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UNITED STATES OF AMERICA 86 FERC ¶61,230

FEDERAL ENERGY REGULATORY COMMISSION


Before Commissioners: James J. Hoecker, Chairman;

Vicky A. Bailey, William L. Massey,

Linda Breathitt, and Curt Hébert, Jr.

Southern California Edison Company ) Project No. 1390-001

ORDER ISSUING NEW LICENSE


(Issued March 3, 1999)
Southern California Edison Company (Edison) has filed an application, 1 pursuant to Sections 4(e) and 15 of the Federal Power Act (FPA), 2 for a new license to continue to operate and maintain the 3-megawatt (MW) Lundy Project, located on Mill Creek in Mono County, California, partly on land in the Inyo National Forest and on land administered by the U.S. Department of the Interior's Bureau of Land Management (BLM). 3 Edison proposes no new capacity or construction.
I. BACKGROUND
Notice of Edison's relicense application was published on May 24, 1982. 4 Joseph M. Keating filed a timely motion to intervene. / Untimely motions to intervene were filed by California Sportfishing Protection Alliance and by Mono Lake


Committee. We are granting the late motions, since the interventions will neither delay nor disrupt the proceeding. /
The Commission staff, the U.S. Forest Service, and BLM jointly prepared an Environmental Assessment (EA), which was issued on February 28, 1992. / The EA, which is attached to this order, contains background information, analysis of impacts, discussion of concerns raised by intervenors, protesters, and other interested entities, and the basis for a finding of no significant impact on the environment. All comments have been fully considered in determining whether, and under what conditions, to issue this license.
II. PROJECT DESCRIPTION
Lundy Dam, which impounds the 132-acre Lundy Lake, is a 33-foot-high and 690-foot-long earth and rockfill structure located on Mill Creek 7 miles upstream of where the creek enters Mono Lake. / Water diverted from Mill Creek at the dam is transported through a 12,000 foot-long pipeline and a 3,000 foot-long penstock to the project powerhouse. Water discharged from the powerhouse tailrace enters a ditch, called Wilson Creek, which, like Mill Creek, empties into Mono Lake. The tailrace water can also be put back in Mill Creek (at a point some 4 miles upstream Mono Lake) through what is known as the Mill Creek return ditch.
Tailrace flows from the project powerhouse have historically flowed down Wilson Creek to satisfy the water right holders along that creek, notably the Conway Ranch. When necessary to satisfy


senior water rights on Mill Creek, flows are redirected into the Mill Creek return ditch.
III. APPLICANT'S PLANS AND CAPABILITIES
In accordance with Sections 10(a)(2)(C) and 15(a) of the FPA, / we have evaluated Edison's record as a licensee with respect to the following: (1) consumption efficiency improvement program; (2) compliance history and 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 services; (7) cost effectiveness of plans; and (8) actions affecting the public.
1. Consumption Efficiency Improvement Program
Edison's efforts to conserve electricity include: (a) using all the energy generated by the projects in its system; (b) encouraging its customers to conserve energy; (c) maintaining extensive ongoing programs to reduce system peak demand; and

(d) promoting and implementing state building and appliance standards, supply and demand-side management programs, public energy programs, and electric utility system improvements. Edison's efforts meet the statutory requirements of the California Energy Commission and conform to that body's recommendations on conservation. We conclude that Edison is making satisfactory good-faith efforts to conserve electric energy.


2. Compliance History and Ability to Comply with

the New License
We have reviewed Edison's license application in order to judge Edison's ability to comply with the conditions of any license issued and with applicable provisions of Part I of the FPA. We have also reviewed Edison's record of compliance with the Commission's requirements under its prior license. Our review shows that Edison has made a satisfactory record of filing submissions in a timely manner and of generally complying with the terms of its existing license. We conclude that Edison will be able to provide the resources and experience necessary to carry out its plans and comply with all articles, terms, and conditions of the new license and other provisions of Part I of the FPA.


3. Safe Management, Operation, and Maintenance of the Project
We have reviewed Edison's management, operation, and maintenance of the project pursuant to the requirements of the Commission's regulations, 18 C.F.R. Part 12, and the associated Engineering Guidelines, including all applicable safety requirements, such as warning signs and boat barriers, Emergency Action Plan, and Independent Consultant's Safety Inspection Report. We conclude that the project is being safely managed, operated, and maintained.
4. Ability to Provide Efficient and Reliable

Electric Service
Edison distributes its monthly generation plans to its inter-company departments and informs agencies not involved in power generation of the water releases. We conclude that Edison has demonstrated the ability to provide efficient and reliable electric service.
5. Need for Power
Edison's operation of the 3-MW Lundy Project under the requirements of this license will result in an estimated annual net energy production of 6.9 gigawatt-hours (GWh) of renewable energy. The Lundy Project helps meet a small part of Edison's total generation requirements, and displaces some fossil-fueled generation.
6. Transmission Services
The primary transmission line for the Lundy Project extends 15 feet from the project generator through the voltage transformer bank to interconnect with Edison's system at the Lundy substation. Edison proposes no new power development at the project and contemplates the continued use of the project's low-cost energy on its system. Edison's electrical system is designed to function so that no significant operational or circuit-loading impacts would occur with the project out of service. The project's principal benefit to Edison is the project's close proximity to the load it serves. Such proximity minimizes electrical losses and improves area system efficiency. We conclude that the existing transmission system is adequate, and that licensing the project to continue operations will have no significant effect on the existing or planned transmission system.



7. Cost-Effectiveness of Plans
Edison does not propose any modifications to the project.

We conclude that the project, as constructed and as Edison proposes to operate it, fully develops and uses the hydropower potential of the site.


8. Actions Affecting the Public
The Lundy Project generates electricity that is used to serve Edison and power customers. The project also provides employment and opportunities for a limited amount of recreational fishing. We conclude that continued operation of the project will therefore benefit the public.
IV. WATER QUALITY CERTIFICATION
Under Section 401(a)(1) of the Clean Water Act (CWA), / the Commission may not issue a license for a hydropower project unless the state certifying agency has issued water quality certification for the project or has waived certification by failing to act on a request for certification within a reasonable time, not to exceed one year.
By letter dated November 4, 1981, Edison filed a request for water quality certification for the Lundy Project with the California Regional Water Quality Control Board. By letter to Edison dated December 13, 1983, the Control Board confirmed that it had reviewed the request for certification and had not acted upon it. Certification for the project has therefore been waived.
V. PROJECT IMPACTS ON THREATENED OR ENDANGERED SPECIES
In 1991, the U.S. Fish and Wildlife Service (FWS) stated that only the threatened bald eagle occurred in the project area. By letter dated November 18, 1997, FWS provided the Commission with an updated list of threatened or endangered species that may occur in the vicinity of the Lundy Project. The updated list contained the threatened bald eagle, which the 1992 EA concluded the Lundy Project would not affect, / and the endangered American peregrine falcon, which the EA did not discuss but which is discussed below.


Peregrine falcons are frequently observed in bird surveys of Mono Lake, downstream of the project. However, we conclude that relicensing the Lundy Project will not affect any peregrine falcon use, now or in the future, of areas near the project for nesting. We believe it unlikely that any falcons that might nest in the area will be disturbed by the minor, short-term noise that will accompany work that is required by the new license: erosion stabilization near the powerhouse and the development of recreational facilities at the dam and along Mill Creek. We also conclude that the project's transmission line, which extends only 15 feet from the powerhouse, does not constitute an electrocution hazard for peregrine falcons and bald eagles. In summary, we conclude that relicensing the project will not affect the endangered peregrine falcon or threatened bald eagle.
VI. SECTION 4(e) FINDINGS AND CONDITIONS
Section 4(e) of the FPA / provides that the Commission may issue a license for a project located on a federal reservation only after a finding that the license will not interfere or be inconsistent with the purpose for which the reservation was created or acquired. /
The Inyo National Forest was created by presidential proclamation issued May 25, 1907. / At the time, the Organic Administration Act of 1897 stipulated that all national forest lands were established and administered only for watershed protection and timber production. / We find that this license will not interfere or be inconsistent with the purposes for which the Inyo National Forest was created. /

FPA Section 4(e) also requires that Commission licenses for projects located within United States reservations include all conditions that the Secretary of the department under whose supervision the reservation falls shall deem necessary for the adequate protection and utilization of such reservation.
Pursuant to Section 4(e), the Forest Service filed on May 18, 1992, / 11 conditions (See Appendix A to this order) to be included in any new license for the Lundy Project. / In June 1992, Edison appealed these conditions to the Forest Service. That appeal remains pending. Ordering Paragraph D of this order therefore reserves Commission authority to amend the license as appropriate in light of the Forest Service's ultimate disposition of Edison's appeal.


There are however three Forest Service conditions that do not qualify for Section 4(e) status. The first is Condition 1, which requires Edison to obtain a Forest Service special-use authorization for the project's occupancy and use of National Forest lands. The Forest Service submitted its Section 4(e) conditions before passage of the Energy Policy Act of 1992. / Section 2401 of that act amended Section 501 of the Federal Land Policy and Management Act of 1976 (FLPMA) / to add a new subsection (d), which grandfathers hydropower projects that did not have such special use authorizations prior to enactment of the Energy Policy Act of 1992. / The Lundy Project has not previously received a permit, right-of-way, or other approval under Section 501 of FLPMA, and this relicensing proceeding does not involve the use of any additional public or National Forest lands. Therefore, we are barred by the Energy Policy Act from requiring Edison to obtain a special use authorization, and Condition 1 cannot be a part of this license. /
The second provision is the first paragraph of Forest Service Condition 5, which requires Edison to release into Mill Creek a continuous minimum flow of 7 cubic feet per second (cfs) or natural inflow into Lundy Lake, whichever is less. However, since Condition 5 requires a minimum flow release at Lundy Dam, which is on non-federal land, paragraph 1 of Condition 5 does not qualify as a mandatory condition under FPA Section 4(e). /
We considered the Forest Service's proposed 7 cfs minimum flow pursuant to the broad public interest standard of FPA Section 10(a)(1). / That consideration is set forth in the next section of this order.


Finally, Condition 6 requires Edison to monitor riparian and aquatic habitat at a downstream location within the Inyo National Forest but outside of the project boundary for the purpose of analyzing the effects on riparian and aquatic habitat of the mandated minimum flows. Since this involves monitoring outside of the project boundary, Condition 6 is not a Section 4(e) condition. However, we require minimum flow and riparian resource monitoring; see license Articles 412 and 415, respectively.
VII. RECOMMENDATIONS OF FEDERAL AND STATE FISH AND WILDLIFE

AGENCIES AND THE SECTION 10(j) PROCESS


Section 10(j)(1) of the FPA / requires any license issued under Part I of the FPA to include conditions based upon recommendations of federal and state fish and wildlife agencies, submitted pursuant to the Fish and Wildlife Coordination Act, / to "adequately and equitably protect, mitigate damages to, and enhance, fish and wildlife (including related spawning grounds and habitat)" affected by the project.
If the Commission believes that any such recommendation may be inconsistent with the purposes and requirements of Part I of the FPA or other applicable law, Section 10(j)(2) requires the Commission and the agencies to attempt to resolve any such inconsistency, giving due weight to the recommendations, expertise and statutory responsibilities of such agencies. If the Commission then does not adopt a recommendation, it must explain how the recommendation is inconsistent with applicable law and how the conditions selected by the Commission adequately and equitably protect, mitigate damages to, and enhance fish and wildlife.


The license contains conditions consistent with the California Department of Fish and Game's (Cal Fish and Game) recommendations that Edison develop an annual water management plan based upon the annual snowpack forecast, and install and maintain stream gages to measure inflows to Lundy Lake and instream flows at appropriate locations, and release flushing flows at outlet works at Lundy dam. / The one Cal Fish and Game recommendation that is not adopted herein concerns minimum instream flows to be released into Mill Creek from Lundy Dam, as is discussed next.
Mill Creek flows are greatest from April through August. / Downstream of the Lundy Project diversion, irrigation ditches divert a substantial amount of water from the stream. / The original project license imposed no minimum instream flow requirement. Edison has been voluntarily releasing (except in winter) 2 cfs into Mill Creek at a point 1/4 mile below the dam. / Edison proposes to release 2 cfs year-round.
Cal Fish and Game recommended that Edison release from Lundy Dam a continuous minimum instream flow of 12 cfs or the natural inflow to Lundy Lake, whichever is less, on behalf of the aquatic and riparian ecosystem in Mill Creek from Lundy Dam to Mono Lake. The only fishery resident in the creek is brown trout. /


Based on the Instream Flow Incremental Methodology (IFIM) study conducted by Edison, Commission staff found / that, in the reach of Mill Creek between the sandtrap and the first major irrigation diversion, a 2-cfs flow would provide about 60 percent of the Maximum Weighted Usable Area (maximum habitat) for adult brown trout, and 78 percent for juveniles. The 7 cfs proposed by the Forest Service would provide about 95 percent and 98.5 percent of maximum habitat for adult brown trout and juveniles, respectively. The 12 cfs proposed by Cal Fish and Game would provide about 99.9 percent and 99.2 percent of maximum habitat for adult brown trout and juveniles, respectively.
Based on its calculation of the annual generation that would be foregone under the alternative minimum flows, Commission staff concluded that Cal Fish and Game's 12 cfs recommendation would have a significant adverse effect on project economics, and that habitat gains at flows above 4 cfs would be incrementally small. / Staff therefore made the preliminary determination that Cal Fish and Game's 12 cfs recommendation was inconsistent with staff's preliminary balancing of developmental and environmental values under the FPA. The staff recommended instead a 4 cfs minimum flow requirement.
By letter to the Commission dated May 15, 1997, Cal Fish and Game revised its minimum instream flow recommendation based on new data from instream flow and habitat development studies the agency conducted on Mill Creek in July 1996 (1996 Mill Creek Report). / The revised recommendation calls for minimum releases ranging from 13 cfs to 27 cfs, depending on the amount of snowmelt and the time of year. /


On June 19, 1997, Commission staff and staff from Cal Fish and Game met in an attempt to resolve the flows issue. / Although no resolution was achieved, the Commission staff agreed to reexamine the various flow alternatives using information from Cal Fish and Game's Mill Creek Report. / That analysis is set forth in Appendix B to this order.
Based on our new analysis, Cal Fish and Game's flow recommendations of 13 cfs to 27 cfs would provide 80 to 100 percent of the brown trout habitat in Mill Creek, depending on the year's run-off and the creek reach and trout life stage. / These flows would cost Edison about $179,000 annually in lost power benefits, representing some 63 percent of the total current (1998) annual value of the project's power.
The Forest Service's 7 cfs recommendation would provide about 85, 49, 95, and 75 percent of the maximum spawning, fry, juvenile, and adult brown trout habitat, respectively, in the upper reach of Mill Creek, and about 93, 81, 90, and 82 percent of the maximum in the lower reach. / These flows would cost Edison about $75,000 annually in lost power benefits, representing some 26 percent of the total current annual value of the project's power.
The 4 cfs minimum flow recommended by Commission staff provides about 46, 56, 83, and 73 percent of the maximum spawning, fry, juvenile, and adult brown trout habitat, respectively, in the upper reach of Mill Creek, and about 85, 84, 87, and 95 percent of the maximum of these habitats in the lower reach. / These flows would cost Edison about $30,000 annually in lost power benefits, representing some 11 percent of the total current value of the project's power.


While the minimum flows recommended by Cal Fish and Game and the Forest Service would provide more habitat for spawning, juvenile, and adult brown trout, staff's recommended 4 cfs minimum flow would provide habitat adequate for these life stages as well as for brown trout fry, at a cost from $45,000 to $149,000 less per year than the cost of the agencies' recommended flows. We conclude that the cost of Cal Fish and Game's recommendations would have a substantial negative effect on the power benefits of the project and is not justified by the incremental benefits to the fishery. As such, its recommendation is inconsistent with our balancing under FPA Sections 4(e) and 10(a)(1) of beneficial public uses of the waterway. We also conclude that the incremental habitat benefit to be derived from a 7 cfs instream flow does not justify its cost. /
A 4 cfs minimum flow will provide relatively high habitat values for most of the brown trout lifestages that occur in Mill Creek, substantially enhance existing conditions in the bypassed reach, and maintain a self-sustaining brown trout fishery. Accordingly, we are adopting, in Article 404, a minimum instream flow requirement of 4 cfs. As is discussed in the next section, we reserve the authority to revise this requirement, as may be appropriate in light of the resolution of pending state water right adjudications.
VIII. OTHER ISSUES
A. Water Rights
The EA concluded that minimum instream flows of up to 12 cfs (as measured near Lundy Dam) would not adversely affect any existing water rights. / However, several commenters have raised concerns that the imposition of minimum flows in Mill Creek, and any redirection of project discharge water from Wilson Creek into Mill Creek, could infringe on water rights exercised in that creek. /

By letter dated August 19, 1997, the California State Water Resources Board (Water Board) set forth the background to the current water rights concerns. / In 1994, the Water Board issued Mono Lake Water Right Decision 1631, which modified the water rights of the City of Los Angeles in order to further the goal of restoring the Mono Lake Basin after years of water diversions that lowered Mono Lake's surface elevation. The Board stated:
The area of greatest controversy is how and what should be done for waterfowl restoration in the northern Mono Basin in the area of Wilson and Mill Creeks and the Conway Ranch. [/] Mill and Wilson Creek water rights are complicated. As you are aware, Mill Creek water has been diverted for irrigation, domestic uses and power generation through the Lundy Project . . . . Water released from the Lundy tailrace has historically flowed primarily to the Conway Ranch and the Wilson Creek drainage to satisfy court decreed water rights. . . . The question of what water may be additionally available for appropriation and at what seasons is currently before the Division of Water Rights. . . . The determination of how and when water is allocated to Mill and Wilson Creeks is at the heart of the controversy. [The Board] will be determining what process should be undertaken to evaluate [fish, wildlife, and other] resource issues and how future restoration efforts should be directed in the northern Mono Basin pursuant to D-1631.


The Commission's regulatory authority under Part I of the FPA extends only to our permittees, licensees, and exemptees. It is the Commission's responsibility to ensure that a licensee has the property rights (including water rights /) necessary to construct, maintain, and operate the project pursuant to the terms of the license. / Our role is thus distinct from the Water Board's conduct of the water rights proceeding involving restoration of Mono Lake Basin, a proceeding with which we have no intention of interfering, and to which we understand the Forest Service and Cal Fish and Game are parties. / Indeed, the information that is developed with respect to that important effort will inform our regulation of projects in the area.
In the meantime, however, we must determine our licensee's obligations under the hydropower project license we issue today. In light of the ongoing water rights proceeding, we impose no requirement on where water discharged into the project tailrace should be directed. / However, we do not understand any party or commenter to have asserted that a 4 cfs minimum instream flow, released into Mill Creek from the sand trap a short distance below Lundy Dam, will infringe on any quantified, adjudicated water right. Therefore, we are requiring a 4 cfs minimum flow on behalf of the Mill Creek habitat improvement. When and as we are advised that any quantified, adjudicated water right is being



infringed on by Lundy Project operations, we will modify the license as needed. /
B. Down-Ramping Rate
During the Section 10(j) meeting Cal Fish and Game proposed that, to prevent stranding of fish in Mill Creek, the down-ramping rate (rate of flow decrease) from the powerhouse tailrace in to Mill Creek should be no greater than 10 percent of the previous day's average flow. / Specifying such down-ramping rates would however be inappropriate, since the project as licensed herein will not discharge tailrace flows into Mill Creek. Because flows from the tailrace will for the most part continue to enter Wilson Creek, there will be little occasion for fish stranding in Mill Creek below the tailrace.
IX. COMPREHENSIVE PLANS
Section 10(a)(2)A) of the FPA / 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 32 plans that address various resources in California. Of these, the Commission staff identified and reviewed five plans that are

relevant to the Lundy Project. / The project does not conflict with any of these comprehensive plans.
X. COMPREHENSIVE DEVELOPMENT
Sections 4(e) and 10(a)(1) of the FPA require the Commission, in acting on applications for license, to give equal consideration to developmental and environmental project purposes. Any license issued shall be such as in the Commission's judgment will be best adapted to a comprehensive plan for improving or developing a waterway or waterways for all beneficial public uses. The decision to license this project, and the terms and conditions included herein, reflect such consideration.
Under our approach to evaluating the economics of hydropower projects, as articulated in Mead Corp., / we employ an analysis that uses current costs to compare the costs of the project and likely alternative power without regard to forecasts of potential future inflation, escalation, or deflation beyond the license issuance date. The basic purpose of our analysis is to provide a general estimate of the potential power benefits and the costs of a project and 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.


Based on 1998 economic conditions, without future escalation or inflation, the Lundy Project, if licensed as Edison proposes, would produce about 9.3 GWh of energy annually at an annual cost of about $188,000 (20 mills/kWh). The current annual value of the project's power would be about $279,000 (30 mills/kWh). We base our estimate of the project's power benefits on Edison's avoided costs. To determine whether the proposed project is currently economically beneficial, we subtract the project cost from the value of project power. We find that the project, as proposed by Edison, would have an annual economic benefit of about $91,000 (10 mills/kWh).
With the license conditions recommended by staff, the project would produce about 8.3 GWh of energy annually, at an annual cost of about $282,000 (34 mills/kWh). The current annual value of the project's power would be about $249,000 (30 mills/kWh). The project, with staff's proposed conditions, would have an annual economic benefit of -$33,000 (-4 mills/kWh).
Based on our review of the environmental and economic aspects of the relicense proposal and its reasonable alternatives, together with the agency and public comments filed in this proceeding, we are relicensing the project as proposed by Edison and modified by staff's recommended measures.
We recognize that the license terms we are adopting result in a negative net annual benefit under our analysis. However, as we have explained, in deciding whether and under what terms to reauthorize an existing project we do not look solely to our economic analysis; we also consider all developmental and nondevelopmental values of the project. Here, we conclude that the new license we issue today is best adapted to a comprehensive plan for making use of the water power resources of the Mill Creek subbasin, while also protecting and enhancing natural resources affected by the project.
XI. LICENSE TERM
Section 15(e) of the FPA / specifies that any new license issued shall be for a term the Commission determines to be in the public interest, but not less than 30 years nor more than 50 years. Our policy is to issue 30-year relicenses for projects with little or no redevelopment, new construction, new capacity, or environmental mitigative or enhancement measures; 40-year relicenses for projects with a moderate amount thereof; and 50-year relicenses for projects with an extensive amount thereof.  The new license we issue today does not provide for any new construction, and the environmental mitigation and enhancement measures provided for herein warrant a term of 30 years.
XII. SUMMARY
Background information, analysis of impacts, support for related license articles, and the basis for a finding of no


significant impact on the environment are contained in the EA and in subsequent filings and analyses.
The design of the project is consistent with the engineering safety standards governing dam safety. The project will be safe if operated and maintained in accordance with the requirements of this license. Analysis of related issues is provided in the Safety and Design Assessment, which is available in the Commission's public file for this project.
The Commission orders:
(A) This license is issued to Southern California Edison Company (licensee)for a period of 30 years, effective the first day of the month in which this order is issued, to operate and maintain the Lundy 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 of:
(1) All lands, to the extent of the Licensee's interests in those lands, enclosed by the project boundary shown by Exhibits G-1 through G-3 (FERC Drawing numbers 26 through 28);
(2) Existing project works: (a) 33-foot-high and 690-foot-long earth and rockfill Lundy dam, impounding Mill Creek to form the 132-acre Lundy Lake, (b) a 270-foot-long concrete intake structure, (c) a 12,000-foot-long, 48-inch-diameter pipeline, (d) a 3,000-foot-long varying-diameter penstock, (e) the Lundy powerhouse with two generating units, each with a rated capacity of 1,500 kilowatts (kW), (f) a tailrace discharging flows into Wilson Creek and bypassing approximately 7 miles of Mill Creek, (g) a water return ditch known as the Mill Creek Return Ditch extending from the powerhouse and tailrace to Mill Creek, (h) a 15-foot-long transmission line, and (i) appurtenant facilities.
The project works generally described above are more specifically described and shown by those portions of Exhibits a and F noted below:
Exhibit A - The following sections of Exhibit a were filed on December 1, 1981: Sections a.3, titled Turbine and Generator and Section A.5 titled Ancillary Equipment.
Exhibit F - The following Exhibit F drawings filed December 1, 1981.

FERC. No.

Drawing 1390- Showing
F- 1 21 Lundy dam
F- 2 22 Lundy Flowline & Penstock Sections

F- 3 23 Lundy Powerhouse and Switchyard


F- 4 24 Lundy 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 and located within or outside the project boundary, and all riparian or other rights that are necessary or appropriate in the operation or maintenance of the project.
(C) Exhibits A, F, and G described above are approved and made part of the license. /
(D) This license is subject to the conditions submitted by the U.S. Forest Service under Section 4(e) of the FPA, as those conditions are set forth in Appendix A to this order, except for condition 1; the first paragraph of condition 5 (minimum instream flow requirement); and condition 6. The Commission reserves the authority to amend this ordering paragraph, Appendix A, and any other part of the license as the Commission deems necessary and appropriate in light of the ultimate disposition of the Licensee's pending appeals of these Section 4(e) conditions.
(E) This license is subject to the Articles set forth in Form L-1 (October 1975), entitled "Terms and Conditions of License for Constructed Major Project Affecting Lands of the United States," and the following additional articles.



Article 201. The Licensee shall pay the United States an annual charge, effective as of the first day of the month in which this license is issued, for the purposes of:
a. Reimbursing the United States a reasonable amount for the cost of administering Part I of the Federal Power Act, as determined in accordance with the provisions of the Commission's regulations in effect from time to time. The authorized installed capacity for that purpose is 3,000 kilowatts.
b. Recompensing the United States for the use, occupancy and enjoyment of 119.8 acres of its lands, other than for

transmission line right of way. The amount of this acreage may be revised as necessary to conform to any alteration of the project boundary that may be approved by the Commission (see n. 57, supra).


Article 202. Pursuant to Section 10(d) of the FPA, a specified reasonable rate of return upon the net investment in the project shall be used for determining surplus earnings of the project for the establishment and maintenance of amortization reserves. The Licensee shall set aside in a project amortization reserve account at the end of each fiscal year one half of the project surplus earnings, if any, in excess of the specified rate of return per annum on the net investment. To the extent that there is a deficiency of project earnings below the specified rate of return per annum for any fiscal year, the Licensee shall deduct the amount of that deficiency from the amount of any surplus earnings subsequently accumulated, until absorbed. The Licensee shall set aside one half of the remaining surplus earnings, if any, cumulatively computed, in the project

amortization reserve account. The Licensee shall maintain the

amounts established in the project amortization reserved account until further order of the Commission.
The specified reasonable rate of return used in computing amortization reserves shall be calculated annually based on current capital ratios developed from an average of 13 monthly balances of amounts properly includible in the Licensee's long-term debt and proprietary capital accounts as listed in the Commission's Uniform System of Accounts. The cost rate for such ratios shall be the weighted average cost of long term debt and preferred stock for the year, and the cost of common equity shall be the interest rate on 10-year government bonds (reported as the Treasury Department's 10-year constant maturity series) computed on the monthly average for the year in question plus four percentage points (400 basis points).



Article 203. Within 45 days of the issuance date of the license, the Licensee shall file with the Commission three sets of aperture cards of all the approved drawings and one set of aperture cards showing only the Exhibit E drawings. The drawings must be reproduced on silver or gelatin 35mm microfilm. All microfilm must be mounted on type D (3-1/4" x 7-3/8") aperture cards. The Licensee shall submit two copies of Form FERC-587 with the aperture cards.
Prior to microfilming, the FERC Drawing Number (1390-1 through 1390-10 and 1390-21 through 1390-24) shall be shown in the margin below the title block of the approved drawing. After mounting, the FERC Drawing Number must be typed on the upper right corner of each aperture card. Additionally, the Project Number, FERC Exhibit (e.g., F-1, G-1, etc.), Drawing Title, and date of issuance of this license must be typed on the upper left corner of each aperture card.
Two sets of aperture cards and one copy of Form FERC-587 should be filed with the Secretary of the Commission, ATTN: Division of Licensing and Compliance/ENGCB and one set with the Commission's San Francisco Regional Office. a fourth set of only Exhibit G drawings on aperture cards and one copy of Form FERC-587, shall be filed with the Bureau of Land Management Office at the following address:
State Director

California State Office

Bureau of Land Management

Branch of Adjudication and Records (CA-943.5)

Attn: FERC Withdrawal Recordation

2135 Butano Drive



Sacramento, CA 95825-0451
Article 401. Within six months from the date of issuance of this license, the Licensee shall file with the Commission, for approval, a plan for monitoring and inspecting the penstock and pipeline. The plan shall include: (1) a schedule for inspecting the penstock and pipeline every three months and after any surges or unexpected flow reductions that have occurred in the penstock and pipeline; (2) a contingency measure for reporting any water leak or rupture in the pipeline or penstock to the U.S. Forest Service and the Commission Regional Office; and (3) a schedule for implementing remedies for any problems diagnosed after consultation with the Forest Service and Commission Regional Office and a schedule for reporting the completion of any remedies to the U.S. Forest Service and the Commission Regional Office.


The Licensee shall prepare the plan after consultation with the U.S. Forest Service, the U.S. Bureau of Land Management, the U.S. Fish and Wildlife Service, the Commission Regional Office, and the California Department of Fish and Game. The Licensee shall include with the plan documentation of consultation, copies of comments and recommendations on the completed plan after it has been prepared and provided to the agencies named above in this article, and specific descriptions of how the plan accommodates the agencies' comments. The Licensee shall allow a minimum of 30 days for the agencies' to comment and to make recommendations before the Licensee files 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, including any changes required by the Commission.
Article 402. Within six months from the date of issuance of this license, the Licensee shall file with the Commission for approval a plan to control erosion and sedimentation resulting from construction of recreational facilities such as parking areas, boat ramps, restrooms, trailhead parking and any land disturbing activities associated with recreation enhancements. The plan shall include revegetating all areas disturbed by stabilizing the existing gully erosion up slope from the powerhouse, all areas disturbed from providing flows to the toe of Lundy dam, and all areas disturbed by developing recreational enhancements.
The plan shall be based on actual site geological, soil and groundwater conditions and on project design, and shall include, at a minimum, the following:
(a) a description of the actual site conditions;
(b) measures proposed to control erosion, to prevent slope instability, and to minimize the quantity of sediment resulting from recreational improvements;
(c) detailed descriptions, functional design drawings, and specific topographic locations of all control measures;
(d) a description of the plant species, densities and fertilizer requirements;
(e) a schedule for irrigating and fertilizing the new plants;


(f) a specific construction implementation schedule;
(g) a specific implementation and monitoring schedule for revegetation as soon as practicable after the beginning of land clearing or land disturbing activities within the disturbed area; and
(h) a description of procedures to be followed if monitoring reveals that the revegetation is not successful.
The Licensee shall prepare the plan after consultation with the U.S. Forest Service, the U.S. Bureau of Land Management, the U.S. Fish and Wildlife Service, and the California Department of Fish and Game. The Licensee shall include with the plan documentation of consultation and copies of comments and recommendations on the completed plan after it has been prepared and provided to the agencies named above in this article, and specific descriptions of how the plan accommodates the agencies' comments. The Licensee shall allow a minimum of 30 days for the agencies to comment and to make recommendations before the Licensee files 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. No land disturbing or land clearing activities shall begin until the Licensee is notified by the Commission that the plan is approved. Upon Commission approval, the Licensee shall implement the plan, including any changes required by the Commission.
Article 403. Within six months of the issuance of this license, the Licensee shall file for Commission approval a plan for providing the minimum flow required by Article 404 of this license. The plan shall include detailed drawings of the system to release flow to Mill Creek at the downstream base of Lundy dam and at the sand trap. The plan shall also include limits on the maximum rate of change in stream flow during the shifting of release points for the minimum flows and provisions for promptly rescuing and releasing any stranded fish.


The Licensee shall prepare the plan after consultation with the U.S. Forest Service, the California Department of Fish and Game, and the U.S. Fish and Wildlife Service. The Licensee shall include with the plan documentation of consultation and copies of comments and recommendations on the completed plan after it has been prepared and provided to the agencies named above in this article, and specific descriptions of how the plan accommodates the agencies' comments. The Licensee shall allow a minimum of 30 days for the agencies to comment and to make recommendations before the Licensee files 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, including any changes required by the Commission.
Article 404. After implementation of the plan required in Article 403 is completed, the Licensee shall release a continuous minimum flow of 4 cubic feet per second, as measured at the existing Mill Creek gage located just upstream of the mouth of Deer Creek, or inflow to the project reservoir, whichever is less, for the protection and enhancement of fish and wildlife resources, riparian vegetation, and aesthetic resources in the bypassed reach of Mill Creek.
The Licensee shall release the minimum flow to Mill Creek at the downstream base of Lundy Dam whenever water levels in Lundy Lake are above the elevation of the Farmers Gate. When water levels in Lundy Lake drop below the elevation of the Farmers Gate, the licensee shall release the minimum flow from the existing penstock tap located at the sand trap just upstream of the existing stream gage on Mill Creek.
The minimum flow release may be temporarily modified if required by operating emergencies beyond the control of the licensee, or for short periods upon agreement between the licensee, the Forest Service and the California Department of Fish and Game. If the flow is so modified, the licensee shall notify the Commission as soon as possible, but no later than 10 days after each such incident.
Article 405. Within six months from the date of issuance of this license, the Licensee shall file for Commission approval a plan to protect the sensitive plants Mono Lake lupine (Lupinus duranii) and Masonic Mountain jewelflower (Streptanthus oliganthus).
The plan shall include the results of botanical surveys of all areas disturbed by: (a) stabilizing the existing erosion gully up slope from the powerhouse; (b) placing a pipe from the sand trap to the toe of Lundy dam to release flows; and (c) developing recreational facilities at Lundy dam and along Mill Creek. The plan also shall include (d) a description of measures to protect any sensitive plants and (e) an implementation schedule for the protection measures.


The Licensee shall prepare the plan taking into account fully the erosion and sediment control plan required in Article 402, prepared pursuant to this license, and after consultation with the U.S. Fish and Wildlife Service, the U.S. Bureau of Land Management, the California Department of Fish and Game, and the U.S. Forest Service. The Licensee shall include with the plan documentation of consultation and copies of comments and recommendations on the completed plan after it has been prepared and provided to the agencies named above in this article, and specific descriptions of how the plan accommodates the agencies' comments. The Licensee shall allow a minimum of 30 days for the agencies to comment and to make recommendations before the Licensee files 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. No land disturbing or land-clearing activities shall begin until the Licensee is notified by the Commission that the plan is approved. Upon Commission approval, the Licensee shall implement the plan, including any changes required by the Commission.
Article 406. Within six months after the date of issuance of this license, the Licensee shall file for Commission approval a plan to minimize disturbances to riparian wildlife habitat, including injury or loss of riparian vegetation due to grazing and firewood harvesting.
The Licensee shall prepare the plan after consultation with the U.S. Fish and Wildlife Service, the U.S. Bureau of Land Management, the California Department of Fish and Game, and the U.S. Forest Service. The Licensee shall include with the plan documentation of consultation and copies of comments and recommendations on the completed plan after it has been prepared and provided to the agencies named above in this article, and specific descriptions of how the plan accommodates the agencies' comments. The Licensee shall allow a minimum of 30 days for the agencies to comment and to make recommendations before the Licensee files 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. No land disturbing or land-clearing activities shall begin until the Licensee is notified by the Commission that the plan is approved. Upon Commission approval, the Licensee shall implement the plan, including any changes required by the Commission.



Article 407. Within one year after the date of issuance of this license, the Licensee shall paint the penstock vent pipe a color chosen by the U.S. Forest Service, to blend the vent pipe with the surrounding landscape. The Licensee shall maintain the painted surface so it blends with the surrounding landscape for the life of the license.
Article 408. The Licensee shall implement the cultural resources management plan filed with the Commission on March 15, 1990, to avoid and mitigate impacts to historic site CA-Mno-2411 (Jordan Powerhouse) from maintenance and repair activities at the project penstock and other project-related activities in the vicinity of the site.
Further, within one year after the date of issuance of the license, the Licensee shall file, for Commission approval, a cultural resources management plan for avoiding impacts to site CA-Mno-2409, together with written comments of the State Historic Preservation Officer (SHPO) and the U.S. Forest Service on the plan. The plan shall be prepared and implemented in a manner satisfactory to the SHPO and the Forest Service, and adhere to the Secretary of the U.S. Department of the Interior's Standards and Guidelines for Archeology and Historic Preservation.
The Commission reserves the right to require changes to the plan. No land disturbing or land-clearing activities shall begin until the Licensee is notified by the Commission that the plan is approved. Upon Commission approval, the Licensee shall implement the plan, including any changes required by the Commission.
Article 409. If archeological or historic sites are discovered during project operation, the Licensee shall: (1) consult with the California State Historic Preservation Officer (SHPO) and the U.S. Forest Service 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 Forest Service, and the Secretary of the U.S. Department 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 the Forest Service; 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 any cultural resources management plan required by this article or begin any land-clearing or land-disturbing activities in the vicinity of any discovered sites until informed by the Commission that the requirements of this article have been fulfilled.
Article 410. Within six months of license issuance, the Licensee shall file, for Commission approval, a recreation plan. The plan shall provide specific details for relocating camping units from sensitive riparian habitat, and for providing traffic controls in the campground and at the dam parking lot, for providing toilets with sealed vaults in the campground and at the dam, and for providing day-use parking and a boat launching ramp at the dam. The plan shall also include an implementation schedule.
The Licensee shall prepare the plan after consultation with the U.S. Forest Service, the U.S. Bureau of Land Management, the U.S. Fish and Wildlife Service, and the California Department of Fish and Game. The Licensee shall include with the plan documentation of consultation and copies of comments and recommendations on the completed plan after it has been prepared and provided to the agencies named above in this article, and specific descriptions of how the plan accommodates the agencies' comments. The Licensee shall allow a minimum of 30 days for the agencies' to comment and to make recommendations before the Licensee files 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. No land-disturbing or land-clearing activities shall begin until the Licensee is notified by the Commission that the plan is approved. Upon Commission approval, the Licensee shall implement the plan, including any changes required by the Commission.
Article 411. Authority is reserved to the Commission to require the Licensee to release tailrace flows not subject to appropriation by or allocation to holders of water rights back into Mill Creek at the location(s) and amount(s) the Commission determines appropriate and adequate. Furthermore, the Commission reserves authority to require the Licensee to use existing project facilities, or construct, operate, and maintain or provide for the construction, maintenance, and operation of any new facilities, that may be necessary to release such unallocated or unappropriated tailrace flows into Mill Creek.


Article 412. Within six months from the issuance of this license, the Licensee shall file for Commission approval a plan to install, operate, and maintain streamflow gages necessary to monitor the minimum flow releases required in Article 404 of this license. The plan shall include the location and design of gages, a schedule for installation, the method of collecting flow data, and a provision for providing the data to the agencies.
The Licensee shall prepare the plan after consultation with the U.S. Forest Service, the U.S. Fish and Wildlife Service, and the California Department of Fish and Game. The Licensee shall include in the plan documentation of consultation and copies of comments and recommendations on the completed plan after it has been prepared and provided to the agencies named above in this article, and specific descriptions of how the agencies' comments are accommodated by the plan. The Licensee shall allow a minimum of 30 days for the agencies to comment and to make recommendations prior to 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, including any changes required by the Commission.

Article 413. Within six months from issuance of this license, the Licensee shall file with the Commission, for approval, a plan to determine and release flows necessary to flush fine sediments from the channel bed of the project's bypassed reach.
The plan shall include a sediment transport analysis to determine the sediment transport capacity and sediment supply of Mill Creek. In addition, based on the sediment transport analysis, the plan shall include recommendations for scheduling release of flows of sufficient magnitude and duration necessary to mobilize and transport fine grain sediment throughout the majority of the Mill Creek's channel bed yet stay within the channel and not cause significant overbank flooding.


The Licensee shall prepare the plan after consultation with the U.S. Forest Service, the U.S. Fish and Wildlife Service, and California Department of Fish and Game. The Licensee shall include in the plan documentation of consultation and copies of comments and recommendations on the completed plan after it has been prepared and provided to the agencies named above in this article, and specific descriptions of how the agencies' comments are accommodated by the plan. The Licensee shall allow a minimum of 30 days for the agencies to comment and to make recommendations prior to 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, including any changes required by the Commission.
Article 414. The Commission reserves the authority to modify the terms of this license as appropriate in light of, among other things, any final adjudication of water rights that will have a bearing on whether water discharged from the Lundy Project powerhouse tailrace should enter Wilson Creek or be put into the Mill Creek Return Ditch.
Article 415. Within six months from the date of issuance of this license, the Licensee shall file for Commission approval a final plan to monitor riparian vegetation on Mill Creek downstream of Lundy Dam throughout the term of this license. The monitoring plan shall include a schedule for: (1) implementing the program; and (2) periodically filing the results with the Commission and the consulted agencies.
The Licensee shall prepare the final plan after consultation with the U.S. Fish and Wildlife Service, the U.S. Forest Service, and the California Department of Fish and Game. The Licensee shall include with the plan documentation of consultation, copies of comments and recommendations on the completed plan after it has been prepared and provided to the agencies, and specific descriptions of how the plan accommodates the agencies' comments. The Licensee shall allow a minimum of 30 days for the agencies to comment and to make recommendations 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 416. (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 is 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 type of use and occupancy of project lands and water 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 watercraft 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 enhancement. 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. If no conveyance was made during the prior calendar year, the Licensee shall inform the Commission and the Regional Director in writing no later than January 31 of each year.


(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 Hydropower Licensing, 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.


Article 417. Within six months of the issuance of this license, and annually thereafter, the Licensee shall file with

the Commission for approval a water management plan for streamflow and lake levels for the Lundy Project based upon the

annual snowpack forecast.
The Licensee shall prepare the plan after consultation with the U.S. Fish and Wildlife Service, the U.S. Bureau of Land Management, the California Department of Fish and Game, and the U.S. Forest Service. The Licensee shall include with the plan documentation of consultation and copies of comments and recommendations on the completed plan after it has been prepared and provided to the agencies named above in this article, and specific descriptions of how the plan accommodates the agencies' comments. The Licensee shall allow a minimum of 30 days for the agencies to comment and to make recommendations before the Licensee files 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. No land-disturbing or land-clearing activities shall begin until the Licensee is notified by the Commission that the plan is approved. Upon Commission approval, the Licensee shall implement the plan, including any changes required by the Commission.
Article 501. If the Licensee's project was directly benefitted by the construction work of another Licensee, a permittee, or the United States on a storage reservoir or other headwater improvement during the term of the original license

(including extensions of that term by annual licenses), and if those headwater benefits were not previously assessed and reimbursed to the owner of the headwater improvement, the Licensee shall reimburse the owner of the headwater improvement for those benefits, at such time as they are assessed, in the



same manner as for benefits received during the term of this new license.


(F) The Licensee shall serve copies of any Commission filing required by this order on any entity specified in this order to be consulted on matters related to that filing. Proof of service on these entities must accompany the filing with the Commission.
(G) This order is final unless a request for rehearing is filed within 30 days of the date of issuance of this order, pursuant to Section 313 of the FPA. Request for rehearing may be filed within 30 days of the date of this order, pursuant to 18 C.F.R. § 385.813. The filing of a request for rehearing does not

operate as a stay of the effective date of this order 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 license.


By the Commission.
( S E A L )

David P. Boergers,

Secretary.


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