19991055 Ver 2_Application_20100217

LETTER OF TRANSMITTAL
DATE: February 16, 2010 SUBJECT: Queens Creek Amended 401 WQC
TO:
M
J
D PROJECT NO. 133056
r.
on
orney
DWQ 401 Unit
2321 Crabtree Blvd. STE 250
Raleigh, NC 27604
919-733-1786 SENT via FedEx

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ENCLOSED: THESE: FOR: PLEASE:
F LISTS r SPECS
r COPIES r REPORTS
r ORIGINALS F MANUALS
r PRINTS r CATALOGS
F REPRODUCIBLES
r PURCHASE ORDER r ARE PRELIMINARY
r HAVE NO EXCEPTIONS
r HAVE EXCEPTIONS NOTED
r ARE FINAL
r ARE FOR REVISION AS
NOTED r INFORMATION
r REFERENCE
r REVIEW & ACTION
r BID
r CONTRACT
r CONSTRUCTION
r CONSTRUCTION AND REVIEW
r FABRICATION
r FABRICATION REVISION r SEE BELOW
r REVISE
r COMMENT
r REVIEW & RETURN
r ACKNOWLEDGE
r DESTROY OLD ISSUES
r FILE
r RETURN ON COMPLETION
OF JOB
r REVISE & R BW
NO.
COPIES DATE DOCUMENT OR
DRAWING NO. DESCRIPTION
1 Original FERC 401 WQ Application for Amendment
7 Copies of the FERC 401 WQ Application
Please date stamp one of the original cover letters and return in the self
address and stamped envelope.
9 0 VLq
Thank you v
d
iFEB t '07 2010
MW- WATERQUAWTY
'
%M1sRAW-H
1'VLAMSMDSt0Rl1iY

SIGNER err, t? a
If enclosures are not as specified, please notify us at once.
TELEPHONE [phone] FAX [phone]
Mk Duke
Energy.
Carolinas
February 15, 2010
STEVEN D. JESTER, A/A
Vice President
Hydro Licensing and Lake Services
Duke Energy Carolinas, LLC
526 South Church St.
Charlotte, NC 28202
Mailing Address:
EC12K / PO Box 1006
Charlotte, NC 28201-1006
704 382 4887
704 562 5850 cell
sjester@duke-energy. com
qq-1 X55 ?2-
Mr. John Dorney 0 if v , --' 11 V
401 Wetlands Unit A 17)
NCDENR-Division of Water Quality FEB 1 ".• 2C10
1650 Mail Service Center DENR-WATER QUAUTY
Raleigh, NC 27699-1650 WETUWDSANDSTORMM4TERERMCM
Subject: Amendment to 401 Water Quality Certification (WQC #3244) Queens Creek
Hydroelectric Project (FERC No. 2694-002)
Dear Mr. Dorney:
Duke Energy Carolinas, LLC (Duke) is pleased to submit to your office the enclosed Application
for an Amendment to the existing 401 Water Quality Certification for the Queens Creek
Hydroelectric Project (Project) (FERC No. 2694-002). The Project, located in Macon County,
North Carolina, consists of a 37-acre reservoir, an earth and rock fill dam with spill valve, and a
powerhouse located approximately 3 miles upstream from the Queens Creek confluence with the
Nantahala River. A steel penstock that extends from the dam supplies the powerhouse with
water.
Licensing issues for the Project were addressed by a Settlement Agreement (Agreement) that
Duke executed with the North Carolina Wildlife Resources Commission (WRC) and North
Carolina Department of Environment and Natural Resources (DENR) in October, 2000. The
Federal Energy Regulatory Commission (FERC) issued a New License for the Project consistent
with the terms of the Agreement in March, 2002. After several years of operational experience
and consulting with the WRC and DENR, the Agreement parties have agreed to a modification
in the Low Inflow Protocol for the Project (contained in License Article 402). These changes are
fully described in the enclosed "Application for an Amendment to the Existing 401 Water
Quality Certification" and will simultaneously implement water conservation measures for
power generation, continuous minimum flow, and minimum lake elevation during drought
conditions.. The modification to the Low Inflow Protocol that Duke is proposing does not
modify continuous minimum flows, lake elevations, or any other aspects of water quality related
to the normal operation of the Project.
www.duke-energy. corn
Mr. John Dorney
February 15, 2010
Page 2
Enclosed is a check in the amount $240.00 for processing fees as required. Please call Steve
Johnson at 704-382-4240 or Phil Fragapane at 704-382-4138 should you have any questions
regarding this issue.
Sincerely,
44
Steven D. Jester, Vice resident
Hydro Strategy, Licensing, and Lake Services
Duke Energy Carolinas, LLC
SDJ/sj
Enclosures
c w/o enclosures: Kevin Barnett, Asheville NCDWQ Regional Office
Jim Mead, NC Division of Water Resources
Jeff Lineberger, Duke Energy Carolinas, LLC
Steve Johnson, Duke Energy Carolinas, LLC
Phil Fragapane, Duke Energy Carolinas, LLC
George Galleher, Duke Energy
Garry Rice, Duke Energy
DWQ ID: 3244 (Modification)
FERC 401 WATER QUALITY CERTIFICATION
APPLICATION (AMENDMENT OF EXISTING CERTIFICATION)
FOR EXISTING FERC PERMITS
* SEND SEVEN (7) COPIES AND THE
APPROPRIATE FEE (SEE ITEM # 16)* OF THIS APPLICATION TO:
THE NC DIVISION OF WATER QUALITY
ATTN: MR. JOHN DORNEY
(PLEASE PRINT OR TYPE)
OWNER'S NAME: Duke Energy Carolinas, LLC
2. MAILING ADDRESS: 526 South Church St., PO Box 1006
PROJECT NAME: Queens Creek Hydroelectric Project
CITY: Charlotte STATE: North Carolina ZIP CODE: 28201-1006
PROJECT LOCATION ADDRESS (IF DIFFERENT FROM MAILING
ADDRESS ABOVE):
Queens Creek Hydroelectric Project, Topton NC, 28781
3. TELEPHONE NUMBER: (WORK) [phone]
4. IF APPLICABLE: AGENT'S NAME OR RESPONSIBLE CORPORATE
OFFICIAL, ADDRESS, PHONE NUMBER:
Jeffrey G. Lineberger, 526 South Church St., Charlotte, NC 28201-1006 (704) 382
5942
5. LOCATION PROJECT (PROVIDE A MAP, INCLUDING A COPY OF USGS
TOPOGRAPHIC MAP OR AERIAL PHOTOGRAPHY WITH SCALE):
COUNTY: Macon NEAREST TOWN: Topton
SPECIFIC LOCATION (INCLUDE ROAD NUMBERS, LANDMARKS, ECT.)
Located at Lat. 35.276107'N-, Long. -83.657102°W. NC Hwy 1412 Winding
Stairs Road.
Version 1.0
January, 1999
6. IMPACTED STREAM/RIVER: Queens Creek RIVER BASIN: Little
Tennessee
CURRENT DIVISION OF WATER QUALITY (DWQ) CLASSIFICATION:
C-Tr
7. (a) IS THE PROJECT LOCATED WITHIN A NORTH CAROLINA DIVISION
OF COASTAL MANAGEMENT AREA OF ENVIRONMENTAL CONCERN
(AEC)?
(b) IF THE PROJECT IS LOCATED WITHIN A COASTAL COUNTY? (SEE PAGE
7 FOR LIST OF COASTAL COUNTIES), WHAT IS THE LAND USE PLAN
(LUP) DESIGNATION?
8. (a) ARE ADDITIONAL PERMIT REQUESTS EXPECTED FOR THIS
PROPERTY IN THE FUTURE? No
IF YES, DESCRIBE ANTICIPATED WORK:
9. (a) ESTIMATED TOTAL NUMBERS OF ACRES IN PROJECT: 39 including
reservoir
10. PROVIDE AN APPROPRIATE ENVIRONMENTAL DOCUMENT. THE
DOCUMENT SHOULD ADDRESS:
(a) DATA SHOWING THAT A 7Q10 MINIMUM FLOW WILL BE PROVIDED
(b) A COST BENEFIT ANALYSIS OF THE PROJECT SHOWING WHY THE
PROJECT IS STILL NECESSARY
(c) DESCRIPTION OF LENGTH OF BYPASS REACH (IF ANY) AND
MEASURES TO PROVIDE FLOW TO THE REACH IN LOW FLOW
CONDITIONS.
(d) MEASURES PLANNED OR TAKEN TO MAINTAIN DOWNSTREAM
WATER QUALITY SUCH AS ADEQUATE DISSOLVED OXYGEN.
This application is for an amendment to the existing 401 Water Quality Certification
(WQC) for the Queens Creek Project which was issued on November 30, 2000
(Attachment 1). The above questions have been addressed in that WQC. The Queens
Creek Project received a license (Attachment 2) from the Federal Energy Regulatory
Version 1.0
January, 1999
Commission (FERC) on March 28, 2002. The proposed changes to the current WQC are
captured in the Settlement Agreement Modification (Attachment 3) and involve
implementation of water conservation measures in a simultaneous manner instead of the
current stepped method. In the proposed modification, reductions in generation flows,
continuous flows, and minimum lake elevations occur together rather than in a stepwise
fashion as required in the current WQC. The proposed change is found on pages 2 to 4 in
the Settlement Agreement Modification and reads as follows:
"The Licensee, except during low inflow periods as defined herein, shall release
from a minimum flow release valve installed at the base of the project's dam, a
continuous minimum flow of 2.0 cubic-feet-per-second (cfs), as calibrated and
metered at the valve, during the period December 1 through May 31 and 1.0 cfs
during the period June I through November 30 for the protection of fishery and
other aquatic resources in the reach of Queens Creek bypassed by the project.
During low inflow periods as defined herein, the Licensee shall follow in
sequential fashion the protocol set forth below regarding adjustments to minimum
flow releases, reservoir elevations, and generation levels and shall make the
adjustments set forth below on a weekly basis so as to equitably allocate the
impacts of reduced water availability:
a) The Licensee shall reduce the normal minimum generation volume by 2001o,
from 36.5 acre-feet per calendar week to 29.2 acre-feet per calendar week, shall
reduce the continuous minimum flow releases specified above for the relevant
time period by 20% (i•e., down to 1.6 cfs for the period December I through May
31 and 0.8 cfs for the period June 1 through November 30), and shall reduce the
minimum reservoir level limitation one additional foot below the lower reservoir
elevation specified for the relevant time period in Article 401 hereof for the
duration of the low inflow period (hereinafter the "first modified reservoir level
band');
b) Upon a determination by the Licensee that the reservoir elevation cannot be
maintained within the first modified reservoir level band with the adjustments in
a) above, the Licensee shall reduce the minimum generation volume by an
additional 15% (down to approximately 23.7 acre-feet per calendar week), shall
reduce the continuous minimum flow release specified herein for the relevant time
period by an additional 15% (? down to approximately 1.3 cfs for the period
December I through May 31 and approximately 0.65 cfs for the period June I
through November 30), and shall reduce the minimum reservoir level limitation
one additional foot below the lower elevation of the first modified reservoir level
band for the duration of the low inflow period (hereinafter the "second modified
reservoir level band');
c) Upon determination by the Licensee that the reservoir elevation cannot be
maintained within the second modified reservoir level band with the adjustments
in b) above, the protocol preceding establishment of the first and second modified
reservoir level bands as specified above shall be repeated, with the Licensee
Version 1.0
January, 1999
reducing minimum generation volumes and continuous minimum flow releases in
increments of 10%, along with one foot incremental reductions in the minimum
reservoir level limitation of the second modified reservoir level band, until inflow
has increased to a point where the reservoir level has been restored to within the
reservoir elevation limits for the relevant time period specified in Article 401
hereof.
For purposes of this Article: the term "calendar week" means Monday through
Sunday; the term "normal minimum generation volume" means 365 acre-feet of
water used per calendar week to generate electricity at the project; the term "low
inflow period" means any period following a calendar week when that week's
inflow to the reservoir could not maintain the reservoir's elevation above
elevation 2,893.0 feet MSL for the period May I through October 31 or elevation
2,888.0 feet MSL for the period November 1 through April 30 if the Licensee had
provided the continuous minimum flow release for the relevant time period
specified herein and used no more than the normal minimum generation volume.
Any adjustments required by this Article will be made at the beginning of the
calendar week (Monday) following the determination that a low inflow period
exists.
Whenever the Licensee at any time during the period May I through October 31
reduces the elevation of the reservoir to below elevation 2,888.0 feet MSL after
following the above-specified protocol and not because of planned drawdowns for
maintenance or inspection purposes or operating emergencies beyond the control
of the Licensee, it shall notify the North Carolina Department of Environment and
Natural Resources (DENR), Division of Water Quality, Central Office, the DENR,
Division of Water Resources and the North Carolina Wildlife Resources
Commission (WRC) and other agencies (United States Fish and Wildlife Service
(USFWS) and United States Forest Service (USFS)) as soon as possible, but no
later than 10 days after each such incident, and shall attend any meeting
convened thereafter to discuss reasonable and desirable options for addressing
the low inflow conditions that caused the reservoir elevation to be reduced below
elevation 2,888.0 feet MSL; provided, however, that no changes in the low inflow
protocol provided for herein may be made without the prior approval of the
Commission. "
There are no changes in minimum flows or lake elevations and no effect on water quality
related to the normal operation of the Queens Creek Project. By way of this application
Duke is requesting that the North Carolina Division of Water Quality issue an amended
401 WQC that incorporates the above italicized language (which is excerpted from the
Settlement Agreement Modification in Attachment 3) in place of the current wording for
the low inflow protocol in the existing 401 WQC (paragraph 5 of Attachment 1 in its
entirety).
Version 1.0
January, 1999
11. WHAT IS THE SIZE OF THE WATERSHED?
The drainage area at the Queens Creek Hydroelectric Project is 3.6 square miles.
Drainage area downstream of Queens Creek Dam (bypassed reach) includes
approximately 0.6 square miles from the dam to the confluence with the Nantahala
River.
WHAT IS THE FULL-POND SURFACE AREA? 37 acres
12. YOU ARE REQUIRED TO CONTACT THE US FISH AND WILDLIFE
SERVICE AND/OR NATIONAL MARINE FISHERIES SERVICE REGARDING
THE PRESENCE OF ANY FEDERALLY LISTED OR PROPOSED FOR
LISTING ENDANGERED OR THREATENED SPECIES OR CRITICAL
HABITAT IN THE PERMIT AREA THAT MAY BE AFFECTED BY THE
PROPOSED PROJECT. DATE CONTACTED:
Addressed in Existing 401 WQC
13. YOU ARE REQUIRED TO CONTACT THE STATE HISTORIC
PRESERVATION OFFICER (SHPO) REGARDING THE PRESENCE OF
HISTORIC PROPERTIES IN THE PERMIT AREA WHICH MAY BE
AFFECTED BY THE PROPOSED PROJECT. DATE CONTACTED:
Addressed in Existing 401 WQC
14. DOES THE PROJECT INVOLVE AN EXPENDITURE OF PUBLIC FUNDS OR
THE USE OF PUBLIC (STATE) LAND? NO
(IF NO, GO TO 15)
(a) IF YES, DOES THE PROJECT REQUIRE PREPARATION OF AN
ENVIRONMENTAL DOCUMENT PURSUANT TO THE REQUIREMENTS OF
THE NORTH CAROLINA ENVIRONMENTAL POLICY ACT? YES ? NO ?
(b) IF YES, HAS THE DOCUMENT BEEN REVIEWED THROUGH THE NORTH
CAROLINA DEPARTMENT OF ADMINISTRATION STATE
CLEARINGHOUSE YES ? NO ?
IF ANSWER 17b IS YES, THEN SUBMIT APPROPRIATE DOCUMENTATION
FROM THE STATE CLEARINGHOUSE WITH THE NORTH CAROLINA
Version 1.0
January, 1999
ENVIRONMENTAL POLICY ACT. QUESTIONS REGARDING THE STATE
CLEARINGHOUSE REVIEW PROCESS
SHOULD BE DIRECTED TO MS. CHRYS BAGGETT, DIRECTOR STATE
CLEARINGHOUSE, NORTH CAROLINA DEPARTMENT OF
ADMINISTRATION, 116 WEST JONES STREET, RALEIGH, NORTH
CAROLINA 27603-8003, TELEPHONE [phone].
15. THE FOLLOWING ITEMS SHOULD BE INCLUDED WITH THIS
APPLICATION IF PROPOSED ACTIVITY INVOLVES THE DISCHARGE OF
EXCAVATED OF FILL MATERIAL INTO WETLANDS: NA
(a) WETLAND DELINEATION MAP SHOWING ALL WETLANDS, STREAMS,
LAKES, AND PONDS ON THE PROPERTY (FOR NATIONWIDE PERMIT
NUMBERS 14, 18, 21,26, 29, AND 38). ALL STREAM (INTERMITTENT AND
PERMANENT) ON THE PROPERTY MUST BE SHOWN ON THE MAP. MAP
SCALES SHOULD BE 1 INCH EQUALS 50 FEET OF 1 INCH EQUALS 100
FEET OF THEIR EQUIVALENT.
(b) IF AVAILABLE, REPRESENTATIVE PHOTOGRAPH OF WETLANDS TO BE
IMPACTED BY PROJECT.
(c) IF DELINEATION WAS PERFORMED BY A CONSULTANT, INCLUDE ALL
DATA SHEETS RELEVANT TO THE PLACEMENT OF THE DELINEATION
LINE.
(d) ATTACH A COPY OF THE STORMWATER MANAGEMENT PLAN IF
REQUIRED.
(e) WHAT IS LAND USE OF SURROUNDING PROPERTY?
(f) IF APPLICABLE, WHAT IS PROPOSED METHOD OF SEWAGE DISPOSAL?
16. CERTIFICATION FEE
(a) IF THE IMPACT IS LESS THAN 1 ACRE OF WETLAND OR WATER AND
LESS THAN 150 FEET OF STREAM, PLEASE ENCLOSE A CHECK FOR
Version 1.0
January, 1999
$240.00 MADE OUT TO THE NORTH CAROLINA DIVISION OF WATER
QUALITY.
(b) IF THE IMPACT EXCEEDS EITHER OR BOTH OF THE LEVELS IN (a),
PLEASE ENCLOSE A CHECK FOR $570.00 MADE OUT TO THE NORTH
CAROLINA DIVISION OF WATER QUALITY.
A check for $240 is included to cover processing fees per discussion between John
Dorney and Steve Johnson on 2/5/2010.
17. PUBLIC NOTICE IS REQUIRED FOR ALL FERC PROJECTS. PLEASE
NOTE THAT THE APPLICANT IS REQUIRED TO REIMBURSE THE
DIVISION OF WATER QUALITY FOR THE COSTS ASSOCIATED WITH THE
PLACEMENT OF THE PUBLIC NOTICE. REFERENCE 15A NCAC 2H.0503
(f). Noted.
Version 1.0
January, 1999
SIGNED AND DATED AGENT AUTHORIZATION LETTER, IF APPLICABLE.
NOTE: WETLANDS OR WATERS OF THE US MAY NOT BE IMPACTED PRIOR
TO:
1. ISSUANCE OF A SECTION 404 CORPS OF ENGINEERS PERMIT,
2. EITHER THE ISSUANCE OR WAIVER OF A 401 DIVISION OF
WATER QUALITY CERTIFICATION, AND
3. (IN THE TWENTY COASTAL COUNTIES ONLY), A LETTER FROM
THE NORTH CAROLINA DIVISION OF COASTAL MANAGEMENT
STATING THE PROPOSED ACTIVITY IS CONSISTENT WITH THE
NORTH CAROLINA COASTAL MANAGEMENT PROGRAM,
C4 +..------
;- 4
Owners Signature Date
Steven D. Jester, Vice President
Hydro Strategy, Licensing and Lake Services
Duke Energy Carolinas, LLC
Version 1.0
January, 1999
ATTACHMENT 1
Water Quality Certification
Queens Creek Hydroelectric Project
November, 2000
--- -- V1-Z7M2 TUE13:20 FAX [phone] NANTAHLA MAINTENANCE
State of North Caro?+' ? l
Department of Envi;kokr l j NA
J
and Natural Resources `-Division of Water Quality
James B. Hunt, Jr., Governor
Bill Holman, Secretary .
Kerr T. Stevens, Director
t002/007
AIT?WA
1
NCDENR
NORTH C,AROUNA DEPARTMENT OF
ENVIRONMENT ANo NATURAL RESOURCES
November 30, 2000 70

Mr. John Wishon M
rn
Nantahala Relicensing Project Manager
Nantahala Power & Light --
301 NP&L Loop Road
Franklin, NC 28734 - ''
Dcar Mr. Wishon: <:

?n r

Re: Certification Pursuant to .'Section 401 of the Federal Clean Water Act,
Proposed Queens Creek Hydroelooric Plant FERC License Renewal
WQC Project # 991055, PERCH 2694
Macon County
Attached hereto is a copy of Certification No.3244 (revised) issued to the Nantahala Power
& Light, a Division of Duke Energy Corporation dated November 30, 2000.
If we can be of further assistance, do not hesitate to contact us.
Si y,
ev
Attachments
cc: Asheville DWQ Regional Office
Pile Copy
Central Files
Fred Tarver; NC Division of Water Resources
Chris Goudream, NC Wildlife Resources Commission
Federal Energy Regulatory Commission, Washington, D.C.
UU1
17)

Division of Water Ciuality + Wetlands/401 Unit
1621 Mall Service Center • Aaleigh NC 27659»1921• Telephone [phone] • FAX M 733.9959
An Equal Opportunity Affirmative Action Employer
5Q% recycled/10% post consumer paper
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0J/ ti2a0z TUE 13:21 FAX [phone] NANTAl1LA MAINTENANCE Z003/07
2
NORTH CAROLINA 401 WATER QUALITY CERTInCATION
THIS CER'TMCATION is issued in conformity with the requirements of Section 401
Public Laws 92.500 and 95-217 of the United States and subject to the North Carolina Division
of Water Quality (DWQ) Regulations in 15 NCAC 2H. Section .0500. It is issued to Nant4hala
Power and Light Company, a Division of Duke Energy Corporation in Macon County pursuant
to an application filed on the 1" day of October, 1999 to relicense the Queens Creek
hydroelectric project and a Settlement Agreement dated October 26, 2000 (received November 6,
2000).
The application providers adequate assurance that the discharge of fill material into the
waters of Queens Creek in conjunction with the proposed development will not result in a
violation of applicable Water Quality Standards and discharge guidelincs. 'Merefore, the State
of North Carolina certifies that this activity will not violate the applicable portions of Sections
301, 302, 303, 306. 307 of PL 92.500 and PI, 95-217 if conducted in accordance with the
application and conditions hereinafter set forth.
This approval is only valid for the purpose and design that you submitted in your
application, as described in the Public Notice, If you change your project, you must notify us
and send us a new application for a new certification. Tf the property is sold, the new owner must
be given a copy of the Certification and approval letter and is thereby responsible for complying
with all conditions. If total wetland fills for this project (now or in the future) exceed one acre
or total perennial stream impact exceeds 150 feet, compensatory mitigation may be required as
described in 15A NCAC 2H.0506 (h) (6) and (7). For this approval to be valid, you must follow
the conditions listed below, In addition, you should get any other federal, state or local permits
before you go ahead with your project including (but not limited to) Sediment and Erosion
control, "Coastal Stormwater, Non-discharge and Water Supply watershed regulations.
Condition(s) of Certification;
1) Appropriate sediment and erosion control practices which equal or exceed, those
outlined in the most recent version of two manuals, either the "North Carolina Sediment
and Erosion Control Planning and Design Manual" or the "North Carolina Surface
Mining Manual" (available from the Division of Land Resources in the DBIM
Regional or Central Offices). The control practices Aall be utilized to prevent
exceedances of the appropriate turbidity water quality standard (50 NTUs in all fresh
water streams and rivers not designated as trout waters; 25 NTUs in all lakes and
reservoirs, and all saltwater classes; and 10 NTUs in trout waters);
2) All sediment and erosion control measures placed in wetlands or waters shall be
removed and the natural grade restored after the Division of Land Resources has
released the project;
3) Measures shall be taken to prevent live or fresh concrete from coming into contact with
waters of the state until the concrete has hardened;
4) Eeservoir Lr,,,vc liM444o -"l'hc Licensee shall maintain the elevation of the project
reservoir within one foot above and two feet below the reservoir's normal full operating
pool level of 2,895.0 feet Mean Sea Levcl (MSL) (i.e., in the range of 2,896.0 feet MSL
and 2,893.0 feet MSL) for the period May 1 through October 31 and within one foot
above and seven feet below the reservoir's normal full operating pool level (i.e., in the
range of 2,846.0 feet MSL and 2,888.0 feet MSL) for the winter drawdown period of
November 1 through April 30. In order to facilitate gradual raising and lowering of the
reservoir during the winter drawdown period, the Licensee shrill operate the project so
as to attempt to have the reservoir elevation at 2,8910 feet MSL on April 1 and
03/12/2002 TUE 13:21 FAX [phone] NANTAHLA MAINTENANCE
16004/007
3
December 1. The licensee shall use the existing float-operated gage on the reservoir to
determine reservoir elevation.
The reservoir elevation limits specified herein may be temporarily modified if
required by operating emergencies beyond the control of the licensee, during periods
of excessive inflow, for planned drawdowns for maintenance or inspection purposes,
for short periods upon mutual agreement of the Licensee, the North Carolina
Department of Environment end Natural Resources (DENR) and the North Carolina
Wildlife Resources Commission (WRC), and during low inflow periods as specified in
Condition 5 of this Certification.
The' licensee shall notify in writing DENR, DWQ-Central Office, Division of
Water Resources (DWR) and the WRC at least 15 days prior to commencing planned
drawdowns for maintenance or inspection purposes that will require a temporary
modification of the reservoir elevation limits. The Licensee shall notify in writing the
DENR, DWQ-Central Office, DWR and the WRC of any temporary modification of
the reservoir elevation limits required by an operating emergency beyond the control of
the Licensee as soon as practical, either before, during, or immediately following such
emergency, but no later than ten days after each such incident.
5) Minimum „Ecw lq Queens 29k Bypass-The Licensee, except during low inflow
periods as defined herein, shall release from a minimum flow release valve required to
be installed at the base of the project's dam, as calibrated and metered at the valve, a
continuous minimum flow of 2.0 cubic-feet per second (cfs) during the period
December 1 through May 31 and 1.0 cfs during the period June 1 through November 30
for the protection of fishery and other aquatic resources in the reach of Queens Creek
bypassed by the project.
During low inflow periods as defined herein, the Licensee shall follow in
sequential fashion the protocol set forth below regarding adjustments to minimum now
releases, reservoir elevations, and generation levels and shall make the adjustments set
forth below on a weekly basis so as to equitably allocate the impacts of reduced water
availability:
a. The licensee shall reduce the normal minimum generation volume by
20% to 29.2 acre-feet per calendar week;
b. Upon a determination by the Licensee that the reservoir elevation
cannot be maintained within the limits specified for the relevant time
period in Condition 4 of this Certification hereof even with
implementation of the measure specified in a) hereof, the Licensee shall
reduce the continuous minimum flow releases specified above for the
relevant time period by 20% (i.e., down to 1.6 cfs for the period
December 1 through May 31 and 0.8 cfs for the period June 1 through
November 30);
c. Upon a determination by the Licensee that the reservoir elevation
cannot be maintained within the limits specified for the relevant time
period in Condition 4 of this Certification hereof even with
implementation of the measures specked in a) and b) hereof, the
Licensee may reduce the reservoir's elevation one additional foot
below the lower reservoir elevation limit specified for the relevant time
period in Condition 4 of this Certification hereof for the duration of the
low inflow period (herein after the "first modified reservoir level
band");
03/12/2002 TUE 13:21 FAX [phone] NANTAIiLA VAiNTENANCE
0005/007
4
d. Upon a determination by the Lioensee-that the reservoir elevation
cannot be maintained within the first modified reservoir level band, the
Licensee shall reduce the minimum generation volume by an additional
15% (down to approximately 23.7 acre-feet per calendar week);
e. Upon a determination by the Licensee that the reservoir elevation
cannot be maintained within the first modified reservoir level band
even with implementation of the measure specified in d) hereof, the
Licensee shall reduce the continuous minimum flow release specified
herein for the relevant time period by an additional 15% (i.e., down to
1.3 cfs for the period December 1 through May 3l and 0.65 cfs for the
period June I through November 30);
f, Upon a determination by the Licensee that the reservoir elevation
cannot be maintained within the first modified reservoir level band
even with implementation of the measures specified in d) and e) hereof,
the Licensee may reduce the reservoir's elevation one additional foot
below the lower limit of the first modified reservoir level band for the
duration of the low inflow period (hereinafter the "second modified
reservoir level band");
g. Upon a determination by the Licensee that the reservoir elevation
cannot be maintained within the second modified reservoir level band,
the protocol preceding establishment of the first and second modified
reservoir level bands as specified above shall be repeated, with the
Licensee first reducing minimum generation volumes in increments of
10%, and subsequently reducing continuous minimum flow releases in
increments of 10%, followed by one foot incremental reductions in the
lower limit of the second modified reservoir level band, until inflow
has increased to a point where the reservoir level has been restored to
within the reservoir elevation limits for the relevant time period
specified in Condition 4 of this Certification hereof.
For purposes of this Article: the term "normal minimum generation volume" mcans 36.5
acre-feet of water used per calendar week to generate electricity at the project; the term "low
inflow period" means any period when weekly inflow to the reservoir cannot maintain the
reservoir's elevation above elevation 2.893.0 feet MSL for the period May 1 through October 31
or elevation 2,888.0 feet MSL for the period November 1 through April 30 if the Licensee
provides the continuous minimum flow release for the relevant time period specified herein and
uses the normal minimum generation volume.
Whenever the Licensee at any time during the period May 1 through October 31 reduces the
elevation of the reservoir to below elevation 2,888.0 feet MSL after following the above
specified protocol and not because of planned drawdowns for maintenance or inspection
purposes or operating emergencies beyond the control of Licensee, it shall notify (in writing) the
North Carolina Dtpartrrunt of Environmental and Natural Resources. DWQ - Central Office and
DWR and the North Carolina Wildlife Resources Commission (WRC) as soon as possible, but
no later than ten days after each such incident, and shall attend any meeting convened thereafter
to discuss reasonable and desirable options for addressing the low inflow conditions that caused
the reservoir elevation to be reduced below elevation 2,838.0 feet MSL; provided, however, that
no changes in the low inflow protocol provided for herein may be made without the prior
approval of the Federal Energy Regulatory Commission (FERC).
6) ReportineReguiremcnts-No later than March 31 of each calendar year beginning the
first calendar year after the calendar year in which the FERC license is issued, the
Licensee shall provide the North Carolina Department of Environment and Natural
. ...._........ 03/12/2002 TUE 13:22 FAX [phone] NANTAHI.A MAINTENANCE
Z006/007
Resources, Division of Water Resources and the No+rtl -Caroliana Wildlife Resources
Commission and file with the federal Energy Regulatory Commission, a report
containing a table of the elevation of the reservoir on a daily basis during the previous
calendar year, a certification by the Licensee that the minimum flow release
requirements of Condition 5 of this Certification were met during the previous calendar
year and a discussion of each incident during the previous calendar year where the
elevation of the reservoir was above or below the level specified in Condition 4 of this
Certification, together with information sufficient to demonstrate that for each incident
where the elevation of the reservoir was below the levels specified in Condition 4 of
this Certification the requirements of the low inflow protocol of Condition 5 of this
Certification were met.
7) The above-described low inflow protocol mid reporting requirements shall be
implemented during the Spring of 2001, but not later than May 31, 2041. NP&L will
install a nynimurn flow release valve and associated flow meter required to provide and
measure the minimum flow as soon as practically achievable following receipt of any
necessary approvals by the FERC under the procedures of the existing license. The
minimum flow release valve will be calibrated to provide the range of minimum flows
under the range of reservoir levels identified in this Certification. Since NP&L cannot
begin construction until any necessary approvals for installation of the minimum flow
release valve and flow meter are received from the FERC, the Division of Water
Quality hereby agrees that failure to implement the subject minimum flows by May 31,
2001 due to delays in receiving any required FERC approvals does not constitute a
default under this Certification.
8) After five years of operations under the provisions of this Certification, NP&L will
confer with the North Carolina Department of Environment and Natural Resources (DWQ-
Central Office and DWR) and the North Carolina Wildlife Resources Commission to
consider holding an informational meeting, to review the operational history of the
Certification to determine if any operational changes are needed and agreeable to all the
Parties. Any such meeting shall be scheduled and held no later than September 30 of the
appropriate year.
Violations of any condition herein set forth shall result in revocation of this Certification
and may result in criminal and/or civil penalties. This Certification shall become null and void
unless the above conditions are made conditions of the Federal 404 and/or coastal Area
Management Act Permit. This Certification shall expire upon expiration of the 404 or CAMA
permit.
If this Certification is unacceptable, you have the right to an adjudicatory hearing upon
written request within sixty (60). days following receipt of this Certification. This request must
be in the form of a written petition conforming to Chapter 150B of the North Carolina General
Statutes and filed with the Office of Administrative Hearings, P.O. Box 27447, Raleigh, N.C.
27611-7447. If modifications are made to an original Certification, you have the right to an
adjudicatory hearing on the modifications upon written request within sixty (60) days following
receipt of the Certification. Unless such demands are made, this Certification shall be final and
binding.
This the 30t4%T4RA3NALrf November 2000
DIVISI 1 Y
te v
03/12/2002 TUE 13:22 FAX [phone] NANTAHLA KAINTENANCE 0007/007
6
WQC* 3244 (revised)
DWQ Project No.:
County: _
Applicant;
Project Name:
Certificate of Cc®ntiletion
Upon completion of all work approved withiff the 401 Water Quality Cerdfication, and any
subsequent modifications, the applicant is required to mium this cettificate to the 4011Wetlands
Unit, North Carolina Division of Water Quality, 1621 Mail Service Center, Raleigh, NC, 27699-
1621 This form may be returned to DWQ by the applicant, the applicant's authorized agent, or
the project engineer. It is not necessary to send certificates from all of these.
Appikant's Certification
I, hereby state that, to the best of my abilities, due
care and diligence was used in the observation of the construction such that the construction was
observed to be built within substantial compliance and intent of the 401 Water Quality
Certification, the approved plans and spccifications, and other supporting materials.
Signature Date:
Agent's Certification
1. hereby state that, to the best of my abilities, due
care and diligence was used in the observation of the construction such that the construction was
observed to be built within substantial compliance and intent of the 401 Water Quality
Certification, the approved plans and spocifications, and other supporting rnateriala.
Signature' ---Date:
U this project was designed by a Certified Profeasional
I, , as a duly registered professionat (i.e.,
Bogineer, I„endseape Archite et, Surveyor, etc.) in the State of North Carolina, having been authorized to
observe (periodically, weekly, full time) the construction of the project, for die Permittee hereby state that,
to the best of my abilities, due care and diligence was used in the observation of the construction such that
the construction was obsewed to be built within substantial compli"" and intent of the 401 Water Quality
Certification, the approved plan. and specifications, and other supporting materials.
Signature Registration No.
Daze
ATTACHMENT 2
Federal Energy Regulatory Commission
Order Issuing Subsequent License
Queens Creek Hydroelectric Project
March, 2002
No Acsn Num Received by FERC OSEC 03/28/2002 in Docket#: No Docket Num
98 FERC ¶ 62, 214
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Nantahala Power and Light, a division Project No. 2694-002
Duke Engineering Company North Carolina
ORDER ISSUING SUBSEQUENT LICENSE
(MINOR PROJECT)
(March 28, 2002)
On September 27, 1999, Nantahala Power & Light, a division of Duke
Engineering Company (NP&L-DEC) filed a license application under Section 15 of the
Federal Power Act (FPA)1 to continue to operate and maintain the existing 1,440-
kilowatt Queens Creek Hydroelectric Project, located on Queens Creek, near the Town
of Topton, in Macon County, North Carolina.2 The current license for this project
expired on September 30, 2001. NP&L-DEC proposes no new capacity.
On January 29, 2001, NP&L-DEC filed with the Commission an amended
application for new license for the Queens Creek Hydroelectric Project. The amended
application reflects the terms of a Settlement Agreement, and amended NP&L-DEC's
proposed operation and maintenance of the Queens Creek Hydroelectric Project.
BACKGROUND
Notice of NP&L-DEC's application for license was published on October 18,
1999. Four entities filed motions to intervene, but not in opposition: State of North
Carolina (April 5, 2000), Nantahala Outdoor Center (April 7, 2000), U.S. Department of
Agriculture, Forest Service (USFS; April 10, 2000), and U.S. Department of Interior,
Fish and Wildlife Service (FWS; April 12, 2000).
116 U.S.C. §§ 808.
2The project affects the interests of interstate or foreign commerce. See
Declaratory Order, Nantahala Power and Light Co., Docket No. E-7261, 36 FPC 119
(1966), rehearing denied, 36 FPC 581 (1966).
In a notice published on August 31, 2000, the staff indicated that the license
application was ready for environmental analysis and solicited comments,
recommendations, and final terms and conditions. Four entities made filing in response
to this notice: USFS, North Carolina Department of Environment and Natural Resources
(NCDENR), North Carolina Wildlife Resources Commission (NCWRC), and FWS. The
USFS provided preliminary 4(e) conditions with no schedule for filing final 4(e)
conditions. No final 4(e) conditions were filed by the USFS.
A settlement agreement between NP&L-DEC, NCDENR, and NCWRC was filed
on October 30, 2000. On December 20, 2000, staff issued a notice of settlement
agreement requesting comments.3 No comments were filed. On January 29, 2001,
NP&L-DEC filed an amended application reflecting the terms of the settlement
agreement, amending proposed operation and maintenance of the Queens Creek
Hydroelectric Project.
On July 27, 2001, an environmental assessment (EA) for the Queens Creek
Project was issued. The EA considered the settlement agreement as one of the licensing
alternatives. Comments on the EA were filed by NCWRC, FWS, Tennessee Valley
Authority (TVA), and the USFS, and the Commission's staff considered these comments
in preparing the final environmental assessment (FEA), which was issued on January 29,
2002, and is attached to this license. The motions to intervene and the comments
received from interested agencies and individuals have been fully considered in
determining whether and under what conditions to issue this license.
PROJECT DESCRIPTION
The Queens Creek Hydroelectric Project is located on Queens Creek, 1.5 miles
upstream of its confluence with the Nantahala River, near the town of Topton, Macon
County, in western North Carolina. The project does not occupy any federally-owned
lands.
The existing facilities at the Queens Creek Project include: (1) an earth-faced
rock fill dam with intake structure; (2) a 37-acre reservoir; (3) a steel penstock leading to;
(4) a powerhouse containing a single generating unit having an installed capacity of
1,440 kilowatts; and (5) appurtenant facilities. A more detailed description can be found
in ordering paragraph (B)(2).
3The notice of settlement agreement constitutes a notice of amendment application
filed by NP&L-DEC on January 29, 2001.
APPLICANT'S PLANS AND CAPABILITIES
In accordance with Sections 10 and 15 of the FPA, the staff has evaluated NP&L-
DEC's record as a licensee for these areas: (1) conservation efforts; (2) ability to comply
with the new license; (3) safe management, operation, and maintenance of the project;
(4) ability to provide efficient and reliable electric service; (5) need for power; (6)
transmission line improvements; (7) project modifications; (8) compliance history; and
(9) actions affecting the public. I accept the staff s finding in each of these areas.
Consumption Efficiency Improvement Programs [Section 10(a)(2) (C)1
NP&L-DEC states that it has initiated and encouraged programs to assist its
customers in conserving energy. NP&L-DEC utilizes advertisements, workshops, energy
audits, school programs, and brochures in passing information to its customers on energy
conservation. Residential customers who meet conservation standards can qualify for a
special conservation rate.
NP&L-DEC's Conservation and Load Management program indicates that good
faith efforts have been expended by the applicant to conserve electricity, reduce peak-
hour demands and to support the objectives of Section 10(a)(2)(C) of the FPA.
2. The Plans and Abilities of the Applicant to Comply with the Articles.
Terms, and Conditions of Any License Issued to It and Other Applicable
Provisions of Part I of the FPA [Section 15(a)(2)(A)l
The staff has reviewed NP&L-DEC's license application in an effort to judge its
ability to comply with the articles, terms, and conditions of any license issued, and with
other applicable provisions of this part of the FPA.
NP&L-DEC has successfully operated the Queens Creek Project for over 50 years
and continues to have the personnel and resources to do so.
Based on the above, the staff concludes NP&L-DEC has or can acquire the
resources and expertise necessary to carry out its plans and comply with all articles, terms
and conditions of a new license.
3. The Plans of the Applicant to Manage, perate, and Maintain the Project
Safely [Section 15(a)(2)(B)l
NP&L-DEC personnel responsible for maintenance and operation of the Queens
Creek Project are stationed at the Nantahala Operation Center and are trained in the
operations of Queens Creek and 10 other hydro plants. NP&L-DEC also has other staff
trained and available to assist the regular crew if and when necessary.
During the term of the existing license, the employee safety record has been
excellent.
The staff concludes that NP&L-DEC's plans to manage, operate, and maintain the
project safely are adequate.
4. The Plans and Abilities of the Applicant to Operate and Maintain the
Project in a Manner Most Likely to Provide Efficient and Reliable Electric
Service [Section 15(a (2)(C)l
NP&L-DEC's operation of the Queens Creek Project has provided an important
source of power for meeting the energy demands within the NP&L-DEC system. As
demonstrated by its history of low unscheduled outage data, NP&L-DEC has
successfully and consistently operated the project to provide efficient and reliable
electricity service to its customers.
5. The Need of the Applicant Over the Short and Long Term for the
Electricity Generated by the Project to Serve Its Customers jSection
15(a (2? )(D)l
The Queens Creek Project is located within the Southeastern Electric Reliability
Council (SERC) region of the North American Electric Reliability Council (NERC).
NERC annually forecasts electric supply and demand in the nation and the region for a
10-year period. The NERC's report (Electric Supply and Demand 2000-2009, Summary
of Electric Utility Supply and Demand Projections) indicates that the demand for electric
capacity in the SERC region will grow at an average rate of 2.14 percent annually
between 2000 and 2009 (from 281,883 megawatt-hours (MWh) to 341,154 MWh).
The Queens Creek Project historical annual average generation is 5,000 NM.
This low cost renewable energy will assist in meeting projected demand. The power
displaces nonrenewable fossil-fueled generation and contributes to diversification of the
generation mix in the SERC region.
The staff concludes that: (a) present and future use of the project's power; (b) the
power's low cost; and (c) the project's displacement of nonrenewable fossil-fueled
generation and contribution to a diversified generation mix, together with the projected
decrease in capacity margin, support a finding that the power from the Queens Creek
Project will help meet a need for power in the SERC region during the short and long
term.
6. The Impact of Receiving or Not Receiving the Project License on the
Operation, Planning and Stability of Applicant's Transmission System
r Section 15(a (2)(E)1
If NP&L-DEC is granted a new license for the project, then project power would
continue to flow through NP&L-DEC's system to provide low cost power.
In the event NP&L-DEC is not granted a license, the existing transmission line
from the generator house to the switchyard (approximately 600 feet) would be removed
from service.
7. Whether the Plans of the Applicant Will be Achieved, to the Greatest
Extent Possible, in a Cost Effective Manner jSection 15(a (2)(F)1
NP&L-DEC has evaluated the existing facilities and found it neither practical nor
economical to increase capacity or generation. NP&L-DEC has no plans to increase the
capacity or generation at the Queens Creek Project. The staff has reviewed the
evaluation of the project contained within the application as well as, the complete case
file, and concludes that the plans of the applicant will be achieved, to the extent possible,
in a cost effective manner.
8. Compliance History Pursuant to Section 15(a)(3)(A)
The staff has reviewed NP&L-DEC's compliance with the terms and conditions of
the existing license, and finds that its overall record of making timely filings and
compliance with its license is satisfactory.
9. Actions Affecting the Public
This license sets reservoir level limits, provides a minimum flow for Queens
Creek, provides a low inflow operating protocol, consolidates public recreation facilities,
and protects historic and cultural resources. These requirements are consistent with
agency recommendations and the settlement agreement.
WATER QUALITY CERTIFICATION
Under Section 401(a)(1) of the Clean Water Act (CWA)4, the Commission may
not issue a license for a hydroelectric project unless the certifying agency either has
issued a water quality certification (WQC) 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. Section 401(d) of the CWA provides that the State certification shall
become a condition on any Federal license or permit that is issued .5 Only a reviewing
court can revise or delete these conditions.6
On October 1, 1998, NP&L-DEC requested a WQC from the NCDENR. On
September 29, 1999, NP&L-DEC simultaneously withdrew and refiled for a new WQC
application. On November 16, 1999, the NCDENR issued a WQC for the Queens Creek
Hydroelectric Project with four conditions, including provisions for sediment and erosion
control, acceptable construction practices, and minimum flows for the Queens Creek
bypass reach. The NCDENR revised the Queens Creek Hydroelectric Project WQC and
reissued the certificate to NP&L-DEC on November 30, 2000, with additional conditions
covering reservoir level limitations and project operations and revised minimum flows
for the Queens Creek bypass reach that were consistent with NP&L-DEC's amended
application. The issued WQC for this project includes eight conditions which are set
forth in Appendix A of this order, and incorporated in ordering paragraph D of the
license.
COASTAL ZONE MANAGEMENT PROGRAM
Under Section 307(c)(3)(A) of the Coastal Zone Management Act (CZMA),7 the
Commission cannot issue a license for a project within or affecting a state's coastal zone,
unless the state CZMA agency concurs with the license applicant's certification of
consistency with the state's Coastal Zone Management program.
The North Carolina Division of Coastal Management (NCDCM) Coastal Program
is responsible for reviewing the Queens Creek Hydroelectric Project for consistency with
the state's Coastal management Program. The NCDCM Coastal Program defines 20
Atlantic coastal counties as the geographic area of concern for federally licensed
433 U.S.C. §1341(a)(1).
533 U.S.C. §1341(d).
6See American Rivers v. FERC, 129 F.3d 99 (D.C. Cir. 1997).
716 U.S.C. §1456(3)(A).
activities. The Queens Creek Hydroelectric Project is in the Little Tennessee River
Basin, which drains into the Gulf of Mexico, outside of the North Carolina coastal zone.
Therefore, the Queens Creek Hydroelectric Project is located outside of North Carolina's
coastal zone boundary.
SECTION 18 OF THE FEDERAL POWER ACT
Section 18 of the FPA provides that the Commission shall require a licensee, at its
own expense, to construct, operate, and maintain such fishways as may be prescribed by
the Secretary of the Interior or the Secretary of Commerce, as appropriate. Interior has
not prescribed, nor has any resource agency recommended upstream or downstream fish
passage facilities at the Queens Creek Project at this time. FWS, by letter dated October
30, 2000, timely requested reservation of authority to prescribe fishways in the future,
under Section 18 of the Federal Power Act. Consistent with the Commission's policy,
Article 407 of this license reserves the Commission's authority to require fishways that
maybe prescribe by Interior for the Queens Creek Project.
SECTION 4(e) OF THE FEDERAL POWER ACT
On October 27, 2000, the USFS filed six preliminary section 4(e) conditions
pursuant to Section 4(e) of the FPA. No final 4(e) conditions were submitted. The six
USFS conditions are summarized below.
Condition 1 reserves the USFS right to modify the conditions resulting from an
appeal process of the Section 4(e) conditions.
Condition 2 requires the licensee to obtain USFS approval before making changes
to the project.
Condition 3 requires the licensee to annually consult with the USFS regarding
measures to protect the natural resources in the project area.
Condition 4 requires seasonal minimum instream flows in the bypassed reach.
Condition 5 requires the licensee to provide to the USFS, a report that includes a
certification that minimum flow release requirements in the bypassed reach were met.
'16 U.S.C. § 811.
Condition 6 requires the licensee to conduct studies to inventory the benthic
macroinvertebrate community, the salamander, and rare plants, and an interpretation of
the effects of the existing and proposed project operations on the inventoried species.
Under Section 4(e) of the FPA, the Commission is required to include in a license
only those conditions that relate to project works9 located within reservations of the
United States.10 Project works as licensed, consists of a dam, a reservoir, a penstock and
powerhouse, and a transmission. Only a portion of the bypassed reach, which is not part
of the project, is located within the Nantahala National Forest. Since no project works
are located within a reservation, the six preliminary conditions filed by the USFS are not
considered mandatory.
On May 16, 2000, NP&L-DEC filed a revised Exhibit G drawing showing the
project boundary line enclosing all of the project works necessary for operating and
maintaining the project. The revised Exhibit G project boundary line did not enclose the
bypassed reach. On October 30, 2000, the USFS filed a motion arguing that a portion of
the project is located on USFS lands, and modifying the revised Exhibit G drawing
should not be allowed. For the reasons explained above, the revised Exhibit G drawing
will be approved in ordering paragraphs B(1) and C.
Under Section 10(a) of the FPA, the Commission is required 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.
Our review of the six conditions under this statute follows.
Conditions 1 through 3 are administrative conditions applicable to projects located
on and administered by the USFS. Condition 3 requiring consultation is applicable to
this project because the required minimum instream flows in the bypassed reach may
affect USFS lands. Therefore conditions 1 and 2 will not be included in the license, but
Article 403 will require the licensee to consult annually with the USFS.
Condition 4 that would require seasonal minimum instream flows in the bypassed
reach will affect USFS lands. The minimum flows stipulated in this condition are
9In Section 3(12) of the FPA, "project works" means the physical structures of a
project.
10 See Pacific Gas & Electric Co., 69 FERC ¶ 61,070 (1994), interpreting
Escondido Mutual Water Co. v. LaJolla Band of Mission Indians, 466 U.S. 765, 780-81
(1984).
consistent with the minimum streamflow regime adopted in the Settlement Agreement
and required in Article 402.
Condition 5 would require the licensee to submit a report including a certification
that minimum flow release requirements in the bypassed reach were met. This condition
is also consistent the Settlement Agreement and required in Article 403. Article 403 will
include the USFS as an agency to be consulted during preparation of the report.
Condition 6 would require the licensee to complete post licensing inventories to
determine project impacts on aquatic and terrestrial species in the bypassed reach. With
increased minimum flows in the bypassed reach as required by Article 402, habitat will
likely improve for the aquatic and terrestrial species.1 This condition will not be
included in the license.
HISTORIC PROPERTIES
The North Carolina State Historic Preservation Officer concludes that no cultural
resources listed or eligible for inclusion in the National Register of Historic Places are
known to exist in the project area and that the project would have no effect on such
resources. However, Article 404 of this license order provides guidance and protection if
archeological or historic sites are discovered during: (1) upgrading recreation facilities;
and (2) the future operation and maintenance of the project.
THREATENED AND ENDANGERED SPECIES
Section 7(a) of the Endangered Species Act of 1973 (ESA) 12 requires federal
agencies to ensure that their actions are not likely to jeopardize the continued existence
of federally-listed threatened and endangered species, or result in the destruction or
adverse modification of their critical habitat. The Endangered Indiana bat, Appalachian
elktoe, and rock gnome lichen, and the threatened noonday snail, bog turtle, spotfin
chub, Virginia spiraea, and small whorled pagonia occur in Macon County, North
Carolina.
The FWS13 states there are no endangered species located within the area affected
by the project. Staff concluded in the FEA that relicensing of the Queens Creek
11 See Sections 3.b. and 4.b. of the FEA.
1216 U.S.C. § 1536(a).
13 See letters dated March 8, 2000 and August 23, 2001 , from Interior's Office of
the Fish and Wildlife Service Ashville, NC office and Atlanta, GA office, respectively.
Hydroelectric Project will have no effect on endangered or threatened species according
to Section 7 of the Endangered Species Act, as amended.
RECOMMENDATIONS OF FEDERAL AND STATE FISH AND WILDLIFE
AGENCIES AND SECTION 100) PROCESS
Section 100) of the FPA14 requires the Commission, when issuing a license, to
include license conditions for the protection, mitigation, and enhancement of fish and
wildlife resources based upon the recommendations of the Federal and state fish and
wildlife agencies, submitted pursuant to the Fish and Wildlife Coordination Act, 15 to
"adequately and equitably protect, mitigate damages to, and enhance fish and wildlife
(including related spawning grounds and habitat)" affected by the project, unless it
believes that the recommendations are inconsistent with Part I of the FPA or other
applicable laws. In those instances where the Commission believes an inconsistency
exists, the agencies and the Commission will try to resolve the inconsistency.
The FWS and the State of North Carolina recommended that the Commission
adopt proposed license articles regarding reservoir operating limits, minimum flows, and
low inflow operating protocols identified in the Settlement Agreement (see Appendix A
of the FEA). I am including in this license conditions based on the agencies
recommendations, that including requirements related to reservoir drawdown limitations
(Article 401), establishing minimum flows, and requiring low inflow operating protocols
(Article 402).
COMPREHENSIVE PLANS
Section I0(a)(2) of the FPA16 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. Under
Section 10(a)(2)(A), federal and state agencies filed 21 comprehensive plans that address
various resources in North Carolina. Of these, Commission staff identified and reviewed
four plans relevant to this project. 17 No conflicts were found.
COMPREHENSIVE DEVELOPMENT
1416 U.S.C. § 8030).
1516 U.S.C. § 661 et seq.
1616 U.S.C. § 803(a)(2)(A).
17 See Section IX of the FEA.
In determining whether a proposed project will be best adapted to a
comprehensive plan for developing a waterway for beneficial public purposes, pursuant
to Section 10(a)(1) of the FPA, the Commission considers a number of public interest
factors, including the economic benefits of project power.
Under the Commission's approach to evaluating the economics of hydropower
projects, as articulated in Mead Corp., 18 the Commission employs an analysis that uses
current costs to compare the costs of the project and likely alternative power, with no
forecasts concerning potential future inflation, escalation, or deflation beyond the license
issuance date. The basic purpose of the Commission's economic analysis is to provide a
general estimate of the potential power benefits and the costs of a project, and of
reasonable alternatives to project power. The estimate helps to support an informed
decision concerning what is in the public interest with respect to a proposed license. In
making its decision, the Commission considers the project power benefits both with the
applicant's proposed measures and with the Commission's modifications and additions to
the applicant's proposal.
As proposed by NP&L-DEC, the project would produce an average of 5,000
MWh of energy annually at an annual cost of about $98,000 or about 19.44 mills per
kilowatt-hour (mills/kWh). The annual value of the power would be about $178,000 or
about 35.05 mills/kWh. To determine if the project would be economically beneficial,
we subtract the project's cost from the value of the project's power. Thus, as proposed by
NP&L-DEC, the Queens Creek Project power would cost about $79,000 less than
currently available alternative power.
As licensed with staff recommended measures, the project would produce an
average of 4,169 MWh of energy annually at an annual cost of about $96,000 or about
22.92 mill/kWh. The annual value of the power would be about $146,000 or about
35.05 mills/kWh. Thus the project's power would cost about $50,000 less than currently
available alternative power.
In analyzing public interest factors, the Commission takes into account that
hydroelectric projects offer unique operational benefits to the electric utility system
(ancillary benefits). These include their value as almost instantaneous load-following
response to dampen voltage and frequency instability on the transmission system, system-
power-factor-correction through condensing operations and a source of power available
to help in quickly putting fossil-fuel based generating stations back on line following a
major utility system or regional blackout.
1872 FERC ¶ 61,027 (1995).
Ancillary benefits are now mostly priced at rates that recover only the cost of
providing the electric service at issue, which do not resemble the prices that would occur
in competitive markets. As competitive markets for ancillary benefits begin to develop,
the ability of hydro projects to provide ancillary services to the system will increase the
benefits of the projects.
Based on our independent review and evaluation of the Queens Creek Project, the
Settlement Agreement, recommendations of the resource agencies and other
stakeholders, and the no-action alternative, as documented in the FEA, I have selected
the Queens Creek Project, with the Settlement Agreement with additional
staff-recommended measures, as the preferred alternative.
I selected this alternative because: (1) issuance of a subsequent license would
provide a beneficial, dependable, and inexpensive source of electric energy; (2) the
required environmental measures would protect and enhance fishery resources, water
quality, vegetation, wetlands, wildlife, land uses, recreational, and cultural resources; and
(3) the 4,169 MWh of electric energy generated from a renewable resource would
continue to offset the use of fossil-fueled, steam-electric generating plants, thereby
conserving nonrenewable resources and reducing atmospheric pollution.
The preferred alternative includes the following enhancement measures:
(1) maintain seasonal reservoir elevation limits (Article 401);
(2) provide seasonal minimum flows in the bypassed reach, and follow low inflow
protocols for adjusting minimum flow releases and reservoir elevations (Article
402);
(3) file an annual report showing the daily reservoir elevation, and a certification that
minimum flow release requirements were met, and consult annually with the U.S.
Forest Service (Article 403);
(4) consult with the SHPO in the event that archeological or historic sites are
discovered (Article 404);
(5) file a land management plan that includes maintaining a 10-foot buffer zone
around Queens Creek reservoir in an undeveloped condition. (Article 405);
(6) file a comprehensive recreational plan (Article 406);
(7) reserve the Commission's authority to require fishways as may be prescribed by
Interior under Section 18 of the FPA (Article 407).
LICENSE TERM
Section 15(e) of the FPA19 specifies that any license issued shall be for a term of
not less than 30 years nor more than 50 years. The Commission's general policy is to
establish 30-year terms for projects with little or no redevelopment, new construction,
new capacity, or environmental measures; 40-year terms for projects with a moderate
amount of such activities; and 50-year terms for projects with extensive measures.
Accordingly, because this subsequent license requires a minor amount of environmental
measures, the license will have a term of 30 years.
SUMMARY OF FINDINGS
Background information, analysis of impacts upon the environment, and support
for related license articles are contained in the attached FEA. Issuance of this license is
not a major federal action significantly affecting the quality of the human environment.
The design of this project is consistent with the engineering standards governing
dam safety. The project would be safe if operated and maintained in accordance with the
requirements of this license.
The Director orders:
(A) This license is issued to Nantahala Power and Light, a division of Duke
Engineering Company (Licensee), for a period of 30 years, effective the first day of the
month the license is issued, to operate and maintain the Queens Creek 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 subject to the regulations the
Commission issues under the provisions of the FPA.
(B) The project consists o£
(1) All land, to the extent of the Licensee's interests in those lands, enclosed by
the project boundary shown by exhibit G filed on May 16, 2000:
Exhibit G Drawing FERC No. 2694- Showiniz
Sheet 1 of 1 1001 Map of Properties
1916 U.S.C. § 808(e).
(2) Project works consisting of: (1) a 78-foot-high, 382-foot-long earth-faced
rock fill dam; (2) a 4-foot-wide by 4-foot-high horizontal intake structure with trashrack;
(3) a 37 acre reservoir; (4) a 6,250-foot-long steel penstock leading to a powerhouse
containing a generating unit with an installed capacity of 1,440 kilowatts; (5) a 500-foot-
long, 2.3 kV transmission line; and (6) appurtenant facilities.
The project works generally described above are more specifically shown and
described by those portions of exhibits A and F shown below:
Exhibit A: The following sections of exhibit A filed on September 27, 2000:
Table A-1 describing the existing mechanical, electrical, and transmission
equipment within the application for license.
Exhibit F: The following exhibit F drawings filed on September 27, 2000:
Exhibit F Drawing FERC No. 2694- Showing
Sheet 1 of 5 1002 Plan of Dam, Intake and
Spillway
Sheet 2 of 5 1003 Cross sections of Dam
Sheet 3 of 5 1004 Dam section Through
Intake Conduit
Fuse Plug Sections
Sheet 4 of 5 1005 Intake and Pipeline Details
Sheet 5 of 5 1006 Powerhouse Plan and
Sections
(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, all riparian or other rights that are
necessary or appropriate in the operation or maintenance of the project.
(C) The Exhibits A, F, and G described above are approved and made part of the
license.
(D) This license is subject to the water quality certification conditions submitted
by the North Carolina Department of Environment and Natural Resources under Section
401(a) of the Clean Water Act, as those conditions are set forth in Appendix A to this
order.
(E) The following sections of the FPA are waived and excluded from the license
for this minor project:
4(b), except the second sentence; 4(e), insofar as it relates to approval of plans by
the Chief of Engineers and the Secretary of the Army; 6, insofar as it relates to public
notice and to the acceptance and expression in the license of terms and conditions of the
FPA that are waived here; l OC), insofar as it relates to depreciation reserves; 10(d);
10(f); 14, except insofar as the power of condemnation is reserved; 15; 16; 19; 20; and
22.
(F) This license is subject to the articles set forth in Form L-12 (October 1975),
entitled "Terms and Conditions of License for Constructed Minor Project Affecting the
Interests of Interstate or Foreign Commerce," and the following additional articles:
Article 201. The licensee shall pay the United States an annual charge, effective
as of the date of commencement of project construction, for the purpose of reimbursing
the United States for the cost of administering Part I of the FPA, as determined by the
Commission. The authorized installed capacity for that purpose is 1,440 kilowatts.
Under regulations currently in effect, projects with authorized capacity of less than or
equal to 1,500-kW are not assessed an annual charge.
Article 202. Within 90 days of the issuance date of this order, the licensee shall
file three sets of aperture cards of the approved drawings. The aperture cards should be
reproduced on silver microfilm. All microfilm should be mounted on a Type D (3 1/4" x
7 3/8") aperture card.
Prior to microfilming, the FERC Drawing Number (2694-1001 through 2694-006)
shall be shown in the margin below the title block of the approved drawings. After
mounting, the FERC Drawing Number should be typed in the upper right corner of each
aperture card. Additionally, the Project Number, FERC Exhibit (G), drawing title, and
date of this order should be typed on the upper left corner of each aperture card. See
Figure 1.
Project Number Exhibit Number Drawing Title
Project 1234, Exhibit G1, Project Boundary
Dec 1, 1979
r
Order Issuance
Date
Exhibit # and -
FERC Drawing #
FERC Drawing
Number , Tw
FERC Dwg 1234-01
14
r-
Type D (31/, " X V/e") Aperture Card
Figure 1. Sample Aperture Card Format
b
sets
of
ape
rtur
car
ds
sho
uld
be
file
d
wit
h
the
Sec
reta
ry of the Commission. The remaining set of aperture cards should be filed with the
Commission's Atlanta Regional Office.
Article 203. The licensee shall clear and keep clear to an adequate width all lands
along open conduits and shall dispose of all temporary structures, unused timber, brush,
refuse, or other material unnecessary for the purposes of the project which result from
maintenance, operation, or alteration of the project works. All clearing of lands and
disposal of unnecessary material shall be done with due diligence to the satisfaction of
the authorized representative of the Commission and in accordance with appropriate
federal, state, and local statutes and regulations.
Article 204. If the licensee's project is directly benefitted by the construction
work of another licensee, a permittee, or of the United States of a storage reservoir or
other headwater improvement, the licensee shall reimburse the owner of the headwater
improvement for those benefits, at such time as they are assessed. The benefits will be
assessed in accordance with Subpart B of the Commission's regulations.
Article 401. The Licensee shall maintain the Queens Creek reservoir within one
foot above and two feet below the reservoir's normal full operating pool level of 2,895.0
feet Mean Sea Level (MSL) (range: 2,896.0-2,893.0 feet MSL) from May 1 through
October 31 and within one foot above and seven feet below the reservoir's normal full
operating pool level (range: 2,896.0-2,888.0 feet MSL) for the winter drawdown period,
from November 1 through April 30. In order to facilitate gradual raising and lowering of
the reservoir during the winter drawdown period, the Licensee shall operate the project
so as to attempt to have the reservoir elevation at 2,891.0 feet MSL on April 1 and
December 1. The Licensee shall use the existing float-operated gage on the reservoir to
determine reservoir elevation.
The reservoir elevation limits specified herein may be temporarily modified if
required by operating emergencies beyond the control of the Licensee, during periods of
excessive inflow, for planned drawdowns for maintenance or inspection purposes, for
short periods upon mutual agreement of the licensee, the North Carolina Department of
Environment and Natural Resources (NCDENR) and the North Carolina Wildlife
Resources Commission (NRWRC), and during low inflow periods as specified in Article
402.
The Licensee shall notify the NCDENR and the NCWRC at least 15 days prior to
commencing planned drawdowns for maintenance or inspection purposes that will
require a temporary modification of the reservoir elevation limits. The Licensee shall
notify the NCDENR and the NCWRC of any temporary modification of the reservoir
elevation limits required by an operating emergency beyond the control of the Licensee
as soon as practical, either before, during, or immediately following such emergency, but
no later than ten days after each such incident.
Article 402. The Licensee, except during low inflow periods as defined herein,
shall release from a minimum flow release value required to be installed at the base of the
project's dam, as calibrated and metered at the valve, a continuos minimum flow of 2.0
cubic-feet-per second (cfs) during the period December 1 through May 31 and 1.0 cfs
during the period June 1 through November 30 for the protection of fishery and other
aquatic resources in the reach of Queens Creek bypassed by the project.
During low inflow periods as defined herein, the Licensee shall follow in
sequential fashion the protocol set forth below regarding adjustments to minimum flow
releases, reservoir elevations, and generation levels and shall make the adjustments set
forth below on a weekly basis so as to equitably allocate the impacts of reduced water
availability.
a) The Licensee shall reduce the normal minimum generation volume by 20
percent to 29.2 acre-feet per calendar week;
b) Upon a determination by the Licensee that the reservoir elevation cannot be
maintained within the limits specified for the relevant time period in Article 401 even
with the implementation of the measure specified in Article 401, the Licensee shall
reduce the continuous minimum flow release specified above for the relevant time period
by 20 percent (i.e., down to 1.6 cfs for the period December 1 through May 31 and 0.8
cfs for the period June 1 through November 30);
c) Upon a determination by the Licensee that the reservoir elevation cannot be
maintained within the limits specified for the relevant time period in Article 401 even
with implementation of the measures specified in a) and b), the Licensee may reduce the
reservoir's elevation one additional foot below the lower reservoir elevation limit
specified for the relevant time period in Article 401 hereof for the duration of the low
inflow period (hereinafter the "first modified reservoir level band");
d) Upon a determination by the Licensee that the reservoir elevation cannot be
maintained within the first modified reservoir level band, the Licensee shall reduce the
minimum generation volume by an additional 15 percent (down to approximately 23.7
acre-feet per calendar week);
e) Upon a determination by the Licensee that the reservoir elevation cannot be
maintained within the first modified reservoir level band even with implementation of
the measure specified in d), the Licensee shall reduce the continuous minimum flow
release specified herein for the relevant time period by an additional 15 percent (i.e.,
down to 1.3 cfs for the period December 1 through May 31 and 0.65 cfs for the period
June 1 through November 30);
f) Upon a determination by the Licensee that the reservoir elevation cannot be
maintained within the first modified reservoir level band even with implementation of
the measure specified in d) and e), the Licensee may reduce the reservoir's elevation one
additional foot below the lower limit of the first modified reservoir level band for the
duration of the low inflow period (hereinafter the "second modified reservoir level
band");
g) Upon determination by the Licensee that the reservoir elevation cannot be
maintained within the second modified reservoir level band, the protocol preceding
establishment of the first and second modified reservoir level bands as specified above
shall be repeated, with the Licensee first reducing minimum generation volumes in
increments of 10 percent and subsequently reducing continuous minimum flow releases
in increments of 10 percent, followed by one foot incremental reductions in the lower
limit of the second modified reservoir level band, until inflow has increased to a point
where the reservo8ir level has been restored to within the reservoir elevation limits for
the relevant time period specified in Article 401 hereof.
Article 403. No later than March 31 of each calendar year beginning the first
calendar year after the calendar year in which this license is issued, the Licensee shall
provide to the U.S. Forest Service (USFS), the North Carolina Department of
Environment and the Natural Resources and the North Carolina Wildlife Resources
Commission and file with the Commission a report containing a table of the elevation of
the reservoir on a daily basis during the previous calendar year, a certification by the
Licensee that the minimum flow release requirements of Article 402 were met during the
previous calendar, year, and a discussion of each incident during the previous calendar
year where the elevation of the reservoir was above or below the levels specified in
Article 401, together with information sufficient to demonstrate that for each incident
where the elevation of the reservoir was below the levels specified in Article 401 the
requirements of the low inflow protocol of Article 402 were met.
Further, no later than March 31 of each calendar year beginning the first calendar
year after the calendar year in which this license is issued, the licensee shall consult with
the USFS regarding measures needed to ensure protection and development of the
natural resource values in the downstream bypassed reach. The licensee shall include
with the consultation, copies of comments and recommendations from the USFS, and
specific descriptions of how the USFS comments are accommodated. The licensee shall
allow a minimum of 30 days for the USFS to comment and to make recommendations
prior to filing the consultation information with the Commission. If the licensee does not
adopt a recommendation, the filing shall include the licensee's reasons, based on project-
specific information.
Article 404. If archeological or historic sites are discovered during any future
project modifications or construction that require land-disturbing activities, or during
project operation or maintenance, or if the licensee plans any future modifications, other
than routine maintenance, the licensee shall: (1) consult with the North Carolina State
Historic Preservation Officer (SHPO) about the discovered sites; (2) prepare a site-
specific plan, including a schedule, to evaluate the significance of the sites and to avoid
or mitigate any impacts to sites found eligible for inclusion in the National Register of
Historic Places; (3) base the site-specific plan on recommendations of the SHPO and the
Secretary of the Interior's Standards and Guidelines for Archeology and Historic
Preservation; (4) file the site-specific plan for Commission approval, together with the
written comments of the SHPO; and (5) take the necessary steps to protect the discovered
archeological or historic sites from further impact until notified by the Commission that
all of these requirements have been satisfied.
The Commission may require cultural resources surveys and changes to the site-
specific plans based on the filings. The licensee shall not implement a cultural resources
management plan, begin any land-clearing or land-disturbing activities in the vicinity of
any discovered sites, or modify previously discovered sites until informed by the
Commission that the requirements of this article have been fulfilled.
Article 405. Within 1 year from the issuance of this license, the licensee shall file
with for Commission approval, a land management plan as described in the exhibit E.8.1
report on land management and visual resources, filed September 27, 1999, in the
application for license. The plan shall include, at a minimum, the 10 foot buffer zone
around the lake to protect the riparian area and aesthetics along Queens Creek Reservoir.
The buffer zone shall be defined as above the full operating pool of 2,895.0 MSL as
defined in Article 401.
The licensee shall prepare the land management plan after consultation with the
North Carolina Department of Environment and Natural Resources and the North
Carolina Wildlife Resources Commission. The licensee shall include with the plan
documentation of consultation, copies of comments and recommendations on the draft
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 agency and county representatives to comment and to make
recommendations prior to filing the final plan with the Commission for approval. 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 approval,
the licensee shall implement the plan, including any changes required by the
Commission.
Article 406. Within one year of the effective date of the license, the licensee shall
file for Commission approval a comprehensive recreation plan for the Queens Creek
Project. The plan shall include, but not be limited to, provisions for the Queens Creek
Project Settlement Agreement (Settlement), as specified in paragraphs 3 and 4 under the
Public Recreation Facility Improvements section of the Agreement filed October 30,
2000, and the amendment of application for new license for the Queens Creek Project
filed February 29, 2001:
(1) picnic tables;
(2) disabled-persons fishing pier; and
(3) "tote and float" launch area with parking at a single location.
The licensee shall construct the facilities after consultation with the North
Carolina Department of Environment and Natural Resources and the North Carolina
Wildlife Resources Commission. The facilities shall be shown on as-built drawings filed
pursuant to this license.
The plan shall include, for the Queens Creek Project, a construction schedule,
costs for the construction and yearly maintenance of each facility, appropriate soil
erosion and sediment control measures, provisions for revegetating disturbed areas,
documentation of agency 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 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.
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 Interior
pursuant to Section 18 of the Federal Power Act.
Article 408. (a) In accordance with the provisions of this article, the licensee
shall have the authority to grant permission for certain types of use and occupancy of
project lands and waters and to convey certain interests in project lands and waters for
certain types of use and occupancy, without prior Commission approval. The licensee
may exercise the authority only if the proposed use and occupancy are consistent with the
purposes of protecting and enhancing the scenic, recreational, and other environmental
values of the project. For those purposes, the licensee shall also have continuing
responsibility to supervise and control the use and occupancies for which it grants
permission, and to monitor the use of, and ensure compliance with the covenants of the
instrument of conveyance for, any interests that it has conveyed under this article.
If a permitted use and occupancy violates any condition of this article or any other
condition imposed by the licensee for protection and enhancement of the project's scenic,
recreational, or other environmental values, or if a covenant of a conveyance made under
the authority of this article is violated, the licensee shall take any lawful action necessary
to correct the violation. For a permitted use or occupancy, that action includes, if
necessary, canceling the permission to use and occupy the project lands and waters and
requiring the removal of any non-complying structures and facilities.
(b) The types of use and occupancy of project lands and waters for which the
licensee may grant permission without prior Commission approval are: (1) landscape
plantings; (2) non-commercial piers, landings, boat docks, or similar structures and
facilities that can accommodate no more than 10 water craft at a time and where said
facility is intended to serve single-family type dwellings; (3) embankments, bulkheads,
retaining walls, or similar structures for erosion control to protect the existing shoreline;
and (4) food plots and other wildlife enhancements.
To the extent feasible and desirable to protect and enhance the project's scenic,
recreational, and other environmental values, the licensee shall require multiple use and
occupancy of facilities for access to project lands or waters. The licensee shall also
ensure, to the satisfaction of the Commission's authorized representative, that the use and
occupancies for which it grants permission are maintained in good repair and comply
with applicable state and local health and safety requirements. Before granting
permission for construction of bulkheads or retaining walls, the licensee shall: (1)
inspect the site of the proposed construction, (2) consider whether the planting of
vegetation or the use of riprap would be adequate to control erosion at the site, and (3)
determine that the proposed construction is needed and would not change the basic
contour of the reservoir shoreline. To implement this paragraph (b), the licensee may,
among other things, establish a program for issuing permits for the specified types of use
and occupancy of project lands and waters, which may be subject to the payment of a
reasonable fee to cover the licensee's costs of administering the permit program. The
Commission reserves the right to require the licensee to file a description of its standards,
guidelines, and procedures for implementing this paragraph (b) and to require
modification of those standards, guidelines, or procedures.
(c) The licensee may convey easements or rights-of-way across, or leases of,
project lands for: (1) replacement, expansion, realignment, or maintenance of bridges or
roads where all necessary state and federal approvals have been obtained; (2) storm
drains and water mains; (3) sewers that do not discharge into project waters; (4) minor
access roads; (5) telephone, gas, and electric utility distribution lines; (6) non-project
overhead electric transmission lines that do not require erection of support structures
within the project boundary; (7) submarine, overhead, or underground major telephone
distribution cables or major electric distribution lines (69-kV or less); and (8) water
intake or pumping facilities that do not extract more than one million gallons per day
from a project reservoir. No later than January 31 of each year, the licensee shall file
three copies of a report briefly describing for each conveyance made under this
paragraph (c) during the prior calendar year, the type of interest conveyed, the location of
the lands subject to the conveyance, and the nature of the use for which the interest was
conveyed.
(d) The licensee may convey fee title to, easements or rights-of-way across, or
leases of project lands for: (1) construction of new bridges or roads for which all
necessary state and federal approvals have been obtained; (2) sewer or effluent lines that
discharge into project waters, for which all necessary federal and state water quality
certification or permits have been obtained; (3) other pipelines that cross project lands or
waters but do not discharge into project waters; (4) non-project overhead electric
transmission lines that require erection of support structures within the project boundary,
for which all necessary federal and state approvals have been obtained; (5) private or
public marinas that can accommodate no more than 10 watercraft at a time and are
located at least one-half mile (measured over project waters) from any other private or
public marina; (6) recreational development consistent with an approved Exhibit R or
approved report on recreational resources of an Exhibit E; and (7) other uses, if. (i) the
amount of land conveyed for a particular use is five acres or less; (ii) all of the land
conveyed is located at least 75 feet, measured horizontally, from project waters at normal
surface elevation; and (iii) no more than 50 total acres of project lands for each project
development are conveyed under this clause (d)(7) in any calendar year.
At least 60 days before conveying any interest in project lands under this
paragraph (d), the licensee must submit a letter to the Director, Office of Energy Projects,
stating its intent to convey the interest and briefly describing the type of interest and
location of the lands to be conveyed (a marked exhibit G or K map may be used), the
nature of the proposed use, the identity of any Federal or state agency official consulted,
and any Federal or state approvals required for the proposed use. Unless the Director,
within 45 days from the filing date, requires the licensee to file an application for prior
approval, the licensee may convey the intended interest at the end of that period.
(e) The following additional conditions apply to any intended conveyance under
paragraph (c) or (d) of this article:
(1) Before conveying the interest, the licensee shall consult with Federal and state
fish and wildlife or recreation agencies, as appropriate, and the State Historic
Preservation Officer.
(2) Before conveying the interest, the licensee shall determine that the proposed
use of the lands to be conveyed is not inconsistent with any approved exhibit R or
approved report on recreational resources of an exhibit E; or, if the project does not have
an approved exhibit R or approved report on recreational resources, that the lands to be
conveyed do not have recreational value.
(3) The instrument of conveyance must include the following covenants running
with the land: (i) the use of the lands conveyed shall not endanger health, create a
nuisance, or otherwise be incompatible with overall project recreational use; (ii) the
grantee shall take all reasonable precautions to insure that the construction, operation,
and maintenance of structures or facilities on the conveyed lands will occur in a manner
that will protect the scenic, recreational, and environmental values of the project; and (iii)
the grantee shall not unduly restrict public access to project waters.
(4) The Commission reserves the right to require the licensee to take reasonable
remedial action to correct any violation of the terms and conditions of this article, for the
protection and enhancement of the project's scenic, recreational, and other environmental
values.
(f) The conveyance of an interest in project lands under this article does not in
itself change the project boundaries. The project boundaries may be changed to exclude
land conveyed under this article only upon approval of revised exhibit G or K drawings
(project boundary maps) reflecting exclusion of that land. Lands conveyed under this
article will be excluded from the project only upon a determination that the lands are not
necessary for project purposes, such as operation and maintenance, flowage, recreation,
public access, protection of environmental resources, and shoreline control, including
shoreline aesthetic values. Absent extraordinary circumstances, proposals to exclude
lands conveyed under this article from the project shall be consolidated for consideration
when revised exhibit G or K drawings would be filed for approval for other purposes.
(g) The authority granted to the licensee under this article shall not apply to any
part of the public lands and reservations of the United States included within the project
boundary.
(G) The licensee shall serve copies of any Commission filing required by this
order on any entity specified in the order to be consulted on matters relating to that filing.
Proof of service on these entities must accompany the filing with the Commission.
(H) This order is final unless a request for rehearing is filed within 30 days from
the date of its issuance, as provided in Section 313(a) of the FPA. The filing of a request
for rehearing does not operate as a stay of the effective date of this license or of any other
date specified in this order, except as specifically ordered by the Commission. The
Licensee's failure to file a request for rehearing shall constitute acceptance of this order.
J. Mark Robinson
Director
Office of Energy Projects
APPENDIX A
NORTH CAROLINA DEPARTMENT OF ENVIRONMENT AND NATURAL
RESOURCES WATER QUALITY CERTIFICATION UNDER SECTION 401 OF
THE CLEAN WATER ACT
On November 30, 2000, the North Carolina Department of Environment and
Natural Resources issued a water quality certification under Section 401 of the Federal
Clean Water Act to Nantahala Power and Light Company for the Queens Creek
Hydroelectric Project with the following conditions:
1) Appropriate sediment and erosion control practices which equal or exceed those
outlined in the most recent version of two manuals, either the "North Carolina Sediment
and Erosion Control Planning and Design Manual" or the "North Carolina Surface
Mining Manual" (available from the Division of Land Resources in the DEHNR
Regional or Central Offices). The control practices shall be utilized to prevent
exceedances of the appropriate turbidity water quality standard (50 NTUs in all fresh
water streams and rivers not designated as trout waters; 25 NTUs in all lakes and
reservoirs, and all saltwater classes; and 10 NTUs in trout waters);
2) All sediment and erosion control measures placed in wetlands or waters shall be
removed and the natural grade restored after the Division of Land Resources has released
the project;
3) Measures shall be taken to prevent live or fresh concrete from coming into contact
with waters of the state until the concrete has hardened;
4) Reservoir Level Limitations-The Licensee shall maintain the elevation of the project
reservoir within one foot above and two feet below the reservoir's normal full operating
pool level of 2,895.0 feet Mean Sea Level (MSL) (i.e., in the range of 2,896.0 feet MSL
and 2,893.0 feet MSL) for the period May 1 through October 31 and within one foot
above and seven feet below the reservoir's normal full operating pool level (i.e., in the
range of 2,896.0 feet MSL and 2,888.0 feet MSL) for the winter drawdown period of
November 1 through April 30. In order to facilitate gradual raising and lowering of the
reservoir during the winter drawdown period, the Licensee shall operate the project so as
to attempt to have the reservoir elevation at 2,891.0 feet MSL on April 1 and December
1. The Licensee shall use the existing float-operated gage on the reservoir to determine
reservoir elevation.
The reservoir elevation limits specified herein may be temporarily modified if required
by operating emergencies beyond the control of the Licensee, during periods of excessive
inflow, for planned drawdowns for maintenance or inspection purposes, for short periods
upon mutual agreement of the Licensee, the North Carolina Department of Environment
and Natural Resources (DENR) and the North Carolina Wildlife Resources Commission
(WRC), and during low inflow periods as specified in Condition 5 of this Certification.
The licensee shall notify in writing DENR, DWQ-Central Office, Division of Water
Resources (DWR) and the WRC at least 15 days prior to commencing planned
drawdowns for maintenance or inspection purposes that will require a temporary
modification of the reservoir elevation limits. The Licensee shall notify in writing the
DENR, DWQ-Central Office, DWR and the WRC of any temporary modification of the
reservoir elevation limits required by an operating emergency beyond the control of the
Licensee as soon as practical, either before, during, or immediately following such
emergency, but no later than ten days after each such incident.
5) Minimum Flow In Queens Creek Bypass-The Licensee, except during low inflow
periods as defined herein, shall release from a minimum flow release valve required to be
installed at the base of the project's dam, as calibrated and metered at the valve, a
continuous minimum flow of 2.0 cubic-feet per second (cfs) during the period December
1 through May 31 and 1.0 cfs during the period June 1 through November 30 for the
protection of fishery and other aquatic resources in the reach of Queens Creek bypassed
by the project.
During low inflow periods as defined herein, the Licensee shall follow in sequential
fashion the protocol set forth below regarding adjustments to minimum flow releases,
reservoir elevations, and generation levels and shall make the adjustments set forth below
on a weekly basis so as to equitably allocate the impacts of reduced water availability:
a. The licensee shall reduce the normal minimum generation volume by 20% to 29.2
acre-feet per calendar week;
b. Upon a determination by the Licensee that the reservoir elevation cannot be
maintained within the limits specked for the relevant time period in Condition 4 of this
Certification hereof even with implementation of the measure specified in a) hereof, the
Licensee shall reduce the continuous minimum flow releases specified above for the
relevant time period by 20% (i.e., down to 1.6 cfs for the period December 1 through
May 31 and 0.8 cfs for the period June 1 through November 30);
c. Upon a determination by the Licensee that the reservoir elevation cannot be
maintained within the limits specified for the relevant time period in Condition 4 of this
Certification hereof even with implementation of the measures specified in a) and b)
hereof, the Licensee may reduce the reservoir's elevation one additional foot below the
lower reservoir elevation limit specified for the relevant time period in Condition 4 of
this Certification hereof for the duration of the low inflow period (herein after the "first
modified reservoir level band");
d. Upon a determination by the Licensee that the reservoir elevation cannot be
maintained within the first modified reservoir level band, the Licensee shall reduce the
minimum generation volume by an additional 15% (down to approximately 23.7 acre-
feet per calendar week);
e. Upon a determination by the Licensee that the reservoir elevation cannot be
maintained within the first modified reservoir level band even with implementation of
the measure specified in d) hereof, the Licensee shall reduce the continuous minimum
flow release specified herein for the relevant time period by an additional 15% (i.e.,
down to
1.3 cfs for the period December 1 through May 31 and 0.65 cfs for the period June 1
through November 30);
f. Upon a determination by the Licensee that the reservoir elevation cannot be
maintained within the first modified reservoir level band even with implementation of
the measures specified in d) and e) hereof, the Licensee may reduce the reservoir's
elevation one additional foot below the lower limit of the first modified reservoir level
band for the
duration of the low inflow period (hereinafter the "second modified reservoir level
band");
g. Upon a determination by the Licensee that the reservoir elevation, cannot be
maintained within the second modified reservoir level band, the protocol preceding
establishment of the first and second modified reservoir level bands as specified above
shall be repeated, with the Licensee first reducing minimum generation volumes in
increments of 10%, and subsequently reducing continuous minimum flow releases in
increments of 10%, followed by one foot incremental reductions in the lower limit of the
second modified reservoir level band, until inflow has increased to a point where the
reservoir level has been restored to within the reservoir elevation limits for the relevant
time period specified in Condition 4 of this Certification hereof.
For purposes of this Article: the term "normal minimum generation volume" means 36.5
acre-feet of water used per calendar week to generate electricity at the project; the term
"low inflow period" means any period when weekly inflow to the reservoir cannot
maintain the reservoir's elevation above elevation 2,893.0 feet MSL for the period May 1
through October 31 or elevation 2,888.0 feet MSL for the period November 1 through
April 30 if the Licensee provides the continuous minimum flow release for the relevant
time period specified herein and uses the normal minimum generation volume.
Whenever the Licensee at any time during the period May 1 through October 31 reduces
the elevation of the reservoir to below elevation 2,888.0 feet MSL after following the
above specified protocol and not because of planned drawdowns for maintenance or
inspection purposes or operating emergencies beyond the control of Licensee, it shall
notify (in writing) the North Carolina Department of Environmental and Natural
Resources, DWQ - Central Office and DWR and the North Carolina Wildlife Resources
Commission (WRC) as soon as possible, but no later than ten days after each such
incident, and shall attend any meeting convened thereafter to discuss reasonable and
desirable options for addressing the low inflow conditions that caused the reservoir
elevation to be reduced below elevation 2,888.0 feet MSL; provided, however, that no
changes in the low inflow protocol provided for herein may be made without the prior
approval of the Federal Energy Regulatory Commission (FERC).
6) Reporting Requirements-No later than March 31 of each calendar year beginning the
first calendar year after the calendar year in which the FERC license is issued, the
Licensee shall provide the North Carolina Department of Environment and Natural
Resources, Division of Water Resources and the North Carolina Wildlife Resources
Commission and file with the Federal Energy Regulatory Commission, a report
containing a table of the elevation of the reservoir on a daily basis during the previous
calendar year, a certification by the Licensee that the minimum flow release requirements
of Condition 5 of this Certification were met during the previous calendar year and a
discussion of each incident during the previous calendar year where the elevation of the
reservoir was above or below the level specified in Condition 4 of this Certification,
together with information sufficient to demonstrate that for each incident where the
elevation of the reservoir was below the levels specified in Condition 4 of this
Certification the requirements of the low inflow protocol of Condition 5 of this
Certification were met.
7) The above-described low inflow protocol and reporting requirements shall be
implemented during the Spring of 2001, but not later than May 31, 2001. NP&L will
install a minimum flow release valve and associated flow meter required to provide and
measure the minimum flow as soon as practically achievable following receipt of any
necessary approvals by the FERC under the procedures of the existing license. The
minimum flow release valve will be calibrated to provide the range of minimum flows
tinder the range of reservoir levels identified in this Certification. Since NP&L cannot
begin construction until any necessary approvals for installation of the minimum flow
release valve and flow meter are received from the FERC, the Division of Water Quality
hereby agrees that failure to implement the subject minimum flows by May 31, 2001 due
to delays in receiving any required FERC approvals does not constitute a default under
this Certification.
8) After five years of operations under the provisions of this Certification, NP&L will
confer with the North Carolina Department of Environment and Natural Resources
(DWQ-Central Office and DWR) and the North Carolina Wildlife Resources
Commission to consider holding an informational meeting, to review the operational
history of the Certification to determine if any operational changes are needed and
agreeable to all the Parties. Any such meeting shall be scheduled and held no later than
September 30 of the appropriate year.
Violations of any condition herein set forth shall result in revocation of this Certification
and may result in criminal and/or civil penalties. This Certification shall become null and
void unless the above conditions are made conditions of the Federal 404 and/or coastal
Area Management Act Permit. This Certification shall expire upon expiration of the 404
or CAMA permit.
FINAL ENVIRONMENTAL ASSESSMENT
FOR HYDROPOWER LICENSING
QUEENS CREEK HYDROELECTRIC PROJECT
FERC Project No. 2694-002
NORTH CAROLINA
Federal Energy Regulatory Commission
Office of Energy Projects
Division of Environmental and Engineering Review
888 First Street, N.E.
Washington, D.C. 20426
January, 2002
TABLE OF CONTENTS
SUMMARY ........................................................... v
1. INTRODUCTION ..................................................... I
II. PURPOSE OF ACTION AND NEED FOR POWER ........................ 2
A. Purpose of Action ............................................... 2
B. Need for Power ................................................. 4
III. PROPOSED ACTION AND ALTERNATIVES ........................... 4
A. Proposed Action ................................................ 4
1. Project Facilities ........................................... 4
2. Existing and Proposed Project Operations ....................... 5
3. Proposed Environmental Measures ............................ 5
B. Proposed Action with Additional Staff-Recommended Measures ......... 6
C. No-Action ..................................................... 6
D. Alternatives Considered but Eliminated from Further Consideration ....... 6
1. Federal Takeover .......................................... 6
2. Nonpower License ......................................... 7
3. Project Retirement ......................................... 7
IV. CONSULTATION AND COMPLIANCE ................................ 8
A. Consultation ................................................... 8
1. Comments ................................................ 8
2. Interventions .............................................. 8
3. Scoping .................................................. 9
B. Section 18 Fishway Prescriptions .................................. 10
C. Water Quality Certificate (WQC) .................................. 10
D. Coastal Zone Consistency Determination ........................... 11
E. Section 4(e) Federal Land Management Conditions ................... 11
V. ENVIRONMENTAL ANALYSIS ...................................... 12
A. General Description of the Queens Creek Basin ...................... 13
B. Scope of the Cumulative Effects Analysis ........................... 13
1. Geographic Scope .........................................14
2. Temporal Scope ..........................................14
C. Environmental Analysis of the Proposed Action and Alternatives ........ 14
1. Geology and Soils ......................................... 14
2. Water Resources ..........................................15
11
3. Fisheries and Aquatic Resources ............................. 18
4. Terrestrial Resources ...................................... 22
5. Recreation and Land Use ................................... 25
6. Cultural Resources ........................................ 26
7. Socioeconomics ..........................................27
D. No-Action ....................................................27
VI. DEVELOPMENTAL ANALYSIS ..................................... 27
A. Power and Economic Benefits of the Project ......................... 28
B. Proposed Action with Additional Staff-recommended Measures ......... 29
C. No-action .....................................................29
D. Economic Comparison of the Alternatives .......................... 30
E. Pollution Abatement ............................................ 31
VII. COMPREHENSIVE DEVELOPMENT AND RECOMMENDED
ALTERNATIVE .................................................31
A. Recommended Alternative ....................................... 31
1. Install Minimum Flow Release Valve and Release Minimum Flows
....................................................33
2. Develop Day-Use Recreational Area on Queens Creek Reservoir ... 33
B. Conclusion ...................................................33
VIII. RECOMMENDATIONS OF FISH AND WILDLIFE AGENCIES .......... 34
IX. CONSISTENCY WITH COMPREHENSIVE PLANS ..................... 34
X. FINDING OF NO SIGNIFICANT IMPACT .............................. 35
XI. LITERATURE CITED ..............................................35
XII. LIST OF PREPARERS ............................................. 35
LIST OF FIGURES
Figure 1. Location of the Queens Creek Hydroelectric Project, FERC No. 2694-002,
including major project features (Source: NP&L-DEC License
Application, 1999, as modified by staff) . .......................... 3
iii
LIST OF TABLES
Table 1. Staffs assumptions for economic analyses of the Queens Creek
Hydroelectric Project ......................................... 29
Table 2. Summary of annual costs of NP&L-DEC's proposed measures for the
Queens Creek Hydroelectric Project ............................. 29
Table 3. Summary of the net annual benefits of alternatives for NP&L-DEC's
proposed Queens Creek Hydroelectric Project ..................... 30
LIST OF APPENDICES
Appendix A Queens Creek Hydroelectric Project Settlement Agreement
Environmental Measures .................................36
Appendix B Responses to Comments on the Draft Environmental Assessment. 39
iv
SUMMARY
Nantahala Power & Light, a division of Duke Engineering Company (NP&L-
DEC) filed an application on September 27, 1999, for a new minor license for the
existing 1,440-kilowatt Queens Creek Hydroelectric Project No. 2694-002. On January
29, 2001, NP&L-DEC filed with the Commission an amended application for new
license for the Queens Creek Hydroelectric Project. The amended application reflects
the terms of a Settlement Agreement, and amended NP&L-DEC's proposed operation
and maintenance of the Queens Creek Hydroelectric Project.
The Queens Creek Hydroelectric Project is located on Queens Creek, 1.5 miles
upstream of its confluence with the Nantahala River, near the town of Topton, Macon
County, in western North Carolina. The project does not occupy any federally-owned
lands.
This final environmental assessment (FEA) analyzes the effects of the proposed
action, the proposed action with additional staff-recommended measures, and no action.
Our analysis shows that the preferred alternative for the Queens Creek Hydroelectric
Project, to reduce or avoid adverse effects on environmental resources, is the proposed
action with one additional staff-recommended measure (item 6):
(1) Maintain the Queens Creek reservoir within one foot above and two feet below
the reservoir's normal full operating pool level of 2,895.0 feet Mean Sea Level
(MSL) (range: 2,896-2,893.0 feet MSL) from May 1 through October 31 and
within one foot above and seven feet below the reservoir's normal full operating
pool level (range: 2,896.0-2,888.0 feet MSL) for the winter drawdown period,
from November 1 through April 30.
(2) Except during low inflow periods, release from a minimum flow release valve
installed at the base of the project's dam, as calibrated and metered at the valve, a
continuous minimum flow of 2.0 cubic feet per second (cfs) from December 1
through May 31 and 1.0 cfs from June 1 through November 30.
(3) During low inflow periods, adjust minimum flow releases, reservoir elevations,
and generation levels on a weekly basis to equitably allocate the effects of reduced
water availability.
(4) Enhance day-use recreational opportunities on Queens Creek reservoir, including
installing picnic tables, developing bank fishing access, including a disabled-
v
persons accessible facility (e.g., fishing pier), and a "tote-and-float" launch area
with parking.
(5) Maintain a 10-foot buffer zone around Queens Creek reservoir in an undeveloped
condition.
(6) Reserve authority for the Secretary of the Interior to prescribe the construction,
operation, and maintenance of fishways.
Overall, these measures, along with the standard articles provided in any license
issued for the project, would protect or enhance water quality, fisheries, terrestrial,
recreational, and cultural resources within the project area.
Under the provision of Section 100) of the Federal Power Act (FPA), each
hydroelectric license issued by the Commission must include conditions based on
recommendations of federal and state fish and wildlife agencies to adequately and
equitably protect, mitigate damages to, and enhance fish and wildlife (including
spawning habitat) affected by the project. State of North Carolina resource agency and
U.S. Department of the Interior, Fish and Wildlife Service, recommendations filed
pursuant to Section 100) of the FPA were adopted by staff, and included in staff s
recommended alternative for the project.
Pursuant to Section 401 of the Clean Water Act, on October 1, 1998, NP&L-DEC
requested a 401 Water Quality Certificate (WQC) from the NCDENR. On September
29, 1999, NP&L-DEC simultaneously withdrew and refiled for a new 401 WQC
application. On November 16, 1999, the NCDENR issued a 401 WQC for the Queens
Creek Hydroelectric Project with four conditions, including provisions for sediment and
erosion control, acceptable construction practices, and minimum flows for the Queens
Creek bypass reach. The NCDENR revised the Queens Creek Hydroelectric Project 401
WQC and reissued the certificate to NP&L-DEC on November 30, 2000, with additional
conditions covering reservoir level limitations and project operations and revised
minimum flows for the Queens Creek bypass reach that were consistent with NP&L-
DEC's proposed action. In this EA, we make recommendations that are consistent with
the State of North Carolina's water quality standards.
On the basis of our independent analysis, we conclude that issuing a new minor
license for the Queens Creek Hydroelectric Project would not be a major federal action
significantly affecting the quality of the human environment.
vi
FINAL ENVIRONMENTAL ASSESSMENT
Federal Energy Regulatory Commission
Office of Energy Projects
Division of Environmental and Engineering Review
Washington, D.C.
Queens Creek Hydroelectric Project
FERC Project No. 2694-002
1. INTRODUCTION
On September 27, 1999, Nantahala Power & Light, a division of Duke Energy
Corporation (NP&L-DEC)20, filed an application with the Federal Energy Regulatory
Commission (Commission) for a new minor license for the existing Queens Creek
Hydroelectric Project No. 2694-002.
On January 29, 2001, NP&L-DEC filed with the Commission an amended
application for new license for the Queens Creek Hydroelectric Project. The amended
application reflects the terms of a Settlement Agreement 21, and amends NP&L-DEC's
proposed operation and maintenance of the Queens Creek Hydroelectric Project.
20 On May 12, 2000, Nantahala Power and Light Company filed with the
Commission a notice indicating a change in licensee name for the Queens Creek
Hydroelectric Project to Nantahala Power and Light, a division of Duke Energy
Corporation. On June 28, 2000, the Director of the Division of Hydropower
Administration and Compliance issued an Order Amending License for the Queens
Creek Hydroelectric Project incorporating this change.
21 On October 30, 2000, NP&L-DEC and the North Carolina Environmental
Management Commission, represented by the North Carolina Department of
Environment and Natural Resources (NCDENR) and the North Carolina Wildlife
Resources Commission (NCWRC), entered into a Settlement Agreement regarding
operational, environmental, and recreational enhancements for the Queens Creek
Hydroelectric Project (see Appendix A). While the U.S. Department of the Interior, Fish
and Wildlife Service (FWS), and the U.S. Forest Service (USFS) declined to sign the
agreement, they both participated in discussions on the development of the Settlement
Agreement and filed recommendations consistent with the terms of the Settlement
Agreement.
The Queens Creek Hydroelectric Project is located on Queens Creek 1.5 miles
upstream of its confluence with the Nantahala River, near the town of Topton, in Macon
County, North Carolina (Figure 1). The project does not use federal lands. 22
The Commission, under the authority of the Federal Power Act (FPA),23 may
issue 30 to 50-year licenses for the construction, operation, and maintenance of
nonfederal hydroelectric projects. Under the Commission's regulations, issuing a license
for the project first requires preparation of either an Environmental Assessment (EA) or
Environmental Impact Statement, in accordance with the National Environmental Policy
Act (NEPA) of 1969.24 Based on the Commission staffs analysis of the issues, the staff
is preparing this FEA to decide whether issuing a new minor license would be a major
federal action significantly affecting the quality of the human environment.
II. PURPOSE OF ACTION AND NEED FOR POWER
A. Purpose of Action
The Commission must decide whether to issue a new license for the Queens Creek
Hydroelectric Project and what, if any, conditions should be placed in any license issued.
In this FEA we assess the environmental and economic effects of operating the project as
proposed by the applicant, operating the project as proposed by the applicant with
additional staff-recommended measures, and no-action.
In deciding whether to issue any license, the Commission must determine that the
project adopted will be best adapted to a comprehensive plan for improving or
developing a waterway. In addition to the power and development purposes for which
22 Pursuant to Section 4(e) of the FPA and 18 C.F.R. § 4.34 (b), the U.S. Forest
Service filed six preliminary Section 4(e) conditions for the Queens Creek Hydroelectric
Project on October 27, 2000 (see Section IV.E of this FEA). Staff s analysis of those
conditions is found in Section V of this FEA. The U.S. Forest Service's Section 4(e)
authority is more appropriately addressed in any license order issued for the Queens
Creek Hydroelectric Project.
23 16 § § U.S.C. Sect. 791(a)-825(r).
24 Pub. L. 91-190.42 U.S.C. 4321-4347, January 1, 1970, as amended by Pub. L.
94-52, July 3, 1975, Pub. L. 94-83, August 9, 1975, and Pub. L. 97-258, §4(b), Sept. 13,
1982.
2
Queens Creek
Hydroelectric Proj
Location
North
Carolina
Figure 1. Location of the Queens Creek Hydroelectric Project, FERC No. 2694-002,
including major project features (Source: NP&L-DEC License
Application, 1999, as modified by staff).
licenses are issued, the Commission must give equal consideration to the purposes of
energy conservation, the protection, mitigation of damage to, and enhancement of fish
and wildlife (including related spawning grounds and habitat), the protection of
recreational opportunities, and the preservation of other aspects of environmental quality.
B. Need for Power
The proposed Queens Creek Hydroelectric Project will generate an average of
4,169 MWh of energy, annually.
To assess the need for power, we reviewed the needs in the operating region in
which the project is located. The Queens Creek Hydroelectric Project is located in the
Southeastern Electric Reliability Council region (SERC) of the North American Electric
Reliability Council (NERC). NERC annually forecasts electrical supply and demand in
the nation and the region for a ten-year period. NERC's most recent report 25 on annual
supply and demand projections indicates that (for the period 2000 through 2009) the
demand for electric energy in the SERC region will grow at an average rate of 2.14
percent annually (from 281,883 MWh to 341,154 MWh). The project could displace
existing and planned nonrenewable fossil-fueled generation which contributes to the
production of nitrous oxides and sulfurous oxides which contribute to air pollution, and
carbon dioxide, which contributes to the theoretical phenomenon of global warming. In
addition, the hydroelectric generation could contribute to diversification of the
generation mix in the SERC region.
We conclude that the project power could displace nonrenewable fossil-fired
generation, contribute to a diversified generation mix, and help meet a need for power in
the SERC area.
III. PROPOSED ACTION AND ALTERNATIVES
A. Proposed Action
1. Project Facilities
The constructed project consists of the following existing facilities: (1) a 78-foot-
high, 382-foot-long earth-faced rock fill dam; (2) a 4-foot-wide by 4-foot-high horizontal
intake structure, having a trashrack with 1.0-inch clear bar spacing; (3) a 6,250-foot-long
25 NERC's Electricity Supply and Demand Database, Data set 2000-2009.
4
steel penstock leading to a concrete and steel powerhouse containing a single generating
unit, having an installed capacity of 1,440 kilowatts; (4) a 37-acre impoundment that
extends approximately 0.7 miles upstream; and (5) appurtenant facilities.
2. Existing and Proposed Project Operations
NP&L-DEC operates the Queens Creek Hydroelectric Project as a peaking
facility, with blocks of generation occurring four hours per day between Monday and
Friday. The project is operated according to seasonal water availability, while
maintaining a rule curve elevation in the reservoir. If peaking does not maintain the
reservoir rule curve elevation, the project is operated additional time at a reduced load to
decrease the reservoir level. During periods of high flow and high reservoir elevation,
NP&L-DEC operates the project at maximum load 24 hours a day to prevent spilling.
NP&L-DEC proposes to continue operating the project as a peaking facility, with
constraints on project operations, including reservoir water surface elevations, and
minimum flows (see Section II.A.3 and Appendix A). Our following analysis considers
the amended application, along with existing applicant proposals on resources not
covered by the Settlement Agreement, to be NP&L-DEC's proposal to operate and
maintain the Queens Creek Hydroelectric Project.
3. Proposed Environmental Measures
NP&L-DEC proposes several measures to protect and enhance project-related
environmental resources:
(1) Maintain the Queens Creek reservoir within one foot above and two feet below
the reservoir's normal full operating pool level of 2,895.0 feet Mean Sea Level
(MSL) (range: 2,896-2,893.0 feet MSL) from May 1 through October 31 and
within one foot above and seven feet below the reservoir's normal full operating
pool level (range: 2,896.0-2,888.0 feet MSL) for the winter drawdown period,
from November 1 through April 30.
(2) Except during low inflow periods, release from a minimum flow release valve
installed at the base of the project's dam, as calibrated and metered at the valve, a
continuous minimum flow of 2.0 cubic feet per second (cfs) from December 1
through May 31 and 1.0 cfs from June 1 through November 30.
(3) During low inflow periods, adjust minimum flow releases, reservoir elevations,
and generation levels on a weekly basis to equitably allocate the effects of reduced
water availability. 26
(4) Enhance day-use recreational opportunities on Queens Creek reservoir, including
installing picnic tables, developing bank fishing access, including a disabled-
persons accessible facility (e.g., fishing pier), and a "tote-and-float" launch area
with parking.
(5) Maintain a 10-foot buffer zone around Queens Creek reservoir in an undeveloped
condition.
B. Proposed Action with Additional Staff-Recommended Measures
Staff recommends that the Commission reserve authority for the Secretary of the
Interior to prescribe the construction, operation, and maintenance of fishways.
C. No-Action
Under the no-action alternative, the project would continue to operate under the
terms and conditions of the existing license, and no new environmental protection,
mitigation, or enhancement measures would be implemented. Any ongoing effects of the
project would continue. We use this alternative to establish baseline environmental
conditions for comparison with other alternatives.
D. Alternatives Considered but Eliminated from Further Consideration
We considered three other alternatives to the proposed action, but eliminated them
from detailed study because they are not reasonable in the circumstances of this case: (1)
federal government takeover; (2) issuance of a nonpower license; and (3) project
retirement.
1. Federal Takeover
In accordance with § 16.14 of the Commission's regulations, a Federal department
or agency may file a recommendation that the United States exercise its right to take over
26 For brevity, a summary of NP&L-DEC's proposed measure (3) is provided here;
see Appendix A for further specifics regarding the low inflow operating protocol.
6
a hydroelectric power project with a license that is subject to Sections 14 and 15 of the
FPA. 27 Federal takeover of the projects would require Congressional approval. While
the need for Congressional approval alone would not preclude further consideration of a
takeover alternative, there is no basis for such a Congressional recommendation. No
party has formally recommended or suggested that Federal takeover of the projects
would be appropriate, and no Federal agency has expressed interest in operating the
projects. We do not, in this case, consider Federal takeover to be a reasonable
alternative.
2. Nonpower License
Issuing non-power licenses for the project would not provide a long-term
resolution of the licensing issues. A non-power license is a temporary license that the
Commission terminates whenever it determines that another governmental agency will
assume regulatory authority and supervision over the lands and facilities covered by the
non-power license. In this case, no party or agency has suggested its willingness or
ability to assume regulatory authority or supervision of project facilities. No party has
sought a non-power license, and we have no basis for concluding that the project should
not be used to produce power. Thus, a non-power license is not a reasonable alternative
to relicensing the Queens Creek Hydroelectric Project.
3. Project Retirement
No entities have recommended that the Queens Creek Hydroelectric Project be
retired. The FWS previously commented that there is insufficient information available
to eliminate the project retirement alternative. Project retirement would involve denying
NP&L-DEC's license application for the Queens Creek Hydroelectric Project and
termination of the project, which would cause a loss in energy production, create costs
for retiring project facilities and equipment, and negate currently proposed environmental
and recreational enhancements. Absent a specific recommendation for project
retirement, including supporting justification for such a recommendation, we find no
basis for further analysis of a project retirement alternative for the Queens Creek
Hydroelectric Project. If the Commission decides to relicense the Queens Creek
Hydroelectric Project and NP&L-DEC does not wish to accept the license, the
Commission may then look at other alternatives. Until then, we do not consider project
retirement to be a reasonable alternative to relicensing the project and do not intend to
study the alternative further.
2716 U.S.C. Sections 791(a) to 825(r).
7
IV. CONSULTATION AND COMPLIANCE
A. Consultation
The Commission's regulations require applicants to consult with appropriate state
and federal environmental resource agencies and the public before filing a license
application. This consultation is required to comply with the Fish and Wildlife
Coordination Act, the Endangered Species Act (ESA), the National Historic Preservation
Act (NHPA), and other federal statutes. Pre-filing consultation must be complete and
documented in accordance with the Commission's regulations. After an application is
accepted, the Commission issues a public notice and seeks formal comment in
accordance with federal statutes; comments become part of the record.
1. Comments
On December 20, 2000, staff issued a Notice of Settlement Agreement and
Soliciting Comments, setting February 8, 2001, as the due date for comments and reply
comments. This Notice of Settlement Agreement constituted our Notice of Amended
Application filed by NP&L-DEC on January 29, 2001. No comments were filed.
On July 27, 2001, staff issued an Environmental Assessment, setting August 27,
2001, as the due date for comments. Comments on the EA were filed by NCWRC, U.S.
Fish and Wildlife Service, TVA, and the U.S. Forest Service. We respond to these
comments in Appendix B of this FEA and, when appropriate, have modified this FEA
based on the comments received.
2. Interventions
The following entities filed motions to intervene in the Queens Creek
Hydroelectric Project relicensing proceeding in response to the February 8, 2000,
issuance of the Notice that the Application was Accepted for Filing and Soliciting
Motions to Intervene and Protests.
Intervenor
Date of Motion
State of North Carolina
Nantahala Outdoor Center
U.S. Department of Agriculture, Forest
Service
April 5, 2000
April 7, 2000
April 10, 2000
8
U.S. Department of the Interior, Fish and
Wildlife Service April 12, 2000
No entities filing motions to intervene in the proceeding were opposed to the
relicensing and continued operation and maintenance of the Queens Creek Hydroelectric
Project.
3. Scoping
Before preparing this EA, we conducted scoping to determine what issues and
alternatives should be addressed. A scoping document was distributed to interested
agencies and others on March 10, 2000. The scoping document described the
environmental resources that would and would not be analyzed in detail, and identified
cumulatively affected resources, based on information contained in the license
application filed on September 27, 1999, and agency and public comments. Two public
scoping meetings were held on April 12, 2000, in the city of Franklin, North Carolina.
The Notice of Scoping Meetings and Site Visit and Soliciting Scoping Comments
set May 12, 2000, as the deadline for filing comments. The following entities provided
either oral or written comments on Scoping Document 1 (SD 1):
Entity
Date Filed
U.S. Department of Agriculture, Forest March 23, 2000
Service
Nantahala Power and Light, a division of May 8, 2000
Duke Energy Corporation
North Carolina Wildlife Resources May 10, 2000
Commission
U.S. Department of the Interior, Fish and May 12, 2000
Wildlife Service
North Carolina Department of May 12, 2000
Environment and Natural Resources -
Division of Water Resources
Nantahala Outdoor Center May 12, 2000
9
We considered and incorporated comments on the SD 1 provided by these entities,
as well as responses and comments provided at the scoping meetings, into the analysis of
this EA. Staff prepared and issued a scoping document 2 (SD2) on July 27, 2000, that
summarized comments received on SDI.
B. Section 18 Fishway Prescriptions
Section 18 of the FPA states that the Commission shall require the construction,
maintenance, and operation by a licensee of such fishways as may be prescribed by the
Secretary of the Interior, or the Secretary of Commerce, as appropriate. 28
Pursuant to Section 18 of the FPA, FWS filed with the Commission on October
30, 2000, a request for the reservation of authority to prescribe the construction,
operation, and maintenance of upstream and downstream fishways for existing riverine
fish species, any fish species (including American eel) to be managed, enhanced,
protected, or restored in the basin during the term of the license.
The Commission recognizes that future fish passage needs and management
objectives cannot always be determined at the time of project licensing. Under these
circumstances, and upon receiving a specific request from Interior, we recommend the
Commission follow its practice of reserving the Commission's authority to require such
fishways as may be prescribed by the Secretary of the Interior, or to require modification
to the fishways prescribed by Interior, as needed.29
C. Water Quality Certificate (WQC)
Under Section 401 (a)(1) of the Clean Water Act (CWA), the Commission may
not issue a license for a hydroelectric project unless either the licensee obtains water
quality certification (WQC) from the certifying agency of the state in which the project
discharge will originate, or the certifying agency waives certification. Section 401(a)(1)
28 Section 18 of the FPA provides that "the Commission shall require
construction, maintenance, and operation by a licensee at its own expense such fishways
as may be prescribed by the Secretary of Commerce or the Secretary of the Interior, as
appropriate."
29 The Commission has specifically sanctioned the reservation of fishway
prescription authority at relicensing. See Wisconsin Public Service Corporation, 62 ¶
61,095 (1993); affirmed, Wisconsin Public Service Corporation v. FERC, 32 F.3d 1165
(1994).
10
states that certification is deemed waived if the certifying agency fails to act on a water
quality certification request within a reasonable period of time, not to exceed one year. 30
Section 401(d) of the CWA provides that state certification shall set forth conditions
necessary to ensure that licensees comly with specific portions of the CWA and with
appropriate requirements of state law. 1
On October 1, 1998, NP&L-DEC requested a 401 WQC from the NCDENR. On
September 29, 1999, NP&L-DEC simultaneously withdrew and refiled for a new 401
WQC application. On November 16, 1999, the NCDENR issued a 401 WQC for the
Queens Creek Hydroelectric Project with four conditions, including provisions for
sediment and erosion control, acceptable construction practices, and minimum flows for
the Queens Creek bypass reach. The NCDENR revised the Queens Creek Hydroelectric
Project 401 WQC and reissued the certificate to NP&L-DEC on November 30, 2000,
with additional conditions covering reservoir level limitations and project operations and
revised minimum flows for the Queens Creek bypass reach that were consistent with
NP&L-DEC's amended application.
D. Coastal Zone Consistency Determination
The North Carolina Division of Coastal Management (NCDCM) Coastal Program
is responsible for reviewing the Queens Creek Hydroelectric Project for consistency with
the state's Coastal management Program. The Queens Creek Hydroelectric Project is
located outside of North Carolina's coastal zone boundary. Further, NCDCM Coastal
Program has defined the 20 Atlantic coastal counties as the geographic area of concern
for federally licensed activities. The Queens Creek Hydroelectric Project is in the Little
Tennessee River Basin, which drains to the Gulf of Mexico, outside of the North
Carolina coastal zone. Therefore, we conclude that the NCDCM has waived its right to
review the project's consistency with the NCDCM, under Section 930.54 of the Coastal
Zone Management Act of 1972, as amended.
E. Section 4(e) Federal Land Management Conditions
30 Section 401(a)(1) requires an applicant for a federal license or permit to
conduct any activity that may result in any discharge into navigable waters to obtain from
the state in which the discharge originates certification that any such discharge will
comply with applicable water quality standards.
31 33 U.S.C. Section 1341(d).
11
By letter dated October 27, 2000, the USFS provided preliminary section 4(e)
conditions. These conditions were filed pursuant to Section 4(e) of the FPA and 18
C.F.R. § 4.34 (b) by October 31, 2000, the deadline for conditions. No schedule for the
submission of final 4(e) conditions was submitted.
The USFS filed six preliminary conditions under the provisions of section 4(e) of
the FPA. In summary these conditions are as follows: conditions 1 through 3 are
standard administrative conditions that would involve obtaining USFS approval on final
project design and project changes, and yearly consultation with the USFS to ensure the
protection and development of natural resources; condition 4 addresses minimum flow
releases to the Queens Creek bypass reach; condition 5 addresses reporting requirements
for minimum flows; and condition 6 addresses additional studies and analyses. The
USFS condition 6 regarding minimum streamflow regimes is consistent with NP&L-
DEC's amended application (see Appendix A, Minimum Flow).
As part of condition 6, the USFS recommended the licensee conduct the following
studies:
(a) an inventory of the benthic macroinvertebrate community per the State of North
Carolina macroinvertebrate bioassessment protocol, EPT methodology, at one
station in the high gradient bypass reach between Queens Creek dam and the
Winding Stairs Road crossing;
(b) a salamander and rare plant inventory for species that are currently listed or
proposed for listing by the FWS, species currently on the Forest Service regional
sensitive species list, and Forest Concern species (species for which there is a
documented or demonstrated viability concern) in the vicinity of the station
selected above and also in the small pools located immediately downstream of the
dam; and
(c) an interpretation of the effects of existing and proposed operations on any species
that are currently listed or proposed for listing by the FWS, species currently on
the Forest Service regional sensitive species list, and Forest Concern species in the
project area.
V. ENVIRONMENTAL ANALYSIS
In this section, we describe the Queens Creek basin, including the project drainage
area and other man-made and natural features that could affect the resources analyzed.
We also discuss the environmental resources subject to cumulative effects from the
12
proposed action when considered in combination with other actions affecting the
resources. Then, for each resource, we describe the affected environment, the
environmental effects and recommendations, cumulative effects (where applicable), and
the unavoidable adverse effects.
We address in detail only those resources affected by the operation of the Queens
Creek Hydroelectric Project, and include analysis of comments by interested parties on
the proposed action. Unless otherwise mentioned, the sources of our information include
the license application (NP&L-DEC, 1999), the amended application, and other
supplemental filings made by the applicant or resource agencies, and non-governmental
organizations providing comments on the proceeding.
A. General Description of the Queens Creek Basin
The Queens Creek Hydroelectric Project is located in western North Carolina on
Queens Creek, a tributary of the Nantahala River, Macon County (Figure 1). The project
area is sparsely populated with no industry found in the vicinity of the project. The
Queens Creek watershed is mostly forested, much of which is federal land in the Pisgah
National Forest. Agriculture comprises a relatively small percentage of the entire
watershed. The minimal development that exists in the watershed is contained in several
small communities located upstream of the project.
There is minimal development directly on the Queens Creek reservoir or
downstream of the project on the Queens Creek bypass reach. A road and several
residences border the west side of Queens Creek reservoir, and the east side is forested,
undeveloped private lands.
The bypass reach, the former natural channel for Queens Creek, is 1.5 miles in
length from the base of the dam to its confluence with the Nantahala River. Downstream
of the project dam, Queens Creek is bordered by USFS lands through to its confluence
with the Nantahala River. The bypass reach is located in highly mountainous terrain, is
remote, and has steep gradient containing numerous cascades and two waterfalls. The
two largest waterfalls occur about 200 yards downstream of the dam (60 feet high) and
450 yards downstream of the dam, the creek cascades over a rock cliff and falls 150 feet
in elevation. Queens Creek changes a total of 1,014 feet in elevation from the dam to the
confluence with the Nantahala River. The high gradient bypass reach is dominated by
large substrate (boulder, rubble) and has minimal amounts of silt. The influence of
canopy cover in the Queens Creek bypass is very high (90 percent).
B. Scope of the Cumulative Effects Analysis
13
According to the Council on Environmental Quality's regulations for
implementing NEPA (C.F.R. § 1508.7), cumulative effects are the effects on the
environment, which result from the incremental effect of the action when added to other
past, present, and reasonably foreseeable future actions. Cumulative effects can result
from individually minor, but collectively significant, actions taking place over a period of
time, including hydropower and other land and water development activities.
Based on the license application (as amended), comments from agencies and other
interested parties, and our preliminary analysis, we reviewed all resources to determine if
they could be affected in a cumulative manner by the licensing of the Queens Creek
Hydroelectric Project. We used this review to determine the geographic and temporal
scope of our cumulative effects analysis.
1. Geographic Scope
We define the geographical boundary of our cumulative effects analysis as
portions of the upper Nantahala River watershed, including Queens Creek. This
geographic scope includes the physical limits or boundaries of the proposed action's
effects on water quality and quantity, fish and aquatic resources, and recreational
resources.
2. Temporal Scope
The temporal scope of our analysis includes a discussion of past, present and
future actions and their effects on cumulatively affected resource areas. Based on the
term of the proposed license, we looked 30 to 50 years into the future, concentrating on
the effect on the resource from reasonable foreseeable future actions. The effects of past
actions on cumulatively affected resources is by necessity limited to the available
information for each resource. We identified the present resource conditions based on
the license application, comprehensive plans, and scoping comments received from
agencies.
C. Environmental Analysis of the Proposed Action and Alternatives
Only those resources that are involved in substantial project-related issues are
analyzed in detail in this section. We have eliminated aesthetics from our detailed
analysis.
1. Geology and Soils
14
a. Affected environment
The Queens Creek Hydroelectric Project area contains a well established riparian
buffer with little potential for soil erosion. The riparian area along the Queens Creek
bypass reach is forested and undisturbed. The majority of sediment deposition into the
reservoir arises from agricultural and forested lands upstream of the project. The
reservoir banks are sufficiently vegetated to prevent erosion from occurring during
seasonal drawdowns of the reservoir. During the warm weather months the project
maintains elevation using a rule curve; hence, daily fluctuations in reservoir elevation are
minimal and so is potential for bank erosive activity.
b. Environmental effects and recommendations
The licensee has no plans to remove sediment from the reservoir and proposes no
land disturbing activities on the project, with exception of construction activities
associated with recreational facilities. The 401 WQC requires the licensee to undertake
appropriate sediment and erosion control practices. We recommend the licensee follow
best management practices, in consultation with the resource agencies, to ensure land
disturbance and thus soil erosion is minimal.
Aside from construction activities associated with project enhancements, we
conclude that there is little potential for significant soil erosion resulting from operating
the Queens Creek Hydroelectric Project. On Queens Creek reservoir, we recommend the
licensee address soil erosion through vegetative plantings, or other means, should soil
erosion become evident in the future, as required by the 401 WQC.
c. Cumulative effects
None.
d. Unavoidable adverse impacts:
None.
2. Water Resources
a. Affected environment
Water Use and Quantity
15
There are currently no monitored stream gages located on Queens Creek. Flow
volume on Queens Creek is estimated from both project operations records by NP&L-
DEC and from USGS formulas for ungaged river basins in North Carolina. Mean annual
flow on Queens Creek at the project site ranges from approximately 8 to 11 cfs, with
7Q 10 flows of 1.71 cfs at the Queens Creek dam and 1.99 cfs at the confluence of
Queens Creek and the Nantahala River (source: USGS Mountain Hydraulic Area 10
Equation). The 10 percent exceedance flow is approximately 21 cfs and the 90 percent
exceedance flow is approximately 4 cfs. The drainage area at the Queens Creek
Hydroelectric Project is 3.6 square miles.
The bypass reach downstream of the dam receives an undetermined amount of
leakage from the dam. At present, the flow in Queens Creek downstream of the dam is
from the 0.6 square miles of intervening drainage between the dam and Queen Creek's
confluence with the Nantahala River. A number of groundwater seeps and small spring-
fed tributaries intersect with lower Queens Creek and provided an unknown quantity of
supplemental flow to the bypass reach. About 4,000 feet downstream of the dam,
additional flow provided by springs and seeps is estimated to be 0.5 cfs.
Water Quality
Monthly water temperature/dissolved oxygen (DO) monitoring was conducted in
Queens Creek reservoir between July and October 1996 and 1997. Water temperatures
ranged from 15 to 25° C, with surface temperature peaking at 25° C in July. The
reservoir exhibited weak thermal stratification during the July to October survey period.
Dissolved oxygen concentrations differed between the surface and the bottom of the
reservoir being near 7 to 9 mg/L at the surface and generally 5 mg/L or less at the
bottom. Dissolved oxygen concentrations exceeded 5.0 mg/L at depths less than 4
meters throughout the survey period. In both years in September, DO declined sharply
from 8 to 9 mg/L at the surface to 2 to 3 mg/L at depths equal to and greater than 3
meters.
Water quality sampling was not completed in the bypass reach. It was concluded
during initial consultation that the high gradient of Queens Creek downstream of the
dam, coupled with the abundance of spring fed tributaries located along lower Queens
Creek, provide for suitable water quality. Macroinvertebrate sampling completed by the
State of North Carolina identified water quality as "good" based on the type and
abundance of aquatic insects found in lower Queens Creek in the bypass reach section
(North Carolina Department of Environment, Health, and Natural Resources - Division
of Water Quality - Water Quality Section, 1996).
16
b. Environmental effects and recommendations
Water Quantity
Although the project's operating mode relates to water quality, the effects pertain
mostly to fisheries and other aquatic biota. Therefore, we discuss these effects in Section
V.C.3, Fisheries and Aquatic Resources.
Water Quality
The applicant proposes no additional water quality monitoring at the Queens
Creek Hydroelectric Project and the resource agencies have not requested additional
water quality monitoring. The applicant proposed the following measures that may
influence water quality at the Queens Creek Hydroelectric Project: (1) maintain the
Queens Creek reservoir within one foot above and two feet below the reservoir's normal
full operating pool level of 2.895.0 feet Mean Sea Level (MSL) (range: 2,896-2,893.0
feet MSL) from May 1 through October 31 and within one foot above and seven feet
below the reservoir's normal full operating pool level (range: 2,896.0-2,888.0 feet MSL)
for the winter drawdown period, from November 1 through April 30; and (2) except
during low inflow periods, release from a minimum flow release valve installed at the
base of the project's dam, as calibrated and metered at the valve, a continuous minimum
flow of 2.0 cfs from December 1 through May 31 and 1.0 cfs from June 1 through
November 30.
Our analysis
Due to the small size of the Queens Creek drainage, the highly forested nature of
the basin, and the minimal amount of human development that exists in the drainage,
water quality is likely to remain supportive of fisheries and aquatic resources in the
future. Reducing the variance in water surface elevation, as NP&L-DEC proposes, will
likely minimize the suspension of sediments and enhance water quality in the Queens
Creek reservoir.
The applicant's proposal to release to the bypass reach 2.0 cfs from December 1
through May 31 and 1.0 cfs from June 1 through November 30 would increase flows
over the existing leakage flows. Increased flows in the bypass reach should increase the
turbulence of flows and improve air-water exchange and lead to enhanced DO
17
conditions. The beneficial effects on water quality resulting from increases in seasonal
minimum flow to the bypass reach, as NP&L-DEC proposes, will therefore likely
enhance habitat conditions for fish and aquatic resources. To ensure that water quality at
the Queens Creek Hydroelectric Project remains supportive of a healthy fish and aquatic
resources community, we recommend that the licensee operate and maintain the reservoir
water surface elevation and release minimum flows, as proposed above.
c. Cumulative effects
Operating and maintaining the Queens Creek Hydroelectric Project, as proposed
by NP&L-DEC and recommended by staff, would not contribute to cumulative negative
effects on water quality in the Queens Creek basin. Reduced reservoir drawdowns and
increased flows in the bypass reach should result in a cumulative beneficial effect on
water quality in Queens Creek and downstream in the Nantahala River.
d. Unavoidable adverse effects
None.
3. Fisheries and Aquatic Resources
a. Affected environment
Macroinvertebrates
Macroinvertebrate sampling conducted in Queens Creek downstream of the dam
found mayfly, stonefly, and caddis fly species known to be intolerant of pollution.
Macroinvertebrate species richness and abundance in Queens Creek were reflective of
values in small tributary streams, having low inherent productivity.
Fish
Bypass reach
Queens Creek is managed as a wild trout water. The stream is bordered entirely
by USFS lands from the Nantahala River confluence to the Queens Creek dam.
Electrofishing surveys completed in the lowermost portion of the bypass reach in May
1997and July 1999 found standing crops of rainbow trout comparable to, and in some
cases exceeding, those found in other unregulated streams in Macon County. Both
18
young-of-the-year and older fish were found, indicating successful natural reproduction
had occurred. Mottled sculpin were also found in abundance in the bypass reach.
An instream flow study was completed in the lower portion of the bypass reach
using the Instream Flow Incremental Methodology. Target species included rainbow
trout, mottled sculpin and aquatic invertebrates. The habitat modeling portion of the
analysis suggested the majority of usable habitat for fishes and aquatic invertebrates was
available at streamflows of 2-3 cfs. The models also predicted little suitable habitat for
rainbow trout spawning under current project operations.
Although the Queens Creek bypass reach does not support a significant
recreational fishery, it serves as a refugium for young trout and thus a recruitment source
for trout populations in the Nantahala River. The upper reaches of the bypass reach that
are intersected by high water falls are not accessible to spawning fishes from the
Nantahala River.
Queens Creek reservoir
Queens Creek reservoir is managed as a multi-species fishery including a put and
take trout fishery and a warmwater fishery supported by natural reproduction. Surveys
completed by the applicant and resource agencies found 11 fish species in Queens Creek
reservoir, including largemouth and smallmouth bass, rockbass, sunfish, trout, catfish,
and yellow perch. Several goldfish were also observed in the reservoir.
Queens Creek reservoir is designated as a Public Mountain Trout Water,
maintained by NCWRC's stocking of catchable-size hatchery trout between April and
June. Between 1987 and 1993, the NCWRC stocked approximately 1,000 brook trout
annually and an average of 1,940 trout per year were stocked from 1993-1995, including
brook, rainbow, and brown trout. Water temperatures and DO concentrations during the
summer months limit the available habitat for trout in Queens Creek reservoir. Trout
habitat substantially diminishes in July and August, lessening the chance that stocked
trout will survive to subsequent years. For this reason, the NCWRC does not stock trout
past June or use fingerling fish, which would require several years to grow to catchable
size. Queens Creek upstream of the reservoir supports wild rainbow and brown trout.
Along with the seasonal trout fishery, the reservoir provides year-around
opportunities for anglers to catch a variety of panfish, largemouth bass, and smallmouth
bass. Based on mean length-at-age data, largemouth bass collected from Queens Creek
reservoir are recruiting to harvestable size by age-3, which reflects growth that is typical
for largemouth bass in North Carolina and in the region. Analysis by NCWRC personnel
19
found that bluegill in Queens Creek reservoir, in addition to largemouth bass, have good
condition relative to same species individuals found in other locations.
Entrainment and impingement
The intake of the Queens Creek reservoir is located at a depth of 58 feet from full
pool elevation. The intake supports a screen having 1-inch bar spacing. NP&L-DEC
estimated the water velocities at the intake to be 0.41 (14.1 cfs) to 0.64 (22.1 cfs) feet per
second (fps). The 1-inch bar spacing meets the criterion of the NCWRC, which is 2.5
inch maximum. The standard maximum intake velocity criterion (not to exceed) for
North Carolina is 1.5 fps.
In addition to the physical barrier provided by the intake screening, the depth of
the intake coupled with low DO concentrations that often exist in the project reservoir
would serve to restrict the majority of fish from being entrained. Fish passage issues
have not been identified at the Queens Creek Hydroelectric Project. The large waterfalls
that exist in the bypass reach would preclude movement of most resident fishes upstream
to the base of the project dam.
b. Environmental effects and recommendations
Macroinvertebrates
The USFS recommended as part of their preliminary section 4(e) conditions, that
the licensee conduct macroinvertebrate sampling in the Queens Creek bypass reach at
two locations. The NCDENR has sampled the Queens Creek bypass reach and found the
macroinvertebrate community included species considered intolerant of pollution. With
increased minimum flow, as proposed by NP&L-DEC and recommended by staff, we
anticipate that habitat conditions will improve for macroinvertebrates in the bypass reach.
Lacking any clear justification for additional macroinvertebrate sampling at this time, we
find that additional sampling for macroinvertebrates is unnecessary.
Reservoir operating limits
As above, NP&L-DEC proposes to maintain the Queens Creek reservoir within
one foot above and two feet below the reservoir's normal full operating pool level of
2,895.0 feet MSL (range: 2,896-2,893.0 feet MSL) from May 1 through October 31 and
within one foot above and seven feet below the reservoir's normal full operating pool
level (range: 2,896.0-2,888.0 feet MSL) for the winter drawdown period, from
November 1 through April 30. All resource agencies provided this same
20
recommendation regarding operation of the Queens Creek reservoir; these reservoir
operating levels are also a condition of the 401 WQC issued by the NCDENR.
Our analysis
Operating the Queens Creek reservoir, as proposed by NP&L-DEC, will provide
for more stable reservoir water surface elevations during the spawning and growing
season for reservoir fishes. Providing for water surface elevation stability should
therefore enhance the recruitment success of nest spawning fishes, such as bass and
sunfish, that are found in Queens Creek reservoir that are often the target species for
recreational fishing. We recommend that the reservoir operating limits, as proposed by
NP&L-DEC, be incorporated in any new license for the Queens Creek Hydroelectric
Project.
Bypass reach flows
As above, NP&L-DEC proposes to release from a minimum flow release valve
installed at the base of the project's dam, as calibrated and metered at the valve, a
continuous minimum flow of 2.0 cfs from December 1 through May 31 and 1.0 cfs from
June 1 through November 30 except during low inflow periods. All resource agencies
provided this same recommendation regarding flows for the Queens Creek bypass reach;
this minimum flow regime is also included as a condition of the 401 WQC issued by the
NCDENR.
Our analysis
Instream flow studies completed by NP&L-DEC suggest that significant
enhancement of macroinvertebrate and fish communities would occur if bypass reach
flows were increased over existing levels, which included minimal leakage from Queens
Creek dam and inflow from seeps and spring-fed tributaries located downstream of the
dam. Releases of 2.0 cfs from December through May should increase overwinter
habitat for sculpin and trout, and provide for increased spawning opportunities to occur
in the lower Queens Creek bypass for larger trout originating in the Nantahala River.
Increased flow during the spring and summer growing season of 1.0 cfs should increase
the amount and diversity of habitats available to juvenile rainbow trout and improve
recruitment success and trout population densities. Higher flows throughout the year
should also increase the abundance of macroinvertebrates, which will have indirect
benefits to fish populations in the bypass reach by increasing the forage base.
21
In most cases, a provision of 1.0 cfs from June through November and 2.0 cfs
from December through May to the bypass reach will not likely cause conflicts with
recommended water surface elevations in Queens Creek reservoir. NP&L-DEC proposes
a stepped approach to adjust in concert, project operations, reservoir water surface
elevation operating limits, and bypass reach flows when inflow is low and insufficient to
satisfy generation, reservoir water surface elevation operating limits, and bypass reach
flows (see Appendix A). This stepped approach is a condition of the 401 WQC, and was
included, verbatim, in recommendations of the FWS. The stepped approach would
require the licensee to first reduce minimum generation volumes in certain specified
increments, and subsequently reduce continuous minimum flow releases, followed by
one-foot incremental reductions in the lower limit of the reservoir level band.
We find that the stepped approach to project operations, minimum flow releases,
and reservoir draw down limits, as proposed by NP&L-DEC, represents a reasonable and
balanced approach for resource protection between the reservoir and bypass reach fish
and aquatic resources. We therefore recommend that the stepped approach, as proposed
by NP&L-DEC, be incorporated into any new license issued for the Queens Creek
Hydroelectric Project.
c. Cumulative effects
Operating and maintaining the Queens Creek Hydroelectric Project, as proposed
by NP&L-DEC and recommended by staff, would not contribute to cumulative negative
effects on fish and aquatic resources in the Queens Creek basin. Reduced reservoir
drawdowns and increased flows in the bypass reach should result in enhanced conditions
for fish and macroinvertebrates and have a cumulative beneficial effect on fish and
aquatic resources in Queens Creek and downstream in the Nantahala River.
d. Unavoidable adverse effects
Small numbers of fish will likely be entrained and lost to mortality at the Queens
Creek Hydroelectric Project.
4. Terrestrial Resources
a. Affected environment
Queens Creek is a tributary of the Nantahala River that is part of the Little
Tennessee River Basin, which is located in the far southwestern corner of the North
Carolina mountains. The Little Tennessee's major tributaries include the Cartoogechaye,
22
Cheoah, Cullasaja, Nantahala, Oconaluftee, and Tuckasegee rivers. Public lands in the
vicinity of the project include the Nantahala National Forest and the Great Smoky
Mountains National Park.
Queens Creek is located in the far southwestern corner of the North Carolina
mountains. The vegetation around the upper part of the project is second growth
hardwood-pine forest characterized by red maple, tulip poplar, black locust and species
of pine and oak. Vegetation around the reservoir consists of willows, elderberry,
multiflora rose, cinnamon fern, water cress and smart weed. The Queens Creek riparian
zone is characterized by rhododendron and hemlock. At lower elevations the project is
located in a cove hardwood forest that gradually changes on the south slope to a
oak-hickory forest. Wildlife using the project area include deer, muskrat, raccoons,
kingfisher, various snakes, and salamanders.
b. Environmental effects and recommendations
Queens Creek reservoir
NP&L-DEC proposes to maintain a 10-foot buffer zone around Queens Creek
reservoir in an undeveloped condition. As above, the applicant proposes and the
resource agencies support maintaining the Queens Creek reservoir within one foot above
and two feet below the reservoir's normal full operating pool level of 2,895.0 feet MSL
(range: 2,896-2,893.0 feet MSL) from May 1 through October 31 and within one foot
above and seven feet below the reservoir's normal full operating pool level (range:
2,896.0-2,888.0 feet MSL) for the winter drawdown period, from November 1 through
April 30.
Our analysis
We agree with NP&L-DEC's proposal to maintain a 10-foot buffer zone around
the Queens Creek reservoir in an undeveloped conditions. Undisturbed reservoir edge
habitats are important foraging areas for terrestrial wildlife and may be used by breeding
birds and amphibians. Human encroachment on the reservoir could cause the loss of
protection for transitional upland and terrestrial areas and diminish the value of the
reservoir to local and migratory wildlife.
Resource agencies have previously noted confusion regarding the definition of the
normal full pool reservoir level, which could affect the location of the 10-foot buffer
zone. If the buffer zone is set too low, littoral and riparian resources in the reservoir may
not be adequately protected by the proposed buffer zone.
23
Operating the Queens Creek reservoir, as proposed by NP&L-DEC, sets the
normal full operating pool at 2,895.0 feet MSL, which will result in a clear definition of
the buffer zone. We recommend that NP&L-DEC's proposed reservoir operating limits
be incorporated in any new license for the Queens Creek Hydroelectric Project.
Bypass reach flows
As above, the applicant proposes and the resource agencies support a continuous
minimum flow release to the bypass reach of 2.0 cfs from December 1 through May 31
and 1.0 cfs from June 1 through November 30.
Our analysis
Increased minimum flows in the bypass reach will likely enhance habitat
conditions for terrestrial wildlife, particularly species using the riparian zone. We
anticipate that increased macroinvertebrate and fish production would occur as a result of
increased flows, thus improving forage conditions for wildlife that feed on
macroinvertebrates and fish.
In their preliminary section 4(e) conditions filed October 27, 2000, the USFS
noted there may be endangered or threatened (or proposed) listed species by the FWS
(see the following Threatened and Endangered species section), salamanders, USFS
sensitive species, or Forest Concern species located in the vicinity of the project;
specifically, in two pools immediately below the dam and the downstream high gradient
reach.
The present plant and animal life associated with the bypass reach will not be
degraded by increased minimum flows. NP&L-DEC's proposed minimum flow, in
addition to improving the aquatic environment, will likely enhance the plant and animal
species that are associated with the hydric and mesic habitats along the Queens Creek
bypass reach.
Threatened and Endangered Species
On January 14, 2000, NP&L-DEC, requested an updated list of federally
endangered and threatened species from the FWS. On February 21, 2000, via telephone
conference, the FWS requested that two species the noonday snail, Mesodon clarki
nantahala, and the Indiana bat, Myotis sodalis, be added to the list of already identified
endangered or threatened species (bog turtle, Clemmys muhlenbergii; spotfin chub,
Cyprinella monacha; Appalachian elktoe, Alasmidonta raveneliana; Virginia spiraea,
24
Spiraea virginiana; small whorled pagonia, Isotria medeoloides; and rock gnome lichen
Gymnoderma lineare) occurring in Macon County, North Carolina.
NP&L-DEC conducted field surveys in 1996, 1997, 1998, and 1999 and
determined that six species found on the list do not occur in the project area, and except
for the small whorled pagonia, there is not suitable habitat in the project area for the
listed species.
After the FWS update to the list of federally listed species, NP&L-DEC evaluated
the habitat requirements for the noonday snail and Indiana bat. There may be suitable
habitat for the noonday snail in the project area; however, there are no changes in the
project that would affect the snail.
The Indiana bat requires limestone caves for winter hibernaculum and shaggy
bark trees for summer roosts. There are records of Indiana bats during winter at a cave
within two miles of the project. There are no caves or trees appropriate for summer
roosts in the project area. Roost trees do occur away from the project; however, Queens
Creek has dense canopy cover making it less desirable for bat foraging.
The FWS, by letter dated March 8, 2000, stated that there are no endangered
species located within the area affected by the project. Staff concludes that relicensing of
the Queens Creek Hydroelectric Project will have no effect on endangered or threatened
species according to Section 7 of the Endangered Species Act, as amended.
c. Cumulative effects
None.
d. Unavoidable adverse effects
None.
5. Recreation and Land Use
a. Affected environment
The Queens Creek reservoir has limited access and is relatively isolated. Public
use is low, consisting of some motorized and non-motorized boating and bank fishing for
stocked trout and resident fishes. At present there is a small undeveloped boat access
area at the head of the reservoir.
25
Queens Creek downstream of the dam is partially diverted into a pipeline and
penstock that drops to a powerhouse. Queens Creek downstream of the dam has a steep
gradient with dense vegetative cover. There is some hiking and camping and limited
angling along the lower part of Queens Creek, which is surrounded by USFS lands. The
Nantahala and Pisgah National Forest land and resource management plan designated the
Queens Creek area unsuitable for timber production.
b. Environmental effects and recommendations
NP&L-DEC proposes to develop a single day-use recreation area, having picnic
tables, a disabled-persons fishing pier, and a tote and float launch area with parking. The
resource agencies also recommend that a single day-use recreation area be developed on
Queens Creek reservoir.
Our analysis
A single developed day-use recreation site will have minimal effect on the isolated
nature of the Queens Creek reservoir, yet provide sufficient public access and day-use
facilities. Compared with more dispersed recreation sites, a single day-use area will
reduce effects on the reservoir shoreline. We recommend that the recreational day-use
facilities as proposed by NP&L-DEC and the revised map of the recreational day-use
plan area, which is included in the letter dated January 5, 2001 for the minimum flow
equipment design and conceptual recreation plans, be incorporated in any new license for
the Queens Creek Hydroelectric Project.
c. Cumulative effects
Development of recreational access and facilities on Queens Creek reservoir will
have a positive beneficial cumulative effect on recreational resources in the project
region. Small reservoirs are uncommon in western North Carolina. Queens Creek
reservoir, therefore, adds to the diversity and mix of locations available for water-borne
recreation in the region.
d. Unavoidable adverse effects
None.
6. Cultural Resources
a. Affected environment
26
The Little Tennessee River Basin was once home to the Cherokee, who lived in
the river valley and farmed its floodplains. The Queens Creek powerhouse is near the
NP&L-DEC Nantahala Substation Complex that is designated on the Study List in 1994
after the completion of a county-wide survey of Macon County.
b. Environmental effects and recommendations
NP&L-DEC documented the location of the Queens Creek powerhouse and the
Nantahala Substation Complex and consulted with the North Carolina Department of
Cultural Resources (NCDCR). The NCDCR, by letter dated March 17, 2000, determined
that Queens Creek powerhouse is not a part of the Nantahala Substation Complex. In a
previous letter the NCDCR review of the area determined that the department is not
aware of any properties of architectural, historic or archaeological significance that
would be affected by the project.32 The NCDCR concluded that they have no comment
on the project as proposed. We therefore conclude that cultural resources will not be
affected by relicensing the Queens Creek Hydroelectric Project.
7. Socioeconomics
The Queens Creek Hydroelectric Project is an important socioeconomic resource
at the local level. Socioeconomics effects associated with the proposed action would
result primarily from employment and expenditures associated with construction
activities at the project. The recreational facility construction and installation would
result in increased expenditures and employ a small number of construction workers.
This employment, and the income taxes it would generate, would result in a small benefit
to the area.
D. No-Action
Under the no-action alternative, the project would continue to operate as it has in
the past and there would be no change to the existing environment; no new
environmental measures would be implemented.
VI. DEVELOPMENTAL ANALYSIS
32 The NCDCR letters were filed pursuant to Section 106 of the National Historic
Preservation Act and the Advisory Council on Historic Preservation's Regulations for
Compliance with Section 106 codified at 36 CFR Part 800.
27
In this section, we analyze the project's use of the Queens Creek's available water
resources to generate hydropower; estimate the economic benefits of the proposed action;
and estimate the cost of various environmental measures and the effects of these
measures on project operations.
A. Power and Economic Benefits of the Project
Our independent economic studies are based on existing electric power
conditions, with no considerations for future inflation, escalation, or deflation beyond the
potential license issuance date. 33
We base the net investment cost for the project on the sum of the undepreciated
blue book value and the cost of licensing, both provided by the applicant. For our
economic analysis of the alternatives, we use the assumptions, values, and sources shown
in table 1.34 The proposed action consists of the operation of the Queens Creek
Hydroelectric Project with NP&L-DEC's proposed environmental and safety measures as
shown in table 2.
Based on the assumptions in table 1 and the costs of measures shown in table 2,
we estimate that the annual cost of the Queens Creek Hydroelectric Project would be
$96,000, or about $50,000 (12.13 mills/kWh) less than the annual power value of
$146,000. The estimated average annual output of the project would be 4,169 MWh.
33 See Mead Corporation, Publishing Paper Division, 72 FERC 161,027 (July 13,
1995).
34 Our estimate of the cost of alternative power is based on the current cost of
energy generation in natural gas-fueled combined cycle combustion turbine (CCCT)
generating plants in the ECAR region, plus a value of $99 per kilowatt year for the
project's average annual capacity of 578 kW. We compute the regional energy value to
be 17.34 mills/kWh and the capacity value to be 12.43 mills/kWh, for a total power value
of 29.77 mills/kWh. Our estimate of the energy value is based on the cost of fuel that
would be displaced by the hydroelectric generation in a natural gas-fueled CCCT
generating plant, operating at a heat rate of 6,200 Btu/kWh. We estimate the cost of fuel
based on the Energy Information Administration's reference-case estimate of average real
fossil fuel costs for electric utilities, as published by the Energy Information
Administration (EIA) in their Annual Energy Outlook for 2001 and its supplemental data
on the EIA Internet Homepage.
28
Table 1. Staff s assumptions for economic analyses of the Queens Creek Hydroelectric
Project (Source: Staff).
Assumption Value Source
Energy value (2000) 23.75 mills/kWh Staff
Capacity value (2000) $99/kW-yr Staff
Operation & maintenance costs $29,064 NP&L-DEC
(1999)
Period of analysis 30 years Staff (Mead)
Discount rate 8% Staff
Net investment $242,622 NP&L-DEC
Table 2. Summary of annual costs of NP&L-DEC's proposed measures for the Queens
Creek Hydroelectric Project (Source: Staff).
Protection, mitigation, or Capital cost O&M cost Annual cost
enhancement measure (2001$) (2001$) (2001$)
Minimum flow addition $11,642 0 $22,000*
Low inflow operating protocols 0 0 0
Reservoir operating limits 0 0 0
Buffer zone 0 0 0
Day use recreation area $75,000 $1,500 $7,000
* The minimum flow addition annual cost includes the cost of reduced generation.
B. Proposed Action with Additional Staff-recommended Measures
Staffs one additional recommended measure to reserve authority for the Secretary
of the Interior to prescribe the construction, operation, and maintenance of fishways has
no cost. Therefore, the cost of the proposed action with staffs additional recommended
measure is the same as cost of NP&L-DEC's proposed action outlined above (Section
VI.A and table 2).
C. No-action
Under the no-action alternative, the project would continue to operate as it does
now, with no change in existing environmental conditions.
29
The annual cost of the existing project is about $98,000 (19.44 mills/kWh) for the
existing generation of about 5,066 MWh annually. As stated above, we assume that the
cost of alternative power is 23.75 mills/kWh. Therefore, the existing project would
produce power at a cost of about $79,000 (15.6 mills/kWh) less than the currently
available alternative.
D. Economic Comparison of the Alternatives
Table 3 presents a summary of the current net annual power benefits for the
proposed action with staffs additional recommended measure and no action.
Table 3. Summary of the net annual benefits of alternatives for NP&L-DEC's proposed
Queens Creek Hydroelectric Project (Source: Staff)
Proposed action with
additional staff-
recommended
measure*

No action
Annual generation (MWh) 4,169 5,066
Annual power benefit
($) 146,000 178,000
(mills/kWh) 35.05 35.05
Annual cost
($) 96,000 98,000
(mills/kWh) 22.92 19.44
Annual net benefit
($) 50,000 79,000
(mills/kWh) 12.13 15.6
* Staffs one additional measure has no cost; all costs herein are derived from NP&L-DEC's
proposed action.
Project economics is only one of the many public interest factors that is
considered in determining whether or not to issue a license. The construction and-
operation of a project may be desirable for other reasons, such as to diversify the mix of
energy sources in the area, to promote local employment, to provide a fixed-cost source
of power and reduce contract needs, and to conserve fossil fuels and reduce atmospheric
pollution.
30
E. Pollution Abatement
The Queens Creek Hydroelectric Project would annually generate about 4,169
MWh of electricity. This amount of hydropower generation, when contrasted with the
generation of an equal amount of energy by fossil-fueled facilities, avoids the
unnecessary emission of atmospheric pollutants. Assuming that the 4,169 MWh of
hydropower generation would be replaced by an equal amount of natural gas-fired
generation, generating electrical power equivalent to that produced by the Queens Creek
Hydroelectric Project would require combustion of about 42.9 million cubic feet of
natural gas annually. Removal of pollutants from the emissions to levels presently
achievable by state-of-the-art technology would cost about $2,308 (2001$) annually.
VII. COMPREHENSIVE DEVELOPMENT AND RECOMMENDED
ALTERNATIVE
Sections 4(e) and 10(a) of the FPA require the Commission to give equal
consideration to all uses of the water way on which the project is located. When we
review a hydropower project, we consider the water quality, fish and wildlife,
recreational, cultural and other nondevelopmental values of the involved waterway
equally with its electric energy and other developmental values. In determining whether,
and under what conditions, to license a project, the Commission must weigh the various
economic and environmental tradeoffs involved in the decision.
This section contains the basis for, and a summary of, our recommendations to the
Commission for licensing the Queens Creek Hydroelectric Project. We weighed the
costs and benefits of our recommended alternative against other alternatives.
A. Recommended Alternative
Based on our independent review and evaluation of the proposed action, the
proposed action with staff s additional recommended measure, and no-action, we select
the proposed action with staffs additional recommended measure as the preferred
alternative. We recommend this alternative because: (1) issuance of a license would
allow NP&L-DEC to continue to operate the project as a dependable source of electric
energy; (2) the Queens Creek Hydroelectric Project would avoid the need for an
equivalent amount of fossil fuel- fired electric generation and capacity, continuing to
help conserve these nonrenewable energy resources and reduce atmospheric pollution;
and (3) the recommended environmental measures would improve water quality, enhance
fish and terrestrial resources, improve public use of recreation facilities and resources,
31
improve multiple use and management of project lands, and maintain and protect historic
and archeological resources within the area affected by project operations.
We recommend including the following proposed action with one additional staff-
recommended measure (item 6) in any license issued by the Commission for the Queens
Creek Hydroelectric Project:
(1) Maintain the Queens Creek reservoir within one foot above and two feet below
the reservoir's normal full operating pool level of 2,895.0 feet MSL (range:
2,896-2,893.0 feet MSL) from May 1 through October 31 and within one foot
above and seven feet below the reservoir's normal full operating pool level (range:
2,896.0-2,888.0 feet MSL) for the winter drawdown period, from November 1
through April 30.
(2) Except during low inflow periods, release from a minimum flow release valve
installed at the base of the project's dam, as calibrated and metered at the valve, a
continuous minimum flow of 2.0 cfs from December 1 through May 31 and 1.0
cfs from June 1 through November 30.
(3) During low inflow periods, adjust minimum flow releases, reservoir elevations,
and generation levels on a weekly basis to equitably allocate the effects of reduced
water availability.
(4) Enhance day-use recreational opportunities on Queens Creek reservoir, including
installing picnic tables, developing bank fishing access, including a disabled-
persons accessible facility (e.g., fishing pier), and a "tote-and-float" launch area
with parking.
(5) Maintain a 10-foot buffer zone around Queens Creek reservoir in an undeveloped
condition.
(6) Reserve authority for the Secretary of the Interior to prescribe the construction,
operation, and maintenance of fishways.
Because NP&L-DEC's proposal for minimum flows and recreational measures
represent tradeoffs between developmental and non-developmental resources, we present
our justification for including these measures in the preferred alternative in the following
section. Implementation of these measures would protect and enhance water quality,
fisheries and wildlife, and recreational resources in the project area and provide for the
best use of the waterway.
32
The costs of some measures would reduce the net benefit of the project. As
discussed in Section VI, we estimate that the proposed action would cost $96,000.3s
Relative to no action, two of the measures proposed by NP&L-DEC, and included by
staff in the preferred alternative, reduce the economic benefits of the project, including:
(1) installation of a minimum flow release valve and release of minimum flows; and (2)
development of a day-use recreation area on Queens Creek reservoir.
1. Install Minimum Flow Release Valve and Release Minimum Flows
We adopted NP&L-DEC's proposal to install a minimum flow release valve and
release seasonally-adjusted minimum flows to the Queens Creek bypass reach. Because
the bypass reach, at present, receives only leakage flows from the project, we anticipate
that the continual release of higher minimum flows will significantly enhance habitat for
fish and aquatic resources. We estimated that the current annual cost of increasing
minimum flows would be about $22,000.
2. Develop Day-Use Recreational Area on Queens Creek Reservoir
We adopted NP&L-DEC's proposal to develop a day-use recreation area that is
ADA accessible, to include a fishing pier, picnic area, and parking. Currently, there are
no formal day-use recreational facilities on Queens Creek reservoir. We therefore
anticipate that improving recreational access, including an ADA accessible fishing pier,
will significantly enhance recreational opportunities on Queens Creek reservoir and in
the region. We estimated that the current annual cost of developing day-use recreation
facilities would be about $7,000.
B. Conclusion
Based on our independent analysis of the Queens Creek Hydroelectric Project, we
conclude that operation of the project, including measures of the preferred alternative,
would improve environmental conditions in the project area and be a beneficial use of
the resources.
35 Staff has adopted NP&L-DEC's proposed action, with one additional no cost
staff-recommended measure, as the preferred alternative for relicensing the project;
hence, all project costs are associated with NP&L-DEC's proposed action.
33
VIII. RECOMMENDATIONS OF FISH AND WILDLIFE AGENCIES
Under the provisions of Section 100) of the FPA, each hydroelectric license
issued by the Commission shall include conditions based on recommendations provided
by federal and state fish and wildlife agencies submitted to adequately and equitably
protect, mitigate damages to, and enhance fish and wildlife resources affected by the
project, to the extent that such conditions are consistent with the FPA and other
applicable law.
Section 100) of the FPA states that, whenever the Commission believes that any
fish and wildlife agency recommendation is inconsistent with the purposes and the
requirements of the FPA or other applicable law, the Commission and the agency shall
attempt to resolve any such inconsistency, giving due weight to the recommendations,
expertise, and statutory responsibilities of the agency.
The State of North Carolina recommended that the Commission adopt proposed
license articles regarding reservoir operating limits, minimum flows, and low inflow
operating protocols identified in the Settlement Agreement (see Appendix A). The FWS
recommended that the Commission include in any new license issued for the Queens
Creek Hydroelectric Project, reservoir level limitations, minimum flows, and low inflow
operational protocols consistent with those found in the Settlement Agreement
(Appendix A). As noted above, NP&L-DEC amended their application to be consistent
with a Settlement Agreement, and as such is now the proposed action. In this EA, we
recommend that any new license issued for the Queens Creek Hydroelectric Project
include provisions for reservoir level limitations, minimum flows, and low inflow
operating protocols proposed by NP&L-DEC. Therefore, we find no inconsistencies
among the resource agencies recommendations and the requirements of the FPA.
IX. CONSISTENCY WITH COMPREHENSIVE PLANS
Section I0(a)(2)(A) of the FPA requires the Commission to consider the extent to
which a hydroelectric project is consistent with federal and state comprehensive plans for
improving, developing, or conserving waterways affected by the project. Under Section
10(a)(2)(A), federal and state agencies filed 21 comprehensive plans that address various
resources in North Carolina. Of these, Commission staff identified and reviewed four
plans relevant to this project: U. S. Forest Service's Nantahala and Pisgah National
Forest Management Plan (1994); North Carolina Statewide Comprehensive Outdoor
Recreation Plan (NC SCORP, 1995); and U.S. FWS's Fisheries USA (the Recreational
Fisheries Policy of the U.S. Fish and Wildlife Service). No inconsistencies were found.
34
X. FINDING OF NO SIGNIFICANT IMPACT
We have prepared this EA for the Queens Creek Hydroelectric Project pursuant to
the National Environmental Policy Act of 1969. If the Queens Creek Hydroelectric
Project is relicensed as proposed with staffs additional recommended measure, the
project would continue to operate while providing enhancements to fish and wildlife
resources, improvements to recreation facilities, and protection of cultural resources in
the project area.
Based on our independent analysis, issuing a license for the project, as proposed
with staffs additional recommended measure, would not constitute a major federal action
significantly affecting the quality of the human environment.
XI. LITERATURE CITED
North Carolina Department of Environment, Health, and Natural Resources - Division of
Water Quality - Water Quality Section. 1996. Outstanding resource waters
evaluation of the lower Nantahala River water shed, Macon and Swain counties;
Little Tennessee River basin (040403). October 29, 1996.
Nantahala Power & Light, a Division of Duke Engineering Company (NP&L-DEC).
1999. Application for relicensing of the Queens Creek Hydroelectric Project
Macon County, North Carolina, FERC No. 2694-002 NATDAM ID N000333.
September 27, 1999.
XII. LIST OF PREPARERS
Steve Kartalia, Team Leader - Water Resources and Fisheries and Aquatic Resouces
(Fisheries Biologist; M.S., Fisheries Biology).
Kevin Whalen -- Geology and Soils, Water Resources, and Fisheries and Aquatic
Resources (Fisheries Biologist; Ph.D., Wildlife and Fisheries Conservation).
Ronald McKitrick - Terrestrial Resources, Land Use and Recreation, and Cultural
Resources (Wildlife Biologist; M.S., Wildlife Biology).
Mike Spencer -- Developmental Analysis and Need for Power, (Civil Engineer, B.S.,
Civil Engineering)
35
Appendix A
Queens Creek Hydroelectric Project Settlement Agreement Environmental
Measures
The following summarizes the primary environmental enhancement measures of
the Queens Creek Hydroelectric Project Settlement Agreement filed with the
Commission on October 30, 2000. NP&L-DEC includes these measures as the proposed
action for operating and maintaining the Queens Creek Hydroelectric Project.
Reservoir Level Limits
The Licensee shall maintain the Queens Creek reservoir within one foot above
and two feet below the reservoir's normal full operating pool level of 2.895.0 feet Mean
Sea Level (MSL) (range: 2,896-2,893.0 feet MSL) from May 1 through October 31 and
within one foot above and seven feet below the reservoir's normal full operating pool
level (range: 2.896.0-2.888.0 feet MSL) for the winter drawdown period, from
November 1 through April 30. In order to facilitate gradual raising and lowering of the
reservoir during the winter drawdown period, the Licensee shall operate the project so as
to attempt to have the reservoir elevation at 2.891.0 feet MSL on April 1 and December
1. The Licensee shall use the existing float-operated gage on the reservoir to determine
reservoir elevation.
The reservoir elevation limits specified may be temporarily modified if required
by operating emergencies beyond the control of the Licensee, during periods of excessive
inflow, for planned drawdowns for maintenance or inspection purposes, for short periods
upon mutual agreement of the licensee, the North Carolina Department of Environment
and Natural Resources (NCDENR) and the North Carolina Wildlife Resources
Commission (NRWRC), and during low inflow periods as specified below.
The Licensee shall notify the NCDENR and the NCWRC at least 15 days prior to
commencing planned drawdowns for maintenance or inspection purposes that will
require a temporary modification of the reservoir elevation limits. The Licensee shall
notify the NCDENR and the NCWRC of any temporary modification of the reservoir
elevation limits required by an operating emergency beyond the control of the Licensee
as soon as practical, either before, during, or immediately following such emergency, but
no later than ten days after each such incident.
36
Minimum Flow
The Licensee, except during low inflow periods as defined below, shall release
from a minimum flow release value required to be installed at the base of the project's
dam, as calibrated and metered at the valve, a continuos minimum flow of 2.0 cubic-feet-
per second (cfs) during the period December 1 through May 31 and 1.0 cfs during the
period June 1 through November 30 for the protection of fishery and other aquatic
resources in the reach of Queens Creek bypassed by the project.
Low Inflow Operating, Protocol
During low inflow periods as defined below, the Licensee shall follow in
sequential fashion the protocol set forth below regarding adjustments to minimum flow
releases, reservoir elevations, and generation levels and shall make the adjustments set
forth below on a weekly basis so as to equitably allocate the impacts of reduced water
availability.
a) The Licensee shall reduce the normal minimum generation volume by 20
percent to 29.2 acre-feet per calendar week;
b) Upon a determination by the Licensee that the reservoir elevation cannot be
maintained within the limits specified for the relevant time period even with the
implementation of the reservoir operating limit measures, the Licensee shall reduce the
continuous minimum flow release specified above for the relevant time period by 20
percent (i.e., down to 1.6 cfs for the period December 1 through May 31 and 0.8 cfs for
the period June 1 through November 30);
c) Upon a determination by the Licensee that the reservoir elevation cannot be
maintained within the limits specified for the relevant time period even with
implementation of the measures specified in a) and b), the Licensee may reduce the
reservoir's elevation one additional foot below the lower reservoir elevation limit
specified for the relevant time period hereof for the duration of the low inflow period
(hereinafter the "first modified reservoir level band");
d) Upon a determination by the Licensee that the reservoir elevation cannot be
maintained within the first modified reservoir level band, the Licensee shall reduce the
minimum generation volume by an additional 15 percent (down to approximately 23.7
acre-feet per calendar week);
37
e) Upon a determination by the Licensee that the reservoir elevation cannot be
maintained within the first modified reservoir level band even with implementation of
the measure specified in d), the Licensee shall reduce the continuous minimum flow
release specified herein for the relevant time period by an additional 15 percent (i.e.,
down to 1.3 cfs for the period December 1 through May 31 and 0.65 cfs for the period
June 1 through November 30);
f) Upon a determination by the Licensee that the reservoir elevation cannot be
maintained within the first modified reservoir level band even with implementation of
the measure specified in d) and e), the Licensee may reduce the reservoir's elevation one
additional foot below the lower limit of the first modified reservoir level band for the
duration of the low inflow period (hereinafter the "second modified reservoir level
band");
g) Upon determination by the Licensee that the reservoir elevation cannot be
maintained within the second modified reservoir level band, the protocol preceding
establishment of the first and second modified reservoir level bands as specified above
shall be repeated, with the Licensee first reducing minimum generation volumes in
increments of 10 percent and subsequently reducing continuous minimum flow releases
in increments of 10 percent, followed by one foot incremental reductions in the lower
limit of the second modified reservoir level band, until inflow has increased to a point
where the reservoir level has been restored to within the reservoir elevation limits for the
relevant time period specified above.
Public Recreation Facility Improvements
The day-use recreational facilities proposed by NP&L-DEC in its September 27,
1999, application for new license will be consolidated at a single location within the
existing FERC project boundary and thereafter maintained by the NCWRC. The
construction of the consolidated facilities will be completed in 2001 or as soon as
practically achievable following the receipt of any necessary approvals by the FERC
under the procedures of the existing license. The recreational facilities in the FERC
application include (a) picnic tables; (b) disabled persons fishing pier; and (c) a "tote-
and-float" launch area.
38
Appendix B
Responses to Comments on the Draft Environmental Assesssment
The Commission issued its draft environmental assessment (DEA) for the Queen's
Creek Project on July 27, 2001. The Commission requested that comments be filed
within 30 days, or by August 27, 2001. The following entities filed comments pertaining
to the DEA. In this appendix, we summarize the comments received, provide responses
to those comments, and indicate where we have modified the text in the final
environmental assessment (FEA).
Entity Date of Letter
North Carolina Wildlife Resources
Commission August 7, 2001
Tennessee Valley Authority September 10, 2001
U.S. Forest Service August 27, 2001
U.S. Department of the Interior August 23, 2001
Comment: NCWRC and FWS concur with the findings of the DEA.
Response: No response necessary.
Comment: TVA noted some typographical errors.
Response: We have corrected the text.
Comment: TVA commented that NP&L-DEC may need certain permits in order to make
alterations to the dam that may be necessary for providing minimum flows.
Response: It is understood that the licensee must acquire any necessary permits from
TVA or any other appropriate agency, as may be required by local, state, or federal laws.
Comment: FWS commented that there is foraging habitat for the endangered Indiana bat
within the project boundary.
Response: We have revised the text to indicate this.
39
Comment: USFS commented that additional analysis of water quality and benthic
invertebrates should be conducted.
Response: We disagree. Staff believe that enough study and analysis of potentially
affected resources has been conducted. With additional flow in the bypassed reach of
Queen's Creek, habitat for aquatic and adjacent resources would improve. While certain
additional studies may provide interesting data, we do not believe that they would provide
data that is necessary for making a licensing decision. Therefore, we do not recommend
conducting additional studies or performing additional analysis. Further, the settlement
agreement indicates that NCWRC and the NCDENR are satisfied with the degree of
protection and enhancement recommended in the DEA.
Comment: USFS commented that until additional studies are conducted on "Forest
Service sensitive and forest concern species", it will not be able to make a determination
of consistency with its Nantahala/Pisgah Land and Resource Management Plan and will
not be able to provide final 4(e) conditions. FWS recommends that we require monitoring
consistent with the plan.
Response: Staff believe that improving aquatic and adjacent habitat in the project area
could not possibly have adverse effects on environmental resources. Therefore, it is
unclear how the recommended enhancements to habitat would be inconsistent with this or
any resource management plan.
Comment: USFS commented that the recommended habitat improvements should be
characterized as enhancements rather than protection of resources.
Response: We have changed the text.
Comment: USFS comments that the bypassed reach is on USFS land, as indicated on
"USA Tract No N-143p".
Response: The existing record in this proceeding indicates that no federal lands are
occupied by the project. The issue of project boundary and the USFS's authority under
4(e) is more properly addressed in any licensing decision.
40
ATTACHMENT 3
Settlement Agreement Modification
Queens Creek Hydroelectric Project
January, 2010
STATE OF NORTH CAROLINA
COUNTY OF MECKLENBURG
DUKE ENERGY CAROLINAS, LLC
SETTLEMENT AGREEMENT MODIFICATION
THIS SETTLEMENT AGREEMENT MODIFICATION ("Modification"), made and
entered into as of the ? 2' day of ` , 2010, by and between DUKE ENERGY
CAROLINAS, LLC, a limited liability comp?ganized and existing pursuant to the laws of
the State of North Carolina, with a place of business in Mecklenburg County, North Carolina
("Duke"), the NORTH CAROLINA DEPARTMENT OF ENVIRONMENT AND NATURAL
RESOURCES ("DENR"), and the NORTH CAROLINA WILDLIFE RESOURCES
COMMISSION ("WRC") (collectively "State Agencies"), (all referenced agencies and Duke
referred to individually as "Party" and collectively as "Parties"), provides as follows:
WITNESSETH
WHEREAS, Duke operates a hydroelectric power project on Queens Creek in Macon
County, North Carolina known as the Queens Creek Project (the "Project") pursuant to a New
License issued March 1, 2002, by the Federal Energy Regulatory Commission ("FERC") (FERC
Project No. 2694) and consisting primarily of:
a) A 37-acre reservoir (the "Reservoir") located approximately 1.5 miles upstream
of Queens Creek's confluence with the Nantahala River; and
b) An earth and rock fill dam (the "Dam") impounding the water in Queens Creek
and including a spill valve and a minimum flow release valve; and
c) A powerhouse (the "Station") located on the Nantahala River approximately 3
miles upstream from the river's confluence with Queens Creek and being supplied
with water from the Reservoir by a steel penstock extending from the Dam;
WHEREAS, construction of the Dam and creation of the Reservoir have created reduced
stream flow in the approximately 1.5-mile long section of Queens Creek between the Dam and
Queens Creek's confluence with the Nantahala River (the "Bypass");
WHEREAS, on September 27, 1999, Duke filed an application with FERC for renewal of
its license for the Project (the "New Liccnse");
WHEREAS, on October 1, 1999, Duke filed an application with the DENR for Water
Quality Certification pertaining to the New License pursuant to §401 of the Clean Water Act, as
amended;
WHEREAS, on November 16, 1999, the DENR issued Water Quality Certification
Number 3244 (the "Initial 401 Certification") for continued operation of the Project under the
New License;
WHEREAS, Duke filed a contested case petition (00 EHR 0043) challenging the Initial
401 Certification and subsequently withdrew its contested case petition pursuant to a Settlement
Agreement ("2000 Settlement Agreement") entered into by the Parties on October 25, 2000;
WHEREAS, pursuant to the 2000 Settlement Agreement (00 EHR 0043) on
November 30, 2000, the DENR issued a subsequent 401 Certification (the "Second 401
Certification") revising the Initial 401 Certification, which contains a provision by which the
Parties agreed that after five years of operations under the provisions thereof, Duke will confer
with the Parties to consider holding an informational meeting to review the operational history of
the 2000 Settlement Agreement to determine if any operational changes are needed and
agreeable to all the Parties;
AND WHEREAS, Duke has conferred with the Parties who have held an informational
meeting and have agreed to needed operational changes;
NOW, THEREFORE, IN CONSIDERATION of all other actions and undertakings as set
forth herein below, the Parties contract, settle and agree to amend the 2000 Settlement
Agreement only as follows:
Modified Paragraph 5 for the 2000 Settlement Agreement
A. (1) The existing Paragraph 5 "Minimum Flow in Queens Creek Bypass" of the
2000 Settlement Agreement is modified by replacing it in its entirety with the following
language:
5. The Parties agree that Article 402 of the New License for the Project should be
revised as follows:
The Licensee, except during low inflow periods as defined herein, shall release from a
minimum flow release valve installed at the base of the project's dam, a continuous
minimum flow of 2.0 cubic-feet-per-second (efs), as calibrated and metered at the valve,
during the period December 1 through May 31 and 1.0 cfs during the period June 1
through November 30 for the protection of fishery and other aquatic resources in the
reach of Queens Creek bypassed by the project.
During low inflow periods as defined herein, the Licensee shall follow in sequential
fashion the protocol set forth below regarding adjustments to minimum flow releases,
reservoir elevations, and generation levels and shall make the adjustments set forth below
on a weekly basis so as to equitably allocate the impacts of reduced water availability:
Settlement Agreement Modification Between Duke Energy Carolinas, LLC, the Page 2 of 9
North Carolina Department of Environment and Natural Resources, and the
North Carolina Wildlife Resources Commission
a) The Licensee shall reduce the normal minimum generation volume by 20%, fiom 36.5
acre-feet per calendar week to 29.2 acre-feet per calendar week, shall reduce the
continuous minimum flow releases specified above for the relevant time period by 20%
(i.e., down to 1.6 cfs for the period December 1 through May 31 and 0.8 cfs for the
period June 1 through November 30), and shall reduce the minimum reservoir level
limitation one additional foot below the lower reservoir elevation specified for the
relevant time period in Article 401 hereof for the duration of the low inflow period
(hereinafter the "first modified reservoir level band");
b) Upon a determination by the Licensee that the reservoir elevation cannot be
maintained within the first modified reservoir level band with the adjustments in a)
above, the Licensee shall reduce the minimum generation volume by an additional 15%
(down to approximately 23.7 acre-feet per calendar week), shall reduce the continuous
minimum flow release specified herein for the relevant time period by an additional 15%
(i.e., down to approximately 1.3 cfs for the period December 1 through May 31 and
approximately 0.65 cfs for the period June 1 through November 30), and shall reduce the
minimum reservoir level limitation one additional foot below the lower elevation of the
first modified reservoir level band for the duration of the low inflow period (hereinafter
the "second modified reservoir level band");
c) Upon determination by the Licensee that the reservoir elevation cannot be maintained
within the second modified reservoir level band with the adjustments in b) above, the
protocol preceding establishment of the first and second modified reservoir level bands as
specified above shall be repeated, with the Licensee reducing minimum generation
volumes and continuous minimum flow releases in increments of 10%, along with one
foot incremental reductions in the minimum reservoir level limitation of the second
modified reservoir level band, until inflow has increased to a point where the reservoir
level has been restored to within the reservoir elevation limits for the relevant time period
specified in Article 401 hereof.
For purposes of this Article: the term "calendar week" means Monday through Sunday;
the term "normal minimum generation volume" means 36.5 acre-feet of water used per
calendar week to generate electricity at the project; the term "low inflow period" means
any period following a calendar week when that week's inflow to the reservoir could not
maintain the reservoir's elevation above elevation 2,893.0 feet MSL for the period May 1
through October 31 or elevation 2,888.0 feet MSL for the period November 1 through
April 30 if the Licensee had provided the continuous minimum flow release for the
relevant time period specified herein and used no more than the normal minimum
generation volume. Any adjustments required by this Article will be made at the
beginning of the calendar week (Monday) following the determination that a low inflow
period exists.
Whenever the Licensee at any time during the period May 1 through October 31 reduces
the elevation of the reservoir to below elevation 2,888.0 feet MSL after following the
Settlement Agreement Modification Between Duke Energy Carolinas, LLC, the Page 3 of 9
North Carolina Department of Environment and Natural Resources, and the
North Carolina Wildlife Resources Commission
above-specified protocol and not because of planned drawdowns for maintenance or
inspection purposes or operating emergencies beyond the control of the Licensee, it shall
notify the North Carolina Department of Environment and Natural Resources (DENR),
Division of Water Quality, Central Office, the DENR, Division of Water Resources and
the North Carolina Wildlife Resources Commission (WRC) and other agencies (United
States Fish and Wildlife Service (USFWS) and United
States Forest Service (USFS)) as soon as possible, but no later than 10 days after each
such incident, and shall attend any meeting convened thereafter to discuss reasonable and
desirable options for addressing the low inflow conditions that caused the reservoir
elevation to be reduced below elevation 2,888.0 feet MSL; provided, however, that no
changes in the low inflow protocol provided for herein may be made without the prior
approval of the Commission."
(2) There are no other changes to the 2000 Settlement Agreement.
Revised 401 Certification and Amendment to FERC License
B. Within 30 days following the date of the last signature affixed to this
Modification, Duke will apply for a 401 Certification (the "Third 401 Certification") with terms
as required by the terms of this Modification. This Third 401 Certification may, in DENR's
discretion, be in the form of an amendment to the Second 401 Certification or a separate 401
Certification.
C. The Parties agree that the provisions in modified Paragraph 5 of the 2000
Settlement Agreement as noted above are to be incorporated into an amendment of the New
License for the Project.
D. Duke shall file a request for FERC approval of an amendment (the "License
Amendment") to the New License for the Project incorporating the agreements described in
modified Paragraph 5 of the 2000 Settlement Agreement as noted above no later than 60 days
following issuance by DENR of the Third 401 Certification, except as allowed in Paragraph E.
E. In the event that either the Third 401 Certification issued by DENR or the License
Amendment issued by the FERC materially alters the provisions referenced in modified
Paragraph 5 of the 2000 Settlement Agreement as noted above, any Party may terminate this
Modification with thirty days written notice to all Parties, at which point the 2000 Settlement
Agreement as originally written, without this Modification, will govern the agreement among the
Parties; provided however, a Party's right to terminate this Modification shall cease once both
the Third 401 Certification and the License Amendment are final and no longer subject to appeal.
If any Party intends to exercise its right to terminate this Modification, it shall consult with the
other Parties first, and discuss in good faith any means for amending the Third 401 Certification
or the License Amendment to conform it more closely to the modified Paragraph 5 of the 2000
Settlement Agreement as noted above.
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North Carolina Department of Environment and Natural Resources, and the
North Carolina Wildlife Resources Commission
F. The State Agencies agree that the terms of this Modification address their
concerns regarding continued operation of the Project under the New License and therefore that
they (a) will support issuance of the License Amendment that is consistent with the terms of this
Modification and (b) will not, as a part of these license amendment proceedings, communicate to
the FERC, to any other federal, state or local government entity or any other organization or
individual any comments, conditions, recommendations or prescriptions that are inconsistent
with the terms of this Modification or the 2000 Settlement Agreement or that if followed or
adopted by the FERC as part of the New License would reduce the economic value of the Project
to Duke. However, notwithstanding any other provision of this Modification, DENR shall not be
subject to any obligation that would infringe upon or in any way alter its rights, duties and
responsibilities under Clean Water Act §401 and implementing State statutes and rules.
G. This Modification does not grant or affirm any property right, license or privilege
in any waters or any right of use in any waters. This Modification does not authorize any person
to interfere with the riparian rights, littoral rights or water use rights of any other person. No
person shall interpose this Modification as a defense in any action respecting the determination
of riparian or littoral rights or other water use rights.
H. This Modification is a compromise of diverse interests. The actions taken
hereunder are not to be construed as any admission of liability on the part of any settling Party,
including its agents, representatives, attorneys or employees, as to all of whom liability is
expressly denied.
1. This Modification and the 2000 Settlement Agreement jointly together contain the
entire agreement between the Parties. The terms of this Modification are contractual and not
mere recitals.
J. This Modification and the 2000 Settlement Agreement shall not be modified or
amended except by an instrument in writing signed by all of the Parties or their successors in
interest.
K. This Modification may be executed in separate counterparts, with each
counterpart deemed to be an original having the full force and effect thereof.
L. This Modification and the 2000 Settlement Agreement shall be governed by and
interpreted under the laws of the State of North Carolina. If any part of the terms of this
Modification is adjudged to be contrary to law by a court of competent jurisdiction, such terms
shall in all other respects be and remain legally effective and binding to the fullest extent
permissible. All actions and proceedings brought by any Party against any other Party must be
litigated in courts or other appropriate forums located in the State of North Carolina. The Parties
agree that such forums are convenient forums and irrevocably submit to the personal jurisdiction
of such forums, except that the State of North Carolina does not by entering into this
Modification waive sovereign immunity or any other immunity and the State waives such
defenses, if at all, only to the extent required by law.
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North Carolina Department of Environment and Natural Resources, and the
North Carolina Wildlife Resources Commission
M. This Modification shall not create any right in any individual or entity that is not a
Party or in the public as a third-party beneficiary. This Modification shall not be construed to
authorize any such third party to maintain a suit in law or equity under this Modification.
N. Nothing in this Modification shall be construed as obligating any state agency to
expend in any fiscal year any sum in excess of appropriations made by the North Carolina
General Assembly or administratively allocated for the purpose of this Modification for the fiscal
year or to involve any state agency in any contract or obligations for the future expenditure of
money in excess of such appropriations or allocations.
0. Nothing in this Modification shall be construed as requiring or involving the
delegation by any state agency to any other body of any authority entrusted to it by the North
Carolina General Assembly.
P. Nothing in this Modification shall restrict in any way any State agency in
complying with and exercising its responsibilities and obligations under the State Public Records
Law, N.C. Gen. Stat. §132-1 et seq. or similar laws.
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North Carolina Department of Environment and Natural Resources, and the
North Carolina Wildlife Resources Commission
DUKE ENERGY CAROLINAS, LLC
By:
?t.?--?? • tom---- >
Steven D. Jester
Vice President
Hydro Strategy, Licensing and Lake Services
Date: 1 0
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North Carolina Department of Environment and Natural Resources, and the
North Carolina Wildlife Resources Commission
N.C. DEPARTMENT OF ENVIRONMENT AND
NATURAL RESOURCES
By:
Dee Freeman
Secretary

Date:
N.C. WILDLIFE RESOURCES COMMISSION
By:
Gordon Myers
Executive Director
Date: Z$ J'W 20 ? C)
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North Carolina Department of Environment and Natural Resources, and the
North Carolina Wildlife Resources Commission