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Energy and permitting policy, read from the public record.

Register entry No. 0007AuthorizationPub. L. 118-5, sec. 321

FERC adds categorical exclusion for hydropower license terminations and revocations, Docket RM26-7-000

A final rule published at 91 FR 46267 lets FERC skip an environmental assessment when it ends an abandoned or noncompliant hydro license with only minor ground disturbance and flow changes. It takes effect August 24; voluntary surrenders are left out.

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Summary

A Federal Energy Regulatory Commission hydropower license can end in four ways: the licensee surrenders it, or the Commission terminates it for failure to start construction, terminates it by implied surrender, or revokes it [1]. Until now, FERC’s National Environmental Policy Act regulations spoke only to the first [1]. A final rule issued July 16, 2026, and published July 23 at 91 FR 46267 (Docket No. RM26-7-000, RIN 1902-AG50) adds the other three to an existing categorical exclusion at 18 CFR 380.4(a)(13), so FERC staff can end those licenses without preparing an environmental assessment or impact statement when the action involves only minor change on the ground and in the water [1]. The rule takes effect August 24, 2026 [1].

What the record shows

The operative change is one new clause. Revised section 380.4(a)(13) now lists four categorically excluded actions, and the fourth reads: “Terminations or revocations of water power licenses and exemptions that will result in minor or no ground disturbing activity and minor or no changes in reservoir conditions and downstream flows” [1]. The first three clauses carry over the existing exclusion for amendments and surrenders of preliminary permits, license amendments without ground disturbance, and surrenders where no project works exist [1]. The text is unchanged from the February proposal [1, 2].

FERC describes the three Commission-initiated actions this way [1]:

  • Failure to commence construction. Termination after notice when a licensee does not begin building within the time FERC set. FERC says this “results in no environmental effects” because the site has not been altered.
  • Implied surrender. Termination when a licensee has signaled, by action or inaction, that it intends to abandon the project, or has failed for several years to operate or maintain it.
  • Revocation. Action under Federal Power Act section 31 when a licensee has knowingly violated a compliance order after a reasonable time to comply.

Both implied surrender and revocation “typically leave project facilities in place,” the rule states, and once the license ends the project leaves FERC’s jurisdiction and falls under state dam safety and other law [1]. FERC adds that it “cannot conduct post-action monitoring” after that point [1].

The exclusion does not apply automatically. FERC describes a “dual screening”: staff ask whether a termination, including any decommissioning requirements, would cause more than minor ground disturbance or more than minor reservoir and flow changes, and whether any extraordinary circumstance under 18 CFR 380.4(b)(2) is present [1]. If either is true, staff prepare an environmental assessment or impact statement [1].

The rule imposes no information collection, the Commission certified it will not have a significant economic impact on a substantial number of small entities, and the Office of Information and Regulatory Affairs found it not significant under Executive Order 12866 [1].

What evidence did FERC use to support the exclusion?

Under the 2023 amendments to NEPA, a categorical exclusion is “a category of actions that a Federal agency has determined normally does not significantly affect the quality of the human environment” [6]. FERC staff built a Substantiation Record from the environmental assessments for every implied surrender termination and revocation since 1978 [1, 2]. There were 13 [1].

Six of those assessments recommended ending the license with no further requirements and found no potential effects on any resource [1]. The other seven required the licensee to stabilize, repair or remove project works, and identified more effects, but all concluded the action would not significantly affect the human environment [1]. FERC says it “has never found a potentially significant effect” from a termination or revocation that required an impact statement [1].

One case would not have qualified. FERC calls the 2002 implied surrender termination of the Mechanicville Hydroelectric Project, No. 6032-041, an outlier: its assessment found that required repair work could put polychlorinated biphenyl pollution from the riverbed back into the water column, a more-than-minor change that “would have placed the termination outside the scope” of the new exclusion [1].

Where it sits in the process

The rulemaking follows the removal of CEQ’s NEPA regulations, which CEQ finalized on January 8, 2026, at 91 FR 618 [5]. On April 9, CEQ issued replacement guidance on establishing, adopting and applying categorical exclusions, rescinding its 2010 version [4]. FERC’s final rule frames its analysis around two questions drawn from that guidance: whether the Commission has a written record of reliable data, and whether the exclusion’s text is unambiguous [1]. Public Record Service covered CEQ’s withdrawal of 18 older NEPA guidance documents on July 1.

FERC proposed the change on February 24 at 91 FR 8799, with comments due March 26 [2]. It received nine comments: seven opposed and two in support [1].

On the same day it issued the final rule, the Commission also issued an order in Docket No. CX26-2-000, 196 FERC ¶ 61,037, adopting two Tennessee Valley Authority categorical exclusions on development of recreation sites and public use areas for use in water power proceedings [3]. That adoption, made under NEPA section 109, takes effect August 17 [3, 6].

The termination exclusion becomes available when the rule takes effect on August 24 [1]. Individual termination and revocation orders remain final agency actions subject to rehearing and judicial review, the rule notes [1].

What the record does not show

A definition of “minor.” Two commenters, Addison Lee and Madeline Stewart, asked FERC to define the word [1]. FERC declined, saying such words “are not susceptible of an exact definition” and that about 100 categorical exclusions across federal agencies already use it [1]. Where the line falls will be set in individual orders.

How many projects are in line. The rule does not list pending implied surrender or revocation proceedings or estimate how often the exclusion will be used. The historical record is 13 assessments in more than four decades [1].

Voluntary surrenders. Patriot Hydro LLC asked FERC to cover licensee-initiated surrenders on the same terms, arguing that a licensee working with the Commission now carries a heavier burden than one facing termination for being unresponsive [1]. FERC said its staff did not analyze surrender assessments, so the record “does not provide sufficient evidence” to extend the exclusion; it said it lacked “a basis to take the action Patriot Hydro suggests in this rulemaking” [1].

Financial assurance. American Whitewater argued FERC should instead require financial assurances from licensees [1]. The rule notes a pending rulemaking on that subject in Docket No. RM21-9-000 and restates the 1995 policy of deciding decommissioning funding case by case at licensing or relicensing [1]. It sets no schedule for that docket.

What happens to a dam after FERC. FERC says states have dam programs and that Congress anticipated continued supervision after a license ends, but it lacks jurisdiction once a license is terminated [1]. The Nature Conservancy asserted that many tribes and states lack the capacity and expertise to take on that role; FERC treated the concern as outside the scope of the rulemaking and did not assess any state program [1].

Positions on the record

Opponents named in the rule are Addison Lee; American Whitewater with the California Sportfishing Protection Alliance; the Hydropower Reform Coalition; Madeline Stewart; the Michigan Department of Natural Resources; The Nature Conservancy; and New York Rivers United [1]. Patriot Hydro LLC and American Dams supported the proposal [1].

American Whitewater argued that FERC’s baseline should be conditions before a dam was built, citing the D.C. Circuit’s 2018 decision in American Rivers v. FERC [1]. FERC answered that it has long used existing conditions as the baseline and cited the same court’s January 2025 decision in American Whitewater v. FERC, which it says affirmed that approach for a surrender [1]. FERC also noted that CEQ’s cumulative effects definitions were removed with its regulations [1, 5].

Michigan DNR and the Hydropower Reform Coalition said the analysis ignored the foreseeable effects of neglected dams left in place [1]. American Whitewater pointed to the 2020 failures of Edenville Dam and Sanford Dam in Michigan after revocation, and The Nature Conservancy warned of “orphaned dams” [1]. FERC’s response is that the exclusion “does not absolve dam owners of any responsibility; it only deals with the Commission’s NEPA responsibilities,” and that it will still evaluate safety under the Federal Power Act, issue public notice and coordinate with state regulators before acting [1].

On alternatives such as dam removal, FERC wrote that a valid exclusion “obviates the need” for an alternatives analysis, and that by the time it moves to terminate, it has “typically has determined that the licensee cannot or will not engage in activities such as dam removal” [1].

Reading-room questions

Questions readers bring to this record, answered from the documents cited below.

When does FERC's hydropower termination categorical exclusion take effect?
August 24, 2026 [1]. The rule was issued July 16 and published at 91 FR 46267 on July 23 [1].
Does the new categorical exclusion cover voluntary surrender of a hydro license?
No. It covers Commission-initiated terminations and revocations only; FERC rejected Patriot Hydro's request to add licensee-initiated surrenders, saying its record does not support that step [1]. Surrenders where project works exist still normally get an environmental assessment under 18 CFR 380.5(b)(13) [1].
What does "minor" ground disturbance mean in the FERC rule?
The rule does not define it. FERC says the word will be applied case by case, with the text and the historical examples in the Substantiation Record as the guide [1].
Will FERC still give public notice before terminating a hydropower license?
Yes. The rule says FERC notices every termination or revocation, serves it on known tribal, federal, state and local entities, publishes it in the Federal Register and allows interventions, comments and protests [1]. Implied surrender terminations take effect no sooner than 90 days after notice [1].
Can FERC still require dam removal when it ends a license?
Yes. FERC says it may require site restoration in a given case, an action it says would likely involve preparing an environmental assessment [1].

Note on sourcing

This report rests on the final rule and proposed rule as published in the Federal Register, FERC's notice of its TVA adoption order, CEQ's notice of its April 2026 categorical exclusion guidance, CEQ's January 2026 final rule and the 2023 statute. The Final Substantiation Record and the individual comments in Docket No. RM26-7-000 are described here as the final rule summarizes them; the underlying filings and the 13 earlier environmental assessments are not separately examined. The text of FERC's July 16 TVA order, 196 FERC ¶ 61,037, is described only through the published notice. No commenter had made a public statement on the final rule as of publication, and no rehearing request had appeared in the Federal Register.

Sources

  1. Categorical Exclusion Under the National Environmental Policy Act for Certain Terminations or Revocations of Water Power Licenses or Exemptions, final rule, 91 FR 46267 (FR Doc. 2026-14878)Federal Register (Federal Energy Regulatory Commission), July 23, 2026 · federalregister.gov
  2. Categorical Exclusion Under the National Environmental Policy Act for Certain Terminations or Revocations of Water Power Licenses and Exemptions, notice of proposed rulemaking, 91 FR 8799 (FR Doc. 2026-03657)Federal Register (Federal Energy Regulatory Commission), February 24, 2026 · federalregister.gov
  3. Order Adopting Categorical Exclusions From Tennessee Valley Authority Under the National Environmental Policy Act; Notice of Adoption, 91 FR 45806 (FR Doc. 2026-14685)Federal Register (Federal Energy Regulatory Commission), July 21, 2026 · federalregister.gov
  4. Implementation of the National Environmental Policy Act Guidance (categorical exclusions), notice of availability, 91 FR 18836 (FR Doc. 2026-07115)Federal Register (Council on Environmental Quality), April 13, 2026 · federalregister.gov
  5. Removal of National Environmental Policy Act Implementing Regulations, final rule, 91 FR 618 (FR Doc. 2026-00178)Federal Register (Council on Environmental Quality), January 8, 2026 · federalregister.gov
  6. Fiscal Responsibility Act of 2023, Pub. L. 118-5, sec. 321 (NEPA amendments)U.S. Government Publishing Office (Public Law), June 3, 2023 · govinfo.gov

Subject headings

Cross-references

Other register entries filed under the same subject headings.

  1. No. 0025 · Environmental review · 3 shared headingsBLM opens supplemental EIS on Seminoe Pumped Storage Project, moving FERC license order to October 2027, P-14787-004
  2. No. 0031 · Floor order · 2 shared headingsSenate order sets Nov. 9 cloture vote on motion to proceed to H.R. 2347, the vehicle for a permitting package
  3. No. 0030 · Report · 2 shared headingsFERC opens scoping on Longboard LNG import terminal off Oʻahu, Docket No. PF26-10-000