Desert Pumped Storage, LLC, 15030-000

CourtFederal Energy Regulatory Commission
Citation177 FERC ¶ 61, 104
Decision Date18 November 2021
PartiesDesert Pumped Storage, LLC
Docket Number15030-000

177 FERC ¶ 61, 104

Desert Pumped Storage, LLC

No. 15030-000

United States of America, Federal Energy Regulatory Commission

November 18, 2021


Before Commissioners: Richard Glick, Chairman; James P. Danly, Allison Clements, and Mark C. Christie.

ORDER ISSUING PRELIMINARY PERMIT AND GRANTING PRIORITY TO FILE LICENSE APPLICATION

1. On April 27, 2020, as supplemented September 1, 2020, Desert Pumped Storage, LLC (Desert Pumped Storage or applicant) filed an application for a preliminary permit, pursuant to section 4(f) of the Federal Power Act (FPA), [1] to study the feasibility of the 100-megawatt (MW) SilverKing 2 Energy Storage Project (SilverKing 2 Project or project). The project would be located at the existing Carlota open pit mine in Gila County, Arizona. For the reasons discussed below, we are issuing a preliminary permit to Desert Pumped Storage.

1. Proposal

2. As proposed, the SilverKing 2 Project would consist of the following new facilities: (1) a 33-foot-high dam with a crest length of 9, 780 feet, creating a 2, 047 acre-foot upper reservoir with a maximum surface elevation of 1, 499 feet above mean sea level; (2) two 3, 329-foot-long, 10-foot-diameter steel penstocks that would connect the upper and lower reservoirs after passing through the powerhouse; (3) a powerhouse to be located near the afterbay with an approximate elevation of 1, 210 feet above mean sea level with four 25-megawatt generator units and a total installed generation capacity of 100 megawatts; (4) an approximately 100-foot-long, 14-foot-diameter low pressure draft tube and tailrace between the powerhouse and the lower reservoir; (5) a 98-foot-high, 3, 273-foot long dam, creating a 1, 846 acre-foot lower reservoir, to be located in an existing waste rock dump of the Carlota mine, with a maximum surface elevation of 1, 210 feet above mean sea level; (6) a substation located adjacent to the lower reservoir; (7) an approximately 500-foot-long, 230-kilovolt primary transmission line from the new

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substation to existing transmission lines owned by Salt River Project Agricultural Improvement and Power District; and (8) appurtenant facilities. Desert Pumped Storage plans to source initial fill water from the pit mine and from purchases from existing water rights holders. The estimated average annual generation of the SilverKing 2 Project would be 400 gigawatt-hours. Desert Pumped Storage requests a permit term of 36 months.[2]

II. Notice, Interventions, and Comments

3. On March 11, 2021, the Commission issued public notice of the permit application, establishing a deadline of May 10, 2021, for filing comments, interventions, and competing applications. Notice of the application was published in the Federal Register on March 17, 2021.[3]

4. The U.S. Department of Agriculture, on behalf of the Forest Service, filed a timely notice of intervention. The Salt River Project Agricultural Improvement and Power District (Salt River) filed a timely, unopposed motion to intervene. Carlota Copper Company (Carlota) filed a timely, unopposed motion to intervene and comments in opposition to the permit. Timely, unopposed motions to intervene are granted by operation of Rule 214 of the Commission's regulations.[4]

III. Discussion

5. Section 4(f) of the Federal Power Act authorizes the Commission to issue preliminary permits for the purpose of enabling prospective applicants for a hydropower license to secure the data and perform the acts required by section 9 of the FPA, [5] which in turn sets forth the material that must accompany an application for license. The purpose of a preliminary permit is to preserve the right of the permit holder to have the first priority in applying for a license for the project that is being studied.[6] Because a

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preliminary permit is issued only to allow the permit holder to investigate the feasibility of a project while the permittee conducts investigations and secures data to determine the feasibility of the proposed project and to prepare a license application, it grants no land-disturbing or other property rights.[7] Further, preliminary permit conditions have been framed to ensure that the permittee does not tie up a site without pursuing, in good faith, a study of the project's feasibility.[8]

A. Comments Regarding Site Access

6. The Forest Service notes the proposed project may impact National Forest System land and resources within Tonto National Forest.[9] It emphasizes that, while it does not object to issuance of a preliminary permit, any preliminary studies must be evaluated for compliance with the Tonto National Forest management plan. The Forest Service further states that the applicant will need a special use authorization prior to undertaking any ground disturbing activities.[10] The Forest Service also notes that it is processing an application for, but has not yet issued, a special use authorization for Carlota to construct a solar power generation facility within the area of the permit application.[11]

7. Carlota, owner and operator of the Carlota Mine, states that the project is at odds with the operation, reclamation, and remediation of the mine and that it does not intend to grant Desert Pumped Storage rights of access.[12] Carlota objects to the issuance of the permit because Carlota believes the proposed project would be incompatible with current and future mining operations.

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8. A permit applicant is not required to have access rights to a project site as a condition of receiving a preliminary permit, and a preliminary permit does not grant a right of entry onto any lands.[13] A permittee must obtain any necessary authorizations and comply with any applicable laws and regulations to conduct field studies.

9. The Commission has previously issued preliminary permits where the proposed project would be built on land controlled by parties unlikely to grant access to a holder of a preliminary permit.[14] The Commission, however, has denied applications for a preliminary permit "where licensing of the project to be studied is clearly statutorily precluded, because no purpose would be served by issuing a permit for a proposed development that could not be licensed."[15] Carlota does not assert that licensing of the proposed proposal is barred by statute. We note, however, that when a permittee initiates the pre-filing consultation process to prepare a license application, lack of access to the project site for studies could hinder the preparation of an adequate application. Further, in the course of reviewing any license application, we would carefully review potential land use conflicts such as those raised by Carlota in considering whether to authorize the proposed project.

B. Comments on...

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