UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION. Penobscot River Restoration Trust Project No.

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1 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION Penobscot River Restoration Trust Project No (Howland) DRAFT APPLICATION FOR SURRENDER OF LICENSE FOR MAJOR PROJECT AND REMOVAL OF PROJECT WORKS, IN COORDINATION WITH JOINT APPLICATION FOR TRANSFER OF PROJECT LICENSE Introduction (1) The Penobscot River Restoration Trust ("Trust" or "Applicant") files this application for surrender of the license for the Howland Project, FERC No (issued September 12, 1980, 12 FERC 62,207), and removal of project works, to be acted on by the Commission no sooner than the effective date of the grant of the concurrently applied-for transfer of the Howland Project license from PPL Maine, LLC to the Trust. The Trust is also filing a withdrawal of the pending relicensing application for the Howland Project. PPL Maine, LLC currently owns and operates several other hydroelectric projects in central Maine s Penobscot River basin, including the Veazie Project (FERC No. 2403). PPL Great Works, a wholly-owned subsidiary of PPL Maine, owns and operates the Great Works Project (FERC No. 2312). Concurrent with the filing of the Howland surrender application, the Trust is filing applications to surrender the licenses for the Veazie and Great Works Projects; both applications also to be acted on by the Commission no sooner than the effective dates of the grant of the simultaneously filed joint applications to transfer the Veazie and Great Works Projects from the existing licensees to the Trust. This application to surrender the Howland Project license, as well as the surrender applications for the Veazie and Great Works Projects, is made pursuant to a comprehensive multi-party settlement agreement ("Agreement"), which was filed with the Commission on June 25, 2004, for informational purposes. Fulfillment of the terms of the Agreement will lead to restoration of native sea-run fish and 1000 miles of their historic habitat in miles of the Penobscot River while IS-1

2 also accommodating the continued generation of hydroelectric power at specified locations. The Agreement gives the Trust the option to purchase the Veazie, Great Works, and Howland Projects for the purpose of surrendering their licenses subject to stipulated conditions. In exchange, PPL Maine may, if it chooses, apply to increase generation at six other existing dams, providing PPL Maine with the opportunity to maintain more than 90% of its current hydroelectric generation. PPL has already applied and received approval for changes at four projects that would result in an increase of approximately 25,750 MWh of annual energy production. PPL Maine has also agreed to improve fish passage at four additional dams. Under the terms of the Agreement, the applications for transfer and surrender of the Veazie, Howland, and Great Works Project licenses constitute an indivisible element of the Agreement: all of these applications must be granted, or the Agreement may be undone. The three surrender applications constitute a single, indivisible proposed action. If any element of the proposed action is substantially altered or removed by the Commission s action on the three surrender applications, the terms of the MPA provide that any party prejudiced thereby may ultimately terminate the MPA as to its uncompleted items. The Agreement was signed by PPL Maine and PPL Great Works, LLC (hereinafter collectively PPL ), the U.S. Department of the Interior (acting through its Fish and Wildlife Service, Bureau of Indian Affairs, and the National Park Service), four State of Maine natural resource agencies (the State Planning Office, Department of Marine Resources, Department of Inland Fisheries and Wildlife, and Atlantic Salmon Commission), the Penobscot Nation, American Rivers, the Atlantic Salmon Federation, Maine Audubon, the Natural Resources Council of Maine, Trout Unlimited, and the Trust. In addition to this application with the Commission, appropriate applications for dam removal are also being filed with other regulatory agencies, including the Maine Department of Environmental Protection and the U.S. Army Corps of Engineers. (2) The location of the project is: State: County: Nearby towns: Stream: Maine Penobscot Veazie, Eddington, Bradley, and Orono Piscataquis River IS-2

3 (3) The exact name and business address of the applicant are: Penobscot River Restoration Trust P. O. Box 5695 Augusta. ME Attn: Laura Rose Day (207) Copies of all correspondence should also be served on: Ms. Kristina Nygaard Winston and Strawn, LLP 1700 K Street NW Washington, DC (202) knygaard@winston.com Mr. Andrew E. Sims Kleinschmidt Associates PO Box 650 Pittsfield, ME (207) Andy.Sims@KleinschmidtUSA.com (4) The applicant is a domestic non-profit organized in the State of Maine and is not claiming preference under Section 7(a) of the Federal Power Act. (5) (a) The statutory or regulatory requirements of the state in which the project is located that affect the project as proposed, with respect to bed and banks and the appropriation, diversion and use of water for power purposes, and with respect to the right to engage in the business developing, transmitting and distributing power and in any other business necessary to accomplish the purposes of the proposal under the Federal Power Act are: (A) Maine Waterway Development and Conservation Act The Maine Waterway Development and Conservation Act (MWDCA) requires that a permit be issued for the construction, reconstruction, or structural alteration (including maintenance and repair) of powered electrical and mechanical generating projects and water storage projects. The MWDCA sets up a comprehensive, one-stop state permitting process that is administered by the IS-3

4 Maine Department of Environmental Protection (MDEP) for projects in organized municipalities and by the Land Use Regulation Commission in unorganized territories. The law requires consideration of the full range of economic, environmental, and energy benefits and adverse impacts of a hydro project. (B) Maine Water Quality Law Pursuant to Section 401 of the Clean Water Act, 33 U.S.C. 1341, the construction or operation of hydropower projects subject to federal licensing requires state certification that such activities meet state water quality standards. Federal hydropower licenses are issued for terms of up to 50 years. MDEP is the water quality certification agency for Maine. The Maine Water Quality Law, 38 M.R.S.A. 361-A et seq., provides MDEP with regulatory authority over water quality, including the authority to issue water quality certification pursuant to Section 401 of the Clean Water Act. (C) Mandatory Shoreland Zoning Law The Mandatory Shoreland Zoning Act was enacted by the Legislature in The current law, as amended, requires municipalities to establish land use controls for all land areas within 250 feet of ponds and non-forested freshwater wetlands that are 10 acres or larger; rivers with watersheds of at least 25 square miles in drainage area; coastal wetlands and tidal waters; and all land areas within 75 feet of certain streams. The law s purpose is to protect water quality, wildlife habitat, wetlands, archaeological sites and historic resources, and commercial fishing and maritime industries; and to conserve shore cover, public access, natural beauty, and open space. It does this by controlling land uses, and placement of structures within the shoreland area. (b) The steps which the applicant has taken or will take to comply with each of the laws cited above are: (A) The Trust will apply to MDEP for water quality certification under the Clean Water Act with respect to its plan to construct a fish bypass around the dam; and will apply to MDEP for a fish bypass construction permit under the Maine IS-4

5 Waterway Development and Conservation Act, subject to its obligations under federal laws. (B) The Trust will, subject to its obligations under federal laws, work with the Town of Howland to determine what, if any, approvals under the Mandatory Shoreland Zoning Law or other local laws are necessary for partial removal of the dam and construction of a fish bypass. (6) The Commission has concluded that there are no lands of the United States within the project boundary. Consistent with the requirements of Section IV(h)(2) of the Agreement, DOI withdrew, without prejudice to its position, its asserted conditions/requests under Sections 4(e) and 10(e) of the FPA that it had submitted for Milford, and, pursuant to Section IV(h)(3) of the MPA, such withdrawal rendered moot all issues related to DOI's authority under Sections 4(e) and 10(e) of the FPA as to Milford. (7) The name and address of the project owner as of the filing of this application is: PPL Maine, LLC P.O. Box 276 Milford, ME (8) Proposed Project Decommissioning The Trust, after extensive consultation with the U.S Fish and Wildlife Service (USFWS), National Oceanic and Atmospheric Administration (NOAA), state fishery agencies, Penobscot Nation, and Town of Howland, will apply to the Commission to surrender the license for and decommission the Howland Project. The Trust will remove the flashboards from the dam and pursue construction of a fish bypass around the dam pursuant to the terms of the Agreement. If, after a 15-year monitoring period, the Trust cannot demonstrate that the bypass design is providing safe, timely, and effective fish passage for American shad and other migratory species, it will, subject to the terms of the Agreement, seek state and local regulatory approval to remove the dam. The Trust has developed preliminary plans for removal of the flashboards and construction of the fish bypass channel at the Howland Project as described in Exhibit H of this application. IS-5

6 BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION PENOBSCOT RIVER RESTORATION TRUST HOWLAND PROJECT FERC NO DRAFT APPLICATION FOR SURRENDER OF LICENSE FOR MAJOR PROJECT Statement Pursuant to 18 C.F.R (1) Entity that has or intends to obtain and will maintain any proprietary right necessary to operate or decommission the Project: The Penobscot River Restoration Trust, upon the effectiveness of the transfer to it of the Howland Project license, as concurrently applied for by PPL Maine, LLC and the Trust. (2) (i) Every county in which any part of the Project is located: Penobscot County (ii) Every city, town, or similar local political subdivision: (A) In which any part of the Project is located: Howland, Maine (B) That has a population of 5,000 or more people and is located within 15 miles of the Project dam: Lincoln, Maine (iii) Every irrigation district, drainage district, or similar special purpose political subdivision: IS-6

7 (A) In which any part of the Project is located: None (B) That owns, operates, maintains, or uses any Project facilities used by the Project: None (iv) Every other political subdivision in the general area of the Project that there is reason to believe would likely be interested in, or affected by, the application: Lincoln Water District P.O. Box 306 Lincoln, ME (v) All Indian tribes that may be affected by the Project: Penobscot Nation IS-7

8 BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION PENOBSCOT RIVER RESTORATION TRUST HOWLAND PROJECT FERC NO DRAFT APPLICATION FOR SURRENDER OF LICENSE FOR MAJOR PROJECT Subscription and Verification Under Oath This application for Surrender of License for the Howland Project (Application) is executed in the: State of Maine By: Laura Rose Day County of Kennebec Executive Director PENOBSCOT RIVER RESTORATION TRUST P.O. Box 5695 AUGUSTA, ME 4332 Being duly sworn, deposes and says that the contents of this Application are true to the best of (his/her) knowledge or belief. The undersigned applicant has signed the Application this day of, PENOBSCOT RIVER RESTORATION TRUST BY: Laura Rose Day Subscribed and sworn to before me, a Notary Public of the State of Maine, this day of, SEAL Notary Public IS-8

9 PENOBSCOT RIVER RESTORATION TRUST HOWLAND PROJECT FERC NO DRAFT APPLICATION FOR SURRENDER OF LICENSE FOR MAJOR PROJECT EXHIBIT A PROJECT DESCRIPTION 1.0 INTRODUCTION The Penobscot River Restoration Trust applies to the Federal Energy Regulatory Commission to surrender the license for the Howland Project (FERC No. 2721) as described in the attached exhibits. The Howland Project, which is located on the Piscataquis River in the town of Howland, Maine, was constructed in 1916 by the Howland Pulp and Paper Company. The original license for the project was issued to Bangor Hydro-Electric Company on September 12, 1980 (12 FERC 62,207), and was transferred to Penobscot Hydro, LLC on April 1, 1999 (87 FERC 62,001). By order of October 31, 2000, FERC amended the project license to reflect Penobscot Hydro, LLC's change of name to PPL Maine, LLC (93 FERC 62,076). The Howland Dam hydroelectric facility is operated as a run-of-theriver facility, with inflow to the impoundment equal to the outflow from the dam and powerhouse. (Milone & MacBroom, 2004a). 2.0 CURRENT PROJECT FACILITIES The Project dam is a concrete gravity design that was constructed on existing rock outcrop. The dam spillway is approximately 570 feet long and has an average height of nine feet, exclusive of flashboards. The dam was designed to carry 3-foot, 9-inch-high flashboards. The operating head for hydroelectric generation is about 17 feet with flashboards in place. The upstream impoundment has a surface area of 270 acres, with a normal headpond elevation of feet (top of flashboards). The impoundment is approximately 4.7 miles long and extends from the dam to the upstream area of Doe Island (BHEC, 1998). The dams consists of a foot-long concrete cut-off at the north embankment of the dam, a 6-foot-long left non-overflow abutment, a 570-foot-long concrete spillway, an 85-foot-long section containing gated spillway with four 9-foot by 9-foot steel roller flood gates and an abandoned fishway, a 20-foot-long non-overflow section containing the exit of the upstream fishway, and a 76-foot-long forebay entrance deck located immediately upstream of the powerhouse (BHEC, 1998). A-1

10 The Howland dam is also equipped with a fishway that was constructed by the Bangor Hydro- Electric Company in The fishway provides limited upstream passage for anadromous and catadromous fish via a four-foot-wide concrete Denil fishway with wooden baffles located adjacent to the powerhouse. Downstream fish passage is provided through operation of the existing 5-foot, 9-inchwide trash sluice located adjacent to the trashracks at the Howland Project site. In 1993, downstream fish passage was enhanced by the installation of a 3-foot, 6-inch-deep bellmouth weir. In 1994, new trashracks with one-inch-clear spacing were installed as a physical deterrent to entrainment of downstream migratory fish (BHEC, 1998). The Howland impoundment is approximately 4.7 miles long and extends upstream to the area of Lowell Island, which is just downstream of the Howland/Maxfield town line. At the average annual flow with the gates closed, the impoundment has a surface area of approximately 290 acres at elevation feet. At this elevation, with 0.4 foot of spill over the flashboards, the gross storage capacity of the impoundment is approximately 1,700 acre-feet. 3.0 CURRENT PROJECT OPERATIONS The Howland Hydroelectric Project is operated as a run-of-river facility. The hydraulic capacity of the turbines is approximately 1,710 cfs. On an annual basis, this turbine capacity is exceeded approximately 47 percent of the time, while the capacity of the turbines and the gates (5,310 cfs) is exceeded approximately 16 percent of the time (Milone & MacBroom, 2004a). Average Annual Generation for the Project is 7,585 MWh. The normal impoundment elevation is feet and is maintained when river flows are at or below the hydraulic capacity of the units and the gates. When river flows exceed the hydraulic capacity of the units and the gates, water spills over the flashboards. When the gates are closed and river flow is at 2,500 cfs (average annual flow), the impoundment elevation is When the water reaches a height of two feet over the top of the flashboards, the boards begin to fall. The total hydraulic capacity of the gated and ungated spillway is 55,100 cfs before the deck of the gated spillway becomes inundated at elevation (Milone & MacBroom, 2004a). A-2

11 4.0 DAM DECOMMISSIONING PROPOSAL A complete Dam Decommissioning Proposal is included in Exhibit H. 5.0 LANDS OF THE UNITED STATES The Commission has concluded that there are no lands of the United States within the project boundary. Consistent with the requirements of Section IV(h)(2) of the Agreement, DOI withdrew, without prejudice to its position, its asserted conditions/requests under Sections 4(e) and 10(e) of the FPA that it had submitted for Milford, and, pursuant to Section IV(h)(3) of the MPA, such withdrawal rendered moot all issues related to DOI's authority under Sections 4(e) and 10(e) of the FPA as to Milford. A-3

12 PENOBSCOT RIVER RESTORATION TRUST HOWLAND PROJECT FERC NO DRAFT APPLICATION FOR SURRENDER OF LICENSE FOR MAJOR PROJECT EXHIBIT E ENVIRONMENTAL REPORT The attached Multi-Project Environmental Assessment is being submitted in lieu of an Exhibit E. E-1

13 PENOBSCOT RIVER RESTORATION TRUST HOWLAND PROJECT FERC NO DRAFT APPLICATION FOR SURRENDER OF LICENSE FOR MAJOR PROJECT EXHIBIT H DESCRIPTION OF PROJECT DECOMMISSIONING AND MANAGEMENT PLANS 1.0 CONSULTATION AFFECTING DECOMMISSIONING PLANS During the preparation of the surrender applications, there were several opportunities for resource agencies, Indian tribes, NGOs, and the public to provide input. These opportunities occurred:! During the public scoping process;! During the draft surrender application review period; In addition to written comments solicited by the Scoping document, the Trust has provided opportunities for verbal comments at three public scoping meetings that it has conducted in the project vicinity. A daytime and two evening meetings were held. The Trust provided public notice of the meetings and invited all interested agencies, Tribal representatives, NGOs and individuals to attend these meetings to assist it in identifying potential issues that it should analyze in the surrender applications. A court reporter recorded the scoping meetings. All statements (verbal and written) became part of the Trust s public records for the project. The Trust asked before each meeting that all individuals who attended, especially those who made statements, sign in and clearly identify themselves for the record. Interested parties who chose not to speak or who were unable to attend the scoping meetings were given the option to provide written comments and information to the Trust by December 18, ENVIRONMENTAL CONSIDERATIONS AFFECTING PLANS The attached Multi-project Environmental Analysis provides an analysis of both long term and short term environmental considerations associated with the proposed decommissioning of the Howland Project facilities. H-1

14 3.0 DISPOSITION OF PROJECT FACILITIES Because the local residents want the Howland Dam impoundment to remain, the Trust has focused on evaluating a bypass channel as a fish passage option at the Howland Dam in order to allow the impoundment to remain in place. Successful bypass channels for passing small runs of migratory fishes are being built and tested at many sites in Germany and Austria, but are seldom found in the United States. Bypass channels have benefits over traditional fishway structures in that their usefulness is not limited to passage of a particular fish species. The objectives of the bypass channels are to create: (1) a semi-natural channel that fish will use for upstream and downstream passage; (2) habitat that fish will use during the non-migratory season; and (3) a natural, aesthetically pleasing area for people. Based on the physical configuration of the confluence of the Piscataquis River and the Penobscot River, the logical location for a bypass channel is along the southern bank of the Piscataquis and the western bank of the Penobscot. This is due to the position of the downstream channel, the occurrence of bedrock, and possible attraction flow from the gates. All evaluations have been focused in this area, including a two-level brick and concrete generating building and an electrical transformer substation. 4.0 BYPASS CHANNEL CONSTRUCTION PLANS The following information is described in greater detail in Appendix D of the Environmental Report, Technical Memorandum Penobscot River Restoration Project Bypass Channel at Howland Dam Conceptual Design. The proposed bypass channel at the Howland Dam located on the south bank of the Piscataquis River. The channel is 924 feet in length, and has a width to the limits of proposed grading of approximately 170 feet. A compound channel cross-section will support both low summer flows and high spring flows under fish passable conditions. The main bypass channel is 110 feet wide, with a ten foot wide low flow channel. Typical ranges of flow in the channel vary from just under 2,200 cfs during high May flows (11,400 cfs in the Piscataquis River), and just over 100 cfs during low July flows (400 cfs in the Piscataquis River). H-2

15 The upland site at the proposed bypass channel location includes a two-level brick and concrete generating facility (the powerhouse), and electrical transformer substation, an existing recycling facility, and remnants of a former tannery building. The powerhouse will remain. The electrical substation, if deemed necessary, will need to be relocated to an alternate location on the site. The main recycling facility building will not be impacted by the channel and could remain. However, the recycling facility storage building and unloading area would need to be relocated. Alternately, the entire recycling facility could be relocated to an alternate site. The remnants of the former tannery building at the site will be entirely removed. The powerhouse building will be retrofitted to allow for functional flow. In addition, the existing gates at the dam will be maintained to allow flow. Both the powerhouse and the existing gates will require long-term operation and structural maintenance. An access drive to the powerhouse with a bridge over the bypass channel will be provided. The most likely location for this access drive is on to the site from the west, from Route 116. The bridge will pass over the bypass channel close to the hydraulic entrance of the channel. \\falcon\jobs\1483\002\docs\surrender Applications\Howland\001-Draft Howland Surrender Application doc H-3

16 APPENDIX A LICENSE INSTRUMENTS

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24 Jnofflclal FERC-Generated PDF of Issued by FERC OSEC 03/22/1999 in Docket#: P UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION 86 FERC 62,21 1 Bangor Hydro-Electric Company ) Project No ORDER AMENDING LICENSE On November 19,1998, Bangor Hydro-Electric Company (Bangor), licensee for the Howland Project (FERC 2712) filed an application to amend its license, i/ The Howland Project is located at the mouth of the Piscataquis River, within the city limits of Howland, in Penobscot County, Maine. BACKGROUND Bangor filed the application to correct the project's description given in ordering paragraph (B) (2)(i) and the fourth page of exhibit M to revise the high-side voltage. The project description and exhibit M give the high-side voltage as 44,000 volts. The actual high-side is 46,000 volts. The project description and exhibit M will be revised to reflect this value. The Director orders: (A) The license for the Howland Project, FERC Project No is amended as described below effective the issuance date of this order. (B) The high-side voltage for the transformer describe on fourth page of exhibit M is revised to 46,000 volts. (C) Licensing order (B) (2) is revised to read as follows: (2) Project works consisting of: (a) a concrete gravity dam 660 feet long, with an average height of 13 feet; (b) a 270- acre reservoir which extends upstream approximately 4 miles, with a normal water surface elevation of feet mean sea level (when 3.75-foot-high flashboards are installed); (c) a gate section with four 9x9-foot gates; (d) a 570-foot-long spillway, integral with the dam; (e) an abandoned fishway; (f) an operating fishway and log sluice section; (g) a 90- foot-long concrete cutoff wall (constructed to prevent seepage) located on the west abutment; (h) a powerhouse with an installed capacity of 1875 kilowatts; (i) generator leads, a 2.4 kv generator bus, a bank of 2.4/46-kV 83 FERC ~61,037 Order Issuing new License issued April 20, [X~-A-6

25 Jnofflclal FERC-Generated PDF of Issued by FERC OSEC 03/22/1999 in Docket#: P Project No transformers, and appurtenant facilities to connect to the Licensee's 46-kV system; and (j) appurtenant facilities. (D) This order constitutes final agency action. Requests for rehearing by the Commission may be filed within 30 days of the date of issuance of this order, pursuant to 18 C.F.R <211!iilR:'i::::nsing and Compliance

26 Jnofflclal FERC-Generated PDF of Issued by FERC OSEC 04/01/1999 in Docket#: P T O0 1 UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION Bangor Hydro-Electric Company ) Penobscot Hydro, LLC ) Projects Nos , , , , , , ORDER APPROVING TRANSFER OF LICENSES i J999 By application filed December 7, 1998, as amended January 22, 1999, Bangor Hydro-Electric Company (Bangor or transferor) and Penobscot Hydro, LLC (Penobscot or transferee) request Commission approval to transfer the licenses for the Veazie, Milford, Medway, Orono, Stillwater, Howland, and Ellsworth Hydroelectric Projects (Nos. 2403, 2534, 2666, 2710, 2712, 2721, and 2727, respectively) from Bangor to Penobscot. i/ The first five named projects are located on the Penobscot and Stillwater Rivers in Penobscot County, Maine; the sixth on the Piscataquis River in Penobscot County, Maine; and the seventh on the Union River in Hancock County, Maine. Transfer of the licenses for these projects is requested in connection with the divestiture by Bangor of certain generation and other assets, pursuant to Maine Public Law 1997, ch. 316, 35- A 3204, et sem. (An Act to Restructure the State's Electric Industry). BACKGROUND As discussed below, the transfers will be approved. ~/ i/ The amendment substituted Penobscot Hydro, LLC for Penobscot Hydro, Inc., as the proposed transferee. 2/ On March 15, 1999, the Commission issued an order in Docket Nos. EC and ER99-I , approving Bangor Hydro- Electric Company's related application for authority under Section 203 of the Federal Power Act for the sale of jurisdictional facilities and accepting for filing proposed agreements. 61,281. qqoqoeo'4o - See Bangor Hydro-Electric Company, 86 FERC DC-A-4

27 Jnofflclal FERC-Generated PDF of Issued by FERC OSEC 04/01/1999 in Docket#: P Projects Nos et al. -2- Bangor holds original licenses for the Medway, Orono, and Howland Projects, // and new licenses for the Veazie, Milford, Stillwater, and Ellsworth Projects. i/ Bangor proposed ~o decommission the Orono Project No (which is operating under an annual license) as part of its proposal to build the downstream Basin Mills Project No However, by order issued April 20, 1998, the Commission denied Bangor's application for license for Project No ~/ Bangor subsequently requested rehearing of the denial, which is pending before the Commission. Penobscot will be succeeding to the interests of PP&L Global, Inc., under an Asset Purchase Agreement entered into between Bangor and PP&L Global, Inc., on September 25, 1998, pursuant to the noted Maine restructuring law, whereby Bangor agreed to sell certain generation and other assets to PP&L Global, Inc., including the seven subject hydroelectric projects, subject to Commission approvals. PP&L Global, Inc. is a whollyowned subsidiary of PP&L Resources, Inc., and is primarily engaged in the development, acquisition, ownership, and management of generation, ~ransmlssion, and distribution facilities worldwide. Penobscot is a wholly-owned subsidiary of PP&L Global, Inc. On January 29, 1999, public notice of the amended transfer application was issued. A timely motion to intervene was filed by the Maine State Planning office (requesting party status only). ~/ The U.S. Department of the Interior filed comments. DISCUSSION Interior notes that it has reserved authority to prescribe fishways under Section 18 of the Federal Power Act (FPA) at the Ellsworth and Medway Projects. It describes Bangor's cooperation in developing fish passage measures at Ellsworth and eel passage measures at Medway, and urges the Commission to view with ~/ 6 FERC ~ 61,287 (1979), 1 FERC ~ 61,104 (1977), 12 FERC 62,207 (1980). ~/ 83 FERC ~ 61,040 (1998), 83 FERC ~ 61,037 (1998), 83 FERC 61,038 (1998), 41 FERC ~ 62,304 (1987). ~/ 83 ImERC ~ 61,039. f~/ The motion to intervene was timely, unopposed, and accordingly granted by operation of Rule 214(c) of the CommLission's Rules of Practice and Procedure, 18 C.F.R. Section (c) (1998).

28 Jnofflclal FERC-Generated PDF of Issued by FERC OSEC 04/01/1999 in Docket#: P Projects Nos et al. -3- disfavor any transferee request for extensions of compliance deadlines based solely on the transfer. The applicants request substitution of Penobscot for Bangor as applicant in the pending relicensing proceedings in Project Nos and 2721 and waiver of the requirements of Section 16.9(d)(i) pertaining to the public notice requirements for material amendments relicensing applications. I/ The public notice of the transfer application stated that the transfer would lead to the substitution of the transferee for the transferor as the applicant for new licenses for Project Nos and This notice was published in the Federal and in the local newspaper once, and was served on federal and state resource agencies and Indian tribes, substantially as required by Section 16.9(d) (i). ~/ Adherence to the remaining notice requirements of Section 16.9(d) (i) would serve no useful public purpose, and those requirements are therefore waived. Applicants request that the substitution be made contingent upon the consummation of the asset sale contemplated in the Asset Purchase Agreement and be made effective upon the "transfer date." Since the "transfer date" is unknown to the Commission until the date of the filing of transferee acceptance forms and conveyance documents (see ordering paragraph (C), below), substitution is approved as of the latter date. ~/ 2/ Under Section 4.35(f)(4) of the Commission's regulations (18 C.F.R. 4.35(f) (4) (1998)), the Commission treats a substitution of all of the original applicants for a license as a material amendment to the application. It changes the filing date of the application to the filing date of the amendment and reissues public notice of the application. See Michigan Power Company and Indiana Power Company, 57 FERC ~ 61,227 (1991). Under Section 16.9(b) (3) of the Commission's relicensing regulations (18 C.F.R. 16.9(b)(3)), Section 4.35 does not apply to a relicensing application, except that the Commission will reissue a public notice of the application in accordance with the Provisions of Section 16.9(d)(i), if an amendment described in Section 4.35(f) is filed. Section 16.9(d) (1)(ii) and (iii) requires publishing notice once a week for four weeks and notifying appropriate federal, state, and interstate resource agencies and Indian tribes by mail of material amendments to relicensing applications. ~/ Applicants also request that Penobscot be substituted for (continued...)

29 Jnofflclal FERC-Generated PDF of Issued by FERC OSEC 04/01/1999 in Docket#: P Projects Nos et al. -4- As noted in the public notice of the transfer application, the Commission's policy is to scrutinize transfer requests that are filed during the last five years of a license to determine if the transfer's primary purpose is to give the transferee an advantage in relicensing, such as when a transfer is intended to escape consideration of a transferor's poor compliance record. /~/ Here, the compliance record of the transferor is satisfactory, and the transfer will facilitate the continued operation and maintenance of the projects under the described transaction. Therefore, there is no basis for concluding that the transfer is intended to avoid a poor compliance record or otherwise give Penobscot an advantage in relicensing. CONCLUSIONS Bangor has satisfactorily complied with the terms and conditions of the licenses. Bangor has paid and agrees to continue to pay charges which accrue until the transfer is effective. Penobscot is not a licensee of the Commission. Therefore, we have no hydroelectric compliance record to review. However, Penobscot intends to hire several employees of the transferor who have experience operating and maintaining the licensed projects. Penobscot is qualified to hold the licenses and to operate the properties under the licenses, and it has agreed to accept all the terms and conditions of the licenses, and to be bound by the licenses as if it were the original licensee. In the January 22, 1999 amendment to the transfer application, at p. 3, Penobscot states that it has not yet obtained, but will obtain, authority to conduct business in the State of Maine. 9J(...continued) Bangor in the pending rehearing request, filed May 20, 1998, in the Veazie, Milford, Stillwater, and Basin Mills Projects Nos. 2403, 2534, 2712, and See Hydroelectric Relicensing Regulations Under the Federal Power Act, 54 Fed. Reg. 23,756 (June 2, 1989); FERC Statutes and Regulations, Regulations Preambles ~ 30,854 at p. 31,438 n. 318 (May 17, 1989). As noted, Section 8 of the FPA provides that a transferee is subject to the conditions of the license as if it were the original licensee, and Section 9.3 of the Commission's regulations, 18 C.F.R. 9.3, states that the transferee shall be responsible for the payment of annual charges that accrue prior to the date of transfer. Based on these statutory and regulatory provisions, any delinquent annual charges are regarded as the responsibility of the transferee.

30 Jnofflclal FERC-Generated PDF of Issued by FERC OSEC 04/01/1999 in Docket#: P Projects Nos et al. -5- The proposed transfers are consistent with the Commission's regulations and are in the public interest. The Director orders: (A) Transfer of the licenses for Projects Nos. 2403, 2534, 2666, 2710, 2712, 2721, and 2727, the Veazie, Milford, Medway, Orono, Stillwater, Howland, and Ellsworth Hydroelectric Projects, from Bangor Hydro-Electric Company to Penobscot Hydro, LLC is approved. (B) Bangor Hydro-Electric Company shall pay all annual charges that accrue up to the effective date of the transfer. (C) Approval of the transfers is contingent upon: (i) transfer of title of the properties under license and delivery of all license instruments to Penobscot Hydro, LLC, which shall be subject to the terms and conditions of the licenses as though it were the original licensee; (2) Penobscot Hydro, LLC acknowledging acceptance of this order and its terms and conditions by signing and returning the attached acceptance sheets; and Penobscot Hydro, LI~ obtaining authorization to conduct business in the State of Maine. Within 60 days from the date of this order, Penobscot Hydro, ~ shall submit certified copies of all instruments of conveyance, the signed acceptance sheets, and the state authorization to conduct business. (D) This order constitutes final agency action. Reguests for rehearing by the Co~ission may be filed within 30 days of the date of issuance of this order, pursuant to 18 C.F.R i Mark Robinson Director Division of Licensing and Compliance

31 Jnofflclal FERC-Generated PDF of Issued by FERC OSEC 04/01/1999 in Docket#: P Project No IN TESTIMONY of its acknowledgment of acceptance of all of the terms and conditions of this order, Penobscot Hydro, LLC, this day of, 1 9, has caused its corporate name to be signed hereto by its President, and its corporate seal to be affixed hereto and attested by, its Secretary, pursuant to a resolution of its Board of Directors duly adopted on the day of, 19, a certified copy of the record of which is attached hereto. By Attest: Secretary (Executed in quadruplicate)

32 FEDERAL ENERGY REGULATORY COMMISSION WASHINGTON, DC October 20, 2004 OFFICE OF ENERGY PROJECTS Project Nos and Maine Howland and Great Works Projects PPL Maine, LLC Mr. Scott Hall Director of Environmental Services PPL Maine, LLC Davenport Street P.O. Box 276 Milford, Maine Reference: Request for Suspension of Processing Relicense Applications Dear Mr. Hall: On June 25, 2004, PPL Maine, LLC (PPL) filed, on behalf of itself and 15 parties, a Comprehensive Settlement Agreement (agreement) for the Lower Penobscot River Basin in Maine. The goal of the agreement is to restore access to 500 miles of fish habitat within the Penobscot River Basin while retaining 90 percent of existing hydroelectric generation. The agreement calls for phased implementation that would allow PPL and the parties time to implement various conditions, including transferring and surrendering three licenses. Generating capacity would be increased at six projects through a combination of additional generation capacity and operational changes. The agreement filing includes a request of the Commission to delay processing the relicense applications for the Howland and Great Works Projects for five years. During this 5-year period, 1 the Penobscot River Restoration Trust (Trust) would raise the funds required to exercise an option to purchase the Howland, Great Works, and Veazie Projects from PPL, and transfer the licenses to the Trust. Once the option is exercised, the Trust would apply to surrender the licenses. The parties are also asking that certain current license requirements at the Veazie and Milford projects be delayed. 2 1 The 5-year clock started June A final recreation plan for Veazie and an additional generating unit at Milford.

33 2 As you know, we encourage settlements in licensing proceedings because we believe that, in many cases, a settlement will result in a license with conditions that are acceptable to more stakeholders than might otherwise occur. In most recent cases, we've been continuing with the licensing process as the settlement process unfolds. However, in this case, the settlement agreement is complete, but, because of its phased approach, requires a number of years to fully implement. Therefore, I am granting your request on the condition that the parties show progress in implementing the agreement, specifically, in raising the funds required for the Trust to exercise their option to purchase the projects. As such, I am requiring PPL to file six-month updates, and convene an annual meeting on the status of the agreement. If you have any questions, please call Ed Lee at (202) , or edlee@ferc.gov. Sincerely, J. Mark Robinson Director Office of Energy Projects cc: Service Lists for Project Nos. 2721, 2312, 2403, 2534, 2666, 2710, 2712, 2600, 10981, and Docket No. DI97-10