Fair Value, Net Investment and Relicensing

by John W. Gulliver, Pierce, Atwood, Scribner, Allen, Smith Lancaster, Portland, United States,



Document Type: Proceeding Paper

Part of: Waterpower '91: A New View of Hydro Resources

Abstract:

The Federal Power Act ('Act') requires that a Federal Energy Regulatory Commission ('FERC') license receive only 'net investment' in its project, if, upon relicensing, the United States Government takes over the project or FERC awards the new license to a competing applicant. 'Net investment,' which essentially is original cost of physical plant less depreciation, amounts to less than the fair market value of a project. In addition to being constitutionally suspect, this compensation scheme has several practical and strategic implications for the hydro industry.



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