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92 FERC ¶ 61,261 UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: James J. Hoecker, Chairman; William L. Massey, Linda Breathitt, and Curt Hébert, Jr.

PP&L Montana, LLC Project No. 2188-030

ORDER ISSUING NEW LICENSE

(Issued September 27, 2000)

On November 25, 1992, Montana Power Company filed an application for a new license pursuant to Part I of the Federal Power Act (FPA) for the Missouri-Madison Hydroelectric Project. The project consists of nine hydroelectric developments located on the Madison and Missouri Rivers in Gallatin, Madison, Lewis and Clark, and Cascade Counties, in southwestern Montana. Portions of the project are located on federal lands, including lands within the Gallatin and Helena National Forests. The project has a total generating capacity of 291.8 megawatts (MW), which Montana Power proposed to increase by 35.1 MW, to 326.9 MW. The Commission subsequently approved transfer of the license to PP&L Montana, LLM, which is currently operating the project. For the reasons discussed below, we will issue a new license for the project.

BACKGROUND

Eight of the project's nine developments were constructed between 1906 and 1930. The original license for the project was issued in 1956,1 when Montana Power sought authorization to add the ninth development, Cochrane. The original license expired on November 30, 1994, with the project operating pursuant to annual licenses thereafter.

115 FPC 1330. Montana Power amended its application on February 24 and March 21, 1994, March 2 and June 15, 1995, and March 6, 1996. Notices were issued of the application and of the above-enumerated amendments to it, and comments were received. Timely motions to intervene were filed by the U.S. Department of the Interior (Interior); the Montana Department of Natural Resources and Conservation (Montana DNRC); the City of Great Falls, Montana; the Great Falls City-County Planning Board; the Madison County Board of Commissioners; the Madison Coalition;2 American Rivers, Inc.; the Pat Barnes Missouri River Chapter of Trout Unlimited and Pete Test; Alan Rollo; Doug Wicks; Lee B. Tebo, Jr.; Lewis F. Zanto; Michael Azeka; Mildred Carmichael; Donald C. and Dorothy A. Warner; Chester J. Stodden; Harold D. Babb; Lorraine V. Kennedy; Willis and Marie Haagenson; Clifford E. Bernard; Mr. and Mrs. Robert L. Brown; Wayne A. Michel; Peter S. Cole; Allan and Lynn Aniksdal; Bernie Peterson; Tim and Lori Matich; Zackary and Katharina Helms, and George and Carole Helms Reichhelm; Stanley Burgard; Fred P. Bronaugh; Kevin Kreig; Peter S. Cole; Robert D. Nichols; Chester J. Stodden; Jan Murphy; and Owen Herold. These timely motions to intervene were all granted automatically by operation of the Commission's procedural regulations. In addition, by notices issued by the Secretary on August 18 and October 1, 1998, the Commission granted motions to intervene out of time that were filed by the U.S. Environmental Protection Agency (EPA), Region VIII; Source Giant Springs, Inc.; and Trout Unlimited.

On August 24, 1999, Trout Unlimited and its Montana State Council filed a motion to intervene out of time with respect to certain operations at the Holter Development, discussed below. On October 27, 1999, the Holter Coalition3 filed a comparable motion to intervene out of time, and Montana Power filed an answer opposing the intervention as untimely and unjustified. Grant of the motions will not delay or disrupt the proceeding or prejudice any party to it. Accordingly, we will grant both of these motions to intervene out of time.

On January 18-20, 1994, the Commission's staff held public environmental scoping meetings on the project in Great Falls, Helena, and Ennis, Montana. In

2The Madison Coalition is comprised of Trout Unlimited, the Madison-Gallatin Chapter of Trout Unlimited, Tom Morgan, Bud Lilly, Dave Kumlein, Dave Corcoran, and the R.L. Winston Rod Company. As noted above, Trout Unlimited subsequently filed a separate motion to intervene in its own name.

3The Holter Coalition is comprised of commercial guides, outfitters and homeowners whose commercial, recreational, economic and personal interests are affected by the condition of the fisheries in the vicinity of and downstream from the Holter Development. September of 1997, the Commission staff issued a Draft Environmental Impact Statement (Draft EIS), and held public hearings on it in Great Falls and Ennis on September 18 and 20, 1997. Staff issued the Final Environmental Impact Statement (Final EIS) in September of 1999. The Forest Service is a cooperating agency on the Draft and Final EIS.

On March 19, 1999, Montana Power and PP&L Montana filed an application for approval of the transfer of licenses for three projects from Montana Power to PP&L Montana, including the then-extant annual license for the Missouri-Madison Hydroelectric Project. The transfers implement Montana Power's restructuring pursuant to applicable Montana regulatory requirements. The transfers were approved on July 7, 1999,4 and became effective on December 17, 1999.5

On August 31, 1999, Montana Power and PP&L Montana filed an application to amend the annual license to reflect changes in primary transmission lines and appurtenant facilities. The Commission approved these amendments on December 7, 1999,6 and the license we issue today incorporates these changes.

PROJECT DESCRIPTION

The Missouri-Madison Hydroelectric Project develops hydropower on a 324-mile stretch of the Madison and Missouri Rivers.7 The Madison River combines with the Gallatin and Jefferson Rivers8 to form the Missouri River, which flows north toward the City of Great Falls, Montana. The Hebgen and Madison Developments are located on the Madison River. The other seven developments (Hauser, Holter, Black Eagle, Rainbow, Cochrane, Ryan, and Morony) are located on the Missouri River, downstream from the Bureau of Reclamation's Canyon Ferry Hydroelectric Project. The last five developments are clustered near and downstream of the City of Great Falls. All nine developments

488 FERC ¶ 62,018.

5The transfer became effective once Montana Power and PP&L Montana completed the sale of the project assets.

689 FERC ¶ 62,182. The parties had also applied for license amendments to align certain property rights in conformance with the transfer of the license. The December 7 order dismissed this request as unnecessary.

7The nine developments are located between river miles 40 and 103 of the Madison River, and between river miles 2,105 and 2,237 of the Missouri River. have dams. Eight of the nine developments have power generating facilities, while the Hebgen Development is used as a storage facility. The developments and their facilities, including the capacity of the power generating facilities in each development, are described in greater detail in ordering paragraph (C)(2) of this order.

As noted, parts of the project occupy federal lands. The Holter, Hauser, and Hebgen Developments occupy a total of 11,031 acres of National Forest lands. The Hauser and Madison Developments occupy a total of 932 acres of BLM lands. The Holter Development occupies 567 acres of Bureau of Reclamation lands.

Hebgen Reservoir inundates the Madison River valley adjacent to the western edge of Yellowstone National Park, in the vicinity of West Yellowstone, Montana, but beyond the boundaries of the Park. It is operated as a storage facility, with releases providing head and flow to the Missouri-Madison Hydroelectric Project's eight downstream developments as well as to the Canyon Ferry Hydroelectric Project.

In 1959, a 7.1-magnitude earthquake triggered a landslide along the Madison River canyon about six miles downstream from Hebgen Dam, substantially blocking the river so as to create a six-mile-long lake, Quake Lake, the upper end of which extends almost up to Hebgen Dam.

Madison Dam is located about 63 miles downstream from Hebgen Dam, and the reservoir it creates is Ennis Lake. From Ennis Lake and Madison Dam, the Madison River flows approximately 40 miles through open country to its confluence with the Jefferson and Gallatin Rivers, forming the Missouri. There are valuable fishery resources in both Ennis Lake and the river flow beyond it, and those resources have significant commercial and recreational value.

The principal controversies in this proceeding concern water flows and temperatures in the Madison River in and below Ennis Lake, their effects on the fishery resources in those waters, and the comparative beneficial and adverse impacts, and costs, of constructing, altering or removing facilities, or altering water flows, in that reach of the river. These matters are discussed below.

The principal focus of interest with respect to the five developments in the vicinity of the City of Great Falls was how best to allocate resources for recreation. As discussed

8These rivers were explored by Captains Meriwether Lewis and William Clark during their epic journey of 1804-1806. James Madison was at that time serving as Secretary of State in President Thomas Jefferson's cabinet, while Albert Gallatin was Secretary of the Treasury. below, there was broad support to provide a measure of funding for the federal Lewis and Clark Interpretive Center, then under construction near Great Falls.

APPLICANT'S PLANS AND CAPABILITIES

In accordance with Sections 10 and 15 of the Federal Power Act (FPA),9 we have evaluated Montana Power's record as a licensee with respect to the following: (1) conservation efforts; (2) compliance history and ability to comply with the 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 service; (7) cost effectiveness of plans; and (8) actions affecting the public. In light of our approval of the transfer of the license from Montana Power to PP&L Montana, we have also evaluated PP&L Montana's record.

1, 2 and 3. Conservation Efforts, Ability to Comply with the New License, and Safe Management, Operation and Maintenance of the Project

The Director, in his July 7, 1999 order approving the transfer of the licenses, determined that Montana Power has adequately complied with the terms and conditions of its licenses. The Director also determined that, although PP&L Montana is not currently a licensee of the Commission, and therefore has no compliance record to review, PP&L Montana intends to retain key Montana Power hydroelectric plant management personnel and will maintain its hydroelectric offices, staffed by current Montana Power employees, in Butte, Montana. The Director determined that PP&L Montana "is qualified to operate the properties under the licenses" (including the Missouri-Madison license herein).

The Commission's staff has determined that Montana PP&L has the ability to comply with the FPA and the articles, terms and conditions of the license issued herein. We have determined that PP&L has the capacity to operate the project safely during the license term, in a manner that will not pose a threat to public safety if the project is operated and maintained in a manner consistent with the the Commission's regulations, the license conditions, and sound engineering practices.

4. Ability to Provide Efficient and Reliable Electric Service

In accepting the transfer of the license from Montana Power, PP&L Montana agreed to accept all of the responsibilities, terms and conditions of the existing license and of the Federal Power Act (FPA). Montana Power operated the project in an efficient manner within the constraints of the existing license. We believe that PP&L Montana

916 U.S.C. § 808(a)(2). will operate the project in an efficient manner within the constraints of the license issued herein, and that the project will continue to provide efficient and reliable electric service in the future.

5. Need for Power

As discussed above, the project's nine developments were built between 1891 and 1958. Since license issuance in 1956, the project's long operating history demonstrates both short and long term needs for the power it generates.

In analyzing public interest factors, the Commission takes into account that hydroelectric projects offer unique operational benefits to the electric utility system (ancillary benefits). These benefits include their value as almost instantaneous load- following response to dampen voltage and frequency instability on the transmission system, system-power-factor-correction through condensing operations, and a source of power available to help in quickly putting fossil-fuel based generating stations back on line following a major utility system or regional blackout.

Ancillary benefits are now mostly priced at rates that recover only the cost of providing the electric service at issue, which don't resemble the prices that would occur in competitive markets. As competitive markets for ancillary benefits begin to develop, the ability of hydro projects to provide ancillary services to the system will increase the benefits of the projects.

6. Transmission Service

As noted above, on August 31, 1999, Montana Power and PP&L Montana filed a joint application to amend the licenses for three projects, including the Missouri-Madison Hydroelectric Project, to better delineate the points of interconnection between developments in the projects that will be conveyed to PP&L Montana and the primary transmission facilities that will be retained by Montana Power, including removal of certain transmission facilities from the Missouri-Madison Hydroelectric Project.10 As discussed above, the amendments involving primary lines and appurtenant facilities were approved and are incorporated in the license issued herein. We conclude that the operation of the operation of the transmission lines is satisfactory and will not be affected by issuance of this new license.

7. Cost Effectiveness of Plans

10The other two projects encompassed within the application to amend are the Thompson Falls Project No. 1869 and the Mystic Lake Project No. 2301. Montana Power proposed new construction, environmental and recreational enhancement measures for the project that would affect the existing project operation and the associated environmental and aesthetic resources of the project area. The need for, usefulness of, and economic impact of these various modifications, including alternatives and variations proposed by the Commission's staff, are discussed in the Final EIS.11

8. Actions Affecting the Public

We have no reason to doubt that PP&L Montana will implement the various environmental and recreational enhancement measures that Montana Power proposed in its application and that we have approved in this license. These measures, discussed elsewhere herein and in the Final EIS, as well as the power to be generated by the project, will benefit the public.

WATER QUALITY CERTIFICATION

On September 9, 1993, pursuant to Section 401(a) of the Clean Water Act (CWA),12 the Montana Department of Health and Environmental Services issued water quality certification for the project.13 Pursuant to Section 401(d) of the CWA, the certification is a mandatory condition of the license we issue today.14 The certification, which contains eleven conditions, is set forth in Appendix A to this order.

11See Final EIS, Section 5, Staff conclusions.

1233 U.S.C. § 1341(a)(1).

13Montana Power initially appealed the certification but then withdrew its appeal. The CWA Section 401 responsibilities were transferred to the Montana Department of Environmental Quality (Montana DEQ) pursuant to a July 1, 1995 reorganization of Montana's natural resource and environmental agencies.

1433 U.S.C. § 1341(d). Pursuant to American Rivers v FERC, 129 F.3d 99 (2d Cir. 1997), the Commission must accept as license conditions all conditions attached to a valid water quality certification. In any event, nothing in the conditions of a water quality certification shall be viewed as restricting the Commission's ability or the licensee's obligation, under Part I of the FPA, to take timely action to protect human life or the environment. THREATENED AND ENDANGERED SPECIES

By a letter dated November 18, 1998,15 the U.S. Fish and Wildlife Service (FWS) notified the Commission that it had reviewed the Commission's biological assessment and concurred that the project, if relicensed, is not likely to adversely affect seven threatened or endangered species: the grizzly bear (Ursos arctos), bald eagle (Haliaeetus leucocephalus), American peregrine falcon (Falco peregrinus anatum),16 pallid sturgeon (Saphirhynchus albus), gray wolf (Canis lupus), least tern (Sterna antillarum), and piping plover (Charadrius melodus). Therefore, formal consultation is not required.

The Canada Lynx (Lynx Canadensis) was listed as threatened on March 24, 2000. Since the current range of the lynx either encompasses or occurs near some of the Missouri-Madison Project developments, Commission staff issued on February 10, 2000, a supplemental biological assessment which concluded that continued operation and maintenance of the project, if relicensed, is not likely to adversely affect the Canada lynx. By letter dated February 28, 2000, FWS concurred.17

FEDERAL RESERVATIONS AND FPA SECTION 4(e)

A. Consistency Finding

Section 4(e) of the FPA18 provides that licenses shall be issued within any federal reservation only after a finding by the Commission that the license will not interfere or be inconsistent with the purpose for which such reservation was created and acquired. As noted, the Hebgen Development and parts of the Hauser and Holter Developments occupy Forest Service lands.19

Both the Gallatin and Helena National Forests were created for the purposes of securing favorable conditions for water flows and furnishing a continuous supply of

15Letter from Kemper M. McMaster, Field Supervisor, to the Director, in response to the Director's October 14, 1998 letter to FWS, both of which, along with the biological assessment, are reproduced in Appendix C of the Final EIS.

16The American peregrine falcon was delisted from the threatened species list on August 25, 1999.

17Letter from Kemper M. McMaster to Thomas E. Dewitt.

1816 U.S.C. § 797(e). timber.20 We find that the issuance of a new license, as conditioned herein, for the Missouri-Madison Project No. 2188 will not interfere or be inconsistent with these purposes.

B. Section 4(e) Conditions

Section 4(e) also provides that licenses for hydropower projects on federal reservations shall contain such conditions as the Secretary of the department under whose supervision such reservation falls shall deem necessary for the adequate protection and utilization of such reservation.21 The Forest Service's final Section 4(e) conditions, filed on February 10, 2000,22 are set forth in Appendix B to the license issued herein.

SECTION 18 FISHWAY PRESCRIPTIONS

Section 18 of the FPA states that the Commission shall require construction, maintenance, and operation by a licensee of such fishways as the Secretaries of

19The Hauser Dam and the Holter Dam and Reservoir are located on Forest Service lands.

20The Gallatin National Forest was originally established on February 10, 1899, by Presidential Proclamation, 30 Stat. 1788. The Helena National Forest was originally established on April 12, 1906, by Presidential Proclamation, 34 Stat. 3196. Pursuant to the Organic Act of June 4, 1897, 16 U.S.C. § 475, national forests could be established only "to improve and protect the forest within the [forest] or for the purpose of securing favorable conditions for water flows, and to furnish a continuous supply of timber for the use and necessities of citizens of the United States." See also discussion in Keating v. FERC, 114 F.3d 1265, 1266 (D.C. Cir. 1997).

21With exceptions not relevant here, the Commission cannot alter or reject Section 4(e) conditions. See Escondido Mutual Water Co. v. LaJolla Band, 466 U.S. 765 (1984).

22Normally, 18 CFR 4.34(b)(1) establishes the deadlines for submitting mandatory conditions. However, as noted, the Forest Service was a cooperating agency on the EIS in this proceeding. The Commission and the Forest Service entered into a letter of understanding (dated December 26, 1993) with respect to procedures for the preparation of the EIS in this proceeding, pursuant to which the Forest Service obtained extensions to submit its Section 4(e) conditions. Commerce and the Interior may prescribe.23 By filing of June 1, 1995, Interior timely asked the Commission to reserve in the Project No. 2118 license Interior's authority to prescribe fishways at the nine developments. Consistent with our policy,24 we do so in license Article 407.

RECOMMENDATIONS OF FEDERAL AND STATE FISH AND WILDLIFE AGENCIES

Section 10(j) of the FPA25 requires the Commission, when issuing a license, to include license conditions, based on 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.26

On June 1, 1995, Interior (on behalf of its FWS, BLM, and Bureau of Reclamation) filed 96 preliminary recommended license conditions, accompanied by the signed concurrence of Montana DNRC, Montana Department of Fish Wildlife and Parks (Montana DFWP), and (with certain noted exceptions) Montana Power. The agencies state that this filing constitutes a settlement agreement.27

23See June 1, 1995 filing at pp. 1.15, 2.4, 3.3, 4.3, 5.2, 6.2, 7.2, 8.2, and 9.3.

24See Wisconsin Public Service Corp., 62 FERC ¶ 61,095 (1993), aff'd, Wisconsin Public Service Corp. v. FERC, 32 F.3d 1165 (7th Cir. 1994).

2516 U.S.C. § 803(j).

26If 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.

27See Interior filing of February 18, 1998, at 2; Montana DFWP filing of February 19, 1998, at 1. Although the May 31, 1995 filing was entitled "Recommended Terms and Conditions (Sections 4(e), 10(j), and 18) of the Federal Power Act) for the Missouri- Madison Hydroelectric Project," it did not identify which recommendations were made pursuant to which section of the FPA.28 Accordingly, these recommendations are considered as filed under FPA Section 10(a).

The agreement provides for five Technical Advisory Committees, chaired by the licensee and comprising state and federal agency personnel, to manage the development, execution, and monitoring of Commission-approved environmental protection, mitigation, and enhancement measures.29 The committees cover Missouri-Madison River Wildlife; Madison River Fisheries; Hauser-Holter Fisheries; Missouri River Fisheries; and Missouri-Madison River Water Quality. The licensee will budget and manage a variety of specified one-time and annual funds for use by each committee, totalling over $3.6 million in one-time funding and $861,500 in annual funding.30

In February 1998, FWS and Montana DFWP filed timely comments on the Draft EIS, including, pursuant to Section 10(j) of the FPA, 63 amended recommendations, many of which elaborated on earlier-filed recommendations.31

28See 18 CFR 4.34(b)(1) .

29The proposed conditions state, in a number of places, that if a technical committee consensus cannot be reached with respect to a particular environmental measure, the licensee will submit a proposal to the Commission, along with the relevant agencies' comments, and the Commission "will determine whether the [licensee's] proposal is reasonable and consistent with the requirements of the license and any applicable federal laws or regulations." See June 1, 1995 filing at Section I.A.3; Section II.1.C. Of course, the Commission's review authority includes approving, modifying, or rejecting a proposal, based on substantial evidence.

30We note that agreements among settlement parties to limit a licensee's costs for agreed-upon measures do not limit the Commission's reserved authority to require additional measures, as future circumstances may warrant. See, e.g., Southern California Edison Co., 77 FERC ¶ 61,313 at p. 62,428 n. 46 (1996), and cases cited therein.

31See FWS filing of February 18, 1998, and Montana DFWP filing of February 19, 1998. By letter filed February 20, 1998, the EPA stated its support for the Section 10(j) recommendations of the state and federal fish and wildlife agencies.

18 CFR 4.30(b)(9(ii) defines "fish and wildlife recommendation" as: Of the 159 recommendations filed by the fish and wildlife agencies, we are adopting as license conditions 103 in total and 17 in part.32 Nine recommendations were not adopted because the Final EIS identified specific measures to address the adverse impacts identified in the recommendations. The remaining 30 recommendations were not adopted because they were unrelated to project impacts or insufficiently specific to evaluate.33

We conclude that the recommendations we adopt and incorporate as requirements of the license, together with the additional conditions recommended by the Commission staff, will adequately and equitably protect, mitigate impacts to, and enhance fish and wildlife and other environmental resources affected by the project.

any recommendation designed to protect, mitigate damages to, or enhance any wild member of the animal kingdom, . . . [including] related breeding or spawning grounds, and habitat. A "fish and wildlife recommendation" includes a request for a study which cannot be completed prior to licensing, but does not include . . . a request for additional pre-licensing studies or analysis . . . .

In the Final EIS (at p. 5-18), Commission staff found that 61 of the 96 June 1, 1995 recommendations were within the scope of Section 10(j). As we note above, all 96 of the recommendations are being considered under FPA Section 10(a). In addition, we find that 15 of the additional 63 recommendations are outside the scope of Section 10(j).

32The recommendations we adopt include provisions for the licensee to mitigate for unquantified project-induced fish losses by contributing funds for a state fish stocking program. See June 1, 1995 filing at pp. 3.3, 4.3, 6.3, and 7.3. While a licensee cannot be required to provide or fund compensatory mitigation for project-related fish mortality in the absence of any evidence that such mortality has an adverse effect on fish populations, see City of New Martinsville, W.Va. v. FERC, 102 F.3d 567 (D.C. Cir. 1996), where a licensee voluntarily undertakes to provide such funding, the Commission will approve the undertaking. See City of Crystal Falls, Michigan, 86 FERC ¶61,104 (1999). The same principle applies to recommendations for the licensee to undertake or fund studies in the absence of a showing of the project-induced harm to be addressed in such studies. See City of Centralia, Wash. v. FERC, 213 F.3d 742 (D.C. Cir. 2000).

33See Table 5-6 of the Final EIS, which summarizes each recommendation and the Commission staff's analysis thereof. RECREATION

Article 426 of the license issued herein approves the licensee's plans for recreational resource management at the Missouri-Madison Project, including a proposal, made in a February 21, 1994 amendment to its license application, to reallocate $1.1 million in proposed recreational funds from two project sites to the federally operated Lewis and Clark Interpretive Center, which is located outside the project's boundaries.34

Montana Power had originally proposed to spend $1,500,000 to develop the Black Eagle Recreation Area, near the project's Black Eagle Dam, and $200,000 to develop the Sulfur Springs Trailhead, near the project's Morony Dam. The Commission staff's Final EIS (at p. 5-15) recommended adoption of Montana Power's amended proposal, together with the requirement that the licensee file a revised Comprehensive Recreation Plan for the affected developments describing, among other things, how the remaining funds would be spent for the Black Eagle Recreation Area and Sulfur Springs Trailhead.35

We approve the licensee's proposal for the reallocation of recreation development funds. According to the March 18, 1997 settlement filing, the Sulfur Springs Trailhead has already been completed through local voluntary efforts, and a private firm has plans to construct a campground near Black Eagle Island, in the licensee's view obviating the need for the campground element of the proposed project recreational development at that site. Also, the licensee has delivered $1.1 million to the Lewis and Clark Center Fund,36 and the Center is built and operating. Accordingly, at this point the new license need only require the licensee to submit a proposal for use of the remaining funds for development at the Black Eagle Recreation Area (see Article 426).

HISTORIC PROPERTIES

34On March 18, 1997, Montana Power and a number of agencies and interest groups filed a "settlement agreement" in support of Montana Power's February 21, 1994 application amendment on this point.

35Final EIS at p. 3-5.

36Id. at p. E-183. In giving $1.1 million to the Center before the Commission acted on the relicense application, the licensee assumed the risk that the Commission might decline to reduce the level of expenditures to be made for the Black Eagle Recreation Area and Sulfur Springs Trailhead. On May 6, 1998, the Advisory Council on Historic Preservation, the Montana State Historic Preservation Office, and the Commission executed a Programmatic Agreement for the project, thereby satisfying the Commission's responsibilities under Section 106 of the National Historic Preservation Act. The Gallatin and Helena National Forests and Montana Power signed the Programmatic Agreement as concurring parties.

THE MADISON DEVELOPMENT

The Madison Coalition, in its motion to intervene, identifies its members as conservationists, river guides, fishing guides, and manufacturers or retail sellers of fly rods for trout fishing, all with an economic stake in the fishery and associated recreational resources of the Madison River.37 The Coalition characterizes the Madison River as one of the finest wild trout streams in the country,38 and opposes issuance of a new license for the project unless it is conditioned to mitigate the project's alleged deleterious water temperature impacts on the river.39

The Coalition contends that the Madison Development, by slowing down the flow of the water in the Madison River, causes the temperature to rise, with consequent adverse impacts on the trout resources in the river during peak high temperatures in the summer. In its motion to intervene in its own name, Trout Unlimited, a member of the Madison Coalition, advocated removal of the Madison Dam as its preferred alternative.40 In a subsequent filing, the Madison Coalition favored an alternative of leaving the dam and Ennis Lake in place but channeling normal river flows around them and routing only flows in excess of channel capacity into the lake.41

37Motion to intervene, filed August 5, 1993, at pp. 5-6.

38Id. at p. 2.

39Letter from Madison Coalition to the Secretary, filed January 25, 1993, at p. 17.

40Motion to intervene in opposition, comments on Draft EIS, and request for supplemental EIS, filed February 23, 1998, at p. 4.

41Reply comments on applicant's and resource agencies' proposed conditions, filed April 8, 1998, at p. 3. The Final EIS analyzes four alternative methods of reducing the temperature of the waters in the Madison River below the Madison Dam.42 The first method would be to remove the dam and drain Ennis Lake, to allow the relatively cooler water from Hebgen Reservoir to flow downstream through the river channel rather than gathering solar radiation in Ennis Lake. Montana Power estimates the total cost of removing the dam at $59 million, including $6 million for the removal itself, $27 million for channel reconstruction and stabilization, $11 million for revegetation of the inundation zone, $1 million for environmental assessment and mitigation, and $14 million for design, contingency, and other costs.43

Removing Madison Dam and draining Ennis Lake would reduce the mean temperature of the water by approximately 1.5 degrees Celsius (C) in the vicinity of the dam, and by about 0.5 degrees C at Three Forks, where the Madison combines with the Jefferson and Gallatin Rivers to form the Missouri. Removing Madison Dam and draining Ennis Lake would also end the existing fishery community in Ennis Lake,44 and would put the lake-based recreational facilities around Ennis Lake out of business, with significant adverse impacts on the local economy, particularly in the towns of Ennis and McAllister.45

The second alternative would be to construct a new, 80-foot-high arch dam in Bear Trap Canyon that would increase the depth of Ennis Lake by 40 feet, to allow relatively cooler water from the bottom of the lake to be released for power generation. Montana Power estimated that the total cost of constructing a new dam would be $104 million, including $ 32.5 million for the dam structure, $13 million to modify the hydroelectric power facilities, $32.5 million for lands, roads and bridges, $1 million for environmental studies and mitigation, and $25 million for design, contingency and other costs.46

42See section 4.2.2, Appendices A and B, and pp. E-155, E-190, E-235, and E-354 of the Final EIS.

43Id. at pp. A-3 to A-4.

44Id. at p. A-15.

45Id. at p. A-20.

46Id. at p. A-4. Constructing a new dam would reduce the mean temperature by approximately 7 degrees C in the vicinity of the dam and by approximately 3 degrees C at Three Forks.47 Raising the level of Ennis Lake would inundate the existing residential, recreational, and agricultural land uses and facilities along the Ennis Lake shoreline.

The third alternative is to construct a channel to reroute Madison River flows around the shoreline of Ennis Lake. Montana Power estimated the total cost of this option at $30 million, including $1 million for environmental studies and mitigation.48 The effect on water temperature in the Madison River would be comparable to the effect from removing Madison Dam, in that both involve flowing the water through without delay or obstruction. Depending on the frequency of use of the channel, the temperature of the water in Ennis Lake might rise, affecting the fishery resources in the lake.49 Constructing a channel would adversely affect fish and waterfowl populations, and would restrict boat access by anglers, hunters, birdwatchers, and other recreationists to areas along the eastern and southern shorelines of the lake.50

The fourth alternative is to "pulse" alternating high and low flows from Ennis Lake during hot days or weeks in the summer.51 This would be done by releasing water from Madison Dam for 12 hours (during the warmest part of the day) at a flow of 2,100 cubic feet per second (cfs), followed by 12 hours (during the coolest part of the day) at 1,100 cfs. The larger volume of water would provide a greater mass for the absorption of heat during the warmer part of the day, while the smaller volumes of water would be flowing during the cooler parts of the day. The concept of pulsed flows relies on the fact that the greater the volume of water, the less the rate of heat transfer.

The effect of pulsed flows on water temperature in the Madison River below Madison Dam would be roughly comparable to the reduction in temperature that would be obtained by either removing the dam or channeling around the lake; the difference in mean temperature reduction among those three alternatives is no more than one half of

47Id. at p. A-12, figure A-3.

48Id. at p. A-4.

49Id. at p. A-16.

50Id. at p. A-20.

51Id. at p. A-5. one degree C.52 There would be no impact on the fishery or recreational resources at Ennis Lake.53

The Final EIS rejects the dam removal, dam construction, and channel alternatives because all three involve high costs, substantial disruption, and adverse impacts that are far out of proportion to the benefits to be derived. We agree with that analysis.54 The "pulse" alternative avoids all of those costs, disruptions, and adverse impacts while providing essentially the same benefit as the dam removal and channel around alternatives. While the new dam alternative would provide marginally greater benefits, those benefits are heavily outweighed by the cost, disruption, and adverse impacts inherent in that alternative. The license issued by this order mandates use of pulsed flows, by requiring that the licensee develop, implement, and monitor the effectiveness of a protocol to reduce the potential thermal effects from the operation of the Madison Development on the fishery of the Madison River downstream of Madison Dam.55

The Madison Coalition contends that the pulsed-flow alternative does not address the potential effects of chronic exposure to elevated temperatures. While we recognize that chronic effects, such as changes in the benthic community, reduced fish growth, spawning success and condition factor, may be a concern, our staff was unable to find any data to substantiate the Coalition's contention that chronic impacts represent a threat to the fishery downstream of Madison Dam, and there are no established exposure criteria with which to compare the thermal regime of the Madison River. The persistence of a viable trout population subsequent to construction of the dam indicates that chronic exposure to sub-lethal temperatures does not have any meaningful long-lasting effects on the fish population.

52Id. at p. A-14.

53Id. at pp. A-17 and A-21.

54The fishery resources in Ennis Lake are also valued for recreational and commercial purposes; even before the Madison Dam was built, native salmonids in the lower Madison River were naturally limited by high water temperatures; food, habitat quality, and angling likely play a role in limiting trout populations in the lower river (Final EIS at p. A-24); and the species of concern to the Coalition, rainbow and brown trout, while valued for recreational and commercial purposes, are not indigenous to the river, nor are they threatened or endangered. Id.

55See Article 413. THE HOLTER DEVELOPMENT

On August 2, 1999, Montana Power filed a letter describing its plans to replace the flashboards on the Holter Dam, which involved drawing down the Holter reservoir by 16 feet. In response to our notice of the filing, Trout Unlimited filed a protest and request for a stay, and the Holter Coalition and numerous local residents, fishing outfitters and guides filed comments and protests. In general, they objected to both the method and the timing of Montana Power's proposed flashboard replacement. Trout Unlimited contended that the 16-foot drawdown would negatively affect trout spawning periods in the Missouri River by encouraging trout to spawn above the normal downstream water surface elevation, and that when downstream water surface elevations receded to their normal level spawning redds would be exposed. Trout Unlimited also contended that yellow perch and kokanee salmon in Holter Reservoir would be flushed from the reservoir into the downstream tailwater, resulting in a loss of fishery resources from the reservoir. Trout Unlimited and others advocated, in the alternative, the use of a bulkhead or coffer dam. The Holter Coalition advocated various mitigation and consultation measures to ameliorate the impact of the drawdown.

By letter filed September 3, 1999, Montana Power withdrew its Holter flashboard proposal, rendering the flashboard replacement issue moot.56 We recognize, however, that the issue of reservoir drawdowns may arise in the future. Therefore, Article 403 of the license issued herein requires Montana Power to consult with the resource agencies prior to seeking Commission approval for any deviation from typical operations for maintenance or construction activities.

HEBGEN DEVELOPMENT

Historically, and under normal operations, the Hebgen Development has been operated such that Montana Power attempts to maintain the pool elevation within 4.61 feet of the normal maximum pool elevation of 6,540.18 feet (USGS) until September 1 of each year. Beginning on September 1, Hebgen Lake is drafted down so that by the end of November it reaches an elevation of 6,529.31 feet (USGS) . Beginning in April, the lake is refilled to again be within 4.61 feet of the normal maximum pool elevation. However, under the Missouri River Coordination Agreement with the Bureau of Reclamation, the licensee may release water from Hebgen Lake if storage in the Bureau's Canyon Ferry Reservoir falls below elevation 3,769 feet.

56Letter to the Secretary from John C. Van Devoir, Manager, Hydro Operations, Montana Power, August 31, 1999. Under the conditions of this license, the drawdown of Hebgen Lake will be prolonged, beginning September 1 and concluding at the end of March. The reason for prolonging the draw-down period is to stabilize aquatic habitat in the Madison River in order to enhance trout spawning success downstream of Hebgen Lake.

Subsequent to issuance of the Final EIS, we received a number of letters from local residents who own property on the shore of the lake, expressing concern that the prolonged drawdown period would result in damage to boat docks surrounding the reservoir. They described problems that they have experienced when drawdowns have not been completed before the lake froze: docks became locked in the ice and were pulled out of their locations.

The issue before us is one of balancing reservoir-related recreational opportunities with downstream fishery resource enhancement opportunities. Over the years the Madison River downstream has become one of the premier trout streams in the country, classified by the Montana Department of Fish Wildlife and Parks as an outstanding fishery resource.57 In recent years, however, the introduction of whirling disease has reduced the rainbow trout population to only about 10 to 25 percent of its former level. In addition, a historically important spawning area downstream of Quake Lake has undergone significant changes that have reduced the amount of available spawning habitat.58 Brown trout, which have become the predominant game species in the Madison River, spawn in the fall. In order to protect brown trout spawning success, spawning redds must not become dewatered over winter. The proposal to lengthen the drawdown rate of Hebgen Reservoir will ensure that brown trout redds remain adequately watered during incubation and emergence periods.59 However, as the Final EIS noted, prolonging the drawdown period may result in adverse impacts to shoreline recreation facilities. The Final EIS therefore recommends that the licensee develop a shoreline management plan that provides for monitoring such impacts and studying mitigative measures, including possible adjustments to the precise rate and timing of the prolonged drawdown required herein.60 This recommendation is incorporated in Article 424 of the license issued herein.

57Final EIS at p. 3-42.

58Final EIS at p. 3-48.

59Final EIS at 4-21.

60Final EIS at p. 2-7. WATER RIGHTS

The Montana Department of Environmental Quality (Montana DEQ) points out that the licensee has certain senior water rights in the upper Missouri River basin that it has not called in the last 50 or more years. The agency states that over the years junior water rights holders, many of them agricultural irrigators, "have grown accustomed to" using their irrigation water without calls thereon by senior water rights.61 In consequence, according to Montana DEQ, were the licensee to exercise its senior water rights, the result could be "adverse economic effects on junior irrigators, agricultural sales, farm labor income and the economic base of communities in the upper Missouri basin."62 For this reason, the agency asks the Commission either to condition the Missouri-Madison Project license upon the maintenance of project's historical use of water, or to supplement the Final EIS with a comprehensive analysis of the impacts the licensee's call on senior water rights could have on agricultural and other interests.63 Montana asserts that the need for such an analysis is vital, since a new project license "will decide for the next 50 years what is the best comprehensive plan for the development of the waterway."64

Montana Power responded that any harm from a future call on the project's senior water rights is too speculative to be analyzed; that the project's water rights are only a fraction of senior rights and are themselves subject to more senior irrigation rights; and that in any event the Commission cannot interfere with its state-granted water rights in the manner sought by Montana DEQ.65

61Letter from Mark A. Simonvich, Director, Montana DEQ, to the Secretary, filed November 1, 1999, attachment at p. 2.

62Id., letter at 1-2.

63Source Giant Springs, Inc., which has a bottled water facility using water from a Missouri River tributary, filed, on November 10, 1999, comments in support of Montana DEQ's request.

64Montana DEQ's November 1, 1999 letter, attachment at 3.

65Montana Power comments filed November 12, 1999. First, we note that, whereas the Commission has no jurisdiction over water rights, it does have the authority to condition of the grant of a hydroelectric project license with constraints on the licensee's use of its water rights, if the public interest so requires.66 Second, we point out that, whereas new licenses are issued for terms of 30 to 50 years,67 the mandate of FPA Section 10(a)(1) that the licensed project be best adapted to a comprehensive plan for all beneficial purposes applies throughout the term of the license.68 For this reason, licenses reserve our authority to modify project operations as appropriate in light of changing circumstances, after notice and opportunity for a hearing, and based on substantial evidence.69 Thus, while we agree with the licensee that the hypothetical possibility of harm to the junior water rights holders attributable to a potential licensee call at some unknown time in the future on its senior water rights is too speculative to warrant either a supplement to the Final EIS or a subordination clause in the license,70 we retain the ability to reexamine the project's use of its water rights, should there be evidence of the need for such reexamination.

66See, e.g., Trinity River Authority of Texas, 41 FERC ¶ 61,300 at p. 61,791 (1987); Rancho Riata Hydro Partners, Inc., 54 FERC ¶ 61,176 at p. 61,534 (1991).

67See Section 15(e) of the FPA, 16 U.S.C. § 808(e).

68See cases cited in n. 66, supra.

69Standard Article 12 of the new Project No. 2118 license provides:

[t]he operations of the Licensee, so far as they affect the use, storage and discharge from storage of waters affected by the license, shall at all times be controlled by such reasonable rules and regulations as the Commission may prescribe for the protection of life, health, and property, and in the interest of the fullest practicable conservation and utilization of such waters for power purposes and for other beneficial public uses, including recreational purposes . . .

See Form L-5, published at 54 FPC 1832-42 (1975) at 1836; incorporated by reference in ordering paragraph (E) in this order. See also discussion in Rancho Riata Hydro Partners, supra, 54 FERC at p. 61,534.

70See discussion in Horseshoe Bend Hydroelectric Co., 42 FERC ¶ 61,072 at pp. 61,324-25 (1988) . 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 waterways affected by the project.71 Federal and state agencies filed 36 comprehensive plans that address various resources in Montana. Of these, we identified and reviewed 21 plans relevant to the Missouri-Madison Hydroelectric

71The definition of "comprehensive plan" in this context is set forth at 18 CFR 2.19 (2000). Project,72 and have concluded that the project, with the environmental measures adopted herein, will be consistent with these plans.

COMPREHENSIVE DEVELOPMENT

Sections 4(e) and 10(a)(1) of the FPA, §§ 16 U.S.C. 797(e) and 803(a)(1), require the Commission, in acting on applications for license, to give equal consideration to the power development purposes and to the purposes of energy conservation, the protection, mitigation of damage to, and enhancement of fish and wildlife, the protection of recreational opportunities, and the preservation of other aspects of environmental quality. 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

72These plans are: (1) Environmental Impact Statement for the Helena National Forest Land and Resource Management Plan, 1986, U.S. Forest Service, Helena, Montana; (2) Lewis and Clark National Forest Plan, 1986, U.S. Forest Service, Great Falls, Montana; (3) Gallatin National Forest Plan, 1987, U.S. Forest Service, Bozeman, Montana; (4) Montana Statewide Comprehensive Outdoor Recreation Plan, 1988, MDFWP, Helena, Montana; (5) Hauser Reservoir Fisheries Management Plan, September 1989 to September 1994, 1989, MDFWP, Helena, Montana; (6) Missouri River Management Plan: Holter Dam to Great Falls, 1990 to 1994, 1990, MDFWP, Helena, Montana; (7) Canyon Ferry Reservoir/Missouri River Fisheries Management Plan, January 1993 to January 1998, 1992, MDFWP, Helena, Monatana; (8) MDFWP Water Rights Filings Under S.B. 76, 1993, MDFWP, Helena, Montana; (9) Montana Statewide Comprehensive Outdoor Recreation Plan: Executive Summary, 1993, MDFWP, Helena, Montana; (10) State of Montana Nonpoint Source Management Plan, 1991, MDEQ, Helena, Montana; (11) Montana Water Quality 1994: The Montana 305(b) Report, 1994, MDEQ, Helena, Montana; (12) Montana Water Plan Management Section: Federal Hydropower Licensing and State Water Rights, 1989, MDNRC, Helena, Montana; (13) Montana Water Plan Management Section: Instream Flow Protection, 1989, MDNRC, Helena, Montana; (14) Montana Water Plan: Water Storage, 1990, MDNRC, Helena, Montana; (15) Montana Water Plan: Drought Management, 1990, MDNRC, Helena, Montana; (16) Montana Water Plan: Integrated Water Quality and Quantity Management, 1992, MDNRC, Helena, Montana; (17) Montana List of Waterbodies in Need of Total Maximum Daily Load Development, 1996, MDEQ, Helena, Montana; (18) Northwest Conservation and Electric Power Plan, 1986, Northwest Power Planning Council (NPPC), Portland, Oregon; (19) Protected Areas Summary and Response to Comments, 1990, NPPC, Portland, Oregon; (20) Proposed Protected Areas Changes: 1992 Rulemaking, 1992, NPPC, Portland, Oregon; and (21) Montana House Bill No. 546, Total Maximum Daily Load Legislation, 1997, State of Montana, Helena, Montana. beneficial public uses. As part of this analysis, the Commission considers the economic benefits of project power.

Under the Commission's approach to evaluating the economics of hydropower projects, as articulated in Mead Corp.,73 the Commission employs an analysis that uses current costs to compare the costs of the project and likely alternative power with no forecasts concerning potential future inflation, escalation, or deflation beyond the license issuance date. The basic purpose of the Commission's economic 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.

In addition, certain economic factors related to project decommissioning impinge on the decision to issue a new license that are not present in the licensing of new projects. If an existing project is not issued a new license, or if the licensee declines to accept the new license, the project probably will have to be retired in one form or another. This could range from simply removing the generators at the project developments to potential major environmental impacts and restoration resulting from removing the project's dams.

Based on current economic conditions, without future escalation or inflation, the Missouri-Madison Project, if licensed as proposed by the applicant, would provide a firm capacity of 326.9 MW and produce an average 1,945 GWh of energy, at an annual cost of about 13.8 mills/kWh, or about 17.76 mills/kWh less than the current cost of an equivalent amount of capacity and energy using available alternative power sources. If licensed in accordance with the Commission staff's preferred alternative as described in the Final EIS, the project would produce a firm capacity of 326.9 MW and an average of 1,945 GWh of energy at an annual cost of about 13.4 mills/kWh, or about 18.16 mills/kWh less than the current cost of alternative power.74

The Final EIS analyzes the effects associated with the issuance of a new license for the project, and recommends a variety of measures to protect and enhance the environmental resources, which we adopt, as discussed herein. The recommended

7372 FERC ¶ 61,027 (1995).

74 The Final EIS (see pp. 2-55 and 2-56) did not include the cost of capacity in the cost of alternative power. The cost of alternative power was based on the cost of alternative energy only, or 18.66 mills/kWh. Assuming a cost of alternative capacity is $105 per kilowatt-year based on the cost of combined-cycle combustion turbine capacity and an average annual plant factor of 70 percent for combined-cycle generation, the cost of alternative capacity would be about 12.9 mills/kWh. Therefore, the total cost of alternative power is 31.6 mills/kWh. measures were for the most part developed after the consideration of the terms and conditions submitted by federal and state agencies.

Based on review and evaluation of the project as proposed by the applicant/licensee, and with the additional required measures, we conclude that operating and maintaining the project in the manner required by the license will protect and enhance fish and wildlife resources, water quality, recreational, and cultural resources. The electric power generated from renewable water power resources will be beneficial because it will continue to offset the use of fossilfueled, steamelectric generating plants, thereby conserving nonrenewable resources and reducing atmospheric pollution. With this project providing the infrastructure for a total generating capacity of 326.9 MW, using the Oak Ridge Competitive Electricity Dispatch model, it is estimated that approximately 300,000 metric tons of greenhouse gas emissions may be avoided annually. We find, therefore, that the Missouri-Madison Hydroelectric Project, with the required measures, is best adapted to a comprehensive plan for the use, conservation, and development of the waterway for beneficial public purposes.

The design of this project is consistent with the engineering standards governing dam safety. The project will be safe if operated and maintained in accordance with the requirements of this license.

LICENSE TERM

Section 15(e) of the FPA75 provides that any new license issued shall be for a term of not less than 30 years nor more than 50 years. The Commission's general policy is to establish 30-year terms for projects with little or no redevelopment, new construction, new capacity, or environmental mitigative and enhancement measures; 40year terms for projects with a moderate amount of such activities; and 50-year terms for projects which propose extensive measures of these kinds. Accordingly, because this new license requires a moderate amount of environmental mitigative and enhancement measures, the license will have a term of 40 years.

The Commission orders:

(A) The motions to intervene out of time, filed by Trout Unlimited and its Montana State Council, and by the Holter Coalition, are granted.

7516 U.S.C. § 808(e). (B) This license is issued to PP&L Montana, LLC (Licensee), for a period of 40 years, effective the first day of the month in which the license is issued, to construct, operate, and maintain the Missouri-Madison Hydroelectric 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.

(C) The project consists of:

(1) All land, to the extent of the Licensee's interests in those lands, enclosed by the project boundary shown by exhibit G:

Exhibit G FERC Drawing No. Showing

Sheet 1 2188-1091 Hebgen Development Boundary Sheet 2 2188-1092 Hebgen Development Boundary Sheet 3 2188-1093 Madison Development Boundary Sheet 4 2188-1094 Madison Development Boundary Sheet 5 2188-1095 Madison Development Boundary Sheet 6 2188-1096 Hauser Development Boundary Sheet 7 2188-1097 Hauser Development Boundary Sheet 8 2188-1098 Hauser Development Boundary Sheet 9 2188-1099 Holter Development Boundary Sheet 10 2188-1100 Holter Development Boundary Sheet 11 2188-1101 Holter Development Boundary Sheet 12 2188-1102 Black Eagle Development Boundary Sheet 13 2188-1103 Rainbow Development Boundary Sheet 14 2188-1104 Cochrane Development Boundary Sheet 15 2188-1105 Ryan Development Boundary Sheet 16 2188-1106 Morony Development Boundary

(2) Project works consisting of nine developments: (A) the Hebgen Development; (B) the Madison Development; (C) the Hauser Development; (D) the Holter Development; (E) the Black Eagle Development; (F) the Rainbow Development; (G) the Cochrane Development; (H) the Ryan Development; and (I) the Morony Development.

A. The Hebgen Development is located on the Madison River at mile 103 and consists of: (1) an earth-filled with concrete core dam 721 feet long and 85 feet high, with a crest elevation of 6,546 feet, with outlet works through the dam and a side-channel spillway; (2) an impoundment with a surface area 13,000 acres and a storage capacity of 386,845 acre-feet at normal maximum water surface elevation of 6,534.87 feet; and (3) other appurtenances. The Hebgen Development occupies 10,790 acres of Forest Service lands. This development is used to store and regulate water; there are no generating facilities at this development.

B. The Madison Development is located on the Madison River at river mile 40 and consists of: (1) a 257footlong, 38.5foothigh rockfilled concrete dam with a spillway crest elevation of 4,833 feet with 9foothigh slide panels on top; (2) an impoundment, known as Ennis Lake, with a surface area of 3,900 acres and a storage capacity of 41,917 acrefeet at normal maximum water surface elevation of 41,841 acre-feet; (3) a control building; (4) an intake structure; (5) a 7,500foot, 13footdiameter flow line; (5) a surge chamber; (7) four 9footdiameter, about 222footlong riveted steel penstocks; (8) a powerhouse with 4 turbinegenerator units with a total installed capacity of 10.9 MW; (9) an interconnection with the licensee's integrated transmission system at the powerhouse side; (10) a tailback; and (11) other appurtenances. The Madison Development occupies 358 acres of lands administered by BLM.

C. The Hauser Development is located on the Missouri River at River mile 2,237 and consists of: (1) a 700 footlong, 80foothigh concrete gravity dam with a spillway crest elevation 3,621 feet with 5 bays of slide gates and 19 bays of 14.5foothigh removable flash boards on top; (2) an impoundment composed of two connected bodies of water: the Hauser Lake and the Helena Lake with a combined surface area of 5,970 acres and a storage capacity of 111,060 acrefeet at the normal maximum water surface elevation of 6,35.4 feet; (3) an intake and forebay structure; (4) five 12foot diameter short buried riveted steel penstocks and a 14foot-diameter short riveted steel penstock (a section of which is tunneled through rock); (5) a powerhouse with 6 turbine generator units with a total installed capacity of 21 MW; (6) an interconnection to the integrated transmission system at the powerhouse; (7) a tailback; and (8) other appurtenances. The Hauser Development occupies 75 acres of U.S. Forest Service lands and 574 acres of BLM lands.

D. The Holter Deve1opment is located on the Missouri River at river mile 2,211 and consists of: (1) a 1,364footlong, 124foothigh concrete gravity dam with a spillway crest elevation of 3,548 feet with 10 bays of slide gates and 21 bays of 16foothigh flash boards on top; (2) an impoundment, known as the Holter Lake, with a surface area of 4,550 acres and a storage capacity of 240,000 acrefeet at the normal maximum water surface elevation of 3,564 feet; (3) an intake/powerhouse structure with four turbinegenerator units with a total installed capacity of 50 MW; (4) an interconnection to the transmission system at the powerhouse; (5) a tailrace; and (6) other appurtenances. The Holter Development occupies 567 acres of Bureau of Reclamation lands and 166 acres of Forest Service lands.

E. The Black Eagle Development is located on the Missouri River at river mile 2,1l8 and consists of: (1) a 782foot-long, 345foothigh curved concrete gravity dam with a spillway crest elevation of 3,279 feet with 25 bays of 11-foothigh flash boards on top; (2) a reservoir with a surface area of 402 acres and a storage capacity of 1,820 acrefeet at normal maximum water surface elevation of 3,290 feet; a 421footlong, 96footwide forebay; (4) an intake/powerhouse structure containing 3 turbine generator units with a total installed capacity of 18 MW; (5) an interconnection to its integrated system; (6) a tailrace; and (7) other appurtenances.

F. The Rainbow Development is located on the Missouri River at river mile 2,115 and consists of: (1) a 1,146footlong, 43.5foothigh rockfilled timber crib and concrete dam with a 2portion spillway with a crest elevation of 3,212 and 3,214 feet, respectively (the left portion is topped with 10foothigh flash boards and the right portion with rubber dams providing a total top elevation of 3,224 feet); (2) the Rainbow Reservoir with a surface area of 126 acres and a storage capacity of 1,237 acrefeet at a normal water surface elevation of 3,224 feet; (3) two adjacent intake structures, one for units 1 through 6 and the second for units 7 and 8; (4) two parallel 15.5footdiameter 2,350 footlong riveted steel flow lines for units 1 through 6 leading to; (5) a surge chamber; (6) twelve 8footdiameter, 343footlong riveted steel penstocks from the surge chamber to the powerhouse feeding units 1 through 6; (7) a 2,401- footlong, 14footdiameter steel flow line from the second intake structure at the dam, with a surge tank at 1,689 feet from the intake; (8) four-footdiameter, 172footlong riveted steel penstocks from a manifold at the end of the flow line to the powerhouse, feeding units 7 and 8; (9) a 20.5foot diameter, 550footlong flow line from the existing surge chamber to the new powerhouse; (10) two powerhouses housing 8 turbinegenerator units and 2 turbine-generating units for a total installed capacity of 58 MW; (11) an interconnection with its integrated system at the powerhouses; (12) a tailrace; and (13) other appurtenances.

G. The Cochrane Development is located on the Missouri River at river mile 2,111 and consists of: (1) 856footlong, 100foothigh concrete gravity dam with a spillway crest elevation of 3,034.75 feet with radial gates on top with a top elevation of 3,120 feet; (2) the Cochrane Reservoir with a surface area of 249 acres and a storage capacity of 8,464 acrefeet at a water surface elevation of 3,115 feet; (3) a powerhouse at the dam with 2 turbinegenerator units with a total installed capacity of 60 MW; (4) a 2.9milelong, 100-kV transmission line; (5) a tailrace; and (6) other appurtenances.

H. The Ryan Development is located on the Missouri River at river mile 2,110 (upstream from the crest of the Great Falls) and consists of: (1) a 1,465footlong, a 82foot-high curved concrete gravity dam with a spillway crest elevation of 3,023 feet topped with 16.25foothigh flash boards; (2) the Ryan Reservoir with a surface area of 168 acres and a normal maximum storage capacity of 3,653 acrefeet at a water surface elevation of 3,037 feet; (3) an intake structure; (4) six 12foot 8inchdiameter and 327footlong riveted steel penstock; (5) a powerhouse with 6 turbine generator units with a total installed capacity of 60 MW; (6) a 4.6milelong, 100kV transmission line; (7) a tailrace; and (8) other appurtenances. I. The Morony Development is located on the Missouri River at river mile 2,105 and consists of: (1) 842footlong, 96-foothigh concrete gravity dam with a spillway crest elevation of 2,864 feet topped with 9 bays of radial gates and 1 bay of slide gates with a top elevation of 2,887; (2) the Morony Reservoir with a surface area of 304 acres and a storage capacity of 13,889 acrefeet at water surface elevation of 2,887 feet; (3) an intake/powerhouse structure containing 2 turbinegenerator units with a total installed capacity of 49 MW; (4) an 8.5milelong, 100 kV transmission line; (5) a tailrace; and (6) other appurtenances.

In summary, the project has a total installed capacity of 326.9 MW and an average annual generation of 1,945 GWh. The project will occupy 11,031 acres of federal reservation lands in National Forests; 567 acres of federal reservation lands under Bureau of Reclamation management; and 932 acres of federal non-reservation lands managed by the Bureau of Land Management.

The project works generally described above are more specifically shown and described by those portions of Exhibits A and F shown below:

Exhibit A: The following section of Exhibit A filed on November 25, 1992:

Pages A-1 through A-9, describing the existing and proposed mechanical, electrical, and transmission equipment within the application for license.

Exhibit F: The following Exhibit F filed on November 25, 1992:

Exhibit F Drawing FERC Drawing No. Description

Hebgen Development Sheet 1 of 3 2188-1001 Plan, Elevation, and Sections Sheet 2 of 3 2188-1002 Spillway Plan Sheet 3 of 3 2188-1003 Intake and Outlet Works Plan Madison Development Sheet 1 of 8 2188-1004 General Dam Plans Sheet 2 of 8 2188-1005 Spillway Plans Sheet 3 of 8 2188-1006 Spillway Section and Details Sheet 4 of 8 2188-1007 Intake and Right Abutment Plans Sheet 5 of 8 2188-1008 Training and Retaining Wall Plans Sheet 6 of 8 2188-1009 Flowline and Access Road Layouts Sheet 7 of 8 2188-1010 Proposed Powerhouse Plans Sheet 8 of 8 2188-1011 Proposed One-Line Diagrams

Hauser Development Sheet 1 of 9 2188-1012 General Dam Plans Sheet 2 of 9 2188-1013 Spillway Plans Sheet 3 of 9 2188-1014 Spillway Gates Plan Sheet 4 of 9 2188-1015 Spillway Gate Details Plan Sheet 5 of 9 2188-1016 Proposed Powerhouse Plans Sheet 6 of 9 2188-1017 Proposed Improvements of Powerhouse Sheet 7 of 9 2188-1018 Proposed Improvements of Powerhouse Sheet 8 of 9 2188-1019 Proposed One-Line Diagrams Sheet 9 of 9 2188-1020 Lake Helena Dam Plan & Sections

Holter Development Sheet 1 of 10 2188-1021 Powerhouse Elevations & Sections Sheet 2 of 10 2188-1022 Sections A/2, D/2, and Details Sheet 3 of 10 2188-1023 Section B/3 Sheet 4 of 10 2188-1024 Section C/4 & Rating Curve Sheet 5 of 10 2188-1025 Powerhouse Sections & Plans Sheet 6 of 10 2188-1026 Intake Plan, Elevation, & Detail Sheet 7 of 10 2188-1027 Turbine Floor Plan of Powerhouse Sheet 8 of 10 2188-1028 Powerhouse Generator & Floor Plans Sheet 9 of 10 2188-1029 Powerhouse 3rd & 4th Floor Plans Sheet 10 of 10 2188-1030 One-Line Diagrams

Black Eagle Development Sheet 1 of 9 2188-1031 General Plans Sheet 2 of 9 2188-1032 Spillway Plans & Elevations Sheet 3 of 9 2188-1033 Waste Gates & R. Abutment Plans Sheet 4 of 9 2188-1034 Forebay & Bridge Plans & Sections Sheet 5 of 9 2188-1035 Powerhouse Plans & Elevations Sheet 6 of 9 2188-1036 Turbine and Generator Floor Plans Sheet 7 of 9 2188-1037 Second and Third Floors Sheet 8 of 9 2188-1038 Powerhouse Elevations Sheet 9 of 9 2188-1039 One-Line Diagrams

Rainbow Development Sheet 1 of 19 2188-1040 General Plans Sheet 2 of 19 2188-1041 Spillway Plans & Elevations Sheet 3 of 19 2188-1042 Rubber Dam & Control House Plans Sheet 4 of 19 2188-1043 Spillway Sections & Details Sheet 5 of 19 2188-1044 Units 1-6 Intake Structure Plans Sheet 6 of 19 2188-1045 Intake-Unit 7 and 8 Plans & Elevations Sheet 7 of 19 2188-1046 Waste Gates Plan 7 Sections Sheet 8 of 19 2188-1047 Surge Tank, Flowline Profiles & Plans Sheet 9 of 19 2188-1048 Existing Surge Chamber Plan & Plans Sheet 10 of 19 2188-1049 Existing Powerhouse Plan & Sections Sheet 11 of 19 2188-1050 Proposed Intake Plans & Sections Sheet 12 of 19 2188-1051 Proposed Surge Chamber Modifications Sheet 13 of 19 2188-1052 Proposed Powerhouse Roof Plan Sheet 14 of 19 2188-1053 Proposed Powerhouse Generator Plans Sheet 15 of 19 2188-1054 Proposed Powerhouse Turbine Plans Sheet 16 of 19 2188-1055 Proposed Powerhouse Section A-A Sheet 17 of 19 2188-1056 Proposed Powerhouse Section B-B Sheet 18 of 19 2188-1057 Proposed Powerhouse Section C-C Sheet 19 of 19 2188-1058 Proposed One-Line Diagrams

Cochrane Development Sheet 1 of 7 2188-1059 General Plan & Elevations Sheet 2 of 7 2188-1060 Spillway Sections & Details Sheet 3 of 7 2188-1061 Powerhouse Plan Turbine Floor/Intake Sheet 4 of 7 2188-1062 Powerhouse Plan Generator Deck Sheet 5 of 7 2188-1063 Powerhouse Elevations Sheet 6 of 7 2188-1064 Powerhouse and Intake Cross Section Sheet 7 of 7 2188-1065 One-Line Diagrams

Ryan Development Sheet 1 of 16 2188-1066 General Plans Sheet 2 of 16 2188-1067 Spillway Plans & Elevations Sheet 3 of 16 2188-1068 Intake Plans & Elevations Sheet 4 of 16 2188-1069 Intake Cross Sections & Details Sheet 5 of 16 2188-1070 Waste Gates Plan & Sections Sheet 6 of 16 2188-1071 Abutment Plans & Elevations Sheet 7 of 16 2188-1072 Powerhouse Elevations Sheet 8 of 16 2188-1073 Powerhouse Elevations & Turbine Plans Sheet 9 of 16 2188-1074 Powerhouse Generator&2nd Floor Plans Sheet 10 of 16 2188-1075 Powerhouse 3rd Floor & Roof Plans Sheet 11 of 16 2188-1076 Powerhouse Cross Sections Sheet 12 of 16 2188-1077 One-Line Diagrams Sheet 13 of 16 2188-1078 Proposed Intake Plans & Sections Sheet 14 of 16 2188-1079 Proposed Powerhouse Plans Sheet 15 of 16 2188-1080 Proposed Powerhouse Sections Sheet 16 of 16 2188-1081 Proposed One-Line Diagram

Morony Development Sheet 1 of 9 2188-1082 General Dam Plans & Elevations Sheet 2 of 9 2188-1083 Spillway Cross Sections A&B Detail Sheet 3 of 9 2188-1084 Sections C, D, E & Trash Chute Detail Sheet 4 of 9 2188-1085 Powerhouse Elevations Sheet 5 of 9 2188-1086 Powerhouse Cross Sections & Plans Sheet 6 of 9 2188-1087 Powerhouse Turbine Floor Plan Sheet 7 of 9 2188-1088 Powerhouse Generator Floor Plan Sheet 8 of 9 2188-1089 Powerhouse Roof Plan Sheet 9 of 9 2188-1090 Proposed One-Line Diagrams (3) All of the structures, fixtures, equipment, or facilities used to operate or maintain the project and located in the project boundary, all portable property that may be employed in connection with the project, all riparian or other rights that are necessary or appropriate in the operation or maintenance of the project.

(D) The Exhibits A, F, and G described above are approved and made part of the license.

(E) This license is subject to the articles set forth in Form L5 (October 1975), entitled "Terms and Conditions of License for Constructed Major Project Affecting Navigable Waters and Lands of the United States," and the following additional articles:

Article 201. The Licensee shall pay the United States the following annual charges, effective the first day of the month in which the license is issued, and as determined in accordance with provisions of the Commission's regulations in effect from time to time, for the purposes of:

(1) reimbursing the United States for the cost of administration of Part I of the FPA. The authorized installed capacity for that purpose is 291.8 megawatts, until the date of commencement of construction of the new capacity authorized by this license, after which time the authorized installed capacity is 326.9 megawatts;

(2) recompensing the United States for the use, occupancy and enjoyment of 12,530 acres of its lands (other than for transmission line rightofway);

(3) recompensing the United States for the use, occupancy and enjoyment of its lands for transmission line rightofway; and

(4) recompensing the United States for the utilization of surplus water or water power from the Bureau of Reclamation’s Canyon Ferry Hydroelectric Project.

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 reserve 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 longterm 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 date of issuance of the license, the licensee shall file an original set and two duplicate sets of aperture cards of the approved drawings. The set of originals must be reproduced on silver or gelatin 35mm microfilm. The duplicate sets are copies of the originals made on diazo-type microfilm. All microfilm must be mounted on type D (3-1/4" x 7-3/8") aperture cards.

Prior to microfilming, the Commission Drawing Number (e.g. 2188-F1, F2, etc. and 2188-G1, G2, etc.) shall be shown in the margin below the title block of the approved drawing. After mounting, the Commission Drawing Number must be typed on the upper right corner of each aperture card. Additionally, the Project Number, Commission Exhibit (e.g., F-1, G-1, etc.), Drawing Title, and date of this license must be typed on the upper left corner of each aperture card.

The original and one duplicate set of aperture cards must be filed with the Secretary of the Commission, ATTN: OEP/DHAC. The remaining duplicate set of aperture cards shall be filed with the Commission's Portland Regional Office.

Article 204. If the Licensee's project was directly benefitted by the construction work of the United States (in this case, the Bureau of Reclamation’s Canyon Ferry Hydroelectric Project) 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. Article 301. The Licensee shall commence construction of and/or modification to the project works within two years of the issuance of this license and shall complete construction/modification of the project within four years of the issuance of this license.

Article 302. Within 90 days after finishing construction, the Licensee shall submit, for Commission approval, eight copies of the revised Exhibits A, F, and G describing the modified project (at the Madison, Hauser, Holter, and Rainbow developments) as built. The Licensee shall submit six copies to the Commission, one copy to the Commission's Regional Director, and one to the Director, Division of Engineering and Environmental Review.

Article 303. Before starting construction, the Licensee shall review and approve the design of contractor-designed cofferdams and deep excavations and shall make sure construction of cofferdams and deep excavations is consistent with the approved design. At least 30 days before starting construction of the cofferdam, the Licensee shall submit one copy to the Commission's Regional Director and two copies to the Commission (one of these copies shall be a courtesy copy to the Commission's Director, Division of Dam Safety and Inspections), of the approved cofferdam construction drawings and specifications and the letters of approval.

Article 304. The Licensee shall, at least 60 days prior to the start of construction, submit one copy to the Commission's Regional Director and two copies to the Commission (one of these shall be a courtesy copy to the Director, Division of Dam Safety and Inspections), of the final contract drawings and specifications for pertinent features of the project, such as water retention structures, powerhouse or equivalent, and water conveyance structures. The Commission may require changes in the plans and specifications to assure a safe and adequate project. If the Licensee plans substantial changes to location, size, type, or purpose of the water retention structures, powerhouse or equivalent, or water conveyance structures, the plans and specifications must be accompanied by revised exhibits F and G drawings, as necessary.

Article 401. The Licensee, after consultation with the Montana Department of Environmental Quality (Montana DEQ), the Gallatin National Forest, the Helena National Forest, the Bureau of Land Management (BLM), and the Bureau of Reclamation (BOR), shall file the final drawings, specifications, and implementation schedule for controlling erosion and sediment during project construction and spoil-disposal activities, and for restoration and revegetation of disturbed areas. The drawings, specifications, and schedule shall be filed along with the final project drawings and specifications required by Article 302.

The filing shall also include documentation of agency consultation, copies of documents and recommendations, and specific descriptions of how the agencies' comments are accommodated. The Licensee shall allow a minimum of 30 days for the agencies to comment and to make recommendations before filing with the Commission. If the Licensee does not adopt a recommendation, the filing shall include the Licensee's reasons, based on conditions at the site.

The Commission reserves the right to require changes in the drawings and specifications to ensure proper control of erosion and discharge of sediment to wetlands and watercourses, revegetation of disturbed areas with species important to wildlife, and adequate protection of the environmental, scenic, and cultural values of the project area.

The Licensee shall implement the controls and restore and revegetate disturbed areas according to the final drawings, specifications, and schedule, including any changes required by the Commission.

Article 402. Within one year of the date of issuance of the license, the Licensee shall file for Commission approval a plan to monitor and control reservoir shoreline erosion at the project. The plan shall be based on, but not necessarily be limited to, the Shoreline Bank Erosion Assessment (SBAE) filed as Exhibit 3 of Attachment 4 on February 24, 1993. The plan at a minimum shall include: (1) annual monitoring of reservoir shoreline sites identified in the SBAE as being in an active erosion condition to determine whether or not control measures need to be implemented, and provisions for implementing necessary control measures as their need is identified; (2) a schedule for visual inspection on a 5- to 7-year basis of the reservoir shorelines identified in the SBAE as experiencing minor or moderate erosion, and provisions for determining whether specific sites would be reclassified and added to the "active" sites in (1), above; and (3) provisions for periodic review and modification of the plan. The Licensee shall prepare the plan after consultation with the Montana DEQ, the Montana State Historic Preservation Officer, the Gallatin National Forest, the Helena National Forest, BLM, and BOR.

The Licensee shall include with the plan documentation of consultation, copies of documents and recommendations on the completed plan after it has been prepared and provided to the agencies, 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 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 conditions at the site.

The Commission reserves the right to require changes in the plan to ensure proper control of shoreline erosion, and adequate protection of the environmental and cultural values of the project area. Upon Commission approval, the Licensee shall implement the plan including any changes required by the Commission. Article 403. Within 180 days after the issuance date of the license, the Licensee shall file for Commission approval, and upon approval, implement the approved plan to operate the Missouri Madison Project developments as described below:

Hebgen Development

(1) maintain a continuous minimum flow of 150 cfs in the Madison River as measured just downstream from Hebgen Dam at USGS Gauge No. 6385, and a continuous minimum flow of 600 cfs at USGS Gauge No. 6388 near the Kirby Ranch;

(2) limit flows at USGS Gauge No. 6388 near Kirby Ranch to no more than 3,500 cfs to minimize erosion of the Quake Lake outlet;

(3) limit changes in outflow from Hebgen Dam to no more than 10 percent per day for the entire year;

(4) maintain the elevation of Hebgen Reservoir between 6,530.26 and 6,534.87 feet (normal full pool elevation) from June 20 through October 1. In a typical year, the Licensee shall operate the Hebgen Development so that Hebgen Reservoir would refill to approximately its full pool elevation of 6,534.87 feet in late June or early July. The Licensee shall then maintain Hebgen Reservoir near its full pool elevation until September 1. Between September 1 and March 31 of a typical year, the Licensee shall draft Hebgen Reservoir to approximately an elevation of 6,524 feet. During this period, as Hebgen Reservoir is being drafted, the Licensee shall, to the extent practical given the variability of inflows to Hebgen Reservoir, maintain a reasonably uniform discharge from the Hebgen Development. After April 1 of a typical year, the Licensee shall operate the Hebgen Development to refill Hebgen Reservoir to at least elevation 6,530.26 feet by June 20;

(5) obtain concurrence from the U.S. Fish and Wildlife Service (FWS), Forest Service, Bureau of Land Management (BLM), Bureau of Reclamation (BOR), Montana Department of Natural Resources and Conservation (Montana DNRC), and Montana Department of Fish, Wildlife and Parks (Montana DFWP) to intentionally deviate from proposed operations during normal river flows and normal facility conditions; and

(6) implement the Missouri River Coordination Agreement with the Bureau of Reclamation (BOR) (dated March 30, 1972, amended June 8, 1979).

For the purpose of implementing The Missouri River Coordination Agreement with BOR, drafting of the Hebgen Reservoir shall not begin until all storage in Canyon Ferry Reservoir above elevation 3,769 feet (28 feet below Canyon Ferry’s normal full pool) has been utilized.

Madison Development

(1) operate Madison Dam as a baseload, runofriver project (i.e., the dam shall not be used for peaking, load following, or providing nonspinning operating reserves);

(2) coordinate with the operation of the Hebgen Development to maintain a continuous minimum flow of 1,100 cfs in the Madison River as measured at USGS Gauge No. 6410 downstream from the Madison Development; (3) maintain the elevation of Ennis Lake between 4,840 and 4,841 feet (normal full pool) when ice is absent, and at 4,839 feet between early December and early April;

(4) provide an instantaneous minimum spawning flow of 200 cfs in the bypass reach from April 1 through June 30, and an instantaneous minimum (maintenance) flow of 80 cfs in the bypass reach from July 1 through March 31;

(5) not reduce flow in the Madison bypass reach from 600 cfs to minimum flow by more than 100 cfs per hour, and not increase flow from less than 600 cfs to 600 cfs by more than 100 cfs per hour (except when needed to meet the 1,100cfs minimum flow below the powerhouse or to avoid overfilling Ennis Lake); and

(6) recognize continued flushing flow needs in the lower Madison River.

The Licensee shall also install a permanent flow gauge in the Madison bypass reach to monitor instantaneous minimum flows and flow ramping rates (at bypass streamflows less than 600 cfs).

Hauser Development

(1) operate the Hauser Dam as a baseload, runof-river project (i.e., the dam shall not be used for peaking, load following, or providing nonspinning operating reserves);

(2) maintain the elevation of Hauser Reservoir and Lake Helena between 3,634.4 and 3,635.4 feet (normal full pool) and maintain continuous, stable flows in the Missouri River immediately below Hauser Dam; (3) limit to 10 percent the difference between the daily average flow measured just below Hauser Dam (at a USGS gauging station to be installed) and the daily average inflow to Hauser Reservoir and Lake Helena. For this purpose, the inflow to Hauser Reservoir and Lake Helena shall be calculated based on the measured flow below Hauser Dam and the change in storage content of Hauser Reservoir and Lake Helena;

(4) limit the difference between the highest hourly average flow and the lowest hourly average flow (as measured at the USGS gauging station to be installed) on any day to no more than the sum of (a) 10 percent of the previous day’s average flow at the gauging station and (b) any increase or decrease in releases from Reclamation’s Canyon Ferry Dam occurring on the day in question or on the day immediately preceding or the day immediately following the day in question;

(5) limit changes in the hourly average flow measured at the gauging station to be installed to no more than 5 percent of the previous hour’s average flow; and

(6) enhance downstream power production, as required by the Missouri River Coordination Agreement, if extreme drought conditions persist for an extended period. The maximum required draft for this purpose is to elevation 3,621 feet. Drafting Hauser Reservoir and Lake Helena for this purpose is only required after all of the storage in Canyon Ferry Reservoir and Hebgen Reservoir has been utilized.

Holter Development

(1) operate holter Dam as a baseload, run-of-river project (i.e., the dam shall not be used for peaking, load following, or providing nonspinning operating reserves);

(2) maintain the elevation of Holter Reservoir between 3,563 and 3,564 feet (normal full pool) and maintain continuous, stable flows in the Missouri River immediately below the Holter Development;

(3) limit to no more than 10 percent the difference between the daily average flow measured just below Holter Dam (USGS Gauge 6665) and the daily average inflow to Holter Reservoir. For this purpose, the inflow to Holter Reservoir shall be calculated based on the measured flow at USGS Gauge No. 6665 and the change in storage content of Holter Reservoir; (4) limit the difference between the highest hourly average flow and the lowest hourly average flow (as measured at USGS Gauge No. 6665) on any day to no more than the sum of (a) 10 percent of the previous day’s average flow at USGS Gauge No. 6655 and (b) any increase or decrease in releases from BOR’s Canyon Ferry Dam occurring on the day in question or on the day immediately preceding or immediately following the day in question;

(5) limit changes in the hourly average flow measured at USGS Gauge No. 6655 to no more than 5 percent of the previous hour’s average flow; and

(6) obtain concurrence from FWS, Forest Service, BLM, BOR, Montana DNRC, and Montana DFWP to intentionally deviate from proposed operations during normal river flows and normal facility conditions.

The Licensee may temporarily (for a period of a few to several days) increase flows from the Holter Development during and immediately preceding periods of extreme cold to maintain or enhance power production at the Great Falls developments downstream. The Licensee shall endeavor to minimize the reservoir drafts and downstream flow fluctuations caused by this type of operation by coordinating the increased flows from the Holter Development with increased flows from the Canyon Ferry Project.

Black Eagle Development

(1) operate black Eagle dam as a baseload, run-of-river project;

(2) maintain the elevation of Black Eagle Reservoir near its normal full pool elevation of 3,290 feet;

(3) spill a minimum of 200 cfs at Black Eagle Dam between the hours of 9:00 a.m. and 8:00 p.m. on weekends and holidays during the summer, beginning with the Memorial Day weekend and ending with the Labor Day weekend (except during years when the April–June natural runoff into Canyon Ferry Reservoir is less than 900,000 acre-feet [50 percent of the 1961–1990 average]); and

(4) obtain concurrence from FWS, Montana DNRC, and Montana DFWP to intentionally deviate from proposed operations during normal river flows and normal facility conditions.

The Licensee may increase generation above the normal run-of-river level for up to four hours to provide short-term generation reserves.

Rainbow Development (1) operate Rainbow dam as a baseload, run-of-river project;

(2) maintain the elevation of Rainbow Reservoir near its normal full pool elevation of 3,224 feet;

(3) spill a minimum of 200 cfs at Rainbow Dam between the hours of 9:00 a.m. and 8:00 p.m. on weekends and holidays during the summer, beginning with the Memorial Day weekend and ending with the Labor Day weekend (except during years when the April–June natural runoff into Canyon Ferry Reservoir is less than 900,000 acre-feet [50 percent of the 1961–1990 average]); and

(4) obtain concurrence from FWS, Montana DNRC, and Montana DFWP to intentionally deviate from proposed operations during normal river flows and normal facility conditions.

The Licensee may increase generation above the normal run-of-river level for up to four hours to provide short-term generation reserves.

Cochrane Development

(1) at its discretion, operate the Cochrane Development to provide baseload generation, short-term generation reserves, load-following generation, and, on a coordinated basis with the Ryan and Morony developments, peaking generation;

(2) during baseload operation, maintain the elevation of Cochrane Reservoir near its normal full pool elevation (currently 3,116.5 feet and proposed 3,120 feet);

(3) during operations other than baseload, maintain the elevation of Cochrane Reservoir between 3,105 and 3,116.5 feet until the Rainbow Development has been modified, and between 3,110 and 3,120 feet thereafter; and

(4) obtain concurrence from FWS, Montana DNRC, and Montana DFWP to intentionally deviate from proposed operations during normal river flows and normal facility conditions.

Ryan Development

(1) at its discretion, operate the Ryan Development to provide baseload generation, short-term generation reserves, load-following generation, and, on a coordinated basis with the Cochrane and Morony developments, peaking generation; (2) during baseload and other operations, maintain the elevation of Ryan Reservoir near its normal full pool elevation of 3,037 feet by coordinating operations with the Cochrane Development;

(3) spill a minimum of 200 cfs at Ryan Dam between the hours of 9:00 a.m. and 8:00 p.m. on weekends and holidays during the summer, beginning with the Memorial Day weekend and ending with the Labor Day weekend (except during years when the April–June natural runoff into Canyon Ferry Reservoir is less than 900,000 acre-feet [50 percent of the 1961–1990 average]); and

(4) obtain concurrence from FWS, Montana DNRC, and Montana DFWP to intentionally deviate from the above proposed operations during normal river flows and normal facility conditions.

Morony Development

(1) operate the Morony Development as a baseload project with outflows approximately equal to inflows into the Great Falls developments upstream;

(2) not operate the Morony Development for peaking, load following, or providing nonspinning operating reserves;

(3) use the Morony Development to re-regulate releases from the Cochrane and Ryan developments when they are operated to provide short-term reserve generation, load-following generation, or peaking generation;

(4) during baseload operations at the Ryan and Cochrane developments, maintain the elevation of Morony Reservoir between 2,885 and 2,888 feet;

(5) during Ryan and Cochrane operations other than baseload, maintain the elevation of Morony Reservoir between 2,878 and 2,888 feet;

(6) limit to 10 percent the difference between the daily average flow measured just below Morony Dam (at USGS Gauge 6903) and the daily average inflow to the Great Falls developments. For this purpose, the inflow to the Great Falls developments shall be calculated based on the measured flow at USGS Gauge No. 6903 and the change in storage content of Black Eagle, Rainbow, Cochrane, Ryan, and Morony reservoirs;

(7) limit the difference between the highest hourly average flow and the lowest hourly average flow (as measured at USGS Gauge No. 6903) on any day to no more than the sum of (a) 15 percent of the previous day’s average flow at USGS Gauge No. 6903 and (b) the greater of the sum of the differences between the highest hourly average flow and the lowest hourly average flow measured as inflows to Black Eagle on the day in question or the day preceding the day in question;

(8) limit changes in the hourly average flow measured at USGS Gauge No. 6903 to no more than 7.5 percent from the previous hour’s average flow; and

(9) obtain concurrence from FWS, Montana DNRC, and Montana DFWP to intentionally deviate from proposed operations during normal river flows and normal facility conditions.

Ninety days prior to any scheduled reservoir drawdown, the Licensee shall file, for Commission approval, a reservoir drawdown plan. The Licensee shall prepare the plan after consultation with the Forest Service, BLM, BOR, FWS, Montana DFWP, and other interested entities. 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 agencies' comments are accommodated by the plan.

The Licensee shall allow a minimum of 30 days for the resource agencies to comment and 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 proposed plan. Upon Commission approval, the Licensee shall implement the plan including any changes required by the Commission.

This Article's flows and water surface elevation requirements may be temporarily modified, if required by operating emergencies or flow conditions beyond the control of the licensee, approved maintenance activities, or for short periods upon mutual agreement among the Licensee, the Forest Service as appropriate, the BLM, FWS, Montana DFWP, and Montana DEQ to: (1) accommodate special maintenance or construction requirements; (2) allow for archaeological studies; (3) implement the temperature enhancing pulsed flow protocol at the Madison development, required in Article 413; (4) satisfy power production purposes during an extended period of extreme drought; and (5) implement the Missouri River Coordination Agreement with BOR, which requires that water stored in the reservoirs at the nine project developments be used to enhance downstream power production if extreme drought conditions persist for an extended period. If the flows or water surface elevations are so modified, the Licensee shall notify the Commission as soon as possible, but no later than 10 days after each such incident. Article 404. Within 180 days after the date of issuance of the license, the Licensee shall file for Commission approval a final water quality monitoring program for the Madison River from above Hebgen Reservoir to the Missouri River near Fort Benton. The water quality monitoring conducted under the program must be operational before the Licensee makes any changes in the operation of any of the project reservoirs. The Licensee shall submit to the Commission an updated, Montana DEQ-approved monitoring program every five years. Specific parameters to be monitored include temperature, specific conductance, pH, dissolved oxygen, total dissolved gases (Hauser Development only), alkalinity, turbidity, nutrients (nitrogen and phosphorous), suspended sediments and total suspended solids, and trace elements (total and dissolved arsenic at all locations and cadmium, copper, iron, lead, manganese, and zinc at the five Great Falls developments).

At a minimum, the monitoring program shall include: (1) short-term monitoring of maintenance activities and special project operations; (2) long-term trend monitoring; (3) biomonitoring; (4) biocontaminant monitoring; and (5) analysis and interpretation of monitoring results.

The monitoring program shall also include a schedule for: (1) implementation of the program; (2) reporting and consultation with the Forest Service, FWS, Montana DNRC, and Montana DFWP concerning the annual results from the program; and (3) filing the results, agency comments, and the Licensee’s response to agency comments with the Commission. The program shall also incorporated the following project specific requirements:

Hebgen Development

The Licensee shall establish two water quality stations, one in the Madison River above Hegben Reservoir and the other in the Madison River below Hebgen Dam at USGS Gauge No. 6-385. The Licensee shall analyze the following parameters during March, June, and August of each year: total and dissolved nutrients (PO4-P, TKN, and NH3-N), total and dissolved metals (Ca, Mg, Fe, A, and As), sediment (TSS, TDS, and turbidity), in-situ variables (pH, conductivity, dissolved oxygen, and temperature), and chlorophyll.

The Licensee shall also file with the water quality monitoring program, a plan approved by the Forest Service for monitoring toxic algae blooms in Hebgen Reservoir throughout the term of the license. The toxic algae bloom plan shall be prepared in consultation with the Forest Service, the Montana DEQ, and the Gallatin County Health Department. The plan shall include provisions for information and education should toxic algae bloom be discovered. The Licensee shall assist the Montana DEQ and the Gallatin County Health Department in monitoring toxic algae in Hebgen Reservoir. The Licensee shall fund an annual water quality enhancement account that may be used for monitoring toxic algae blooms in Hegben Reservoir, monitoring and treating appropriate point source discharges, sediment control projects, and applied water quality research studies in the Missouri-Madison river system.

Madison Development

The Licensee shall establish water quality sampling stations at the Montana DFWP river access above Ennis and directly below the Madison powerhouse.

Hauser Development

Within one year of the date of issuance of the license, the Licensee shall establish water quality sampling stations below the outlet of Canyon Ferry Dam and below Hauser Dam. The Licensee shall prepare the program after consultation with the Forest Service, BLM, FWS, Montana DEQ, and Montana DFWP. The Licensee shall include with the program documentation of consultation, copies of comments and recommendations on the completed program after it has been prepared and provided to the agencies, and specific descriptions of how the agencies' comments are accommodated by the program. The Licensee shall allow a minimum of 30 days for the agencies to comment and to make recommendations prior to filing the program with the Commission. If the Licensee does not adopt a recommendation, the filing shall include the Licensee's reasons, based on projectspecific information.

The Commission reserves the right to require changes to the program. Upon Commission approval, the Licensee shall implement the program, including any changes required by the Commission.

Article 405. Prior to any dredging or excavation activities requiring Clean Water Act Section 404 permits from the U.S. Army Corps of Engineers (Corps), the licensee shall file for Commission approval a plan for conducting such activities. The plan shall include the results of historic reservoir sediment toxicity testing and any other information required to evaluate compliance with Section 404(b)(1) guidelines.

The Licensee shall prepare the plan after consultation with the Forest Service, BLM, FWS, Corps, Montana DEQ and Montana DFWP. 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 agencies' comments are accommodated by the program. 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 projectspecific 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 406. By 180 days prior to scheduled powerhouse rehabilitation construction at the Hauser Development, the Licensee shall submit for Commission approval a plan for gas super-saturation monitoring during construction.

The Licensee shall prepare the plan after consultation with FWS, Montana DFWP, and other interested entities. 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 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 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 may require changes to the plan to ensure adequate protection of the environmental, scenic, and cultural values of the project area. Upon Commission approval, the licensee shall implement the plan.

Article 407. Authority is reserved to the Commission to require the licensee to construct, operate, and maintain, or to provide for the construction, operation, and maintenance of, such fishways as may be prescribed by the Secretary of the Interior pursuant to Section 18 of the Federal Power Act.

Article 408. Within one year of the date of issuance of the license, and every three years thereafter, the Licensee shall submit for Commission approval a fisheries plan for implementing specific mitigation and enhancement measures and post-licensing evaluation and monitoring for the Madison River from Hebgen Reservoir to Three Forks. The plan should include a schedule for implementing the following tasks for Hebgen Reservoir and the upper Madison River: (1) monitor the effects of modified project operations on Hebgen Reservoir fish populations; (2) evaluate the potential to enhance tributary spawning to increase the contribution of natural reproduction to the Hebgen Reservoir fishery; (3) monitor the effects of the proposed reservoir drawdown regime on macrophytes and reservoir fisheries (e.g., effects on spawning habitat, egg/larvae survival, and refuge habitat for juveniles); (4) identify, restore, and protect important riparian areas;(5) monitor the effects of modified project operations on upper Madison River fish populations; (6) monitor the effects of spring flow fluctuations on spawning success in the upper Madison River as related to possible dewatering of redds during low flow and redd destruction during high flow; (7) evaluate the potential to enhance tributary spawning to increase the contribution of natural reproduction to the upper Madison River fishery; (8) monitor fish species of special concern (i.e., Arctic grayling and cutthroat trout); (9) monitor flushing flows in the Madison River and evaluate their effectiveness; (10) restore spawning habitat (side channels) below Quake Lake in the Slide Inn area; and (11) monitor ice erosion on reservoir shoreline habitats in Hebgen Reservoir to assess the rate of erosion under the new operating regime and determine if erosion is directly or indirectly affecting fish populations.

The Licensee shall prepare the plan in consultation with the Forest Service, FWS, Montana DFWP, Montana DEQ and other interested entities. The plan shall include a schedule for implementation of the program, for reporting and consultation with the agencies concerning the annual results of the program, and for filing the results, agency comments, and the Licensee’s response to agency comments with the Commission. 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 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 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, including any changes required by the Commission

At the end of three years, the Licensee shall submit to the Commission a summary of the measures implemented and an evaluation (conducted in consultation with the agencies) of the need for additional measures.

Article 409. Within one year of the date of issuance of the license, the Licensee shall develop a plan to fund stream habitat enhancement and restoration activities in the Madison River drainage. The plan shall include, but not be limited to: (1) stream structure enhancements (to provide holding water for larger fish) between McAtee Bridge and Varney in the upper Madison River; (2) river bank enhancements (undercuts and vegetative cover) in the upper and lower Madison River to enhance brown trout habitat; (3) fish habitat enhancement both in main stem and tributary streams, including enhancement for all life stages of fishes; (4) purchasing water leases; (5) improving or replacing stream culverts; (6) inclusion or exclusion of fish barriers; (7) purchasing fishing access; (8) promotion or enhancement of wilderness fisheries; and (9) riparian habitat restoration. The Licensee shall prepare the plan in consultation with the Forest Service, FWS, Montana DFWP, Montana DEQ and other interested entities. The plan shall include a schedule for implementation of the program, for reporting and consultation with the agencies concerning the annual results of the program, and for filing the results, agency comments, and the Licensee’s response to agency comments with the Commission. 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 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 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 may require changes to the plan to ensure adequate protection of the environmental, scenic, and cultural values of the project area. Upon Commission approval, the licensee shall implement the plan.

Article 410. Within one year of the issuance of the license, the Licensee shall submit for Commission approval and implement a plan to restore side channels in the upper Madison River just below Quake Lake for the purpose of rehabilitating trout spawning habitat.

The Licensee shall prepare the plan after consultation with the Forest Service, FWS, Montana DFWP and other interested entities. 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 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 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 may require changes to the plan to ensure adequate protection of the environmental, scenic, and cultural values of the project area. Upon Commission approval, the licensee shall implement the plan.

Article 411. Within one year of the issuance of the license, the Licensee shall file for Commission approval a plan approved by the Forest Service for a baseline study to delineate the growth and distribution of submerged macrophytes and their use by waterfowl and reservoir fisheries in Hebgen Reservoir, Ennis Lake, and Lake Helena. The plan shall include a proposal to implement the baseline study. In addition, the Licensee shall conduct time-series (trend analysis) studies of macrophyte abundance in Hebgen Reservoir at 3- to 5-year intervals for the term of the license. The Licensee shall prepare the plan after consultation with the Forest Service, FWS, BLM, Montana DFWP and other interested entities. 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 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 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 may require changes to the plan to ensure adequate protection of the environmental, scenic, and cultural values of the project area. Upon Commission approval, the licensee shall implement the plan.

Article 412. Within one year of the issuance of the license, and every three years thereafter, the Licensee shall submit for Commission approval a fisheries plan for implementing specific mitigation and enhancement measures and post-licensing evaluation and monitoring for the Madison River from Hebgen Reservoir to Three Forks (see Article 408). The plan should include a schedule for implementing the following tasks for Ennis Lake and the lower Madison River: (1) monitor the effects of modified project operations (including pulsed flows) on Ennis Lake and lower Madison River fish populations; (2) monitor ice erosion on reservoir shoreline habitats in Ennis Lake to assess the rate of erosion under the new operating regime and determine if erosion is directly or indirectly affecting fish populations; (3) evaluate the macrophyte community in Ennis Lake relative to changes in the reservoir drawdown regime; (4) identify, restore, and protect important riparian areas along Ennis Lake and the lower Madison River; (5) protect and aid the recovery of threatened and endangered fish species and other aquatic species of special concern, including Arctic grayling, in Ennis Lake and the lower Madison River; (6) provide initial supplementation of spawning gravels within the Madison bypass reach; (7) monitor the effectiveness of spawning gravel supplementation within the bypass reach and make annual replacements as needed; (8) monitor fish and invertebrate population dynamics in the bypass reach in response to new minimum flows; (9) monitor flushing flow needs in the Madison River near Ennis, Norris, and Greycliff in 2002 and every 5 years thereafter for the term of the license; (10) evaluate the potential to enhance tributary spawning to increase the contribution of natural reproduction to the lower Madison River fishery; and (11) monitor fish populations in the lower Madison for evidence of chronic effects of long-term exposure to high temperatures and, if found, prescribe and carry out appropriate mitigation.

The Licensee shall prepare the plan in consultation with FWS, Montana DFWP, Montana DEQ, and other interested entities. The plan shall include a schedule for implementation of the program, for reporting and consultation with the agencies concerning the annual results of the program, and for filing the results, agency comments, and the Licensee’s response to agency comments with the Commission. 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 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 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, including any changes required by the Commission

At the end of three years, the Licensee shall submit to the Commission a summary of the measures implemented and an evaluation (conducted in consultation with the agencies) of the need for additional measures.

Article 413. To monitor and mitigate potential thermal effects in the lower Madison River, the Licensee shall: (1) continue to collect water temperature data at several sites in the lower Madison River; (2) continue development of the Madison Thermal Model (either the existing statistical model or a more mechanistic dynamic model) and update calibration with recent temperature data; (3) use model output to develop and test a pulsed flow protocol (magnitude, duration, and timing) to achieve desired temperature reduction in the lower Madison River at critical times; (4) develop a protocol for implementing pulsed flows based on real time temperature data and model output -- temperature trigger points should include measures such as daily mean, daily maximum, daily range, weekly range, and sudden increases (either daily or weekly); (5) install and maintain remote (real time) water temperature and meteorology sensing equipment in the lower Madison River (in the Greycliff-to-Black’s Ford reach) to trigger pulsed releases; and (6) monitor the effectiveness of pulsed flows to achieve desired temperature reduction in lower Madison River. If pulsed flows do not achieve the desired objectives, other means should be evaluated in consultation with the FWS, Montana DFWP, and Montana DEQ.

Within 180 days after issuance of the license, the Licensee shall submit for Commission approval a three-year plan for continued thermal assessment and monitoring and development of the pulsed flow protocol. The plan shall be developed in consultation with the FWS, Montana DFWP, Montana DEQ and other interested entities. 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 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 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 projectspecific 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.

At the end of three years, the Licensee shall submit to the Commission a summary of the work and a final protocol, developed in consultation with the agencies and other interested parties, for determining when pulsed flows are needed and how they would be implemented. If the summary indicates that the pulsed-flow method is not adequate, the Licensee shall develop and analyze alternatives to address this issue and provide appropriate mitigation.

Article 414. Within one year of the date of issuance of the license, and every three years thereafter, the Licensee shall submit for Commission approval a fisheries plan for implementing specific mitigation and enhancement measures and post-licensing evaluation and monitoring for Hauser Lake and the Hauser Dam tailwaters. The plan should include a schedule for implementing the following tasks: (1) monitor Hauser Dam and tailwaters for evidence of fish loss (dead, injured or alive) from Hauser Lake as a result of impingement, entrainment, or spillage (particularly during high flows); (2) provide $35,500 annually to the Montana DFWP to implement adaptive management practices at Hauser and Holter dams; (3) propose additional measures to mitigate for avoidable and unavoidable impacts; (4) evaluate the effect of short-term flow fluctuations on the resident fish community in the tailwaters; (5) evaluate the impact of fish spilled from Hauser on the resident fish populations in Holter Lake; (6) monitor gas supersaturation in the water and gas bubble trauma in the fish in the Hauser tailwater during powerhouse rehabilitation; (7) propose measures to minimize gas supersaturation during powerhouse rehabilitation and to mitigate for avoidable and unavoidable impacts related to gas bubble trauma; (8) monitor the effects of project operations on Hauser Lake fish populations; and (9) evaluate the potential to enhance tributary spawning to increase the contribution of natural reproduction to the Hauser Lake fishery.

The Licensee shall prepare the plan in consultation with the FWS, Montana DFWP, Montana DEQ and other interested entities. The plan shall include a schedule for implementation of the program, for reporting and consultation with the agencies concerning the annual results of the program, and for filing the results, agency comments, and the Licensee’s response to agency comments with the Commission. 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 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 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, including any changes required by the Commission.

At the end of three years, the Licensee shall submit to the Commission a summary of the measures implemented and an evaluation (conducted in consultation with the agencies) of the need for additional measures.

Article 415. The Licensee shall prepare and submit for Commission review an annual flow window excursion report describing deviations from target flows at the Hauser, Holter, and Morony developments. The initial report shall include a plan, developed in consultation with the FWS and Montana DFWP, to study the effects of flow window excursions on fisheries resources.

The Licensee shall prepare the plan after consultation with the FWS, Montana DFWP and other interested entities. 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 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 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 may require changes to the plan to ensure adequate protection of the environmental, scenic, and cultural values of the project area. Upon Commission approval, the licensee shall implement the plan.

Article 416. Within one year of the date of issuance of the license, and every three years thereafter, the Licensee shall submit for Commission approval a fisheries plan for implementing specific mitigation and enhancement measures and post-licensing evaluation and monitoring for Holter Lake and the Holter Dam tailwaters. The plan should include a schedule for implementing the following tasks: (1) monitor Holter Dam and tailwaters for evidence of fish loss (dead, injured, or alive) from Hauser Lake as a result of impingement, entrainment, or spillage (particularly during high flows); (2) provide $35,500 annually to Montana DFWP to implement adaptive management practices to protect impoundment fisheries at Holter and Hauser Dams; (3) propose additional measures to minimize fish loss and to mitigate for avoidable and unavoidable impacts; (4) evaluate the effect of short-term flow fluctuations on the resident fish community in the tailwaters; (5) evaluate the impact of fish spilled from Holter on the resident fish populations downstream; (6) monitor the effects of project operations on Holter Lake fish populations; and (7) evaluate the potential to enhance tributary spawning to increase the contribution of natural reproduction to the Holter Lake fishery.

The Licensee shall prepare the plan in consultation with FWS, Montana DFWP, Montana DEQ and other interested entities. The plan shall include a schedule for implementation of the program, for reporting and consultation with the agencies concerning the annual results of the program, and for filing the results, agency comments, and the Licensee’s response to agency comments with the Commission. 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 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 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, including any changes required by the Commission.

At the end of three years, the Licensee shall submit to the Commission a summary of the measures implemented and an evaluation (conducted in consultation with the agencies) of the need for additional measures.

Article 417. Within one year of the date of issuance of the license, and every three years thereafter, the Licensee shall submit for Commission approval a fisheries plan for implementing specific mitigation and enhancement measures and post-licensing evaluation and monitoring for the five Great Falls reservoirs and their tailwaters. The plan should include a schedule for implementing the following tasks: (1) monitor the relative abundance of the most abundant fish species in the Great Falls reservoirs and in the Missouri River downstream of Morony Dam; (2) implement adaptive management practices to mitigate fisheries impacts associated with dewatering 0.5 mile of the Missouri River below Rainbow Dam; (3) implement adaptive management practices to mitigate fisheries impacts associated with Cochrane Reservoir and Morony Reservoir fluctuations in conjunction with peaking operations at the Cochrane and Ryan developments; (4) protect and provide for the recovery of threatened and endangered fish species and other aquatic species of special concern in the Great Falls reservoirs and below Morony Dam; (5) provide assistance to the FWS and Montana DFWP for ongoing evaluation of pallid sturgeon in the Missouri River downstream of Morony Dam; (6) evaluate the potential to enhance tributary spawning to increase the contribution of natural reproduction to the Great Falls reservoirs fisheries; (7) evaluate the impact of reservoir drawdowns on spawning success in Cochrane, Ryan, and Morony reservoirs; and (8) evaluate the possibilities of regulating drawdowns of the Cochrane and Ryan reservoirs during the spring and early summer to minimize potential impacts on the reproductive activities of game species.

The Licensee shall prepare the plan in consultation with FWS, Montana DFWP, Montana DEQ and other interested entities. The plan shall include a schedule for implementation of the program, for reporting and consultation with the agencies concerning the annual results of the program, and for filing the results, agency comments, and the Licensee’s response to agency comments with the Commission. 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 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 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, including any changes required by the Commission.

At the end of three years, the Licensee shall submit to the Commission a summary of the measures implemented and an evaluation (conducted in consultation with the agencies) of the need for additional measures.

Article 418. Within one year of the date of issuance of the license, the Licensee shall submit for Commission approval a plan to fund research, along with the National Ecology Research Center, FWS-Fort Collins, and Reclamation, for a one-time riparian flow study of the Missouri River from Holter to Great Falls, and Morony Dam to Fort Peck Reservoir. The study shall be used to determine flows necessary for the maintenance and enhancement of streamline riparian vegetation in the Missouri River between Morony Dam and Fort Peck Reservoir, and to prepare a plan for appropriate riparian enhancement flows.

The Licensee shall prepare the plan in consultation with FWS, BOR, Montana DFWP, and other interested entities. The plan shall include a schedule for implementation of the program, for reporting and consultation with the agencies concerning the annual results of the program, and for filing the results, agency comments, and the Licensee’s response to agency comments with the Commission. 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 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 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, including any changes required by the Commission.

Article 419. Within one year after the date of issuance of the license, the Licensee shall file for Commission approval, and upon approval, implement the approved plan to coordinate and monitor flushing flows in the upper Madison river downstream of Hebgen Dam. The plan shall include, but not be limited to a, provision for monitoring flushing flow needs in the upper Madison River near Kirby Ranch in 2002 and every five years thereafter for the term of the license, and a provision to coordinate flushing flows in the lower Madison River below Madison Dam with flushing flow requirements in the upper Madison River below Hebgen Dam.

The Licensee shall prepare the plan in consultation with the Forest Service, FWS, Montana DFWP, Montana DEQ and other interested entities. The plan shall include a schedule for implementation of the program, for reporting and consultation with the agencies concerning the annual results of the program, and for filing the results, agency comments, and the Licensee’s response to agency comments with the Commission. 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 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 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, including any changes required by the Commission.

Article 420. Within 180 days after the date of issuance of the license and at least 90 days prior to construction, the Licensee shall file for Commission approval, and upon approval, implement the approved plan to restore flows in the Madison and Missouri Rivers downstream of the Madison, Holter, Hauser, and Morony developments within 30 minutes of a plant trip. The plan shall include, but not be limited to: (1) construction, operation, and maintenance of a guaranteed priority streamflow device, approved by the Forest Service, as part of the proposed modifications to the Hauser Development; (2) installation of dam structure upgrades (i.e., automated spillway gates) at Hauser and Madison Dam; (3) modification of the slide gates on the Holter Dam spillway; and (4) modification of two of the nine radial gates on the Morony Dam’s spillway.

The Licensee, after consulting with the Forest Service, US Geological Survey, and Montana DEQ, shall develop plans to install and monitor a water measurement control section with a continuous recording gauge to demonstrate compliance with daily and hourly average flow requirements at the Hauser Development. The Licensee shall file with the Commission, at least 90 days prior to the installation of the water measurement control section, plans approved by the Forest Service for the water measurement control section and gauging.

The Licensee shall provide stage-discharge information to the Forest Service prior to commencement of operation of the project. Within 60 days of request, the Licensee shall provide the Forest Service with updated stage discharge charts and/or with a report of streamflow information collected at the water measurement control section and any other applicable stream gauge records. The water measurement control section and gauge shall be shown on the as-built drawings filed with the Commission.

The Licensee shall prepare the plan after consultation with the Forest Service, BLM, FWS, Corps of Engineers, Montana DEQ and Montana DFWP. The Licensee shall include with the plan documentation of consultation, functional design drawings and an implementation schedule for the guaranteed priority streamflow device, 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 agencies' comments are accommodated by the program. 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 projectspecific 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 421. Within one year after the date of issuance of this license, the Licensee, after consultation with FWS, Forest Service, BLM, and Montana DFWP, as appropriate, shall prepare a Threatened and Endangered Species Protection Plan (T&E Plan) for all federally listed threatened and endangered species that occur within the project area of the Missouri-Madison Project. The T&E Plan shall include, but not be limited to, the following: (1) a project construction schedule, including transmission line construction, to avoid disturbances to threatened and endangered species; (2) the results of a preconstruction survey by a professional wildlife biologist, fisheries biologist, or botanist of all areas to be disturbed by construction or operations under the license; (3) measures to protect the listed species; (4) an implementation schedule for the protective measures; and (5) a monitoring plan and implementation schedule to evaluate the project's effect on threatened and endangered species and critical habitat in the project area.

The Licensee shall include in the T&E Plan documentation of consultation, copies of comments and recommendations on the completed plan after it has been prepared and provided toFWS and Montana DFWP, and descriptions of how the agencies' comments and recommendations are accommodated by the plan. The Licensee shall allow a minimum of 30 days for the agencies to comment 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 T&E Plan, including any changes required by the Commission.

Article 422. At least 90 days before the start of any land-clearing or land- disturbing activities at any of the nine Missouri-Madison developments, the Licensee shall file, for Commission approval, a vegetation and wildlife protection and mitigation plan identifying measures to minimize construction disturbance, to protect native vegetation and wildlife, and mitigate for adverse effects that occur during project construction. The plan shall describe the location of the areas to be revegetated, including wetlands, and include, where possible, revegetation with plant species beneficial to wildlife species. At a minimum the plan shall include:

General vegetation

(1) a description of the plant species used and planting densities;

(2) fertilization and irrigation requirements;

(3) a monitoring program to evaluate the effectiveness of the plantings;

(4) provisions for the filing of monitoring reports with the Commission;

(5) a description of procedures to be followed if monitoring reveals that the revegetation is not successful; and

(6) an implementation schedule that provides for revegetation as soon as practicable after the beginning of landclearing or landdisturbing activities within the disturbed area.

Wetlands (1) details of the final design of measures to protect wetlands affected by the project;

(2) a plan for monitoring the effectiveness of the measures to protect wetlands affected by the project, which includes steps to be taken in the event the measures are not effective in protecting the wetlands, including, but not necessarily limited to, modifying the measures or establishing or enhancing additional wetlands;

(3) a proposal to provide recommendations to the agencies and the Commission for alternative wetland mitigation due to project construction and operation, if monitoring indicates that the implemented wetland establishment or mitigation is not successful; and (4) schedules for establishing or enhancing wetlands, for filing the results of the monitoring program, and for filing recommendations for alternative wetland mitigation.

Wildlife

(1) clearing, revegetating, and maintaining the transmission line rightofway for the benefit of wildlife resources;

(2) the revegetation of disturbed areas with plant species beneficial to wildlife as soon as practicable after project construction;

(3) mitigation for the loss of wildlife habitat, which shall include, but not be limited to: (a) identification of the type of habitat to be used for replacement; (b) a map showing the location and number of acres of habitat to be used for replacement; (c) a plan to manage the habitat to optimize its value to wildlife; (d) a monitoring program to determine the effectiveness of the plan; and (e) a schedule for filing the monitoring results with the Commission.

In preparing the plan, the Licensee shall take into account the final Erosion and Sedimentation Control Plan prepared pursuant to this license, and shall consult with the Forest Service, BLM, FWS, Corps of Engineers, and Montana DFWP, as applicable. 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 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 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 proposed plan. Construction shall not begin until the Licensee is notified by the Commission that the filing is approved. Upon Commission approval, the Licensee shall implement the plan including any changes required by the Commission.

Article 423. Within one year after the date of issuance of this license, the Licensee shall, after consultation with the appropriate agencies and other entities, develop a vegetation and wildlife monitoring and enhancement plan that includes specific goals, objectives, and standards to enhance native plants and wildlife populations on the lands and waters associated with the project. The plan shall include, but not be limited to, the following recommended measures:

(1) monitoring of nonriparian and wetland vegetation, upland habitat, and state- designated rare plants. The monitoring plan shall include a schedule for: (a) implementation of the program; (b) consultation with the appropriate federal and state agencies concerning the results of the monitoring; and (c) filing the results and agency comments with the Commission.

(2) preparation of a riparian monitoring plan and implementation of a monitoring program to assess the effects of project operation on riparian plant communities and the trend in these various communities. The plan and program shall:

(a) include detailed linkage between stream flows and the control of cottonwood regeneration on the reaches of the Madison and Missouri rivers from Hebgen Dam to Fort Peck Reservoir;

(b) include general tracking of the vigor and productivity of riparian vegetation, especially areas subjected to heavily altered hydrologic and sediment regimes;

(c) include clear identification of the effect of project operation, in conjunction with the cumulative effects of other interacting hydrologic developments (such as the Canyon Ferry and Tiber dams) on critical aspects of the hydrologic regime (e.g., the frequency and magnitude of peak discharges); and

(d) incorporate in the monitoring program the principles of multi- scale monitoring (high and low intensity) and consideration of confounding variables such as grazing intensity, agricultural activities, ice, bank stabilization, and sediment supply. (3) preparation of a monitoring program to determine if the proposed pulsing or peaking of flows released from project dams on the Madison-Missouri system would affect the nest success of migratory birds, especially Canada geese. If needed, the Licensee shall develop management measures to mitigate the adverse effects of pulsed or peaking flows on migratory bird nesting.

(4) implementation of a program to identify and stratify for sampling purposes major avian habitat types along the project corridor. The Licensee shall identify priority avian species or communities of species to serve as indicators within these major habitat types. The Licensee shall monitor and evaluate, in five-year increments, the effects of project operations on these avian species and the habitat types that support them. The Licensee shall identify specific protection, mitigation, and enhancement strategies for these avian species.

The Licensee shall prepare the plan after consultation with the Forest Service, BLM, FWS, Corps of Engineers, Montana DFWP, appropriate federal and state soil conservation, water quality, and fish and wildlife agencies, and other interested entities. 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 agencies' comments are accommodated by the plan.

The Licensee shall allow a minimum of 30 days for the resource agencies and landowners to comment and 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 proposed plan. The plant and wildlife enhancement program shall not begin until the Licensee is notified by the Commission that the filing is approved. Upon Commission approval, the Licensee shall implement the plan including any changes required by the Commission.

Article 424. The Licensee shall design and construct any new project transmission lines in accordance with the guidelines set forth in Suggested Practices for Raptor Protection on Power Lines: The State of the Art in 1996 (Avian Power Line Interaction Committee, Edison Electric Institute). The Licensee, after consulting with the Forest Service, FWS, BLM, and Montana DFWP, and within 90 days of the start of construction, shall file a transmission line design plan that considers adequate separation of energized conductors, groundwires, and other metal hardware, adequate insulation, and any other measures necessary to protect raptors from electrocution hazards. The agencies' comments on the design plan shall be included in the filing. Unless the Commission instructs otherwise within 60 days after the filing, the Licensee may begin transmission line construction at the end of the 60day period. Within one year of the date of issuance of the license, the Licensee shall conduct an assessment of the project’s overhead transmission lines on National Forest System land in accordance with the guidelines set forth in Suggested Practices for Raptor Protection on Power Lines: The State of the Art in 1996. Within three years of the date of issuance of the license, the Licensee shall develop a plan, approved by the Forest Service, for the implementation of necessary modifications to the project’s overhead transmission lines on National Forest System land, to provide adequate insulation or separation of energized conductors, groundwires, and other metal hardware, wire markers, wire location and any other measures necessary to protect raptors from electrocution and collision hazards. The Licensee shall file the assessment and the plan for Commission approval.

Article 425. The Licensee shall implement the "Programmatic Agreement Among the Federal Energy Regulatory Commission, the Advisory Council on Historic Preservation, and the Montana State Historic Preservation Office Regarding the Licensing and Continued Operation of the Missouri-Madison Hydroelectric Generating Project (FERC Project No. 2188)", executed on May 6, 1998, including but not limited to the Cultural Resources Management Plan (CRMP) for the project. In the event that the Programmatic Agreement is terminated, the Licensee shall implement the provisions of its approved CRMP. The Commission reserves the authority to require changes to the CRMP at any time during the term of the license. If the Programmatic Agreement is terminated prior to Commission approval of the CRMP, the Licensee shall obtain approval before engaging in any ground-disturbing activities or taking any other action that may affect any Historic Properties within the project's Area of Potential Effect.

Article 426. Within one year after the date of issuance of the license, the Licensee shall file for Commission approval and, upon approval, implement its Comprehensive Recreation Plan for managing recreational resources at the Missouri-Madison Hydroelectric Project. The plan shall include, but not be limited to, provisions for the following:

Hebgen Development

(1) Within four years after the issuance date of the license, the Licensee shall develop a day-use area at Hebgen dam that includes a parking area, picnic tables, interpretive facilities that depict the 1959 earthquake and Hebgen Dam’s role in the Licensee's hydroelectric operations since 1915, and informational signs about the area’s recreational opportunities. The Licensee shall contribute up to $350,000 for the development and $3,000 annually for the operation and maintenance of the site. (2) Within four years after the issuance date of the license, the Licensee shall develop a recreational vehicle (RV) dump station in conjunction with an existing commercial operator along the north shore of Hebgen Reservoir. The RV dump station shall not be located on National Forest system land. The Licensee shall contribute up to $50,000 for construction and $5,000 for annual operation and maintenance of the site.

(3) The licensee shall, in cooperation with the Forest Service, develop two fishing access sites accessible to individuals with disabilities at the Highway Destruction Site and at the Rumbaugh Ridge site. Facilities shall include trails, fishing platforms, restrooms, and signs. The Licensee shall contribute up to $3,500 per site for annual operation and maintenance. Construction of the Highway Destruction Site shall be completed within one year after the issuance date of the license, and the Rumbaugh Ridge site shall be completed within two years after the issuance date of the license.

(4) The Licensee shall monitor and, within the operating parameters set forth in Article 403, minimize adverse impacts to boat ramps and docks located on Hebgen Reservoir that might be caused by the proposed changes in management of reservoir water levels.

Madison Development

(1) Within one year of rehabilitating the Madison Development’s powerhouse, the Licensee shall develop a public day-use site at Kobayashi Beach (formerly Sandy Beach) on the north shore of Ennis Lake. The day-use area shall include a boat ramp, boat dock, parking, restrooms, interpretive facilities that depict the development’s role in the Licensee's hydroelectric operations since 1908, and informational signs about the area’s recreational opportunities. The Licensee shall contribute up to $400,000 for development of the site and up to $15,000 annually for operation and maintenance of the site.

(2) Within one year after the issuance date of the license, the Licensee shall develop the Norman Strung Memorial Campground on BLM's west shore property. The campground shall consist of designated campsites, fire rings, restrooms, drinking water, a boat ramp, a boat dock, interpretive facilities, and informational signs about the area’s recreational opportunities. The Licensee shall contribute up to $500,000 to design and construct the site and up to $20,000 annually to supplement the BLM's operation and maintenance costs for the site.

(3) Within three years of rehabilitating the Madison Development's powerhouse, the Licensee install interpretive facilities at the Fall Creek access site. The facilities shall include a section of the wood flow line and signs. The Licensee shall contribute up to $30,000 for constructing the site.

(4) Within one year after the issuance date of the license, the Licensee shall identify and mark a portage route around the right side of Madison Dam.

Hauser Development

(1) Within five years after the issuance date of the license, the Licensee shall improve and expand the Hauser Dam public access site. The improvements shall include a larger parking area, portage route, carry-in boat ramp below the dam, interpretive facilities that depict the development’s role in the Licensee's hydroelectric operations since 1914, and informational signs about the area’s recreational opportunities. The Licensee shall design, construct, and manage the site. The Licensee shall contribute up to $300,000 for developing the site and up to $10,000 annually for its operation and maintenance.

(2) The Licensee shall cooperate with BLM in planning and developing recreational facilities at the Devil’s Elbow site. The facilities shall consist of a day-use swimming area, boat ramp and dock, designated RV and tent campsites, restrooms, RV dump station, drinking water, fire rings, informational and interpretive signs, and trash cans. The new area shall be designed to accommodate individuals with disabilities. The Licensee shall contribute up to $1,000,000 for site design and development after BLM acquires the Devil's Elbow site.

(3) Within three years after the issuance date of the license, the Licensee shall acquire and develop White Sandy Beach as a day-use and camping area and expand Montana DFWP's proposed fishing piers at the causeway. The facilities at White Sandy Beach shall consist of a boat ramp and dock, designated RV and tent campsites, restrooms, drinking water, fire rings, informational and interpretive signs, and trash cans. The new area shall be designed to accommodate individuals with disabilities. The Licensee shall contribute up to $1,500,000 to acquire, design, and develop the site, and up to $40,000 annually for its operation and maintenance.

Holter Development

(1) Within five years after the issuance date of the license, the Licensee shall design and reconstruct the Holter Dam campground to accommodate overnight campers and day-users. The facilities shall be accessible to individuals with disabilities, and shall include designated RV and tent campsites, drinking water, restrooms, trash cans, fire rings, a boat ramp, shoreline fishing improvements, interpretive facilities, informational signs about the area’s recreational opportunities, and a designated parking area for day-users. The Licensee shall contribute up to $1,000,000 for the design and development of the site and up to $10,000 annually for operation and maintenance of the campground and a portage route around the left side of Holter Dam. (2) Within two years after the issuance date of the license, the Licensee shall construct a portage route around the left side of Holter Dam. The route shall be marked with signs. The Licensee shall contribute up to $5,000 to develop the portage route.

(3) Within two years after the issuance date of the license, the License shall assist BLM in the acquisition and development of land (if available at a reasonable price) for a day-use area on the east side of Holter Lake to reduce day-use congestion at BLM's Holter Lake site. The day-use area shall consist of restrooms, a boat ramp and docks, a parking area, and informational signs about the area’s recreational opportunities. The Licensee shall contribute up to $300,000 for site acquisition and development, and shall transfer the land to BLM.

(4) Within five years after the issuance date of the license, the Licensee shall develop a campground accessible only by boat across from Ming Bar and south of BLM’s Sleeping Giant Wilderness Study Area. The campground may consist of designated campsites, restrooms, drinking water, boat docks, informational signs, and trails. The Licensee shall contribute up to $200,000 for site development, and up to $10,000 annually for the site's operation and maintenance.

(5) Within two years after the issuance date of the license, the Licensee shall cooperate with BLM in developing access facilities for individuals with disabilities at Holter Lake Campground. Facilities may include a parking area, docks, a public information building, pathways, toilets, drinking water, a trail, and a fishing platform. The Licensee shall contribute up to $100,000 for the design and development of facilities.

(6) Within three years after the issuance date of the license, the Licensee shall contribute up to $600,000 for the reconstruction of BLM’s Log Gulch Campground and Departure Point Access Site, including improving the existing camping, day-use, and boating facilities, and access to accommodate the high level of use that the site currently receives. The Licensee shall design and construct the facilities, and shall contribute up to $20,000 annually to supplement BLM’s operation and maintenance costs for the site.

(7) The Licensee shall coordinate with the Forest Service to improve the picnic shelter at the Meriwether Picnic Area and to replace the boat docks at the Meriwether Picnic Area and Coulter Campground, both located within the project boundary in the Helena National Forest. Developments in the Great Falls area

Within five years after the issuance date of the license, and where consistent with project operations, the Licensee shall manage as a natural area the lands it owns on the north shoreline of the Missouri River adjacent to the Rainbow, Cochrane, Ryan, and Morony Reservoirs. The Licensee shall contribute up to $20,000 for developing and up to $5,000 annually for operating and maintaining the area.

Rainbow

(1) Within one year after the issuance date of the license, the Licensee shall contribute up to $100,000 towards the completion of the Lewis and Clark Overlook and the construction of a new overlook at Crooked Falls near Rainbow Dam. The Licensee shall design and construct the overlooks and shall contribute up to $10,000 annually for the operation and maintenance of the Rainbow, Lewis and Clark, and Crooked Falls Overlooks.

(2) Within three years after the issuance date of the license, the Licensee shall construct a pedestrian and bicycle trail from Rainbow Dam to the Sulfur Springs Trailhead downstream of the Morony Development. The trail shall use the existing road from the Rainbow Development to the Ryan Development, linking the Ryan Island Day-Use Area to the trail, and continuing to the Morony Development. The Licensee shall contribute up to $150,000 for the development and up to $5,000 annually for operation and maintenance of the trail.

Cochrane

The Licensee shall cooperate with the Forest Service, Montana DFWP, Montana State Historic Preservation Officer, and BLM in the acquisition, development and/or improvement of four existing or new public access sites to the Missouri River. The Licensee shall contribute up to $200,000 for the acquisition and development of each site and up to $10,000 annually for the operation and maintenance of each site. The locations of the sites shall be selected by the Licensee in consultation with the above-identified agencies. The facilities at the sites shall include boat ramps, parking, and restrooms.

Morony

Within two years after the issuance date of the license, the Licensee shall contribute up to $50,000 to the Montana DFWP to reconstruct the Carter Ferry Access Site. The facilities shall include a parking area, a boat ramp, restrooms, and signs.

Black Eagle

Within one year after the issuance date of the license, the Licensee shall submit a revised proposal for recreational development at the Black Eagle Recreation Area. The proposal shall include documentation of the scope and status of any recreational facilities undertaken or planned to be undertaken by other entities in that area.

The Comprehensive Recreation Plan shall include a description of the entity responsible for operation and maintenance of each of the above-described facilities. Where the Licensee is the responsible entity, the Plan shall describe how the Licensee will operate and maintain the facility in question, as well as all existing project facilities; document the Licensee's agency consultation; include copies of comments and recommendations on the Plan after it has been prepared and provided to the agencies; and describe how the agencies' comments and recommendations are accommodated. The Licensee shall allow a minimum of 30 days for the agencies to comment 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, including any changes required by the Commission. Any recreational facilities designed and constructed by the Licensee or on project lands and waters shall incorporate appropriate measures for erosion and sediment control and for revegetating disturbed areas, both during and after construction of the facilities. The Licensee shall construct facilities after consultation with the Forest Service, BLM, Montana DFWP, and Montana State Historic Preservation Officer. Where the Licensee is the responsible entity, it shall file, in addition to the as- built drawings to be filed pursuant to Article 302 of this license, revised Exhibit G's showing the inclusion of such facilities within the project boundary.

Article 427. The Licensee, after consulting the Forest Service, BLM, and Montana DFWP, shall monitor recreation use of the project area to determine whether existing recreation facilities are meeting recreation needs. Monitoring studies shall begin within six years after issuance of the license and shall be reported to the Commission in conjunction with Section 8 of the Commission's Regulations (18 CFR 8.11), which requires the filing of FERC Form 80. The report shall include: (1) annual recreation use figures; (2) a discussion of the adequacy of the Licensee's recreation facilities at the project site to meet recreation demand; (3) a description of the methodology used to collect all study data; (4) if there is a need for additional facilities, a recreation plan proposed by the Licensee to accommodate recreation needs in the project area; (5) documentation of agency consultation and agency comments on the report after it has been prepared and provided to the agencies; and (6) specific descriptions of how the agencies' comments are accommodated by the report. The Licensee shall allow a minimum of 30 days for the agencies to comment and to make recommendations prior to filing the report with the Commission.

Article 428. (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 waters 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 water craft 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 of its standards, guidelines, and procedures for implementing this paragraph (b) and 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 impoundment 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 impoundment. 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.

(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 water craft 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 Energy Projects, 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 ensure 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.

(F) The water quality conditions in Appendix A, and the Forest Service's FPA Section 4(e) conditions in Appendix B, are conditions to the license.

(G) The Licensee shall serve copies of any Commission filing required by this order on any entity specified in the order to be consulted on matters relating to that filing. Proof of service on these entities must accompany the filing with the Commission.

(H) This order is final unless a request for rehearing is filed within 30 days from the date of its issuance, as provided in Section 313(a) of the FPA. The filing of a request for rehearing does not operate as a stay of the effective date of this license or of any other date specified in this order, except as specifically ordered by the Commission. PP&L Montana's failure to file a request for rehearing shall constitute acceptance of this order.

By the Commission.

( S E A L )

David P. Boergers, Secretary. APPENDIX A

Conditions to the water quality certification issued on September 9, 1993, by the Montana Department of Health and Environmental Services, pursuant to Section 401 of the Clean Water Act, 33 U.S.C. § 1341, for Project No. 2118 at relicensing.

1. MPC shall, prior to any changes in the operation of Cochrane, Ryan, or Morony Reservoirs, submit to DHES a written evaluation of the potential for ground water contamination, and elevated concentrations in downstream surface water, which are likely to be caused by the proposed changes. The evaluation plan must be approved by DHES prior to its implementation. The evaluation must include at least antimony, arsenic, cadmium, copper, lead, manganese, zinc, selenium, silver, and thallium, all of which have elevated concentrations in reservoir sediments. Screening level analysis shall also be done for indium, germanium, mercury, strontium and titanium, to determine if these constituents are also elevated in reservoir sediments. If DHES determines that there is a significant potential for such contamination to cause violations of Title 75, Chapter 5, MCA, and the rules adopted pursuant thereto, MPC shall within one year of written notice from DHES submit a plan that describes measures necessary to comply with Title 75, Chapter 5, MCA, and rules adopted pursuant thereto and provides a schedule for implementation of those measures. Upon approval or modification by the DHES, MPC shall implement the plan according to its terms and schedule.

2. MPC shall, prior to changing its peaking operations at Cochrane and Morony Reservoirs complete an evaluation of the potential for bank erosion and mass wasting at these reservoirs to result from changes in operations. The evaluation plan must be approved by DHES prior to plan implementation, and must include a field-based geo- technical determination of the mass stability and erosion potential of reservoir shoreline material. The study must include determination of the potential short and long-term effects of shoreline erosion on river sediment loading. If DHES determines that there is a potential for such bank erosion from MPC’s proposed operations to violate Title 75, Chapter 5, MCA, and the rules adopted pursuant thereto, MPC shall within one year of written notice from DHES submit a corrective action plan that describes measures necessary to comply with Title 75, chapter 5, MCA, and rules adopted pursuant thereto and provides a schedule for implementation of those measures. Upon approval or modification by the DHES MPC shall implement the corrective action plan according to its terms and schedule.

3. MPC shall within three months of issuance of the FERC license submit Drawdown Operational Plans for Black Eagle and Morony dams to assure that continued operations will be done in the best practicable manner to minimize harmful effects. Upon approval or modification by the DHES MPC may then change its operations consistent with the drawdown plans.

4. MPC shall submit reservoir dredging and monitoring plans for all reservoirs at least three months prior to any dredging. Upon approval or modification by the DHES MPC shall implement the plans according to their terms and schedules.

5. MPC shall develop and implement a water quality monitoring plan for all projects. The water quality monitoring plan shall include chemical, physical and biological components, that measure compliance with Title 75, Chapter 5, MCA, and rules adopted pursuant thereto and measure long-term trends in water quality. Parameters, sampling frequency, and location of stations will be determined by DHES with assistance from the Missouri-Madison Relicensing Water Quality Technical Committee. The water quality monitoring conducted under the water quality monitoring plan must be operational at least two years before MPC makes any changes in the operation of any of its reservoirs covered by FERC license 2188.

6. MPC shall within three months after issuance of the FERC license develop a toxic algae monitoring plan for Hebgen Reservoir. This plan shall be designed to protect the public and domestic animals from toxic algae by the immediate notification of the Gallatin County Health Officer and DHES of any toxicity. Upon approval or modification by the DHES, MPC shall implement the monitoring plan according to its terms and schedule.

7. MPC shall within one year after issuance of the FERC license begin monitoring the bank erosion at each project reservoir. MPC shall submit monitoring plans for all reservoirs at least three months prior to monitoring. The plans must include details for repeatable erosion monitoring at all minor, moderate, and active erosion sites. The plan must be reviewed and approved by DHES prior to implementation of the monitoring. If monitoring shows that erosion is causing violations of Title 75, Chapter 5, MCA, and the rules adopted pursuant thereto MPC shall within one year of written notice from DHES submit a plan that describes measures necessary to comply with Title 75, Chapter 5, MCA, and rules adopted pursuant thereto and provides a schedule for implementation of those measures. Upon approval or modification by the DHES, MPC shall implement the plan according to its terms and schedule.

8. MPC shall apply for and receive any necessary permits and authorizations from DHES prior to any construction activities.

9. MPC shall maintain minimum flows of 200 cfs from April 1 through June 30 and 80 cfs from July 1 through March 31 in the portion of the Madison River from the Madison Dam to the Madison Power House. 10. MPC shall within one year after issuance of the FERC license develop reservoir drawdown criteria for non-emergency drawdowns of each reservoir. Upon approval or modification by the DHES MPC may then change its operations consistent with the drawdown criteria.

11. Any operations under this license that would result in water quality which is worse than conditions associated with reasonable operation of the licensee’s dams at July 1, 1971, must to the extent of the worsened condition, be reviewed and approved under the nondegradation policy at section 75-5-303, MCA prior to commencement.

12. This certification is a final decision of the DHES that is appealable as an administrative contested case to the State of Montana Board of Health and Environmental Sciences. If an appeal is made to the Board, this certification is upheld, modified, or revoked consistent with the Board’s final decision. APPENDIX B

[Conditions filed by the U.S. Forest Service, pursuant to Section 4(e) of the Federal Power Act, for the new license for Project No. 2118]

I. STANDARD PROVISIONS APPLICABLE TO ALL PROJECTS OCCUPYING NATIONAL FOREST SYSTEM LANDS

Condition No. 1 - Implementation and Modification of Forest Service Conditions

The Licensee shall not commence implementation of the License Articles deemed necessary by the U.S. Forest Service , under Federal Power Act Section 4(e) authority, until Forest Service completion of requirements under 36 CFR 215 providing appeal rights of Forest Service 4(e) conditions. Upon completion of said 36 CFR Part 215 requirements, the Forest Service may require modification of the 4(e) conditions resulting from the appeal process. The Commission reserves the right, after notice and opportunity for hearing, to require changes in the project and its operation based on Forest Service modifications of the 4(e) conditions.

Condition No. 2 - Forest Service Approval of Final Design

Before any ground-disturbing actions occur on National Forest System land, the Licensee shall obtain the written approval of the Forest Service for all final plans not previously approved by the Forest Service or which were not part of the approved project license exhibits. For the purposes of this license, (1) final plans are only those plans which show project facilities in complete and accurate detail in relation to the ground surface, which are accompanied by on-the-ground staking of the project facilities, and which have been reviewed and approved in writing by the Forest Service, and (2) the only final plans included are those relating to ground disturbance and to facility locations and appearance, which the Forest Service identifies as affecting the protection and utilization of the National Forest System lands. As part of the written approval for plans not previously approved, the Forest Service may require, within the scope of the licensed project and initial approvals of the Forest Service, adjustments in final plans with regard to facility locations and appearance to preclude or mitigate impacts and to assure that the project is compatible with on-the-ground conditions.

The Forest Service shall have up to 60 days from the date of plan(s) submittal to exercise approval authority. If the Forest Service is unable to proceed with consideration of such plans due to adverse weather or other reasons beyond the control of the Forest Service, the Forest Service shall promptly inform the Licensee and the Commission of the problems, and the running of the 60-day period shall be delayed until the problems are resolved. Condition No. 3 - Approval of Changes After Initial Construction

In addition to any Commission approval or license provisions to make changes to the project, the Licensee shall obtain written approval from the Forest Service prior to making any changes in the location of any constructed project features or facilities, or any changes in the uses of Forest Service administered lands and waters, or any departure from the requirements of any approved exhibits filed with the Commission. Following receipt of such approval from the Forest Service, and not less than 60 days prior to initiating any such changes or departure, the Licensee shall file a report with the Commission describing the changes, the reasons for the changes, and showing the approval of the Forest Service for such changes that relate to National Forest System land. The Licensee shall file an exact copy of this report with the Forest Service at the same time it is filed with the Commission.

This article does not relieve the Licensee from the requirement for amendment or other requirements of Article 2 or Article 3 of this License. Any changes made pursuant to Articles 2 or 3 of the license shall be also subject to any new terms and conditions that the Secretary of Agriculture may impose in accordance with Section 4(e) of the Federal Power Act.

Condition No. 4 - Consultation

Each year during the 60 days preceding the anniversary date of the license, the Licensee shall consult with the Forest Service with regard to measures needed to ensure protection and development of the natural resource values of the project area. Within 60 days following such consultation, the Licensee shall file with the Commission evidence of the consultation with any recommendations made by the Forest Service. The Commission reserves the right, after notice and opportunity for hearing, to require changes in the project and its operation that may be necessary to accomplish natural resource protection.

Condition No. 5 - Dispute Resolution for 4(e) Condition/Special-Use Authorization Administration

In order to expedite the review of disputed Forest Service orders or directions given during construction, the following procedures shall be used:

a. Any orders or directions made during construction of the project can be immediately referred to the Forest Supervisor for resolution. The Forest Supervisor will decide within 5 working days of written notice by the Licensee of its concerns, and whether the original order or directions of the Forest Service shall be deemed to be sustained. If the Licensee disagrees with the decision of the Forest Supervisor, it may request in writing that the appropriate Regional Forester review the decision of the Forest Supervisor. The Regional Forester will act on such request within 15 working days of receipt.

If the Licensee disagrees with the decision made by the Regional Forester, it may request in writing that the Chief review the decision under the applicable administrative appeal procedures of the Forest Service as though the decision was an original decision of the Regional Forester. The Chief will issue a determination regarding the request for review within 30 days of receiving the Licensee's request for review.

b. Any orders or directions given during operation of the project shall be resolved using the appeal regulations applicable to holders of special-use authorizations from the Forest Service.

II. ADDITIONAL PROVISIONS

Condition No. 6 - Instream Flow Requirement

During the operation of the facilities authorized by this license, the Licensee shall maintain each year a continuous minimum flow of at least 150 cfs in the Madison River below Hebgen Dam (gage no. 6-385), 600 cfs on the Madison River at Kirby Ranch (USGS gage no. 6-388), and 1,110 cfs on the Madison River at gage no. 6-410 below the Madison development. Flows at USGS gage no. 6-388 (Kirby Ranch) are limited to a maximum of 3,500 cfs under normal conditions excepting catastrophic conditions to minimize erosion of the Quake Lake spillway.

Establish a permanent flow gauge on the Madison River at Kirby Ranch (USGS Gauge No. 6-388). Include a telephone signal at the gauge for link to Hebgen Dam operators and the Butte-based System Operation Control Center.

Condition No. 7 - Guaranteed Priority Flow Bypass Device and Gaging

The Licensee shall construct, operate, and maintain a guaranteed priority streamflow device, approved by the Forest Service, as part of the diversion/intake structure. At least 90 days prior to beginning construction of the diversion structure, the licensee shall file for Commission approval functional design drawings and an implementation schedule for the guaranteed priority streamflow device. Upon Commission approval, the Licensee shall implement the schedule. The guaranteed priority streamflow device shall be shown on the as-built drawings filed with the Commission. The Licensee shall develop an action plan and install dam structure upgrades (automated spillway gates) at Hauser Dam to restore Missouri River flow within 30 minutes after a plant trip in order to protect and maintain the aquatic environment when water is removed from the river. The east side of the Hauser facility occupies National Forest System land.

The Licensee, after consulting with the appropriate State agency, the Forest Service, and USGS, shall develop plans to install and monitor a water measurement control section with a continuous recording gauge to demonstrate compliance with daily and hourly average flow requirements, as described at 3.2.7 of the application. The Licensee shall file with the Commission, at least 90 days prior to the installation of the water measurement control section, plans approved by the Forest Service for the water measurement control section and gauging. The Commission may require changes to the plans.

The Licensee shall provide stage-discharge information to the Forest Service prior to commencement of operation of the project. Within 60 days of request, the Licensee shall provide the Forest Service with updated stage discharge charts and/or with a report of streamflow information collected at the water measurement control section and any other applicable stream gauge records. The water measurement control section and gauge shall be shown on the as-built drawings filed with the Commission.

Condition No. 8 - Toxic Algae

Within 6 months of license issuance the Licensee shall file for Commission approval a plan approved by the Forest Service to monitoring toxic algae blooms in Hebgen Reservoir throughout the term of the license. The plan shall be prepared in consultation with the Montana Department of Health and Environmental Services, and the Gallatin County Health Dept., and the Forest Service. The plan shall include provisions for information and education should toxic algae bloom be discovered. Upon approval by the Commission, the Licensee shall implement the plan.

Condition No. 9 - Water Quality Monitoring

The Licensee shall establish two water quality stations 1) Madison River above Hegben Reservoir and 2) Madison River below Hebgen Dam at USGS Gauge No. 6-385. The following parameters will be analyzed during March, June, and August: total and dissolved nutrients (PO4-P, TKN, and NH3-N), total and dissolved metals (Ca, Mg, Fe, A., and As), sediment (TSS, TDS, and turbidity), in-situ variables (pH, conductivity, dissolved oxygen, and temperature), and chlorophyll. The Licensee shall assist the Montana DEQ and the Gallatin County Health Department in monitoring toxic algae in Hebgen Reservoir. The Licensee shall fund an annual water quality enhancement account that may be used for monitoring toxic algae blooms in Hegben Reservoir, monitoring and treating appropriate point source discharges, sediment control projects, and applied water quality research studies in the Missouri-Madison river system.

Condition No. 10 - Fish and Wildlife Mitigation Plan

Within 1 year of the issuance of the license, the Licensee shall file for Commission approval a plan which has been approved by the Forest Service, for a baseline study which will delineate the growth and distribution of submerged macrophytes and their use by waterfowl and reservoir fisheries in Hebgen Reservoir. The plan will include a proposal to implement the baseline study. In addition, the Licensee shall conduct time- series (trend analysis) studies of macrophyte abundance in Hebgen Reservoir at 3- to 5- year intervals for the term of the license.

Within 1 year of the issuance of the license, the Licensee shall file for Commission approval a plan which has been approved by the Forest Service, habitat enhancement plan for waterfowl and other migrant (Neotropical) birds using Hebgen Reservoir. The plan shall include, but not be limited to, enhancement of key riparian zones, development of breeding pair pond habitat for ducks near the reservoir, construction of shallow marsh habitat to provide breeding habitat for ducks, shorebirds, loons, and swans and other water related species when the reservoir is drawn down. The plan shall also provide a proposal for implementation of the identified protection, mitigation and enhancement measures.

Within 1 year of the issuance of the license, the Licensee shall file for Commission approval a plan which has been approved by the Forest Service, a fish habitat protection and maintenance plan and a monitoring plan for Hebgen Reservoir and its associated tributaries. The plans shall include but are not limited to; monitoring and analysis of reservoir operations on existing habitat and production, recommendations reservoir and tributary stream habitat enhancement projects, recommendations for cost-sharing of identified projects, annual monitoring of existing fish species within Hebgen Reservoir and associated tributaries, recommendations for obtaining conservation easements on such streams as Red Canyon, Grayling Creek, Duck Creek, South Fork, and Watkins Creek, provide recommendations for trout species most likely to produce a self-sustaining wild trout population is Hebgen Reservoir and associated tributaries. Additionally, the plan will provide a proposal for implementation of the appropriate protection, mitigation, and enhancement measures.

At least 90 days prior to any land-clearing, land-disturbing, or spoil-producing activities that would affect National Forest System lands, the Licensee shall file for Commission approval a fish and wildlife mitigation plan approved by the Forest Service. The plan must be consistent with the standards and guidelines for affected management areas in the Gallatin, Beaverhead-Deerlodge, and Helena Land and Resource Management Plans. The mitigation plan must: (a) identify requirements for conducting activities on National Forest System land to meet Forest Service wildlife habitat objectives and standards; (2) identify needs for timing of any additional studies; and (3) include procedures for effectiveness monitoring and modification of practices when objectives are not achieved. Any comments made by the U.S. Fish and Wildlife Service, or Montana Fish, Wildlife, and Parks shall be filed with the plan. The commission may require changes to the plan to ensure adequate protection of the environmental, scenic, and cultural values of the project area. Upon Commission approval, the Licensee shall implement the plan.

Condition No. 11 - Sensitive Species Plan

At least 1 year prior to scheduled implementation, the Licensee shall notify the Forest Service of any land-clearing, land-disturbing, or other activity proposed for National Forest System land that may potentially have adverse effects to "sensitive species". Under direction of the Forest Service, the Licensee shall plan and conduct sensitive species surveys in the area of proposed activity to specifications provided by the Forest Service. The specifications shall include, but not be limited to, the species for which surveys must occur and the timing of such surveys.

Upon completion of the surveys and at least 90 days prior to the commencement of activity, the Licensee shall submit to the Forest Service a Biological Evaluation that meets Forest Service standards and addresses the effects of the proposed activity on sensitive species that occur or are likely to occur in the area. The Biological Evaluation shall identify mitigation measures to avoid or minimize effects to sensitive species. Upon approval by the Forest Service, the Licensee shall incorporate and implement the mitigation measures as part of the project plan.

Condition No. 12 - Threatened and Endangered Species Plan

Within 6 months of the issuance of the license, the Licensee shall file for Commission approval Forest Service-approved plans for the completion of the Hebgen Development comprehensive bald eagle habitat protection and enhancement plan. The plan shall provide for monitoring of bald eagles throughout the term of the license. The plan shall include, but not be limited to, annual surveys to include incubation and activity/occupation associated with existing nest territories, productivity, distribution of nesting pairs, and annual count of breeding wintering and migrating bald eagles.

At least 90 days prior to starting any land-clearing, land-disturbing, or spoil-producing activities, the licensee shall file for Commission approval, a plan approved the Forest Service and the U.S. Fish and Wildlife Service, for the protection of listed species located in the project area. The plan must be consistent with the standards and guidelines for affected management areas in the Gallatin and Helena Land and Resource Management Plans. This plan must identify requirements for construction, operation, and maintenance measures to meet Forest Service and the U.S. Fish and Wildlife Service objectives and standards for the recovery of the affected species. The licensee will provide a "biological assessment", as required by the Endangered Species Act, prior to project construction for the affected species.

The Commission may require changes to the plan to ensure adequate protection of the environmental, scenic, and cultural values of the project area. Upon Commission approval, the licensee shall implement the plan.

Condition No. 13 - Erosion Control Measures Plan

Within 1 year following the date of issuance of the license, the Licensee shall prepare, and have approved by the Commission a project operations erosion and sedimentation control plan (ESCP) for Hebgen and Hauser developments. The plan should include operational modifications and erosion monitoring and protection measures based on the Montana Power Company's pilot-scale ESCP studies.

At least 90 days prior to starting any land-clearing, land-disturbing, or spoil-producing activities, the Licensee shall file for Commission approval, a plan approved by the Forest Service to control erosion, stream sedimentation, dust, and soil mass movement consistent with the standards and guidelines for affected management areas in the Gallatin and Helena Land and Resource Management Plans. Upon Commission approval, the Licensee shall implement the plan.

The plan shall be based on actual-site geological, soil, and groundwater conditions and, at a minimum, shall include: (1) a description of the actual-site conditions; (2) detailed descriptions, design drawings, and specific topographic locations of all control measures; (3) measures to divert runoff away from disturbed land surfaces; (4) measures to collect and filter runoff over disturbed land surfaces, including sediment ponds at the diversion and powerhouse sites; (5) revegetating disturbed areas; (6) measures to dissipate energy and prevent erosion; and (7) a monitoring and maintenance schedule. The Commission may require changes to the ESCP to ensure adequate protection of the environmental, scenic, and cultural values of the project area.

The plan must identify requirements for construction, operation, and maintenance measures to meet Forest Service erosion control objectives and standards.

Condition No. 14 - Transmission Line Raptor Protection

Within 1 year of the issuance of the license, the Licensee shall conduct an assessment of the project’s overhead transmission lines on National Forest System land in accordance with the guidelines set forth in Suggested Practices for Raptor Protection on Power Lines: The State of the Art in 1996 as described by the Avian Power Line Interaction Committee, Edison Electric Institute.

Within 3 years of the issuance of this license, the Licensee shall develop a plan approved by the Forest Service for the implementation of necessary modifications to the project’s overhead transmission lines on National Forest System land that will provide adequate insulation or separation of energized conductors, groundwires, and other metal hardware, wire markers, wire location and any other measures necessary to protect raptors from electrocution and collision hazards. The Licensee shall file the Forest Service-approved plan and assessment with the Commission.

Condition No. 15 - Vegetation Management

Within 1 year of the issuance of the license, and before starting any activities the Forest Service determines to be of a land-disturbing nature on National Forest System land, the Licensee shall prepare and file with the Commission a plan approved by the Forest Service for vegetation management. At a minimum, the plan must include: vegetation practices planned within the project area and Forest Service requirements for conducting these activities; revegetation, where required, accomplished through the use of local native species unless otherwise authorized by the Forest Service; methods for eradicating and preventing the spread of noxious weeds on existing roads, recreation sites, and other facilities associated with dams and reservoirs; and vegetation management in accordance with the 1988 U.S. Department of Agriculture Forest Service Record of Decision and Final Environmental Impact Statement for Managing Competing and Unwanted Vegetation on National Forests and Grasslands and accompanying 1989 Mediated Agreement, or subsequent requirements. The plan also must include an implementation schedule, effectiveness monitoring, and procedures for modifying practices when objectives are not achieved. Upon approval of the Forest Service and filing with the Commission, the Licensee shall implement the plan.

Condition No. 16 - Scenic Resource Protection Plan

Within 1 year of the issuance of the license, or at least 90 days prior to starting any land- clearing, land-disturbing, or spoil-producing activities, or other action that may have potential negative effects on scenery, the Licensee shall file for Commission approval a plan approved by the Forest Service for the design and construction of the project facilities in order to preserve or enhance the scenic quality of the project area, consistent with the standards and guidelines for affected management areas in the Gallatin and Helena Land and Resource Management Plans. Upon Commission approval, the Licensee shall implement the plan. The Commission may require changes to the plan to ensure adequate protection of the environmental, scenic, and cultural values of the project area. The plan will include the elements described in the final license application, exhibit E, sections 1.8.4., 3.8.4., and 4.8.4. (pp E-1-127, E-3-79, and E-4-93.).

Condition No. 17 - Project Recreation Plan

Within one year after issuance of the license, the Licensee shall file for Commission Approval, a plan which has been approved by the Forest Service, for implementing measures to mitigate project-induced recreation and provide for other recreation needs over the life of the project, consistent with the standards and guidelines for affected management areas in the Gallatin and Helena Land and Resource Management Plans. The plan must include specific measures for the following.

a. Formation of the recreation Technical Working Group made up of the Forest Service in consultation with the licensee, county planning officials, and non- governmental agencies and the State of Montana for future recreation needs on National Forest System lands. Any plan developed as a result of this consultation must be approved by the Forest Service and filed with the Commission. b.1. Hebgen Dam dayuse area that will include a parking area, picnic tables, interpretive facilities depicting the 1959 earthquake and informational signs about the area's recreational opportunities, and will be managed as a pack inpack out facility. The licensee would be responsible for construction and providing funding for the maintenance of the site. b.2. Two fishing access sites on Hebgen Reservoir, to enhance access for individuals with disabilities, along the north and south shore of Hebgen Reservoir. Facilities could include trails, fishing platforms, and signs. Sites will be approved by the Forest Service. c. RV dump station along the north shore of the Hebgen Reservoir in conjunction with an existing commercial operator. The RV dump station shall not be located on National Forest System land. d. Lyon's Bridge Access Site to enhance public access to the Madison River downstream from Hebgen Dam, consisting of a boat ramp, dock, parking and restroom facilities to accommodate high levels of use. e. Boat dock and ramp monitoring program to monitor and mitigate damages to boat ramps and docks on Hebgen Reservoir that might be cause by proposed changes in management of reservoir levels. f. Implementation of the completed Comprehensive Recreation Plan (May 1996) for managing recreation resources at Hebgen and Hauser developments. g. Initiate, publish and analyze results of recreation studies at Hebgen, Holter and Hauser facilities every 4 years. h. Develop and implement information and education plan for Hebgen and Hauser facilities. i. Replacement and maintenance of boat docks at Meriwether Picnic Area and Coulter Campground in the Gates of the Mountains area at the upper reaches of Holter Lake. Replacement of docks must be completed by the summer of 2,000.

Upon Commission approval, the licensee shall implement the plan. The Commission may require changes to the plan to ensure adequate protection of the environmental, scenic, and cultural values of the project area.

Condition No. 18 - Traffic Management and Public Safety

At least 90 days prior to starting any landclearing, landdisturbing, or spoilproducing activities affecting national forest land, the licensee shall file for Commission approval, a plan approved by the Forest Service for traffic management and public safety. The plan must be consistent with the standards and guidelines for affected management areas in the Gallatin and Helena Land and Resource Management Plans. Upon Commission approval, the licensee shall implement the plan. The Commission may require changes to the plan to ensure adequate protection of the environmental, scenic, and cultural values of the project area.

Condition No. 19 - Coordination with Other Authorized Activities

The project area may be under federal authorization for other activities. After consultation with the Forest Service and before starting construction or maintenance activities, which the Forest Service determines may affect another authorized activity on National Forest System land, the Licensee shall develop and enter into an agreement with the representative for the other activity. The agreement must stipulate the joint use of roads and other authorized areas in common that may be affected by activities of the Licensee. The agreement must be approved by the Forest Service before Licensee activities may begin.

Condition No. 20 - Revised Project Boundary

Within 6 months following the date of issuance of this license, the Licensee shall file a revised exhibit of the project boundary, approved by the Forest Service, that displays only those facilities at Hebgen Lake needed for reservoir operation and maintenance as being within the project boundary. The excluded facilities shall be removed unless otherwise authorized by the Forest Service.

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