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Friday, April 18, 2008

Here's a closer look at relicensing

If a new license is denied, Appalachian Power will seek $565 million in damages, although a company spokesman said he doesn't expect that to happen.

After several years of research and studies, Appalachian Power filed its relicensing application to Federal Energy Regulatory Commission (FERC) to continue operating the Smith Mountain Project last month. The application comes as Appalachian's original 50-year license, issued in 1960, is set to expire in March 2010.

John Shepelwich, spokesperson for Appalachian Power, said a core group of about six people put together the application, which totals around 1,500 pages. It was written using recommendations from studies procured by outside sources and American Electric Power employees with varying fields of expertise.

"And I think you can't overlook either the contributions that are made to this by the public and interested parties and state agencies," said Shepelwich. "All those people have expertise and have opinions and have ideas."

FERC's licensing process has and continues to allow public input via e-mail and letters.

The application to operate Smith Mountain Project, a hydroelectric powerhouse consisting of Smith Mountain and Leesville dams, was written in a format required by FERC. It includes the history of the project, an explanation of how it works, the project's value and management plans that cover the spectrum from erosion and sedimentation to navigation aids and water quality.

"You could pick it up pretty much anywhere and find something interesting," said Shepelwich.

Two things area residents won't find, however, are Volumes III and V of the application. In a cover letter to FERC, Appalachian requested Volume III: Project Drawings and Volume V: Cultural Resources "be exempt from the mandatory public disclosure requirements of the Freedom of Information Act and should be withheld from public disclosure."

Shepelwich said Appalachian made the request to protect the security of the dam and the historical artifacts located within the project's boundaries.

"There are issues that we certainly have to be aware of and sensitive to, one of them of course is the security of the dam," he said, in reference to Volume III. "We try to accommodate people's interests ... But certainly I hope everyone understands the security requirements we have to deal with."

The volume on historical resources, said Shepelwich, contains detailed information about historical relics and locations within the project's boundaries. He said Appalachian requested the information be withheld from public view to ensure those areas would be undisturbed, safeguarding the resources for future educational purposes.

According to the application, the fair value of the Smith Mountain Project is $593 million. The net investment, as of Dec. 31, 2006 was estimated at $47,210,017. Severance damages, should Appalachian not receive a new license, also are included.

"The calculation of severance damages assumes that takeover of the project would occur upon expiration of the license in 2010," reads the application. "The total amount due Appalachian in case of takeover as of 2010 for net investment not exceeding fair value plus severance is estimated to be $565,000,000."

But Shepelwich said Appalachian and parent company American Electric Power employees are confident about the application.

"I think everyone feels pretty good about it," he said. "We've taken a lot of input ... and we've tried to work them in where we can to make sure we protect the facility, make sure that we allow access by everyone possible, but also make sure we protect the primary purpose of it, which is to produce electricity."

But Appalachian and AEP employees aren't resting at this point in the application process. The companies are working on relicensing applications for the Claytor Lake Project and a few smaller projects in West Virginia. The Smith Mountain Project, however, is the largest and most time-consuming of the lot.

"It's a sizable amount of time and energy and effort," said Shepelwich. "When you consider the scope of the project and how many people it touches -- as a generator, as a facility, as a homeplace, as a recreational location, as a workplace for many people -- then you understand the importance of the project and how much it takes to put into this effort."

To read the application, visit www.smithmtn.com.

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