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170 FERC ¶ 62,158
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Premium Energy Holdings, LLC

Project No.

14998-000

ORDER ISSUING PRELIMINARY PERMIT AND GRANTING PRIORITY TO FILE
LICENSE APPLICATION
(March 19, 2020)
On June 18, 2019, as supplemented on August 22, 2019, Premium Energy
Holdings, LLC (Premium Energy) filed an application for a preliminary permit, pursuant
to section 4(f) of the Federal Power Act (FPA),1 to study the feasibility of the 2,000megawatt (MW) Pyramid Lake Pumped Storage Project No. 14998 (Pyramid Lake
Project) to be located at Pyramid Lake in Washoe County, Nevada.
I.

Proposal

As proposed, the Pyramid Lake Project would be a pumped storage development
comprising two reservoirs—Pyramid Lake as the lower reservoir and one of three
alternative new upper reservoirs, San Emidio, Tohakum Peak, or Lake Range, all of
which would be located in the Lake Range east of Pyramid Lake. The project would also
include a new, approximately 15-mile-long, 500-kilovolt transmission line to deliver
generated power to the electric grid; and a 500-foot-long, 85-foot-wide, 160-foot-high
powerhouse located in an underground cavern and housing five 400-MW pump-turbine
generators. The project would largely occupy Pyramid Lake Indian Reservation land and
U.S. Department of the Interior, Bureau of Land Management (BLM) land.2 The
estimated annual generation of the Pyramid Lake Project under each upper reservoir
alternative would be 6,900 gigawatt-hours. Premium Energy requests a permit term of 24
months.
Premium Energy proposes to use the existing Pyramid Lake as the lower reservoir
in all three project configurations. The lake, which has a surface area of 121,080 acres at
3,796 feet mean sea level (msl) and a total storage capacity of 23.6 million acre-feet, is
1

16 U.S.C. § 797(f) (2018).

Premium Energy notes that some of the project’s features would also be located
on land owned by the Los Angeles Department of Water and Power (LADWP).
2

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fed solely by the Truckee River, which is the sole outlet of Lake Tahoe. Pyramid Lake is
endorheic, meaning that it has no outlet to any other water body and losses water only by
evaporation.
The proposed San Emidio Reservoir alternative, which would be located on the
Pyramid Lake Indian Reservation, would consist of: (1) a 315-foot-high, 2,385-foot-long
dam; (2) a 180-acre reservoir with a total storage capacity of 21,550 acre-feet at a normal
maximum operating elevation of 6,700 feet msl; (3) a 0.63-mile-long, 28-foot-diameter
underground headrace tunnel; (4) a 0.5-mile-long, 25-foot-diameter underground vertical
shaft; (5) a 2-mile-long, 25-foot-diameter underground horizontal tunnel; (6) five 0.1mile-long, 16-foot-diameter underground penstocks; and (7) a 0.23-mile-long, 30-footdiameter underground tailrace tunnel for discharging into Pyramid Lake.
The proposed Tohakum Peak Reservoir alternative, which would be located on the
Pyramid Lake Indian Reservation, would consist of: (1) a 575-foot-high, 1,740-foot-long
dam; (2) a 160-acre reservoir with a total storage capacity of 27,050 acre-feet at a normal
maximum operating elevation of 5,960 feet msl; (3) a 0.74-mile-long, 33-foot-diameter
underground headrace tunnel; (4) a 0.28-mile-long, 29-foot-diameter underground
vertical shaft; (5) a 1.6-mile-long, 29-foot-diameter underground horizontal tunnel; (6)
five 0.18-mile-long, 19-foot-diameter underground penstocks; and (7) a 0.22-mile-long,
35-foot-diameter underground tailrace tunnel for discharging into Pyramid Lake.
The proposed Lake Range Reservoir alternative, which would be located on the
Pyramid Lake Indian Reservation, would consist of: (1) a 495-foot-high, 2,474-foot-long
dam; (2) a 160-acre reservoir with a total storage capacity of 26,020 acre-feet at a normal
maximum operating elevation of 6,180 feet msl; (3) a 0.75-mile-long, 32-foot-diameter
underground headrace tunnel; (4) a 0.31-mile-long, 29-foot-diameter underground
vertical shaft; (5) a 1.8-mile-long, 29-foot-diameter underground horizontal tunnel; (6)
five 0.18-mile-long, 18-foot-diameter underground penstocks; and (7) a 0.22-mile-long,
34-foot-diameter underground tailrace tunnel for discharging into Pyramid Lake.
In all three configurations, during generation, water would flow from the upper
reservoir, through the headrace tunnel, into the vertical shaft and horizontal tunnel, into
the penstocks and powerhouse, and discharge through the tailrace tunnel into Pyramid
Lake.
II.

Procedural Issues
A.

Notice, Interventions, and Comments

On September 30, 2019, the Commission issued public notice of Premium
Energy’s permit application, establishing a deadline of November 29, 2019, for filing

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comments, interventions, and competing applications. Notice of the application was
published in the Federal Register on October 4, 2019.3
The LADWP4 and the Center for Biological Diversity filed timely motions to
intervene and comments.5 The Nevada Division of Water Resources (NDWR), Pyramid
Lake Fisheries, the Pyramid Lake Paiute Tribe (Paiute Tribe), and the Department of the
Interior, Bureau of Indian Affairs (BIA) filed timely comments. On December 4, 2019,
Aaron Bill, a Paiute Tribe member and Water Quality Standards Specialist, filed untimely
comments on behalf of the Paiute Tribe Water Quality Program.6 On December 10,
2019, Premium Energy filed a response to Mr. Bill’s comments.
While neither intervener opposes permit issuance, commenters assert that the
permit should not be issued because: (1) the Commission failed to provide sufficient
notice; (2) project construction and operation will have negative impacts on
environmental and cultural resources, water rights, seismicity, and electricity prices; (3)
the Commission did not initiate tribal and National Historic Preservation Act (NHPA)
consultation; and (4) Premium Energy’s application is insufficient. The interventions,
comments, and responses to comments on the application have been fully considered in
determining whether to issue a permit for the Pyramid Lake Project and are discussed
below.
B.

Insufficient Notice

Mr. Bill states that the Paiute Tribe’s natural resources department had just five
days to provide comment on Premium Energy’s application for the project.7 This is

3

84 Fed. Reg. 53,140 (2019).

4

In its motion to intervene, the LADWP notes that the application erroneously
suggests that the LADWP is partnering with Premium Energy to develop the Pyramid
Lake Project. The LADWP clarifies that it is not coordinating with Premium Energy and
has had no role in Premium Energy’s pursuit of the project. LADWP November 25,
2019 Motion to Intervene at 4.
5

Timely, unopposed motions to intervene are granted by operation of Rule 214 of
the Commission’s Rules of Practice and Procedure. 18 C.F.R. § 385.214(c)(1) (2019).
6

Because these comments were filed in time for us to consider them in this order,
we do so.
7

Aaron Bill December 4, 2019 Comment at 2.

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incorrect. The Commission’s September 30, 2019 notice provided the tribe 60 days to
file comments.
III.

Discussion
A.

Effects of Project Construction and Operation

Several commenters raise concerns about the effects of project construction and
operation on: Pyramid Lake’s fisheries, cultural resources, federally protected lands,
water rights, water quantity and quality, wildlife and protected species, seismicity, and
electricity prices.8
A preliminary permit does not authorize a permittee to undertake construction of
the proposed project. Therefore, these concerns are premature at the preliminary permit
stage in that they address the potential effects of constructing and operating the proposed
project.9 The purpose of a preliminary permit is to secure the permit holders priority for
hydropower development while they study the feasibility of the project, including
studying potential impacts. Should the permittee file a license application, the issues
raised can be addressed in the licensing process.
B.

Study Requirements Under the Permit

The Paiute Tribe and the BIA request that any permit issued to Premium Energy
include specific study requirements.10 In its application, Premium Energy outlines the

8

See, e.g., NDWR October 11, 2019 Comment; Pyramid Lake Fisheries
November 26, 2019 Comment; Paiute Tribe November 27, 2019 Comment; Aaron Bill
December 4, 2019 Comment at 1–2.
9

See, e.g., Tomlin Energy LLC, 169 FERC ¶ 61,037, at P 8 (2019) (dismissing
concerns about project operation as premature at the preliminary permit stage).
10

Paiute Tribe November 27, 2019 Comment at 2–3 (requesting that Premium
Energy study wildlife and protected species, water quantity and quality, flooding, and
seismicity); BIA November 27, 2019 Comment at 2 (requesting that Premium Energy
study project feasibility and allow for stakeholder participation in studies and project
development). In its comments, the Paiute Tribe also states that the proposed action
would include construction of solar energy farms and requests specific studies for such.
Paiute Tribe November 27, 2019 Comment at 3. Although Premium Energy plans to
utilize renewable energy to integrate renewables onto the electric grid, Premium Energy
does not propose to construct any solar energy farms as a part of its Pyramid Lake
Project.

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studies that it intends to complete during the permit term.11 Premium Energy also states
that it plans to work closely with stakeholders in developing the Pyramid Lake Project,
including local tribes, agencies, and organizations.12 The Commission, however, has not
sought to place all relevant study requirements in preliminary permits.13 Nonetheless,
should a permittee proceeds with preparation of a license application, potential license
applicants are required to consult with appropriate state and federal resource agencies and
affected Indian tribes, conduct all reasonable studies requested by the agencies, and to
solicit comments on license applications before they are filed.14
C.

Tribal and National Historic Preservation Act Consultation

Commenters raise several concerns regarding the project’s proposed location on
the Pyramid Lake Indian Reservation, which is held in trust for the Paiute Tribe by the
BIA on behalf of the United States.15 The Paiute Tribe and the BIA express concern
about the effects of permit issuance on Indian trust resources and, accordingly, identify
several mandates prescribing the management of stream flows to safeguard tribal water
rights and federally protected species.16 The BIA also notes its responsibilities to protect
lands and resources should Premium Energy file a license application for the project. 17
Pyramid Lake Fisheries, the Paiute Tribe, and Mr. Bill argue that the Commission
should have initiated consultation with affected tribes as part of its consideration of

11

Premium Energy June 18, 2019 Application at 17.

12

Premium Energy December 10, 2019 Response at 2.

13

See, e.g., Continental Lands Inc., 90 FERC ¶ 61,355, at 62,177 (2000).

14

18 C.F.R. § 4.38 (2019).

15

See BIA November 27, 2019 Comment at 2. In its comments, the BIA notes
that Premium Energy failed to identify the reservation as federal land in its application
and requests that future filings correct for this failing. Id.
16

Paiute Tribe November 27, 2019 Comment at 2; BIA November 27, 2019
Comment (identifying the federal Operating Criteria and Procedures, the 1996 Water
Quality Settlement Agreement, the 1935 Truckee River Agreement, the Federal Orr Ditch
Decree and corresponding federal court decisions, the Truckee-Carson-Pyramid Lake
Water Settlement and the Truckee River Operating Agreement, and the Endangered
Species Act).
17

BIA November 27, 2019 Comment at 2.

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Premium Energy’s permit application.18 Because preliminary permits do not authorize
construction and operation of a project and development of a license application is not
guaranteed, it is premature to initiate government-to-government consultation with tribes
at this time.19 Should Premium Energy prepare a license application, the Commission
will offer to consult with affected tribes.20
The Paiute Tribe comments that Premium Energy must follow the tribe’s
consultation procedures, including presenting its proposal to the Tribal Interdisciplinary
Team and allowing for questions, comments, and recommendations.21 The Tribal
Interdisciplinary Team will then make a recommendation to the Tribal Council with
respect to the proposal. The Paiute Tribe states that should Premium Energy proceed to
licensing the project, it would have to work closely with the tribe. In response, Premium
Energy states that it has contacted representatives of the Paiute Tribe and is eager to
coordinate with the tribe.22
The Paiute Tribe notes that the three site alternatives proposed for the upper
reservoir contain archaeological sites; traditional gathering locations; sacred sites;
ceremonial locations; and historical, burial, and habitation sites. The Paiute Tribe states
that the Tribal Historic Preservation Officer opposes construction of the reservoirs as well
as several other elements of the project.23 Because a preliminary permit does not
authorize a permittee to undertake any ground disturbance or to enter onto any lands,
permit issuance does not have the potential to impact historic properties and, therefore,
does not give rise to a requirement to consult under section 106 of the NHPA.24 Should
18

Pyramid Lake Fisheries November 26, 2019 Comment at 2; Paiute Tribe
November 27, 2019 Comment at 1, 4; Aaron Bill December 4, 2019 Comment.
19

See, e.g., W. Minn. Mun. Power Agency, 164 FERC ¶ 62,133, at PP 6–8 (2018).

20

See 18 C.F.R. § 2.1c (2019) (policy statement on consultation with Indian tribes
in Commission proceedings). In addition, should the project proposed at the licensing
stage be on reservation land, the Bureau of Indian Affairs will have the authority to issue
mandatory conditions pursuant to FPA section 4(e). 16 U.S.C. § 797(e) (2018).
21

Paiute Tribe November 27, 2019 Comment at 1, 4.

22

Premium Energy December 10, 2019 Response at 1.

23

Paiute Tribe November 27, 2019 Comment at 4 (opposing construction of the
proposed reservoirs, pressure tunnels, PV solar farm, powerhouse, converter station, and
transmission lines). We note again that Premium Energy does not propose to construct
any solar energy farms as a part of its Pyramid Lake Project.
24

54 U.S.C. § 306108 (2018); 36 C.F.R. § 800.3 (2019) (providing that an agency

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Premium Energy prepare a license application, the Commission will comply with the
NHPA. In addition, if a license application is prepared, the regulations implementing
section 106 of the NHPA require the Commission to consult and seek concurrence with
the Tribal Historic Preservation Officer on any finding involving effects or no effects on
historic properties on tribal reservation lands.
Commenters note that Premium Energy would need to obtain Paiute Tribal
Council authorization before conducting studies on reservation lands.25 Pyramid Lake
Fisheries and Mr. Bill further allege that Premium Energy and/or the LADWP have
illegally trespassed on reservation lands. A permit applicant is not required to have
obtained all access rights to a project site as a condition of receiving a preliminary permit,
and a preliminary permit does not grant a right of entry onto any lands. Further, a
permittee must obtain any necessary authorizations and comply with any applicable laws
and regulations to conduct any field studies. We note, however, that when a permittee
initiates the pre-filing consultation process in order to prepare a license application, lack
of access to the project site for studies could preclude the preparation of an adequate
application, thus, requiring that we reject it. In response to commenters’ trespass
allegations, the LADWP and Premium Energy have both stated that the LADWP is not
coordinating with Premium Energy and has had no role in Premium Energy’s pursuit of
the Pyramid Lake Project.26 Likewise, Premium Energy states that it has not conducted
any activities on reservation land and that any activities would occur only after obtaining
Paiute Tribal Council authorization.27

has no further obligation under section 106 if an undertaking, as defined in section
800.16(y), does not have the potential to cause effects on historic properties); id. §
800.16(y) (2019) (defining undertaking to include a project requiring a federal permit,
license, or approval); see, e.g., Badger Mountain Hydro, LLC, 167 FERC ¶ 62,056, at PP
13–14 (2019) (finding that issuance of a permit is not a specific undertaking subject to
NHPA); RAMM Power Grp., LLC, 164 FERC ¶ 62,037, at PP 4–5 (2018) (finding that
NHPA concerns are premature at the preliminary permit stage because they address the
potential effects of constructing and operating the proposed project).
25

See, e.g., Pyramid Lake Fisheries November 26, 2019 Comment; Aaron Bill
December 4, 2019 Comment at 2–3. In a March 4, 2020 filing, the Paiute Tribe states
that it will not permit Premium Energy to execute any part of the project on the Pyramid
Lake Indian Reservation. Paiute Tribe March 4, 2020 Comment.
26

See LADWP November 25, 2019 Motion to Intervene at 4; see also Premium
Energy December 10, 2019 Response.
27

Premium Energy December 10, 2019 Response at 1.

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Issues with Premium Energy’s Application

The NDWR and the Paiute Tribe contend that Premium Energy’s application is
vague. However, commenters have not shown that the application here does not
comply with our regulations. In fact, the regulations contemplate that full, detailed
project information may not be available when a permit application is filed.29 To ensure
that we have adequate information to determine project effects and benefits, we require
that detailed information regarding the proposed project be provided at such time as a
pre-application document (PAD) or a license application is filed.30
28

Mr. Bill also argues that Premium Energy and the LADWP acted in bad faith to
mislead the Paiute Tribe, the Commission, and the general public in their pursuit of the
project.31 As provided above, Premium Energy is not coordinating with the LADWP in
its pursuit of the project.32 Further, a review of the applicant’s statements fails to indicate
an intent to deceive the Paiute Tribe, the Commission, or the general public or evidence
of bad faith. Rather, as provided above, Premium Energy states that it is eager to
coordinate with the tribe in its pursuit of the project.33
IV.

Permit Information

Section 4(f) of the FPA authorizes the Commission to issue preliminary permits
for the purpose of enabling prospective applicants for a hydropower license to secure the
data and perform the acts required by section 9 of the FPA,34 which in turn sets forth the
material that must accompany an application for license. The purpose of a preliminary
permit is to preserve the right of the permit holder to have the first priority in applying for
28

NDWR October 11, 2019 Comment; Paiute Tribe November 27, 2019
Comment at 1.
29

Cat Creek Energy, LLC, 167 FERC ¶ 61,046, at P 11 (2019); Symbiotics, LLC,
99 FERC ¶ 61,101, at 61,419 (2002).
30

Cat Creek Energy, LLC, 167 FERC ¶ 61,046 at P 11; FFP Mass 1, LLC, 133
FERC ¶ 62,230, at P 7 (2010).
31

Aaron Bill December 4, 2019 Comment at 1–3.

32

See LADWP November 25, 2019 Motion to Intervene at 4; see also Premium
Energy December 10, 2019 Response.
33

Premium Energy December 10, 2019 Response at 1.

34

16 U.S.C. § 802 (2018).

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a license for the project that is being studied.35 Because a permit is issued only to allow
the permit holder to investigate the feasibility of a project while the permittee conducts
investigations and secures necessary data to determine the feasibility of the proposed
project and to prepare a license application, it grants no land-disturbing or other property
rights.36
Article 4 of this permit requires the permittee to submit a progress report no later
than the last day of each twelve-month period from the effective date of this permit. The
late filing of a report or the supplementation of an earlier report in response to a notice of
probable cancellation will not necessarily excuse the failure to comply with the
requirements of this article.
During the course of the permit, the Commission expects that the permittee will
carry out prefiling consultation and study development leading to the possible
development of a license application. The prefiling process begins with preparation of a
Notice of Intent (NOI) and Pre-Application Document (PAD) pursuant to sections 5.5
and 5.6 of the Commission’s regulations.37 The permittee must use the Integrated
Licensing Process unless the Commission grants a request to use an alternative process
(Alternative or Traditional Licensing Process). Such a request must accompany the NOI
and PAD and set forth specific information justifying the request.38 As stated above, if
the permittee files a development application, notice of the application will be published,
and those interested may intervene and comment on the project and the effects of its
construction and operation.
A preliminary permit is not transferable. The named permittee is the only party
entitled to the priority of the application for license afforded by this preliminary permit.
35

See, e.g., Mt. Hope Waterpower Project LLP, 116 FERC ¶ 61,232, at P 4 (2006)
(“The purpose of a preliminary permit is to encourage hydroelectric development by
affording its holder priority of application (i.e., guaranteed first-to-file status) with
respect to the filing of development applications for the affected site.”).
36

Issuance of this preliminary permit is thus not a major federal action
significantly affecting the quality of the human environment. A permit holder can only
enter lands it does not own with the permission of the landholder, and is required to
obtain whatever environmental permits federal, state, and local authorities may require
before conducting any studies. See, e.g., Three Mile Falls Hydro, LLC, 102 FERC
¶ 61,301, at P 6 (2003); see also Town of Summersville, W. Va. v. FERC, 780 F.2d 1034
(D.C. Cir. 1986) (discussing the nature of preliminary permits).
37

18 C.F.R. §§ 5.5–5.6 (2019).

38

See id. § 5.3.

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In order to invoke permit-based priority in any subsequent licensing competition, the
named permittee must file an application for license as the sole applicant, thereby
evidencing its intent to be the sole licensee and to hold all proprietary rights necessary to
construct, operate, and maintain the proposed project. Should any other parties intend to
hold during the term of any license issued any of these proprietary rights necessary for
project purposes, they must be included as joint applicants in any application for license
filed. In such an instance, where parties other than the permittee are added as joint
applicants for license, the joint application will not be eligible for any permit-based
priority.39
The Director orders:
(A) A preliminary permit is issued for the Pyramid Lake Pumped Storage Project
No. 14998 to Premium Energy Holdings, LLC, for a period effective the first day of the
month in which this permit is issued, and ending either 24 months from the effective date
or on the date that a development application submitted by the permittee has been
accepted for filing, whichever occurs first.
(B) This preliminary permit is subject to the terms and conditions of Part I of the
Federal Power Act and related regulations. The permit is also subject to Articles 1
through 4, set forth in the attached standard form P-1.
(C) This order constitutes final agency action. Any party may file a request for
rehearing of this order within 30 days of the date of its issuance, as provided in section
313(a) of the Federal Power Act, 16 U.S.C. § 825l (2018), and section 385.713 of the
Commission’s regulations, 18 C.F.R. § 385.713 (2019).

Timothy Konnert, Chief
West Branch
Division of Hydropower Licensing

39

See City of Fayetteville Pub. Works Comm., 16 FERC ¶ 61,209 (1981).

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- 11 Form P-1 (Revised October 2018)

FEDERAL ENERGY REGULATORY COMMISSION
TERMS AND CONDITIONS OF
PRELIMINARY PERMIT
Article 1. The purpose of the permit is to maintain priority of application for a
license during the term of the permit while the permittee conducts investigations and
secures data necessary to determine the feasibility of the proposed project and, if the
project is found to be feasible, prepares an acceptable application for license. In the
course of whatever field studies the permittee undertakes, the permittee shall at all times
exercise appropriate measures to prevent irreparable damage to the environment of the
proposed project. This permit does not authorize the permittee to conduct any grounddisturbing activities or grant a right of entry onto any lands. The permittee must obtain
any necessary authorizations and comply with any applicable laws and regulations to
conduct any field studies.
Article 2. The permit is not transferable and may, after notice and opportunity for
hearing, be canceled by order of the Commission upon failure of the permittee to
prosecute diligently the activities for which a permit is issued, or for any other good
cause shown.
Article 3. The priority granted under the permit shall be lost if the permit is
canceled pursuant to Article 2 of this permit, or if the permittee fails, on or before the
expiration date of the permit, to file with the Commission an application for license for
the proposed project in conformity with the Commission's rules and regulations then in
effect.
Article 4. No later than the last day of each 12-month period from the effective
date of this permit, the permittee shall file a progress report. Each progress report must
describe, for that reporting period, the nature and timing of what the permittee has done
under the pre-filing requirements of 18 C.F.R. sections 4.38 and 5.1-5.31 and other
applicable regulations; and, where studies require access to and use of land not owned by
the permittee, the status of the permittee's efforts to obtain permission to access and use
the land. Progress reports may be filed electronically via the Internet, and the
Commission strongly encourages e-filing. Instructions for e-filing are on the
Commission's website at http://www.ferc.gov/docs-filing/efiling.asp. To paper-file
instead, mail four copies of the progress report to the Secretary, Federal Energy
Regulatory Commission, 888 First Street, N.E., Washington, D.C. 20426.

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Document Content(s)
P-14998-000 Preliminary permit order.DOCX.............................1-11