LegiStorm

Summary:

Congress continues to look at various fuel contributions to the electricity market and federal involvement with these fuel sources. Hydropower, the use of flowing water to produce electricity, is one such contribution. Conventional hydropower accounted for approximately 6% of total U.S. net electricity generation in 2014. Hydropower has advantages and disadvantages as an energy source. Its advantages include its ability to be a continuous, or baseload, power source that releases minimal air pollutants during power generation relative to fossil fuels. Some of its disadvantages, depending on the type of hydropower plant, include high initial capital costs, ecosystem disruption, and reduced generation during low water years and seasons. Hydropower project ownership can be categorized as federal or nonfederal. The bulk of federal projects are owned and managed by the Bureau of Reclamation and the U.S. Army Corps of Engineers. These projects are typically authorized and funded by Congress. Nonfederal projects are licensed and overseen by the Federal Energy Regulatory Commission (FERC). Considered by many to be an established and renewable energy source, hydropower is not always discussed alongside clean or other renewable energy sources in the ongoing energy debate due to its potential environmental impacts. However, hydropower proponents argue that hydropower is cleaner than some conventional energy sources, and point to recent findings that additional hydropower capacity could help the United States reach proposed energy, economic, and environmental goals. Others argue that the expansion of hydropower in the form of numerous small hydropower projects could have environmental impacts and regulatory issues similar to those of existing large projects. The 114th Congress may face several issues as it considers how hydropower fits into a changing energy and economic landscape. For example, existing large hydropower infrastructure is aging; many of the nation's hydropower generators and dams are more than 30 years old. Proposed options to address these concerns include increasing federal funding, utilizing alternative financing and/or customer investments, and privatizing federally owned dams, among other options. Additionally, whether to significantly expand hydropower (either through new or more efficient federal hydropower generation or through federal incentives to encourage expansion or efficiency gains of nonfederal hydropower) may require congressional input due to the role of the federal government in hydropower development and permitting. Another issue receiving attention is the rate at which FERC issues licenses for nonfederal projects, which some find slower than ideal. Others defend the licensing process due to the environmental and other statutes with which agencies must comply. Legislation related to hydropower development was enacted in the 113th Congress, including P.L. 113-23 and P.L. 113-24. P.L. 113-23, the Hydropower Regulatory Efficiency Act of 2013, grants small hydropower projects with a capacity of 10 megawatts or less an exemption from FERC licensing requirements, promotes conduit hydropower projects, and requires FERC to examine the feasibility of a two-year licensing process to promote hydropower development at nonpowered dams and closed-loop pumped storage projects, among other things. P.L. 113-24, the Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act, authorizes nonfederal hydropower development at all Reclamation projects, provides for the preference of existing project sponsors in developing this power, and makes Reclamation the lead agency in implementing this authority. Other legislation related to hydropower enacted in the 113th Congress included the Water Resources Reform and Development Act of 2014 (P.L. 113-121), part of which expedites the approval and development of nonfederal Corps hydropower projects and orders a report on the status and funding of nonfederal hydropower projects as well as a study on the implications of issuing federally tax-exempt bonds from the Inland Waterways Trust Fund to hydropower facilities. Additionally, P.L. 113-76, the Consolidated Appropriations Act of 2014, provided new funding to the Department of Energy (DOE) for the expansion of hydropower development at existing dams, as authorized under the Energy Policy Act of 2005 (P.L. 109-58).