a steel differential surge Project No. 2323-012 -22- tank 50 feet in diameter and 34 feet high, and (c) a steel penstock 6.5 feet in diameter and 495 feet long; (3) a powerhouse containing one vertical Francis turbine unit with a capacity of 4,160 kilowatts (KW); (4) an impoundment, about 0.9 miles long, with a surface area of about 30 AC, a gross storage capacity of 412 AF, a usable storage capacity range of 67 to 197 AF, and a normal pool elevation range of 1746.66 to 1754.66 feet msl; and (5) appurtenant facilities. Harriman consists of: (1) an earthfill dam 215.5 feet high and 1,250 feet long; (2) a storage reservoir, nine miles long, having a surface area of about 2,039 AC, a gross storage capacity of 117,300 AF, a usable storage capacity of 103,375 AF (from elevation 1405.66 to 1491.66 feet msl), and a normal pool headwater elevation of 1449.70 to 1491.66 feet msl; (3) morning glory spillway, with sixteen gates, at a sill elevation of 1491.66 msl, topped with six-foot-high flashboards; (4) two eight-foot diameter valves, a 12,812-foot long, 14-foot-diameter concrete lined horseshoe shaped intake tunnel, a steel differential surge tank 34 feet in diameter and 184 feet high, and three steel penstocks nine feet in diameter and 620 feet long; (5) a powerhouse containing three vertical Francis turbine units with a total hydraulic capacity of 1,600 cfs, and a capacity of 11,200 KW each; and (6) appurtenant facilities. Sherman consists of: (1) a 110-foot-high 810-foot-long earthfill dam, with a crest elevation of 1129.66 feet msl; (2) a 179-foot-long concrete gravity spillway, with a crest elevation of 1103.66 feet msl, topped with four-foot-high flashboards which operate year-round; (3) a concrete and brick intake structure and penstock which conveys water to the powerhouse via a concrete conduit 98 feet in length with a cross-sectional area of 142 square feet, and a steel penstock 13 feet in diameter and 227 feet long; (4) an impoundment, about two miles long, with surface area of about 218 AC, gross storage capacity of 3,593 AF, useable storage capacity of 1,359 AF, and a normal pool headwater elevation range of 1104.66 to 1107.66 feet msl; (5) a powerhouse containing one vertical Francis turbine unit with a capacity of 7,200 kW; and (6) appurtenant facilities. Deerfield No. 5 consists of: (1) the Deerfield No. 5 Dam, comprised of a concrete gravity spillway about 35 feet high and 90 feet long, with a top elevation of 1,109.66 feet msl, topped with eight-foot-high hydraulic steel flap gates which maintain a normal reservoir elevation of 1027.66 feet msl, a concrete intake structure, consisting of two eight-foot wide by 7.75-foot-high sluice gates, with a sill elevation of 1002.28 feet msl, and a single 12.5 foot by 13-foot intake gate with a sill elevation of 1008.16 msl; (2) a small concrete gravity diversion structure on Dunbar Brook approximately 12 feet high and 160 feet long; (3) conveyance sections of tunnel, concrete conduit, and canal Project No. 2323-012 -23- totaling 14,941 feet; (4) a steel penstock ten feet in diameter and 400 feet long; (5) an impoundment about 0.75 miles long, having a surface area of about 38 AC, a storage capacity of 118 AF, and a normal pool headwater elevation range of 1022.66 to 1026.66 feet msl; (6) a powerhouse containing one vertical Francis turbine unit with a capacity of 17,550 KW and a hydraulic capacity of 1,250 cfs; (7) a switchyard located on River Road across from the Bear Swamp Visitor's Center; and (8) appurtenant facilities. Deerfield No. 4 consists of: (1) an earthfill dam (with a concrete core) about 50 feet high and 160 feet long; (2) a 241-foot-long concrete gravity spillway with a crest elevation of 465.66 feet msl, topped with six eight-foot-high wooden flashboards; and (3) three sluice gates located in the east abutment, two with a sill elevation of 462.66 feet msl and another with a sill elevation of 464.66 feet msl; (4) an impoundment about two miles long, having a surface area of about 75 AC, a gross storage capacity of 467 AF, and a usable storage capacity of 432.AF, and a normal pool headwater elevation range of 465.66 to 473.66 feet msl; (5) a power tunnel which conveys water from the intake structure at the impoundment via a 12.5-foot diameter, 1,514-foot-long concrete and brick-lined horseshoe shaped tunnel that leads to the powerhouse forebay; (6) a powerhouse containing three horizontal Francis turbine units with a capacity of 1,600 KW each, and a hydraulic capacity of 1,490 cfs; and (7) appurtenant facilities. Deerfield No. 3 consists of: (1) a concrete gravity spillway about 15 feet high and 475 feet long with a crest elevation of 396.66 feet msl, topped with six-foot-high wooden flashboards; (2) two sluice gates; (3) a power tunnel 677 feet long, 17 feet wide by 12.5 high concrete conduit; (4) an impoundment about 1.3 miles long, having a surface area of about 42 AC, a gross storage capacity of 221 AF, a usable storage capacity of 200 AF and a normal pool headwater elevation range of 396.66 to 402.66 feet msl; (5) a powerhouse containing three horizontal Francis turbine units with a capacity of 1,600 KW each and a hydraulic capacity of 1490 cfs; (6) a switchyard located within the powerhouse; and (7) appurtenant facilities. Deerfield No. 2 consists of: (1) a concrete gravity spillway about 70 feet high and 447 feet long, with a top elevation of 284.66 feet msl, topped with six-foot-high wooden flashboards and four sluice gates; (2) an impoundment about 1.5 miles long, with a surface area of about 63.5 AC, a gross storage capacity of 350 AF, a usable storage capacity of 300 AF, and a normal pool headwater elevation range of 284.66 to 290.66 feet msl; (3) a powerhouse located adjacent to the Deerfield No. 2 Dam, containing three horizontal Francis turbine units with a capacity of 1,600 KW each and a hydraulic capacity of 1450 cfs; Project No. 2323-012 -24- (4) a switchyard located within the powerhouse; and (5) appurtenant facilities. The project works generally described above are more specifically shown and described by Exhibits A and F. Exhibit A: The following sections of Exhibit A filed December 27, 1991: Exhibit A Table Description A-1 Searsburg Project Data A-2 Harriman Project Data A-3 Sherman Project Data A-4 Deerfield No. 5 Project Data A-5 Deerfield No. 4 Project Data A-6 Deerfield No. 3 Project Data A-7 Deerfield No. 2 Project Data Exhibit F: The following Exhibit F drawings filed December 27, 1991: Exhibit F Drawing FERC No. Description F(1) Sheet 1 2323-2001 Deerfield No. 2 General Layout F(1) Sheet 2 2323-2002 Deerfield No. 2 Dam and Powerhouse Plan & Elev. F(1) Sheet 3 2323-2003 Deerfield No. 2 Gate & Powerhouse Sections F(2) Sheet 1 2323-2004 Deerfield No. 3 General Layout F(2) Sheet 2 2323-2005 Deerfield No. 3 Plan of Dam & Conduit Structures F(2) Sheet 3 2323-2006 Deerfield No. 3 Sections of Dam & Conduit F(2) Sheet 4 2323-2007 Deerfield No. 3 Sections of Intake & Powerhouse Project No. 2323-012 -25- F(3) Sheet 1 2323-2008 Deerfield No. 4 General Layout F(3) Sheet 2 2323-2009 Deerfield No. 4 Plan of Dam, Tunnel & Forebay F(3) Sheet 3 2323-2010 Deerfield No. 4 Sections of Dam, Gate & Tunnel F(3) Sheet 4 2323-2011 Deerfield No. 4 Section of Intake & Powerhouse F(4) Sheet 1 2323-2012 Deerfield No. 5 General Layout F(4) Sheet 2 2323-2013 Deerfield No. 5 Dam & Intake Plan & Sections F(4) Sheet 3 2323-2014 Deerfield No. 5 Intake- Powerhouse Plan & Sect. F(4) Sheet 4 2323-2015 Deerfield No. 5 Sections of Powerhouse F(5) Sheet 1 2323-2016 Sherman General Layout F(5) Sheet 2 2323-2017 Sherman Sections of Dam & Spillway F(5) Sheet 3 2323-2018 Sherman Cross Sections of Spillway Channel F(5) Sheet 4 2323-2019 Sherman Sections of Intake & Powerhouse F(6) Sheet 1 2323-2020 Harriman General Layout F(6) Sheet 2 2323-2021 Harriman Dam Embankment F(6) Sheet 3 2323-2022 Harriman Spillway Plan & Sections F(6) Sheet 4 2323-2023 Harriman Intake Plan & Sections F(6) Sheet 5 2323-2024 Harriman Powerhouse & Vicinity Plan F(6) Sheet 6 2323-2025 Harriman Powerhouse Plan & Section Project No. 2323-012 -26- F(7) Sheet 1 2323-2026 Searsburg General Layout F(7) Sheet 2 2323-2027 Searsburg Dam Plan & Section F(7) Sheet 3 2323-2028 Searsburg Intake & Spillway Sections F(7) Sheet 4 2323-2029 Searsburg Surge Tank & Powerhouse F(8) Sheet 1 2323-2030 Somerset Dam & Spillway Plan & Sections F(8) Sheet 2 2323-2031 Somerset Control Works Plan & Sections F(8) Sheet 3 2323-2032 Somerset Spillway Channel Plan & Profile (3) All of the structures, fixtures, equipment, or facilities used to operate or maintain the project and located within the project boundary, all portable property that may be employed in connection with the project and located within or outside the project boundary, and all riparian or other rights that are necessary or appropriate in the operation or maintenance of the project. (C) Exhibits A, F, and G of the license application are approved and made part of the license. (D) This license is subject to the articles set forth in Form L-3 (October 1975) entitled "Terms and Conditions of License for Constructed Major Project Affecting Navigable Waters of the United States" and the following additional articles: Article 201. The Licensee shall pay the United States the following annual Charges, effective as of the first day of the month in which this license is issued: For the purposes of reimbursing the United States for costs of administering Part I of the Federal Power Act, a reasonable amount as determined in accordance with the provisions of the Commission's regulations in effect from time to time. The authorized installed capacity for that purpose is 76,900 kilowatts. Article 202. If the Licensee's project was directly benefitted by the construction work of another Licensee, a permittee, or the United States on a storage reservoir or other Project No. 2323-012 -27- headwater improvement during the term of the original license (including extensions of that term by annual licenses), and if those headwater benefits were not previously assessed and reimbursed to the owner of the headwater improvement, the Licensee shall reimburse the owner of the headwater improvement for those benefits, at such time as they are assessed, in the same manner as for benefits received during the term of this new license. Article 203. Pursuant to Section 10(d) of the FPA, a specified reasonable rate of return upon the net investment in the project shall be used for determining surplus earnings of the project for the establishment and maintenance of amortization reserves. The Licensee shall set aside in a project amortization reserve account at the end of each fiscal year one half of the project surplus earnings, if any, in excess of the specified rate of return per annum on the net investment. To the extent that there is a deficiency of project earnings below the specified rate of return per annum for any fiscal year, the Licensee shall deduct the amount of that deficiency from the amount of any surplus earnings subsequently accumulated, until absorbed. The Licensee shall set aside one-half of the remaining surplus earnings, if any, cumulatively computed, in the project amortization reserve account. The Licensee shall maintain the amounts established in the project amortization reserved account until further order of the Commission. The specified reasonable rate of return used in computing amortization reserves shall be calculated annually based on current capital ratios developed from an average of 13 monthly balances of amounts properly includible in the Licensee's long- term debt and proprietary capital accounts as listed in the Commission's Uniform System of Accounts. The cost rate for such ratios shall be the weighted average cost of long-term debt and preferred stock for the year, and the cost of common equity shall be the interest rate on 10-year government bonds (reported as the Treasury Department's 10 year constant maturity series) computed on the monthly average for the year in question plus four percentage points (400 basis points). Article 204. Within 30 months from the date of issuance of this license, the Licensee shall begin consultations with all parties to the Offer of Settlement dated October 5, 1994, including the U.S. Fish and Wildlife Service, Vermont Agency of Natural Resources, the Massachusetts Division of Fisheries and Wildlife, and the general public on a plan for studying the costs that would be associated with potential retirement of the project. The consultation shall include a transcribed public meeting to discuss the retirement options for the project. Project No. 2323-012 -28- Within six months after consultation begins, the Licensee shall submit to the Commission a study plan. The Licensee shall allow a minimum of 45 days for the consulted entities and general public to comment and to make recommendations before filing the study plan with the Commission. If the Licensee does not adopt a recommendation made by a consulting entity or the public, the filing shall include the Licensee's reasons, based on project- specific information. The Commission shall conduct such proceedings on the study plan as it deems appropriate. At a minimum, the study plan shall describe the proposed scope of the study, including the retirement option or options to be examined, why they were selected, and what actions would be involved under each option. The plan shall also contain an assessment of the likelihood of project retirement at or before the end of the license term. The Commission may require that further information be submitted as part of the study plan and may direct changes in the plan submitted by the Licensee. Upon Commission approval, the Licensee shall implement the plan, including any changes required by the Commission. Within 24 months after Commission approval of the study plan, the Licensee shall file with the Commission a study report documenting the results of the study. When the study report is submitted to the Commission, copies shall also be served on all consulted entities, and copies shall be made available to the public in the Licensee s public files at each project development and at a public library in the county or counties in which the project is located. Following receipt of the study report, and after public notice and opportunity for hearing, the Commission may issue such orders with respect to project retirement and financing as it deems appropriate. When the Licensee files the study report, the Licensee shall also submit a plan for funding any retirement costs. If the Licensee contemplates collection of monies from ratepayers to be deposited in a trust, it shall also submit a proposed trust agreement which shall be consistent with then-prevailing Commission practice governing nuclear decommissioning trust agreements or other analogous situations. The Commission reserves the right to direct such changes as it deems appropriate. Article 401. Within 180 days from the date of the issuance of this license, the Licensee shall file with the Commission, for approval, a plan and schedule for operating the gates of the Deerfield Project's Somerset dam to manage water levels in the Somerset reservoir from May 1 to July 31. The purpose of the plan is to ensure that water levels in the reservoir protect nesting common loons, as described in Article 406. The plan shall include a schedule for: (1) implementing the plan to ensure it is operational no later than the first common Project No. 2323-012 -29- loon nesting season following the date of issuance of this license; (2) consulting with the resource agencies specified below concerning the development and implementation of the plan; (3) agency comments, and the Licensee's response to agency comments on the plan; (4) automating the gates with the goal of having fully automated gates no later than December 31, 1998; and (5) operating the gates manually, on an interim basis until the gates are fully automated. The Licensee shall prepare the plan after consultation with the Vermont Agency of Natural Resources, the Vermont Department of Fish and Wildlife, and the U.S. Fish and Wildlife Service. The Licensee shall include with the plan documentation of consultation, copies of comments and recommendations on the plan after it has been prepared and provided to the agencies, and specific descriptions of how the agencies' comments and recommendations are accommodated by the plan. The Licensee shall allow a minimum of 30 days for the agencies to comment and to make recommendations before filing the plan with the Commission. If the Licensee does not adopt a recommendation, the filing shall include the Licensee's reasons, based on project-specific information. The Commission reserves the right to require changes to the plan. Upon Commission approval, the Licensee shall implement the Somerset Gate Operations Plan, including any changes required by the Commission. Article 402. Within 180 days from the issuance of this license, the Licensee shall file a plan to monitor gate operations at Somerset dam as required by Article 401, above. The purpose of this monitoring plan is to ensure the dam gates, whether manually or automatically operated, would adequately maintain water levels in the Somerset reservoir to protect nesting common loons. The monitoring plan shall include: (1) a schedule for implementing the plan; (2) a schedule for consulting with the resource agencies specified below concerning the results of the monitoring; (3) the performance expectations for the equipment to be used under the proposed operating methods (including use of manual and automatic gates); (4) transmitting real-time data to the Harriman station to enable operators to make gate adjustments needed to meet common loon nesting requirements at the Somerset reservoir; (5) reporting hourly stage and outflow data collected every two weeks from the Somerset reservoir from April 1 through July 31 to the consulted parties within 10 days from the conclusion of the two week data collection cycle; (6) explaining how any inconsistencies in meeting the water level requirements of Article 406 would be accommodated by gate operations or any alternative operating measures; and (7) filing the plan, Project No. 2323-012 -30- including the results, agency comments, and Licensee's response to agency comments, with the Commission. The Licensee shall prepare the plan after consultation with the Vermont Agency of Natural Resources, the Vermont Department of Fish and Wildlife, and the U.S. Fish and Wildlife Service. The Licensee shall include with the plan documentation of consultation, copies of comments and recommendations on the completed plan after it has been prepared and provided to the agencies, and specific descriptions of how the agencies' comments are accommodated by the plan. The Licensee shall allow a minimum of 30 days for the agencies to comment and to make recommendations before filing the plan with the Commission. If the Licensee does not adopt a recommendation, the filing shall include the Licensee's reasons, based on project-specific information. The Commission reserves the right to require changes to the plan. Upon Commission approval, the Licensee shall implement the Somerset Gate Operations Monitoring Plan, including any changes required by the Commission. If the results of the monitoring indicate that changes in project structures or operations, including alternative flow releases or gate operations, are necessary to protect common loon nesting, the Commission may direct the Licensee to modify project structures or operations. Article 403. The Licensee shall operate the Deerfield Project's Somerset development in such a manner as to ensure the following limits on the maximum change in river flows (ramping rate) for the protection of fish resources in the Deerfield River: From August 1 to April 30, the rate for increasing river flows (upramping) shall be 100 cubic feet per second (cfs) or less over 24 hours; the rate for decreasing river flows shall be 50 cfs or less over 24 hours. The 100 cfs upramping requirement may be suspended as necessary to lower the reservoir to meet the common loon nesting target elevation by May 1 as required by Article 406. Article 404. Within 180 days from the issuance of this license, the Licensee shall file with the Commission, for approval, a plan to monitor the effectiveness of Somerset ramping rates required in Article 403, to ensure protection of fishery resources of the Deerfield River. The monitoring plan shall include a schedule for: (1) implementing the plan; (2) consulting with the resource agencies specified below concerning the results of the monitoring; and (3) filing the plan, including the results, Project No. 2323-012 -31- agency comments, and Licensee's response to agency comments, with the Commission. The Licensee shall prepare the monitoring plan after consultation with the Vermont Agency of Natural Resources, the Vermont Department of Fish and Wildlife, and the U.S. Fish and Wildlife Service. The Licensee shall include with the plan: any recommended alternative ramping rates based on biological information resulting from the monitoring; documentation of consultation, including copies of comments and recommendations on the completed monitoring plan after it has been prepared and provided to the agencies; and specific descriptions of how the agencies' comments are accommodated by the plan. The Licensee shall allow a minimum of 30 days for the agencies to comment and to make recommendations before filing the plan with the Commission. If the Licensee does not adopt a recommendation, the filing shall include the Licensee's reasons, based on project- specific information. The Commission reserves the right to require changes to the plan. Upon Commission approval, the Licensee shall implement the plan, including any changes required by the Commission. If the results of the monitoring indicate that changes in project structures or operations, including alternative ramping rates, are necessary to protect fish resources, the Commission may direct the Licensee to modify project structures, operations, or ramping rates. Article 405. The Licensee shall release from the Deerfield Project the following minimum flows from the respective project developments, for the protection of fish and aquatic resources in the affected stream reaches of the Deerfield River: (a) Somerset. Minimum flows shall be released from reservoir storage through the gatehouse and main outlet works as follows: 30 cubic feet per second (cfs) from October 1 to December 15; 48 cfs from December 16 to the last day in February; 30 cfs from March 1 to April 30; and 12 cfs from May 1 to September 30. From May 1 to July 31, the minimum flow may be reduced to 9 cfs, if necessary, to maintain reservoir elevations required in Article 406. The maximum gate release from Somerset shall be 312 cfs, or instantaneous inflow, if higher. (b) Searsburg. Minimum flows shall be released from the dam as follows: 35 cfs or inflow, whichever is less, from June 1 to September 30; and 55 cfs or inflow, whichever is less, from October 1 to May 31. In addition, a minimum flow of 175 cfs shall be released from the powerhouse from April 20 to May 15 to protect smelt spawning. Project No. 2323-012 -32- The Licensee shall modify the minimum flows from the Searsburg development during periods when low flows to the Searsburg impoundment occur during flashboard reinstallation, or when special maintenance operations require a drawdown of the impoundment. Under those conditions, up to ten percent of the instantaneous inflow to the impoundment shall be placed in storage and the downstream minimum flow shall also be reduced by an equivalent adjustment, not to exceed ten percent. (c) Harriman. Minimum flows shall be released from reservoir storage from the dam as follows: 70 cfs from October 1 to June 30 and 57 cfs from July 1 to September 30. (d) Deerfield No. 5. A minimum flow of 73 cfs or inflow, whichever is less, shall be released from the dam. At no time shall the inflow be less than the 57 cfs minimum flow released from the upstream Harriman dam as specified in Article 405 (c). (e) Deerfield No. 4. Minimum flows shall be released from the dam as follows: 100 cfs or inflow, whichever is less, from October 1 to May 31; and 125 cfs or inflow, whichever is less, from June 1 to September 30. (f) Deerfield No. 3. A minimum flow of 100 cfs or inflow, whichever is less, shall be released year round from the dam. (g) Deerfield No. 2. A minimum flow of 200 cfs year round shall be released from reservoir storage from the dam. These flows for the Deerfield Project may be temporarily modified if required by operating emergencies beyond the control of the Licensee, or for short periods upon agreement between the Licensee and the Vermont Department of Fish and Wildlife and the Massachusetts Division of Fisheries and Wildlife. If the flows are so modified, the Licensee shall notify the Commission as soon as possible, but not later than ten days after each such incident. Article 406. The Licensee shall operate the Deerfield Project so that under normal operating conditions, the Somerset, Searsburg, and Harriman reservoirs shall be maintained at the following reservoir elevations: (a) Somerset. Reservoir levels during the summer/fall maximum drawdown period, from August 1 to November 1, shall not fall below 2,120 feet mean sea level (msl), in order to protect open-water recreational use in the reservoir. The maximum annual winter drawdown, from November 2 to April 30, shall not fall below 2,107 feet msl in order to protect fish and aquatic resources in the reservoir. Project No. 2323-012 -33- The Licensee shall limit the impoundment fluctuations at the Somerset reservoir to +/- 3 inches from May 1 through July 31 each year to facilitate common loon nesting. The reservoir shall not be drawn down below the target elevation of 2128.58 feet msl. (b) Searsburg. Reservoir levels during the summer/fall period, from May 1 to October 31, shall not be drawn down below 3 feet below the crest of the dam or below elevation 1,749.66 ft. msl, nor shall the maximum reservoir level exceed the top of the six-foot-high flashboards at 1,755.66 feet msl. From November 1 to April 30 the reservoir level shall not be drawn down below elevation 1,746.66 feet msl, in order to protect fishery resources in the reservoir. (c) Harriman. Reservoir levels during the summer/fall maximum drawdown period, from April 1 to November 1, shall not fall below 1,475 feet msl to protect open-water recreational use. The maximum annual winter drawdown, from November 2 to March 31, shall not be below 1,440 feet msl to protect fish and aquatic resources in the reservoir. The Licensee shall maintain rising or stable water levels in the Harriman reservoir between April 1 and June 15 to protect fishery resources. The Licensee shall not exceed a maximum drawdown rate of one foot per day between June 16 and July 15. Reservoir levels may be temporarily modified if required by operating emergencies beyond the control of the Licensee or for short periods for project maintenance purposes, upon mutual agreement between the Licensee and the Vermont Department of Fish and Wildlife. If the reservoir levels are so modified, the Licensee shall notify the Commission as soon as possible, but not later than ten days after each such incident. Article 407. Authority is reserved to the Commission to require the Licensee to construct, operate, and maintain, or to provide for the construction, operation, and maintenance, of such fishways as may be prescribed by the Secretary of the U.S. Department of the Interior. Article 408. Within 120 days from the date of issuance of this license, and before any land-clearing or land-disturbing activities at the project development sites, the Licensee shall file, for Commission approval, detailed design drawings of the Licensee's proposed facilities for the downstream passage of Atlantic salmon smolts at the Deerfield Project development Nos. 2, 3, and 4, as depicted in plan nos. H64755-P, H64757-P, and H64758-P of the license application, and as described in the Offer of Settlement dated October 5, 1994, together with a plan and schedule to construct and install the facilities. Project No. 2323-012 -34- The plan shall include quantification of flows required to operate the proposed facility, an operation and maintenance schedule, measures to control erosion and sedimentation during project construction, and a construction schedule for installation of the fish passage facilities, with a target date that the facilities be operational within two years from the date of the issuance of this license. Once constructed, the Licensee shall operate the downstream fish passage facilities from April 1 through June 15 and from September 15 to November 15 each year. The Licensee shall provide as-built drawings to the U.S. Fish and Wildlife Service within 180 days from the construction of the downstream fish passage facilities. The Licensee shall prepare the aforementioned drawings and schedule after consultation with the U.S. Fish and Wildlife Service and the Massachusetts Division of Fisheries and Wildlife. The Licensee shall include with the drawings documentation of consultation, copies of comments and recommendations on the drawings and schedule after they have been prepared and provided to the agencies, and specific descriptions of how the agencies' comments are accommodated by the Licensee's facilities. The Licensee shall allow a minimum of 30 days for the agencies to comment and to make recommendations before filing the drawings and schedule with the Commission. If the Licensee does not adopt a recommendation, the filing shall include the Licensee's reasons, based on project-specific information. The Commission reserves the right to require changes to the proposed facilities and schedule. Upon Commission approval, the Licensee shall implement the downstream fish passage plan and schedule, including any changes required by the Commission. Article 409. The Licensee shall file, for Commission approval, a plan for the construction, operation, and maintenance of a permanent upstream fish passage facility at the Deerfield No. 2 development, as depicted in plan No. H-64756-P of the license application, and as described in the Offer of Settlement dated October 6, 1994, in order to provide upstream passage for adult Atlantic salmon returning to the Deerfield River. The timing of the plan for construction of the upstream fish passage facility shall be based on a specific number of migratory adult fish (referred to as trigger numbers) reaching the Deerfield No. 2 dam: twelve adult Atlantic salmon present below the No. 2 dam for each of two consecutive years, as verified by an interim fish trapping system; or the presence of four adult Atlantic salmon below the dam for each of two consecutive years as determined by the radio-tagging monitoring program required in Article 413. If such numbers of migratory salmon are found, the Licensee must complete construction of the upstream fish passage facilities within two construction seasons following the Project No. 2323-012 -35- attainment of the trigger numbers. The plan should provide for measures to control erosion and sedimentation during project construction. Once constructed, the upstream fish passage facility shall be operated according to a schedule established by the U.S. Fish and Wildlife Service and the Massachusetts Division of Fisheries and Wildlife. The Licensee shall provide as-built drawings to the U.S. Fish and Wildlife Service within 90 days of constructing the upstream fish passage facility. The Commission reserves the right to require changes to the fish passage facilities and schedule. Upon Commission approval, the Licensee shall implement the upstream fish passage plan and schedule, including any changes required by the Commission. Article 410. Within 180 days from the date of the issuance of this license, the Licensee shall file with the Commission, for approval, a plan to capture and transport migrating Atlantic Salmon adults reaching the Deerfield Project No. 2 development dam to river reaches above the dam or to hatchery facilities. The passage plan shall describe the interim use of fish capture and transport measures that shall be utilized until the permanent upstream fish passage facilities required in Article 409 are completed and shall meet the requirements of establishing an interim fish passage system agreed to in the Offer of Settlement dated October 6, 1994. The Commission reserves the right to require changes to the plan. Upon Commission approval, the Licensee shall implement the interim fish transport plan, including any changes required by the Commission. Article 411. Within 180 days from the date of the issuance of this license, the Licensee shall file with the Commission, for approval, a plan to monitor the effectiveness of the upstream and downstream fish passage facilities and associated operational flows to pass Atlantic salmon smolts down the Deerfield River past development Nos. 4, 3, and 2 and to pass adult Atlantic salmon upstream past the No. 2 development. The plan shall include provisions for: (1) facility oversight and personnel commitments; and (2) back-up equipment and supplies that would be maintained to ensure efficient and consistent operation of the facilities. The monitoring plan shall also include a schedule for: (1) implementing the plan; (2) consulting with the resource agencies specified below concerning the results of the monitoring; (3) assessing the effectiveness of the bypassed facilities to reduce fish injury and mortality; and (4) filing the results, agency comments, and the Licensee's responses to agency comments with the Commission. Project No. 2323-012 -36- The Licensee shall prepare the monitoring plan after consultation with the U.S. Fish and Wildlife Service and the Massachusetts Division of Fisheries and Wildlife. The Licensee shall include with the plan documentation of consultation, copies of comments and recommendations on the completed plan after it has been prepared and provided to the agencies, and specific descriptions of how the agencies' comments are accommodated by the plan. The Licensee shall allow a minimum of 30 days for the agencies to comment and to make recommendations before filing the plan with the Commission. If the Licensee does not adopt a recommendation, the filing shall include the Licensee's reasons, based on project-specific information. The Commission reserves the right to require changes to the plan. Upon Commission approval, the Licensee shall implement the Fishways Monitoring Plan, including any changes required by the Commission. If the results of the monitoring indicate that changes in project structures or operations, including fish passage facilities and alternative flow releases, are necessary to protect fish resources, the Commission may direct the Licensee to modify project structures or operations. Article 412. The Licensee shall operate the Deerfield No. 2 development such that the changes from the 200 cubic feet per second (cfs) minimum flow required in Article 405(g) to generation flows, occur on average no more than two times per day and not more than ten times per week as described in the Offer of Settlement dated October 6, 1994, in order to reduce the effects of rapidly changing flows on fish resources of the Deerfield River. The Licensee shall, within 180 days from the date of the issuance of this license, file for Commission approval a plan to monitor project operation and minimum flows for 36 months as described above. The monitoring plan shall include a schedule for: (1) implementing the plan; (2) annually making monitoring data available to parties to the Offer of Settlement; (3) annually consulting with the resources agencies specified below, and other parties to the Offer of Settlement, concerning the results of the monitoring; and (4) filing the results, agency and party comments, and the Licensee's response to agency and party comments with the Commission. The Licensee shall prepare the plan after consultation with the U.S. Fish and Wildlife Service and the Massachusetts Division of Fisheries and Wildlife. The Licensee shall include with the plan documentation of consultation, copies of comments and recommendations on the completed plan after it has been prepared and provided to the agencies, and specific descriptions of how Project No. 2323-012 -37- the agencies comments are accommodated by the plan. The Licensee shall allow a minimum of 30 days for the agencies to comment and to make recommendations before filing the plan with the Commission. If the Licensee does not adopt a recommendation, the filing shall include the Licensee's reasons, based on project- specific information. The Commission reserves the right to require changes to the plan. Upon Commission approval, the Licensee shall implement the Monitoring Plan, including any changes required by the Commission. If the results of the monitoring indicate that changes in project structures or operations, including alternative flow releases or rates of flow releases, are necessary to protect fish resources, the Commission may direct the Licensee to modify project structures or operations, including peaking operations, or rate of flow releases. Article 413. Within 180 days from the date of the issuance of this license, the Licensee shall file with the Commission, for approval, an Atlantic salmon radio-tagging plan. Implementation of the tagging plan will help determine when the numbers of Atlantic salmon reaching the Deerfield No. 2 development would trigger a requirement that the Licensee install the permanent upstream fish passage facilities required in Articles 409 and 410. Atlantic salmon shall be radio-tagged and released at the Holyoke Dam Fishway during the first migration season following the issuance of this license and shall continue to be tagged annually until: (1) twelve adult Atlantic salmon have been verified below the Deerfield No. 2 dam in each of two consecutive years using the interim fish trapping system required in Article 410; (2) four adult Atlantic salmon have been verified in the Deerfield River below the Deerfield No. 2 dam for each of two consecutive years without the use of an interim trapping system; or (3) the Connecticut River Atlantic Salmon Commission Technical Committee (Technical Committee) determines that radio-tagging salmon is no longer an acceptable method and an alternative method is selected as described in the October 6, 1994, Offer of Settlement. The plan shall be prepared in consultation with the U.S. Fish and Wildlife Service, the Massachusetts Division of Fisheries and Wildlife, and the Technical Committee. The plan shall include: (1) a schedule for implementing the plan in the first migration season following the issuance of this license; (2) documentation of consultation with the U.S. Fish and Wildlife Service, the Massachusetts Division of Fisheries and Wildlife, and the Technical Committee concerning the development and Project No. 2323-012 -38- implementation of the plan; (3) methods of capturing, radio- tagging, and releasing fish at the Holyoke Dam Fishway; (4) methods of monitoring fish movement in the Deerfield River and the location of the monitoring stations; (5) a specific description of how the interim fish trapping facilities would be used in conjunction with the tagging program as described in the October 6, 1994, Offer of Settlement; and (6) filing agency comments, and Licensee's response to agency comments with the Commission. The Licensee shall include with the plan documentation of consultation, copies of comments and recommendations on the completed plan after it has been prepared and provided to the agencies and Committee, and specific descriptions of how the agencies' and Committee comments are accommodated by the plan. The Licensee shall allow a minimum of 30 days for the agencies and Committee to comment and to make recommendations before filing the plan with the Commission. If the Licensee does not adopt a recommendation, the filing shall include the Licensee's reasons, based on project-specific information. The Commission reserves the right to require changes to the plan. Upon Commission approval, the Licensee shall implement the plan, including any changes required by the Commission. Article 414. Within 180 days from the date of the issuance of this license, the Licensee shall file with the Commission, for approval, a plan to monitor dissolved oxygen (DO) and temperature of the Deerfield River at three locations below Harriman dam. The DO and temperature monitoring at Harriman dam shall not be initiated until the minimum flows required in Article 405(c) are released. The purpose of this water quality monitoring plan is to ensure that streamflows below the Harriman dam would maintain temperature and DO levels of no less than the Vermont state levels, set forth in Section 3-01(B)(2) of the Vermont Water Quality Standards, required for the normal development of trout. The water quality monitoring plan shall include: (1) a schedule for implementing the program; (2) monitoring temperature and DO levels from June 1 through October 31 at three locations, (a) the Deerfield River channel directly below Harriman dam, (b) the penstock at the Harriman Station, and (c) the Harriman tailrace; (3) collecting DO and temperature data at no less than weekly intervals; (4) concurrently collecting DO and temperature samples at the Harriman station and tailrace; (5) filing annual data reports no later than the end of each sampling year with the Vermont Agency of Natural Resources; (6) a schedule for consulting with the resource agencies specified below concerning the results of the monitoring; and (7) filing the results Project No. 2323-012 -39- (including annual data reports in (5)), agency comments, and Licensee's response to agency comments with the Commission. The Licensee shall prepare the monitoring plan after consultation with the U.S. Fish and Wildlife Service, the Vermont Agency of Natural Resources and the Vermont Department of Fish and Wildlife. The Licensee shall include with the plan documentation of consultation, copies of comments and recommendations on the completed plan after it has been prepared and provided to the agencies, and specific descriptions of how the agencies' comments are accommodated by the plan. The Licensee shall allow a minimum of 30 days for the agencies to comment and to make recommendations before filing the plan with the Commission. If the Licensee does not adopt a recommendation, the filing shall include the Licensee's reasons, based on project-specific information. The Commission reserves the right to require changes to the plan. Upon Commission approval, the Licensee shall implement the plan, including any changes required by the Commission. If the results of the monitoring indicate that changes in project structures or operations, including alternative flow releases, are necessary to protect fish resources, the Commission may direct the Licensee to modify project structures or operations. Article 415. Within 180 days from the date of the issuance of this license, the Licensee shall file with the Commission, for approval, a flow monitoring and reservoir operations plan. The plan would monitor reservoir levels and inflows and instantaneous flow releases below dams and in the tailraces of the Deerfield River Project, to ensure that the individual developments of the Deerfield River Project are managed to protect the fishery resources and water quality of the Deerfield River. The plan shall be consistent with the minimum flows required in Article 405, the reservoir water levels required in Article 406, and the conditions described in the Offer of Settlement signed on October 5, 1994, concerning flow monitoring and reservoir operations. The monitoring plan shall include a schedule for: (1) implementing the plan; (2) consulting with the resource agencies specified below concerning the results of the monitoring; and (3) filing the results, agency comments, and Licensee's response to agency comments with the Commission. Following approval of the monitoring plan, the Licensee shall provide the records of the instantaneous flow data and reservoir level data to the Vermont Agency of Natural Resources and the Massachusetts Division of Fisheries and Wildlife, for project developments in their respective states, on a regular basis, but no later than 30 days from the date of the request. Project No. 2323-012 -40- The Licensee shall prepare the plan after consultation with the Vermont Agency of Natural Resources, the Vermont Department of Fish and Wildlife, the Massachusetts Division of Fisheries and Wildlife, and the U.S. Fish and Wildlife Service. The Licensee shall include with the plan documentation of consultation, copies of comments and recommendations on the completed plan after it has been prepared and provided to the agencies, and specific descriptions of how the agencies' comments are accommodated by the plan. The Licensee shall allow a minimum of 30 days for the agencies to comment and to make recommendations before filing the plan with the Commission. If the Licensee does not adopt a recommendation, the filing shall include the Licensee's reasons, based on project-specific information. The Commission reserves the right to require changes to the plan. Upon Commission approval, the Licensee shall implement the plan, including any changes required by the Commission. If the results of the monitoring indicate that changes in project structures or operations, including alternative flow releases, are necessary to protect fish resources and water quality, the Commission may direct the Licensee to modify project structures or operations. Article 416. Within 180 days from the date of the issuance of this license, the Licensee shall file with the Commission, for approval, a plan for revising the existing watershed model for the Deerfield River, including the Somerset and Harriman reservoirs, to produce a model that better predicts the timing and volume of inflows to these reservoirs and reduces the winter drawdowns to levels necessary to capture spring runoff. The Licensee shall prepare the plan after consultation with the Vermont Agency of Natural Resources, the Vermont Department of Fish and Wildlife, and the U.S. Fish and Wildlife Service. The Licensee shall include with the plan documentation of consultation, copies of comments and recommendations on the completed plan after it has been prepared and provided to the agencies, and the specific descriptions of how the agencies' comments are accommodated by the plan. The Licensee shall allow a minimum of 30 days for the agencies to comment and to make recommendations before filing the plan with the Commission. If the Licensee does not adopt a recommendation, the filing shall include the Licensee's reasons, based on project-specific information. The Commission reserves the right to require changes to the plan. Upon Commission approval, the Licensee shall implement the plan, including any changes required by the Commission. Project No. 2323-012 -41- Article 417. Within 180 days from the date of the issuance of this license, the Licensee file with the Commission, with a copy to the Vermont Agency of Natural Resources, the rating curves depicting the head-flow-to power relationship for the Somerset, Searsburg, and Harriman developments of the Deerfield River Project. Article 418. Within 180 days from the date of the issuance of this license, the Licensee shall file with the Commission, for approval, a plan to monitor the effectiveness of the existing trashracks at the Searsburg development in reducing fish impingement and entrainment at the intake. The monitoring plan shall include a schedule for: (1) implementing the plan; (2) consulting with the resource agencies specified below concerning the results of the monitoring; and (3) filing the results, agency comments, and Licensee's response to agency comments with the Commission. The Licensee shall prepare the plan after consultation with the U.S. Fish and Wildlife Service and the Vermont Department of Fish and Wildlife. The Licensee shall include with the plan documentation of consultation, copies of comments and recommendations on the completed plan after it has been prepared and provided to the agencies, and specific descriptions of how the agencies' comments are accommodated by the plan. The Licensee shall allow a minimum of 30 days for the agencies to comment and to make recommendations before filing the plan with the Commission. If the Licensee does not adopt a recommendation, the filing shall include the Licensee's reasons, based on project-specific information. The Commission reserves the right to require changes to the plan. Upon Commission approval, the Licensee shall implement the plan, including any changes required by the Commission. If the results of the monitoring indicate that changes in project structures or operations, including alternative flow releases, are necessary to protect fish resources, the Commission may direct the Licensee to modify project structures or operations. Article 419. Within 180 days from the date of the issuance of this license, the Licensee shall file with the Commission, for approval, a tubercled orchid (Platanthera flava) mitigation and monitoring plan to protect these plants and their habitat, located around the Harriman and Searsburg bypassed reaches, from increased flows released pursuant to Article 405. The Licensee shall prepare the plan after consultation with the Vermont Agency of Natural Resources (Vermont ANR). The plan Project No. 2323-012 -42- shall include provisions for (1) relocating and maintaining in new locations populations of tubercled orchids affected by the increased minimum flows; (2) monitoring the success of tubercled orchid relocations; (3) a monitoring schedule; (4) identification of specific locations for relocating populations and monitoring, designated on a map to include project features; and (5) follow up work if the relocated tubercled orchid populations fail to survive. The plan shall include a schedule for: (1) implementing the plan; (2) consulting with Vermont ANR concerning the results of the monitoring; and (3) filing the results, agency comments, and Licensee's response to agency comments with the Commission. The Licensee shall include with the plan documentation of consultation, copies of comments and recommendations on the completed plan after it has been prepared and provided to Vermont ANR, and specific descriptions of how Vermont ANR s comments are accommodated by the plan. The Licensee shall allow a minimum of 30 days for Vermont ANR to comment and to make recommendations before filing the plan with the Commission. If the Licensee does not adopt a recommendation, the filing shall include the Licensee's reasons, based on project-specific information. The Commission reserves the right to require changes to the plan. Upon Commission approval, the Licensee shall implement the plan, including any changes required by the Commission. Article 420. Within 180 days from the date of the issuance of this license, the Licensee shall file with the Commission, for approval, an artificial nesting structures plan. The Licensee shall prepare the plan after consultation with the U.S. Fish and Wildlife Service (FWS) and the Vermont Agency of Natural Resources (Vermont ANR). The plan shall include the following measures: (1) installation of 55 wood duck boxes; (2) installation of 24 black duck baskets; (3) installation of three common loon rafts; (4) installation of four osprey nesting platforms, around Somerset reservoir; (5) annual maintenance schedule of all installed artificial nesting structures, (6) annual consultation with the FWS and Vermont ANR on the status of waterfowl populations within the Somerset development, and measures to be preformed to protect and enhance those waterfowl populations, including a determination of the effectiveness and benefits of providing these artificial nesting structures; and (7) an implementation schedule and map showing the locations for the installation of the various artificial nesting structures. The plan shall include a schedule for: (1) implementing the plan; (2) consulting with FWS and Vermont ANR, and (3) filing the results, agency comments, and Licensee's response to agency Project No. 2323-012 -43- comments with the Commission. The Licensee shall include with the plan documentation of consultation, copies of comments and recommendations on the completed plan after it has been prepared and provided to FWS and Vermont ANR, and specific descriptions of how agency comments are accommodated by the plan. The Licensee shall allow a minimum of 30 days for the agencies to comment and to make recommendations before filing the plan with the Commission. If the Licensee does not adopt a recommendation, the filing shall include the Licensee's reasons, based on project- specific information. The Commission reserves the right to require changes to the plan. Upon Commission approval, the Licensee shall implement the plan, including any changes required by the Commission. Article 421. Within 180 days from the date of the issuance of this license, the Licensee shall file with the Commission, for approval, a beaver management plan. The Licensee shall prepare the plan after consultation with the U.S. Fish and Wildlife Service (FWS) and the Vermont Agency of Natural Resources (Vermont ANR). The plan shall include the following measures: (1) a description of specific methodology needed to maintain six active beaver ponds surrounding Somerset reservoir, as stipulated in the Deerfield River Project, Offer of Settlement; (2) a description of the monitoring methods and parameters for the beaver ponds; (3) an implementation and monitoring schedule; (4) a map showing project features and all beaver pond locations; and (5) a schedule for providing annual monitoring results to FWS and Vermont ANR. The plan shall include a schedule for: (1) implementing the plan; (2) consulting with FWS and Vermont ANR, and (3) filing the results, agency comments, and Licensee's response to agency comments with the Commission. The Licensee shall include with the plan documentation of consultation, copies of comments and recommendations on the completed plan after it has been prepared and provided to FWS and Vermont ANR, and specific descriptions of how agency comments are accommodated by the plan. The Licensee shall allow a minimum of 30 days for the agencies to comment and to make recommendations before filing the plan with the Commission. If the Licensee does not adopt a recommendation, the filing shall include the Licensee's reasons, based on project- specific information. The Commission reserves the right to require changes to the plan. Upon Commission approval, the Licensee shall implement the plan, including any changes required by the Commission. Project No. 2323-012 -44- Article 422. Within 180 days from the date of the issuance of this license, the Licensee shall file with the Commission, for approval, a forest/timber management plan for the project area. The Licensee shall prepare the plan after consultation with the U.S. Fish and Wildlife Service (FWS), the Vermont Agency of Natural Resources (Vermont ANR), and the Massachusetts Division of Fisheries and Wildlife (Massachusetts DFW). The plan shall include the following measures: (1) objectives and specific measures, to include the specific methodology, used to protect or manage the forest/timber in the project area; (2) a description of clearing and revegetation techniques; (3) a description of the benefits that would result from the proposed management measures; (4) map(s) and acreage of the project areas to be included in the forest/timber management plan, and (5) an implementation schedule for the various management measures. The plan shall include a schedule for: (1) implementing the plan; (2) consulting with FWS, Vermont ANR, and Massachusetts