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Kim Hansen of Kleinschmidt Associates: Putting the Challenges Posed by FERC’s New Part 12 Regulations in Perspective

Kim Hansen, a senior engineering consultant with Kleinschmidt Associates, has worked in the hydro industry for more than 40 years and has conducted more than 100 Part 12 safety inspections. Hydro Leader reached out to him for perspective on the hydro industry’s current challenges in complying with the new Part 12 rule released in December 2021 by the Federal Energy Regulatory Commission (FERC). In this interview, Mr. Hansen discusses how the industry can adapt to the new requirement for more intensive inspections in the face of limited budgets and a shortage of qualified consultants. 

Hydro Leader: Please tell us about your background and how you came to be in your current position. 

Kim Hansen: I have been in the hydro industry for more than 40 years. I received a degree in civil engineering from the University of New Hampshire, and then I worked in the industry in New England and Albany, New York. I have lived in Madison, Wisconsin, for the last 27 years, and I joined Kleinschmidt about 7 years ago. My job here is to provide senior-level review and engineering support to our clients. I make sure that our staff is taking a broad view of our clients’ issues and offering creative solutions. I have been around long enough to have learned a lot of lessons from watching and keeping my eyes open. I am not smarter than anybody else in the room, I have just been alive longer, and I have paid attention to the world around me. 

Hydro Leader: Please tell us about Kleinschmidt. 

Kim Hansen: Kleinschmidt has just over 200 people, which makes it pretty intimate. The company started in Maine, and now it is international, with offices across the country and in Canada. We are a niche firm that focuses on dams, 

hydro projects, and environmental and permitting work related to those projects, so our expertise in dams and hydro projects matches that of larger companies. The other advantage Kleinschmidt has is that because we only have 200 people, we can be more focused on our employees and how to make our teams work well. We put teams together based not just on experience but on staff career development and client needs. 

Hydro Leader: What are the main challenges dam owners and operators face in complying with the regulations of FERC and other federal agencies? 

Kim Hansen: The challenge for hydro owners, especially when it comes to dam safety and compliance, is to maintain and operate their projects in a safe, reliable manner with half the funding they had 40 years ago. That is a huge challenge, and I am impressed that the industry is able to meet it. In light of that, what owners need from consultants are practical and economical ways to address dam safety and regulatory issues related to relicensing and permitting. 

Hydro Leader: In addition to doing work on Part 12 inspections, do you also work on initial permitting and license renewals? 

Kim Hansen: Yes. Although my focus is mostly on dam safety and the development of new hydro, Kleinschmidt is well known for its relicensing strength and has a solid, professional, and knowledgeable staff. 

Hydro Leader: For a Part 12 inspection, does an owner or operator bring Kleinschmidt on just for a single inspection, or is there a longer-term relationship? 

Kim Hansen: We prefer and enjoy establishing long-term relationships. There is an inherent efficiency to repeating Part 12 inspections, because our staff becomes familiar with the facilities. We have clients with which we have worked for 50 years, and they come to us regularly for their dam safety work. However, according to FERC limitations, we can only work on the same project for two cycles. We can do two 5‑year inspections in a row, but the company is locked out of the one after that. It makes sense to have a different set of eyes looking at a project from time to time. The new regulations keep that limit in place. 

Kleinschmidt performed analyses, designed remediation measures, and provided continuous onsite construction observation during the emergency spillway repair at Clear Branch Dam in Oregon.

Hydro Leader: After the two consecutive cycles, would the client put out a request for proposals? 

Kim Hansen: Most utilities have a stable of consultants that they’ve worked with in the past or that have been recommended by their peers. They’ll typically put a request for proposals out to three to five companies for the 5‑year inspections. 

Hydro Leader: Would you walk us through what a Part 12 inspection looks like in practice? 

Kim Hansen: Historically, the approved independent consultant (IC) would get background information, get up to speed on the project, identify resolved and unresolved safety issues, and do an initial site visit. In the last 20 years or so, risk assessments have been incorporated into the dam safety process, so now a potential failure mode analysis (PFMA) document needs to be reviewed prior to the formal inspection and then formally reviewed on site with FERC and the owner. Those reviews allow FERC, the owner, and the engineering consultant to see whether the failure modes are up to current standards and whether there have been changes over the last 5 years that could affect dam safety. The consideration of new potential failure modes is always part of the process, and if there are any of potential significance, you evaluate those risks. 

After the initial review is complete, the IC or the consulting team goes out with the licensee and FERC to inspect the project. It is mostly a visual inspection—you walk on the embankments and all the water-retaining structures, and depending on the site, you might take a boat upstream and downstream to get a better look at the facilities. If there are radial gates, there needs to be an up-close inspection every 10 years. That might require a climbing team with ropes. I have done a lot of those in the past. Finally, the IC writes the inspection report, including a review of all the documentation they have just updated, and then submits it to the client and to FERC. 

Hydro Leader: Is there always an IC involved in a Part 12 inspection, or do some large utilities use an in-house inspection team?

Kim Hansen: FERC has gotten much more sophisticated about dam safety over the years. In the past, licensees considered FERC to be in charge of dam safety. They thought FERC would come to the project every year, and every 5 years they would have an IC complete a review. The licensee did not have to worry too much about dam safety because everybody was advising them. But in the last 10–20 years, the thinking has changed. Now, owners are required to have their own Owners Dam Safety Program in place, which is a written safety plan that demonstrates how the company handles dam safety. As a result, the owners have to inspect their projects annually and have ICs do an inspection every 5 years. 

The new FERC requirements also say that the IC needs to be accompanied by a team. Historically, you would have a single inspector and might bring in a geotechnical engineer for a complicated geotechnical problem with maintenance or stability issues or a mechanical engineer to review an issue with high-risk gates. Now, the lead IC will always be accompanied by a team. I think that is a good idea. 

Hydro Leader: You also mentioned that you do work for the design and permitting of new construction. Would you tell us about that process? 

Kleinschmidt team member Emily Erhart takes part in a dam inspection.

Kim Hansen: It’s possible to build a new dam today, but you have to clear some pretty high hurdles, especially with the resource agencies and the potential for environmental effects. So today, we’re not building many new dams, aside from pumped storage projects and off-stream dams with smaller environmental effects. Most of the time, we work on putting new hydropower projects on existing dams that were originally built for flood control or navigation. The largest environmental effects often occurred during the construction of the original dams, and the additional effects of adding hydro generation are not nearly as great—they may include effects on dissolved oxygen and temperature or the risk of injury to fish. In addition to the environmental review, there are two parts of a regulatory overview for putting in new hydro at an existing dam: First, does it affect dam safety on the existing dam, and second, does it affect the dam’s primary purpose, such as navigation or flood control? If you’re doing hydropower on almost any federal dam, FERC, the U.S. Army Corps of Engineers, and the Bureau of Reclamation may all be involved in the permitting process, which makes it complex from a regulatory standpoint. Wading through all the environmental reviews, agency consultation, and dam safety reviews to permit a new hydro development could easily take 5–10 years. 

Hydro Leader: You have done Part 12 inspections of timber crib and timber buttress dams. Are inspections of those types of dams significantly different from others? 

Kim Hansen: There were once quite a few timber dams in the Northeast, but they are typically older, and there aren’t many of them left. Timber dams are not as long-lived as steel, concrete, or embankment dams. When I first got started 40 years ago, I designed a few repairs for timber dams. Typically, a timber dam has a gridwork of timbers filled with rock and overlaid with wooden planking. Sometimes, it’s a big rectangular structure; sometimes, it is triangular. Typically, it is overlaid with concrete, because it’s too expensive to repair and it is best to encapsulate it. 

Hydro Leader: You talked earlier about how one of your roles as a consultant is to help dam owners and operators meet requirements in an affordable manner. How do you go about that? 

Kim Hansen: When it comes to inspections, it’s a matter of experience. You go through the documentation in a progressive, efficient way to shave costs. We get the data efficiently and document them properly so it only has to be done once. It also involves getting the right level of people involved. If I am the IC, I would have someone who is in training to be an IC do an initial review, make sure that the documents are complete and accurate, and then walk me through what’s there. I leverage my time and delegate work to less expensive staff. 

Kleinschmidt staff take part in an Owners Dam Safety Program audit.

As I mentioned before, the new FERC process requires a team of engineers. We think this new process will multiply costs by a factor of four because it will require a much more comprehensive inspection process and a much more thorough review of all the analyses. The new regulations require independent confirmation that previous analyses are correct. This will typically involve a separate but hopefully simple set of calculations for comparison. This is just one example of why future Part 12 inspections are going to require more scrutiny and, therefore, be more expensive. 

Hydro Leader: How will these changes affect your work? 

Kim Hansen: Dam safety is our primary concern, and in that respect, the new regulations are a good thing. We are going to catch more issues earlier. But it’s going to cost more. We’re already running up against a shortage of ICs to do the work. If there are 100 Part 12 inspections that need to happen in a typical year, it will take four times as much effort to do each one, which means four times more work. Who’s going to do that work? FERC is aware of the issue. We need to do a better job recruiting new talent to the industry. At Kleinschmidt, we’re working to address the issue. It’s our job to make sure that we’re getting bright young minds interested in the profession to help solve that challenge in the future. 

Hydro Leader: Does Kleinschmidt recruit people by offering internships? 

Kim Hansen: We have always offered internships. We also do outreach in elementary, middle, and high schools to discuss the hydro industry and career opportunities. In addition to those efforts, we have a close partnership with the University of Maine and work with other colleges that are close to our regional offices across the United States. It is important to make students aware of the opportunities and to show them that this is an interesting industry in which to have a career. 

Hydro Leader: How else will the revised FERC regulations affect your work? 

Kim Hansen: As with any new program we have gone through in the dam safety industry, there is a learning curve. PFMA is a great example of that. The risk analyses we performed during the first year were okay. Five years later, when we went back to review those initial reports, we could see that our processes had improved considerably with time. It is going to be the same way with these new regulations. The learning curve applies to FERC, too. FERC is going to learn that we need to focus more on certain things than others. There will be improvement as we go through the process. It is going to be a challenge to get there, especially in today’s tariff market, where rates stand at 2 cents or less per kilowatt-hour. But who knows where the marketplace is going? The current focus on renewable energy is good for the industry and, going forward, it may be even better. Maybe hydro will get the same benefits that wind and other renewable energy sources get. 

Hydro Leader: Is there anything else you would like to add? 

Kim Hansen: After the failures of Sanford and Edenville Dams in Michigan in May 2020, FERC came up with the idea of the industry providing financial assurance to help with needed improvements that some owners weren’t doing. It would require everybody to buy insurance or to deposit money in an account that FERC would control. This didn’t sit well with the industry. I’d rather see the solution come from the enforcement side so that FERC can make sure the rules are being followed or step in with procedures that address dam safety issues. Overlaying another financial burden on the industry is not the right way to go. The industry has voiced its opinion loud and clear, but it is an issue that still needs a solution. 

Hydro Leader: What is your vision for the future? 

Kim Hansen: I am bullish on the industry. There is a renewed interest in renewable energy, and hydropower is a huge part of that. The percentage of overall power generated by hydropower is not as high as it used to be; we are generating a lot more power from other sources. Hydropower has a unique place in the marketplace: It is reliable with black start capability and grid support. I am confident that hydro has a bright future. 

Kim Hansen is a senior engineering consultant at Kleinschmidt Associates. He can be contacted at solutions@kleinschmidtgroup.com.