Hydro Review: The Revitalization of Hydropower

This article provides a comprehensive review of the laws and federal actions that encouraged hydropower development, beginning in the 1920s. Recent legislation and executive actions beginning in 2013 make it evident there is a similar, if not more aggressive, movement to once again revitalize the hydropower industry. Where the goal of government to diversify and increase energy sources at a national level remains the same, public interest has shifted from the initial hydropower era’s potential for economic improvement to this hydropower era’s transitioning of the nation’s energy to clean, renewable sources.

By Anne E. Sibree

It has been a century since the Federal Water Power Act (now the Federal Power Act or FPA) was enacted, and the U.S. is entering a second era of renewed interest in hydropower development. This revitalization of hydropower development will be accomplished through three ideals popular with the current administration, the industry and communities alike: reduction of greenhouse gases; addition of reliable energy sources to the grid; and less regulatory burden and cost to the industry. Increased hydropower generation could alter the percentages of reliance on nonrenewable energy sources and improve air quality. For example, based on the Environmental Protection Agency’s (EPA) 2018 e-GRID data, the Colorado region (all of Colorado, most of Wyoming, and western portions of Nebraska and South Dakota), relies on 51.3% coal, 20.2% gas, 15.1% wind, 12.1% hydro, 0.8% solar, and 0.3% biomass.1 This region’s emissions exceed the national average.1

The hydropower industry may soon see the regulatory reform and financial incentives it has been seeking for many years. Within the past six years, there has been noticeable recognition by the federal government of the importance and value of hydropower, as demonstrated through legislative and executive actions to promote simplified and more efficient authorizations for new or increased generation at hydropower projects.

The first section of this article describes the first hydropower era (1920 to 2010), discussing federal actions that encouraged the development of hydropower from the time the government began regulating its construction, operation and maintenance and the changes made to the Federal Power Act over almost a century. The second section describes the second hydropower era (2013 to today), discussing the recent revitalization of hydropower development through legislation promoting efficient authorizations of hydropower projects that have, over time, become costly and time-consuming.

The underlying motivation of the federal government to develop national energy resources remains the same, but the equally important element of public support has shifted. In the first hydropower era, particularly during the time of the New Deal, citizens were in favor of economic drivers and employment. Today, citizens are in favor of reducing GHG emissions and altering the nation’s reliance on non-renewable energy sources to clean, renewable energy sources.

This map, from the Environmental Protection Agency’s website, shows the percentage of renewable generation in each region of the U.S.

Federal government actions encouraging hydropower development in the first hydropower era (1920-2010)

1. The 1920 Federal Water Power Act/1935 FPA

In 1920, the federal government began regulating nonfederal hydropower projects through the Federal Water Power Act, amended in 1935 as the FPA.2 The Federal Power Commission was given sole authority to issue licenses for the construction, operation and maintenance of hydropower projects and to regulate interstate transmission and sale of electricity.3 In 1950, this commission was terminated and its powers were transferred to the Federal Energy Regulatory Commission (FERC).4

• 1930-1940 New Deal Era

To revive the U.S. economy after the Great Depression, President Franklin Roosevelt’s New Deal era passed numerous acts and created new agencies — such as the Tennessee Valley Authority, Public Works Administration, and Civil Work Administration — leading to funding, employment and the construction of infrastructure and hydropower facilities, including Bonneville and Grand Coulee dams.5

• 1978 Public Utilities Regulatory Policies Act

Significant changes to hydropower regulation came almost 40 years later, with the Public Utilities Regulatory Policies Act (PURPA), following on the heels of a wave of new environmental laws (inter alia the National Environmental Policy Act or NEPA in 1969 and the 1972 amendments to the Federal Water Pollution Control Act, the Clean Water Act or CWA). The FPA authorized FERC to grant licenses for all projects subject to the FPA and to grant exemptions only for small conduit hydroelectric projects.6 PURPA expanded FERC’s ability to grant exemptions to other projects. PURPA also defined “small hydroelectric power projects” — projects 15 MW or less that use the water potential of an existing dam or a natural water feature (e.g. natural lake, waterfall, gradient of a stream) — and required FERC to develop a program for “simple and expeditious licensing procedures” for these projects.7 In addition, it authorized FERC to grant exemptions for a subset of small hydroelectric projects, at its discretion. Exemption in this context does not mean that small hydropower projects determined eligible will be exempt from federal jurisdiction or environmental review pursuant to NEPA. Rather, these exemptions are, in fact, an order from FERC authorizing the hydropower project, but they allow the project to operate without expiration and without being subject to many FPA licensing requirements.

In addition to establishing small hydroelectric power project exemptions, PURPA encouraged small power production by establishing how electric utilities are to interact with small energy producers. It required electric utilities to purchase energy from small hydropower producers at a rate equal to the cost of purchasing an equal amount of energy from another source (defined as “avoided costs”) and to provide the project an interconnect to the grid.8

Note: In April 2019, the Ninth Circuit added an important consideration when calculating “avoided cost:” if the purchasing utility is meeting state renewable portfolio standards from a renewable energy source, “avoided cost” should be the cost of an equal amount of energy from “another renewable source,” as opposed to the cost of energy from “another source.”9 This decision helps align rates paid to the hydroelectric power developer with other renewable sources.  On Sept. 19, 2019, FERC issued its proposed revisions to PURPA that would change how and when rates for qualifying hydropower producers would be established and would add circumstances when utilities are not obligated to purchase such power.  

• 1980 Energy Security Act

Two years later, Section 408 of the Energy Security Act of 1980 amended PURPA by expanding the size of a “small hydroelectric project” from 15 MW to 30 MW, meaning PURPA’s mandate for “simple and expeditious licensing procedures” will apply to projects up to 30 MW. However, FERC has yet to promulgate “simple and expeditious licensing procedures” specific to small hydroelectric projects. Additionally, the Energy Security Act incorporated FERC’s discretionary small hydroelectric power project exemption for projects 5 MW or less.10 Under this act, Congress also urged the secretary of the Department of Energy (DOE) to study the development and commercialization of “small scale” hydropower.

• 1986 Electric Consumers Protection Act

The Electric Consumers Protection Act of 1986 amended the FPA by increasing the role of state and federal fish and wildlife agencies in the licensing process.11 FERC would be required to give “equal consideration” to energy conservation and protection in addition to mitigation of damages, enhancement of fish and wildlife, protection of recreation and preservation of environmental quality.11 These new considerations, though important, would result in a more time-consuming and costly licensing process that often results in a license that imposes numerous measures on the licensee. At the same time, however, Congress asked for more studies on “small power production,” reminding us that under PURPA, small hydropower projects should receive simple and expeditious licensing procedures.

• 1992 MOU between FERC and the Bureau of Reclamation

In 1992, the Bureau of Reclamation and FERC signed a memorandum of understanding (MOU) “for the expeditious non-Federal development of hydroelectric energy,” whereby the agencies would identify the proper agency for authorizing hydropower projects at Reclamation facilities.12 When a Reclamation facility is an “asset authorized for federal hydropower development,” Reclamation will authorize hydropower development in the form of a Lease of Power Privilege (LOPP).

Note: Reclamation’s authority over hydropower projects that use Reclamation facilities would be expanded by Congress in 2013 through the Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act (see section on 2013 Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs below).

• 1992 and 2005 energy policy acts

The Energy Policy Act of 1992 set a goal to increase clean energy and reduce reliance on imported energy, and it incentivized renewable energy projects through tax credits.13 Thirteen years later, attention was turned again to renewable energy incentives in the Energy Policy Act of 2005 (EPAct 2005). However, the incentives for hydropower were minimal.14 It was not until 2014 that Congress finally appropriated funds under Section 242 of EPAct 2005, providing direct cash incentives for new small hydropower generation using existing infrastructure. Unfortunately, the program expired only one year later. Annual funding has continued to be available for projects that met the qualifications in 2014.

Nevertheless, Section 241 of EPAct 2005 amended Sections 4 and 18 of the FPA, sections notorious in certain hydropower authorizations because of the sometimes costly and unpredictable mandatory conditions imposed by resource agencies (e.g. the U.S. Forest Service and U.S. Fish and Wildlife Service).15 EPAct 2005 introduced a procedure for the hydropower applicant to propose alternative conditions or request trial-type hearings when there are factual disputes regarding those mandatory conditions. Additionally, it eliminated the requirement under PURPA for a utility to purchase energy from a qualifying facility if the hydropower producer has nondiscriminatory access to the market, allowing the developer access to competitive rates.16

Shortly after EPAct 2005 was enacted, interim rules went into place implementing procedures for the trial-type hearings. In 2016, the departments of Agriculture, Interior and Commerce jointly issued final rules for these procedures.17 Although each agency’s rules are substantially similar, each has its own.17 EPAct 2005 gave licensees the ability to challenge or propose alternatives to mandatory hydropower conditions, over which FERC has limited ability to challenge itself. These agency rules gave a licensee a set procedure to follow, as well as a process that results in documentation of the resource agency’s considerations regarding mandatory hydropower conditions.

• Secure Water Act of 2009

In 2009, the Secure Water Act was passed, requiring more collaboration among the federal water agencies.18 It also asked DOE to report the impacts of global climate change on hydropower generation to Congress every five years.18 The first report was issued in 2013, with a second report following in 2017 (see 2013 Department of Energy’s Climate Report below).

1. 2010 multi-agency MOU

In 2010, the departments of Energy, Interior and Army signed a “Memorandum of Understanding for Hydropower.”19 Through partnership and collaboration, the agencies agreed to “harmonize the production of clean, renewable power generation with avoidance or reduction of environmental impacts and maintenance or enhancement of the viability of ecosystems.”19 In 2015, the MOU was extended five years, implementing a Phase II Action Plan, and committing to continue to improve regulatory processes for hydropower development.20 The extension provided that “the U.S. Army Corps of Engineers and the Department of Energy intend to work collaboratively with the Federal Energy Regulatory Commission to improve regulatory efficiency for private and municipal development and operation of power facilities at the U.S Army Corps of Engineers non-powered dams.”20

Federal government efforts to revitalize hydropower in the second hydropower era (2013-today)

In 2013, we see the beginning of a new hydropower era with renewed momentum at a federal level to revitalize hydropower development. Every year since has brought exciting changes to regulations regarding authorizations and the procedures to acquire authorization for new or increased hydropower production.

This map from the U.S. Department of Energy shows the status of hydropower ownership in the U.S.

1. 2013 Hydropower Regulatory Efficiency Act

One of the most significant laws to change the regulatory landscape since PURPA was the Hydropower Regulatory Efficiency Act (HREA) in 2013. With its goal to reduce costs and regulatory burdens during licensing, this law provided a boost to hydropower development in numerous ways. First, it increased the maximum installed capacity for small hydroelectric power project exemptions from 5 MW to 10 MW.21 Second, it amended Section 30 of the FPA’s definition of small conduit hydroelectric facility exemptions, now allowing these projects on both federal and non-federal lands, and increased this exemption’s maximum installed capacity from 15 MW to 40 MW (an amount that had previously only been available to municipal conduits).22

Third, and perhaps most significant, it codified FERC’s regulatory determination in 2010 that a subset of small conduit exemptions called “qualifying conduit hydropower facilities” are truly exempt from regulation under the FPA. A qualifying conduit hydropower facility is a conduit hydropower project 5 MW or less located on an existing, non-federal conduit that is used for municipal, agricultural or industrial purposes.23 FERC evaluates these projects solely on the basis of their eligibility as a “qualifying facility.” The hydropower developer merely submits a notice of intent (NOI) to FERC for confirmation that the project qualifies to move forward without additional evaluation or authorization.

Last, Congress tasked FERC with investigating the feasibility of authorizing new hydropower development at non-powered dams and closed-loop pump storage projects within a two-year timeframe.

Note: Subsequently, FERC explored this endeavor through a pilot project for each type of hydropower development.24 In 2017, FERC’s report to Congress concluded that without necessitating change to its regulations (i.e. the licensing processes), authorizations could be accomplished in two-year’s time as demonstrated through the pilot projects.25 Two years later, in April 2019, FERC issued regulations for a two-year licensing process for non-powered, existing dam projects and closed-loop pump storage projects (see 2019 expedited licensing for existing non-powered dam and closed loop pump storage projects below).

• 2013 Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act

In the same year as the HREA, another significant game-changer for hydropower development came by way of the Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act. 26 Recall that in 1992 Reclamation and FERC signed an MOU distinguishing the agencies’ regulatory authorities for certain hydropower projects on Reclamation facilities. The MOU provided that assets authorized for federal hydropower developments were within Reclamation’s jurisdiction, but Reclamation assets that had not been authorized for federal hydropower development would be under FERC’s jurisdiction. In 2013, Congress made this determination simpler, giving jurisdiction over all hydropower development using existing Reclamation conduits (i.e. even if it was not authorized for federal hydropower development) to Reclamation through issuance of a LOPP.26 It also provided that hydropower development using Reclamation dams can proceed through a LOPP or a FERC license, per the 1992 MOU, but shall only require one authorization unless there are multiple federal assets involved. This act amended the Federal Reclamation Law and was described as giving local irrigation districts and water agencies a “permanent process … [to] develop this very valuable, renewable carbon-free energy at our reclamation facilities.”27 In recognizing “the beauty of this hydropower legislation … used on much smaller scaled, reliable projects in which we already have the infrastructure in place,” this would help streamline those hydropower projects through Reclamation’s regulations.27

• 2013 Department of Energy’s Climate Report

Pursuant to the Secure Water Act of 2009, DOE reported in 2013 that significant changes in temperature had occurred in all regions of the country.28 The report also drew a direct correlation between the variability of runoff and the variability of hydropower generation.28 Except for the Rio Grande and Apalachicola rivers, “the annual generation in assessment areas was highly correlated with observed runoff values (observed data from USGS).”28 Additionally, the report described the benefit of large water storage reservoirs in the West, helping to spread out the variability of runoff/hydropower generation. “In four of the areas in Western’s region, generation was more related to multi-year runoff than single-year runoff.”28 The report also concluded that the effects of climate change on annual hydropower generation were not significant. In the 2017 report, DOE reported that some regions of the country showed “significant to negligible changes, which can be further explained by watershed storage. Watershed storage may provide a buffer to help absorb part of the runoff variability, resulting in a stable future annual hydropower projection that supports the result in the first study, which used different modeling methods.”29 The 2017 report concluded that “with the relatively large storage capacity at many U.S. federal hydropower reservoirs, the fleet is likely to be able to absorb part of the runoff variability and hence may continue to provide stable annual hydropower generation in the projected near-term and midterm future periods,” and that “change in federal hydropower production is mainly controlled by precipitation and runoff and indirectly by temperature.”29

• 2014 Water Resources Reform and Development Act

In Section 1008 of the Water Resources Reform and Development Act in 2014, Congress declared that “it is the policy of the United States that– (1) the development of non-Federal hydroelectric power at Corps of Engineers civil works projects, including locks and dams, shall be given priority; (2) Corps of Engineers approval of non-Federal hydroelectric power at Corps of Engineers civil works projects, including permitting required under section 14 of the Act of March 3, 1899 (The Rivers and Harbors Act, 33 U.S.C. §408), shall be completed by the Corps of Engineers in a timely and consistent manner.”30 Still, however, neither Congress nor FERC has granted or delegated authority to the Corps to issue hydropower authorizations using Corps facilities equivalent to Reclamation’s authority. Therefore, although two agency authorizations will be required for projects developed at Corps facilities, this act and the 2016 MOU (see 2015 FAST 41 below) requires efficient and coordinated review by the agencies.

• 2015 Carl Levin and Howard P. “Buck” McKeon National Defense Authorization Act

In 2015, Congress again extended Reclamation’s authority under the Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act to issue a LOPP for conduit hydropower projects using Reclamation facilities (see 1992 and 2005 energy policy acts above) to more broadly apply to all water resource assets of Reclamation that were constructed under the 1939 Water Conservation and Utilization Act (WCUA).31 Thus, now all non-federal hydropower projects that use a WCUA Reclamation asset can acquire hydropower authorization through a Reclamation LOPP procedure rather than a FERC license.

Note: Reclamation posts a list of facilities available for development, with the most recent list issued in August 2018.32 As an example, using assessment data from 2011 and 2012, Reclamation identifies 48 facility-sites in Colorado that are available for development.33 “Twenty of those sites have a high cost-benefit ratio, and in total, those twenty sites could produce 46,647 kW.”33

• 2015 FAST 41

Also enacted in 2015 was Fixing America’s Surface Transportation Act.34 Title 41, referred to as “the FAST-41,” established that agency coordination and consultation for permitting and environmental review must be made more efficient through project-specific timelines for eligible FAST-41 projects. To be eligible, a proposal must meet the definition of a “covered project” under the statute. A FAST-41 hydropower project is one that: 1) involves the construction of a non-federal hydropower facility that is subject to NEPA; and 2) is likely to require a total investment of more than $200,000,000.34 

• 2016 MOU between FERC and the Corps

In 2016, the Corps and FERC entered into a Memorandum of Understanding on Non-Federal Hydropower Projects to coordinate their respective regulatory processes under NEPA.35 This MOU establishes FERC as the lead agency and sets forth how the agencies are to coordinate during the preparation of NEPA documents. It also commits the parties to complete the NEPA documents according to FERC’s process schedule with “specific and expeditious timeframes for licensing.”35

• 2017 DOE report on hydropower development in canals

DOE’s efforts to promote and influence hydropower initiatives are key to the industry’s progress. Through its Water Power Technologies Office, DOE is dedicated to researching, funding and cost-sharing projects to advance clean energy efforts, including hydropower.36 In 2017, DOE released a report describing how to evaluate facilities and performance when considering hydropower development on canals and open channels.37 Considerations include the structure of canals best-suited for hydropower units and potential effects on existing canals when hydropower is added to unlined channels (e.g., increased water levels, changes in flow, changes in channel morphology and turbidity).

DOE releases an annual hydropower market update, with the most recent (2018) data released in May 2019, providing interesting statistics about annual hydropower increases and types of authorizations issued over the years.38 And, in April 2019 DOE committed more than $20 million towards new hydropower, hydrokinetic and marine power technologies.39

1. 2017 Executive Order on promoting energy independence and economic growth

In March 2017, Executive Order No. 13783 was issued, promoting energy independence by holding other regulatory agencies accountable to the lead agency’s review and approval timelines to authorize energy infrastructure. “To enable the timely construction of the infrastructure needed to move our energy resources through domestic and international commerce, the Federal Government must promote efficient permitting processes and reduce regulatory uncertainties that make energy infrastructure projects expensive and discourage new investment.”40 This Executive Order asked agencies to review their regulations, orders, guidance and policies to determine which ones potentially burden the development of domestic energy sources.

• 2017 FERC’s policy on license terms and its final report responding to Executive Order 13783

In October 2017, FERC issued a policy statement regarding license terms. The FPA limits licenses to a maximum of 50 years.41 FERC’s policy sets a 40-year term for licenses as the default. A few weeks later, FERC issued its “voluntary” report (because it is an independent regulatory agency not subject to Executive Order 13783), listing nine FERC actions that “potentially materially burden the development or use of domestic energy resources.” 42Seven of the nine items pertain to hydropower authorizations. Thus, the hydropower industry can anticipate the following regulatory or policy changes.

First, FERC identified a burden associated with assigning the Integrated Licensing Process (ILP) as the default process, which results in additional time and cost in the process for a project proponent who wants to use a different licensing process because the proponent must request FERC’s approval. It recognized that the ILP could be optional, with no authorization from FERC required to use any of the three licensing processes.43 A second regulatory “fix” is to eliminate the requirement for, and make optional, sharing a copy of the draft license or exemption application with stakeholders for review and comment before filing the application with FERC.43 Third, review and comment periods during the ILP could be made shorter to reduce the overall 3 to 3 ½ year total licensing process.43 Fourth, license terms, which are discretionary so long as they do not exceed the FPA’s maximum term of 50 years, could be extended from the frequently used 30- and 40-year terms (by the time this report was issued, FERC had already acted on this fix). Fifth, hydropower application filing requirements could be simplified for projects under 10 MW.

The sixth identified “burden” to fix could have significant benefit to many small hydropower licensees whose licenses are nearing expiration. FERC recognized that the regulatory requirement to add generating capacity to qualify for a small hydroelectric power project exemption of 10 MW or less could be eliminated. This would allow small hydropower projects to continue operating in perpetuity under the terms of an exemption order. Nevertheless, until this regulatory change is made, existing licensees should contemplate the option of converting a license to an exemption by adding generating capacity if it is economically viable. At least one municipal licensee has converted a license to an exemption by adding capacity.44

Seventh, FERC’s regulations require an applicant whose exemption application is denied to subsequently submit a license application rather than FERC staff simply requesting any additional information necessary to consider the submittal as a license application. This regulatory change has also not happened, but other ways to file an application have been used, including filing a dual application in which FERC is asked to first consider the application for exemption and, if for whatever reason it is denied, to consider the simultaneously filed, and likely very similar, application for a license.45 In fact, the current regulations describe this approach.46 Last, FERC acknowledged that its prohibition on refiling an application after the first application is denied during re-relicensing could be eliminated, which would allow the licensee to correct deficiencies and resubmit its application if it wishes to proceed with its project.

• 2017 Executive Order on One Federal Decision

On August 15, 2017, President Trump issued Executive Order No. 13807, “Establishing Discipline and Accountability in the Environmental Review and Permitting for Infrastructure Projects.”47 Major infrastructure projects involving multiple agencies will be issued a single Environmental Impact Statement (EIS) and a single Record of Decision (ROD) signed by all agencies with authorization, environmental review or consultation responsibilities, with authorizations from each agency following 90 days later.47 All of this is to be done within two years from publication of the NOI to prepare an EIS.48 Federal agencies signed a Memorandum of Understanding Implementing One Federal Decision. FERC, as well as other agencies, committed to complete the necessary environmental reviews and authorizations for “major infrastructure projects” (projects requiring multiple federal authorizations) within two years.49

• 2017 Secretarial Order 3355 — Streamlining NEPA

On August 31, 2017, Interior Secretary David Bernhardt signed Secretarial Order 3355, implementing One Federal Decision (Executive Order 13807) to improve NEPA review processes, with page and time limits for an EIS. Under this guidance, when Reclamation is the lead agency for hydropower authorization it will strive to complete an EIS within one year from the date of issuance of the NOI to prepare an EIS.

• 2018 America’s Water Infrastructure Act

Signed into law in 2018, America’s Water Infrastructure Act tasked FERC with multiple improvements under the current regulatory regime.50 It required FERC to: 1) establish a two-year decision process for qualifying facilities at existing non-powered dams; 2) develop a list of non-powered Federal dams with the greatest potential for hydropower development; 3) create a two-year decision process for licensing of closed-loop pumped storage projects; and 4) explore development opportunities for closed-loop pump storage projects at abandoned mine sites. Twenty-one days later, FERC issued a notice setting a schedule to accomplish these tasks.51

Note: During the time that FERC was developing regulatory efficiencies pursuant to the AWIA, the courts resolved an important issue about delays that occur during licensing that are beyond FERC’s control. In N.Y. State Dep’t of Environmental Conservation v. FERC, FERC took the position that the state’s water quality department waived its CWA Section 401 water quality certification authority when it failed to act on a CWA Section 401 application within one year.52 The Second Circuit court of appeals agreed with FERC, holding that Section 401 of the CWA outlines a “bright line” mandate that a state has one year to review a request for water quality certification under Section 401, and if action is not taken within that timeframe, the state has waived its certification requirements.53 The court noted that an applicant could withdraw and resubmit its application to the state department, which would start the one-year clock anew.

However, in a similar case before the D.C. Circuit in 2019, the court rejected the Second Circuit’s suggested approach to restart the clock by resubmitting an application, saying that withdrawal and resubmission of a CWA Section 401 application does not trigger a new statutory period of review when the application that is being withdrawn and resubmitted is essentially the same.54 Describing the approach as an “attempt to circumvent FERC’s regulatory authority” of whether and when to issue a federal license, the court put its foot down on regulatory delays affecting FERC’s licensing authority and took a step further than the Second Circuit in enforcing the one-year CWA Section 401 certification review period. This issue was being heard by the court during the time FERC was finalizing its expedited licensing process rule, and the issue is clearly carried over in that rule. The ELP rule requires a hydropower applicant to submit to FERC a copy of its request for a CWA Section 401 certification, including proof of the date it was received by the state, or a copy of the certification or waiver at the same time it submits its hydropower application to FERC.55

Also under the AWIA is a provision to encourage hydropower owners to make improvements to their existing projects rather than wait until re-licensing. This AWIA provision gives “credit” for investments made to a currently licensed project by extending, upon request to FERC, the term of the existing license. For example, a licensee could replace a runner with a new, more efficient runner, increasing production of kilowatt-hours (though not increasing the overall generating capacity) and seek from FERC a 10-year extension on the term of its 40-year license. FERC’s policy statement on extending the term of an existing license provides, “The Commission will consider, on a case-by-case basis, measures and actions that enhance non-developmental project purposes (i.e., environmental, project recreation, water supply), and those that enhance power and developmental purposes, together with the cost of those measures and actions to determine whether they are significant and warrant the granting of a longer license term. Maintenance measures and measures taken to support the licensing process will not be considered.”56

• 2019 Executive Order on Promoting Energy Infrastructure and Economic Growth

Next came an April 2019 Executive Order, “Promoting Energy Infrastructure and Economic Growth,” issued to “enable the timely construction of the infrastructure needed to move our energy resources through domestic and international commerce” by promoting “efficient permitting processes and reduc[ing] regulatory uncertainties.” In furtherance of promoting private investment in energy infrastructure, the EPA was charged with reviewing CWA Section 401 Certification rules, policies and procedures and developing new guidance and proposed rules within 13 months after this Executive Order.56 Additionally, for energy infrastructure requiring rights-of-way from federal land managers, there shall be developed a “master agreement for energy infrastructure that will enable timely and efficient renewals when those permits expire.”56

Note: EPA issued its proposed rules revising CWA Section 401 certifications on August 8, 2019, published in the Federal Register on August 22, 2019.57

• 2019 expedited licensing for existing non-powered dam and closed loop pump storage projects

Also in April 2019, FERC issued its rule for expedited decisions. FERC states that its new regulations setting forth expedited licensing decisions for “qualifying facilities” and closed-loop pumped storage projects “fulfills the spirit of the One Federal Decision MOU.”58 This does not add a fourth licensing process but rather asks that FERC expedite its decision after the applicant has selected its preferred licensing process (from one of three existing licensing procedures, each requiring pre-filing consultation with agencies and stakeholders). Expedited licensing begins after an applicant has submitted a license application, and it may be used for two types of hydropower projects: qualifying facilities at existing, non-powered dams and closed-loop pump storage projects. Expedited licensing ensures a decision from FERC within two years from the date of application.59 It is available only for an original license (i.e. it does not apply for project re-licensing or exemption), and an applicant must request FERC to use the expedited process. In the preamble to this rule, FERC noted that this expedited process could also be used for projects qualifying as “major infrastructure projects” subject to the One Federal Decision MOU.58

Conclusion

At the federal level, all three branches have taken recent steps to promote streamlined hydropower authorizations and encourage development of hydroelectric energy. Soon we should see a public list of non-powered federal dams with the greatest potential for hydropower development from FERC (which was anticipated in August 2019), FERC’s guidance on closed-loop pumped storage projects at abandoned mine sites (anticipated in September 2019) and EPA’s final CWA Section 401 regulations.

The appeal of hydropower energy is not going away. After the Intergovernmental Panel on Climate Change report in 2018, we are likely to see various bills in the coming years with titles including “clean,” “green,” and “renewable” to promote the country’s conversion from non-renewable to renewable energy sources. For instance, in February 2019 Representative Ocasio-Cortez introduced the New Green Deal, and in May 2019 Senator Wyden introduced the Clean Energy for America Act. Hydropower development will certainly be key to achieving these goals.

The recent mandates for streamlined authorizations and environmental reviews combined with the ever-growing desire to reducing GHG emissions make certain an increased demand for renewable energy sources. Hydropower is key to near-term achievements towards ambitious local and statewide goals to become 100% reliant on renewable energy sources.

Anne E. Sibree is Of Counsel with law firm Trout Raley Montano Freeman Sinor Thompson. She advises clients through the various phases of project planning, permitting, construction and permit compliance with regard to environmental and natural resources laws, including the National Environmental Policy Act, Clean Water Act, Endangered Species Act and Federal Power Act.

Notes

1 Power Profiler, Environmental Protection Agency, Washington, D.C.,https://www.epa.gov/energy/power-profiler (accessed August 6, 2019)

2 16 U.S.C. § 791 et. seq.

3 16 U.S.C. §§ 791-828

4 Historical note to 16 U.S.C. §797

5 The Living New Deal, https://livingnewdeal.org/what-was-the-new-deal/timeline/ (accessed July 3, 2019), and National Archives at Seattle: The Great Depression and the New Deal, https://www.archives.gov/seattle/exhibit/picturing-the-century/great-depression.html (accessed July 3, 2019)

6 FPA §30, 16 U.S.C §823a

7 Public Utilities Regulatory Policy Act of 1978, 16 U.S.C. § 2705 (2012)

8 16 U.S.C. 796(17)(C)

9 Californians for Renewable Energy v California Pub. Util. Comm’n, 922 F.3d 929, 937 (9^th Cir. 2019)

10 Energy Security Act of 1980, Pub. L. No. 96-294 (1980)

11 Electric Consumers Protection Act of 1986, Pub. L. No. 99-495 (1986)

12 Memorandum of Understanding Between the Federal Energy Regulatory Commission and the Bureau of Reclamation Department of the Interior for the Early Resolution of Issues Related to the Timely Development of Non-Federal Hydroelectric Power at Bureau of Reclamation Facilities, November 6, 1992.

13 Energy Policy Act of 1992, Pub. L. No. 202-486 (1992)

14 Energy Policy Act (EPAct) of 2005, Pub. L. No. 109-58 (2005) and Energy Policy Act of 2005 Fact Sheet, Federal Energy Regulatory Commission (August 8, 2006)

15 See e.g. 16 U.S.C. § 797(e) (authorizing the federal land management agency to impose mandatory conditions on a license when the project involves federal facilities or lands).

16 16 U.S.C. § 824a-3(m)

17 81 Fed. Reg. 84389 (November 23, 2016)

18 Secure Water Act of 2009, Pub. L. No. 111-11 (2009)

19 Memorandum of Understanding for Hydropower, March 24, 2015

20 Memorandum of Understanding for Hydropower Sustainable Hydropower Action Plan (Phase II), Executive Summary at 3 (March 2015)

21 16 U.S.C. §2707, as amended by the Hydropower Regulatory Efficiency Act of 2013, Pub. L. No. 113-23,3

22 16 U.S.C. § 823(a) (2012), as amended by Pub. L. No 113-23, §4.

23 Pub. L. No. 113-23, §3

24 Pub. L. No. 113-23, §6

25 Report on The Pilot Two-Year Hydroelectric Licensing Process for Non-Powered Dams and Closed-Loop Pumped Storage Projects and Recommendations Pursuant to Section 6 of the Hydropower Regulatory Efficiency Act of 2013, Federal Energy Regulatory Commission (May 2017).

26 Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act of 2013, Pub. L. No. 113-24 (2013)

27 H.R. 678, floor speech by Representative Jim Costa, April 10, 2013.

28 Effects of Climate Change on Federal Hydropower, Department of Energy, 8 (August 2013)

29 Effects of Climate Change on Federal Hydropower, Second Report to Congress, Department of Energy, 6 (January 2017)

30 Water Resources Reform and Development Act of 2014, Pub. L. No. 113-121 (2014), Sec. 1008

31 Levin, Carl, and Howard P. Buck” McKeon National Defense Authorization Act of 2015, Pub L. No. 113-291 (2015)

32 Bureau of Reclamation Resource Assessment Sites Available for Development, https://www.usbr.gov/power/ResourceAssessment/2018_Available_Sites_8-17-18.pdf (last visited August 6, 2019)

33 Bureau of Reclamation. Hydropower Program, https://www.usbr.gov/power/AssessmentReport/ (last visited August 6, 2019)

34 Fixing America’s Surface Transportation Act of 2015, Pub. L. No. 114-94 (2015)

35 Memorandum of Understanding between the United States Army Corps of Engineers and the Federal Energy Regulatory Commission on Non-Federal Hydropower Projects (July 20, 2016).

36 Department of Energy, About the Water Power Technologies Office (WPTO), https://www.energy.gov/eere/water/about-water-power-program (last visited August 7, 2019)

37 Assessing and Testing Hydrokinetic Turbine Performance and Effects on Open Channel Hydrodynamics: An Irrigation Canal Case Study, Department of Energy. March 2017

38 Department of Energy, Hydropower Market Report, https://www.energy.gov/eere/water/hydropower-market-report (last visited August 7, 2019)

39 Department of Energy, DOE Announces Up to 261 Million to Advance Hydropower and Marine Energy, https://www.energy.gov/articles/doe-announces-261-million-advance-hydropower-and-marine-energy

40 Exec. Order No. 13783, 82 Fed. Reg. 16093 (2017)

41 161 FERC ¶ 61,078 (October 19, 2017)

42 82 Fed. Reg. 50517 (November 1, 2017)

43 82 Fed. Reg. 50519 (November 1, 2017)

44 116 FERC ¶ 62, 244 (September 29, 2006)

45 116 FERC ¶ 62, 244 (September 29, 2006) This was the approach used for the Williams Fork project, which was the first project to convert a license to exemption by adding generating capacity to qualify.

46 18 CFR §4.33(d) (providing that if there an unexpired permit or license in effect for the project, FERC will accept an application from the licensee for exemption of that project)

47 82 Fed Reg. 40,463 (August 24, 2017)

48 Exec. Order No. 13807, 82 Fed. Reg. 40463 (2017). Agencies may exceed these timelines by following certain protocols or choose not to do a single EIS/ROD under circumstances that are identified in E.O. 13807.

49 Federal Energy Regulatory Commission, https://www.ferc.gov/legal/mou/2018/MOU-One-Federal-Decision.pdf (last visited August 7, 2019)

50 America’s Water Infrastructure Act of 2018, Pub. L. No. 115-270 (2018)

51 83 Fed. Reg. 58243 (2018).

52 New York State Department of Environmental Conservation v. Federal Energy Regulatory Commission, 884 F.3d 450 (2d Cir. 2018)

53 33 U.S.C. § 1341(a)(1)

54 Hoopa Valley Tribe v. Federal Energy Regulatory Commission, 913 F.3d 1099 (D.C. Cir. 2019)

55 167 FERC ¶ 61,050 at 51-53.

56 161 FERC ¶ 61,078 (October 19, 2017)

57 84 Fed. Reg. 44080 (2019)

58 FERC Final Rule 18 CFR Pt. 7, Hydroelectric Licensing Regulations Under the America’s Water Infrastructure Act of 2018, Order No. 858, 167 FERC ¶ 61,050 (2018) at P 115 (p 55)

59 FERC Final Rule 18 CFR Pt. 7, Hydroelectric Licensing Regulations Under the America’s Water Infrastructure Act of 2018, Order No. 858, 167 FERC ¶ 61,050 (2018)