Who Owns Conowingo?

Conowingo Dam
Conowingo is owned and operated by the Chicago-based Exelon Corporation, an electric and gas utility that reported $80 billion in assets and $24.9 billion in operating revenues in 2013. Exelon acquired Baltimore’s Constellation Energy (parent company of Baltimore Gas and Electric) in 2012, and is currently seeking regulatory approval for a merger with Pepco, which would give Exelon control of more than 80% of the power market in Maryland]. Exelon also owns the Muddy Run pumped storage facility, which uses excess power on the grid to pump water out of the Susquehanna River just upstream of Conowingo Dam, releasing it back into Conowingo’s reservoir later to generate electricity when the demand for power is highest. Muddy Run has its own set of environmental problems, most notably the significant impact on fish that cannot safely migrate past the powerhouse where its turbines pump water out of and discharge water back into the river.

Exelon cannot operate the Conowingo Dam without a license from the Federal Energy Regulatory Commission (FERC). FERC licenses last from 30-50 years and contain conditions that govern every aspect of a hydropower facility’s operations, from power generation to public safety to environmental protection to recreation. Exelon’s current license for the Conowingo was issued on August 14, 1980 and expired in September 2014. Exelon is now operating the dam on a temporary annual license. Exelon has filed an application with FERC for a renewed long-term federal license. This federal relicensing offers us a once-in-a-generation opportunity to renew the health of the lower Susquehanna River and the Chesapeake Bay. A renewed license will dictate every aspect of the facility’s operations for the next 30 to 50 years, providing us with a rare opportunity to repair Conowingo’s environmental damage.

Exelon’s License Application

Federal law requires FERC to make a relicensing decision that balances Conowingo’s hydropower production with all of the other uses of the lower Susquehanna River. Conowingo’s hydroelectric turbines are capable of generating up to 574.5 MW of electricity (a little less than 1.5% of Exelon’s total U.S. generating capacity), and produce about 1.8 million megawatt-hours of power each year. Conowingo also provides drinking water for Baltimore and the Chester Water Authority, and water behind the dam is used to cool Exelon’s Peach Bottom Atomic Power Station. As part of the relicensing, FERC must balance these uses with the ecological needs of the lower Susquehanna River and the Chesapeake Bay. It must also demonstrate that its license is consistent with state and federal comprehensive plans like those designed to restore the Susquehanna River’s fisheries or clean up the Chesapeake Bay.

Exelon filed a license application with FERC on August 31, 2012, requesting a new 46-year license. In its application, Exelon proposed to operate Conowingo much as it has for the past 34 years since it got its last FERC license, with only a very modest investment in addressing Conowingo’s environmental impacts. Exelon proposed to invest far less in fish passage than agencies like the U.S. Fish and Wildlife Service and the Maryland Department of Natural Resources have indicated is necessary to fix Conowingo’s problems. Exelon proposed to invest nothing in addressing the impacts of the dam’s power operations on flows and aquatic habitat for fish and other species – like the threatened bog turtle – that live downstream of the dam. And, incredibly, Exelon has proposed to spend only $16,700 each year to address sediment behind Conowingo Dam.

The environmental measures proposed in Exelon’s license application and in FERC staff’s proposed license conditions do not involve Exelon giving back a fair portion of its revenue to fix Conowingo’s damage to the Lower Susquehanna River and the Chesapeake Bay. FERC explicitly rejected many of the conditions recommended by state and federal resource agencies that were designed to protect the Susquehanna River and the Lower Chesapeake Bay, saying that these environmental benefits are not worth the additional costs. However, in its Draft Environmental Impact Statement, FERC estimates the annual cost of the least-cost alternative for power to be between $17-18 under Exelon’s proposal and FERC staff’s alternative. So while Exelon’s modest proposed investment in Conowingo ignores the expertise of state and federal agencies and would fail to address Conowingo’s environmental problems, the company will still save between $17 and $18 a Megawatt-hour (roughly $31-32 million each year) by using the Susquehanna River – a resource owned by the public, not the power company – to generate hydropower at Conowingo instead of using power from the next lowest-cost source.

FERC’s proposed license conditions do not reflect “balance,” and will not do enough to restore the Susquehanna River and Chesapeake Bay. FERC has failed to protect the public interest.

The Road to a New License for Conowingo

Even though Exelon’s license expired in September of 2014, it could be several years before Exelon secures a new long-term license. FERC is required by federal law to issue a temporary “annual license” each year, allowing the dam to continue to operate under the terms of conditions of its old license while the regulatory process is completed. Several things must happen before FERC can grant Exelon a new long-term license to operate the Conowingo Dam:

First, State and Federal Agencies must submit modified recommendations and conditions within 60 days of the Draft Environmental Impact Study (DEIS) comment deadline (the end of November). FERC must then issue a Final Environmental Impact Statement (FEIS). While FERC’s schedule has it issuing the FEIS by February of 2015, several agencies and other stakeholders have asked FERC to wait until other critical studies are finished before completing this document.

Second, Maryland must certify that the project will meet state water quality standards. The federal Clean Water Act prohibits FERC from issuing a new license to Exelon until Maryland issues this important certification. Exelon submitted an application for a water quality certification in early 2014. After Maryland indicated late in 2014 that it would deny Exelon’s application for certification, Exelon withdrew its application. Exelon refiled its application on March 3, 2015. Maryland now has a 1-year deadline to act that expires in March of 2016. However, Maryland can request that Exelon withdraw an incomplete application and resubmit it, extending that deadline by another year. Maryland has already requested that Exelon perform an additional 2-year water quality study, and Exelon has agreed. Exelon must provide other information that is necessary to evaluate Conowingo’s impacts on water quality.

Once Maryland has given Exelon a Water Quality Certification, FERC staff must prepare a license order and the FERC Commissioners must approve and issue it. FERC does not provide a schedule or deadlines for either of these steps.

Maryland’s authority under the Clean Water Act offers a historic opportunity for the Susquehanna River and the Chesapeake Bay. FERC must adopt all of the conditions in Maryland’s Water Quality Certification. Maryland can accomplish what FERC seems unwilling to do: hold Exelon accountable for Conowingo’s environmental damage and improve the health of the Susquehanna River and Chesapeake Bay.