Renewable Energy Jurisdictional Accord Facilitates Future Offshore Energy Projects

March 18, 2009


On March 17, 2009, Ken Salazar, the Secretary of the U.S. Department of the Interior (“DOI”), and Jon Wellinghoff, the Acting Chairman of the Federal Energy Regulatory Commission (“FERC”), issued a joint statement announcing that the two agencies have reached an accord resolving their nearly four year jurisdictional dispute over renewable energy projects located in the Outer Continental Shelf (e.g., those submerged lands, subsoil and seabed lying between the seaward extent of the states’ jurisdiction and the seaward extent of federal jurisdiction[1]). Under the accord, DOI, acting through the Minerals Management Service (“MMS”), will assert primary jurisdiction over wind power projects located offshore beyond state waters, while FERC will have primary authority over the licensing and management of wave, tidal and ocean current projects within the same territory.

The source of the dispute between FERC and DOI stemmed from FERC’s assertion of jurisdiction over hydropower projects located on “navigable waters” of the U.S. under the Federal Power Act and DOI’s contention that the Energy Policy Act of 2005 gave MMS authority to grant leases, easements and/or rights-of-way for energy activities on the Outer Continental Shelf. The federal agencies’ joint statement resolves this ongoing dispute by apportioning the primary jurisdictional authority over wind power development and hydropower projects to DOI and FERC, respectively.

This longstanding dispute had left potential developers of offshore wind power and hydropower projects in limbo due to uncertainty over what regulations would apply and what agency would oversee alternative energy projects in federal waters. The resolution between FERC and DOI will provide a clearer path to developers so they can begin to harness the estimated 900,000 megawatts (roughly equal to the current installed U.S. electrical capacity from all sources) available from wind power and hydropower projects located on the Outer Continental Shelf.

Currently, no rules or regulations are in place memorializing this division of power, but both FERC and DOI are working together to prepare a short Memorandum of Understanding setting forth the main points of agreement and the process by which permits and licenses related to renewable energy resources on the Outer Continental Shelf will be developed.

1 See 43 U.S.C. § 1331 et seq