APPA Emphasizes Need to Streamline and Reform Hydropower Licensing Process

by Paul Ciampoli
APPA News Director
September 25, 2023

The American Public Power Association on Sept. 19 underscored the need to streamline and reform the licensing process for hydropower projects.

Desmarie Waterhouse, Senior Vice President of Advocacy and Communications & General Counsel at APPA, outlined APPA’s positions on hydropower in a Statement for the Record submitted for a hearing held by the House Energy and Commerce Committee’s Subcommittee on Energy, Climate, and Grid Security.

In the statement, Waterhouse also noted APPA’s strong support for legislation sponsored by Rep. Cathy McMorris Rodgers, R-Wash., who is Chairman of the House Energy and Commerce Committee.

The legislation is H.R. 4045, the Hydropower Clean Energy Future Act, which would confirm that hydropower is an essential renewable energy resource and reform the Federal Energy Regulatory Commission‘s licensing process to protect existing hydropower resources and encourage the development of small and next-generation projects.

There is significant potential for new hydropower to be generated at non-powered dams throughout the country and to increase output at existing hydropower facilities, Waterhouse said in the Statement for the Record. “But there are excessive barriers to tapping this potential.”

FERC is the primary federal agency responsible for the licensing and relicensing of such non-federal hydroelectric projects, “but the process can be lengthy, difficult, costly, and uncertain for applicants,” Waterhouse said.

Under the Federal Power Act, FERC must establish requirements in conjunction with the license that give “equal consideration” to not only power needs, but also Endangered Species Act requirements, water quality issues, marine navigation, and other public-interest concerns.

”FERC must carefully evaluate many aspects of a hydropower project, but at the same time, state and federal agencies can impose ‘mandatory conditions’ that FERC cannot balance or modify in the public interest,” Waterhouse said.

“While it is appropriate to consider a broad array of factors, this process must be streamlined and reformed. Critical new additions to existing hydropower facilities are languishing under bureaucratic and often contradictory processes that can span a decade or more or which simply become too costly,” she said.

“The byzantine licensing and permitting processes are also a significant impediment to simply maintaining existing hydropower capacity.”

Between now and 2030, 281 facilities representing nearly 14 gigawatts of hydropower generation and pumped storage capacity (roughly 30 percent of FERC hydropower licenses) are up for relicensing.

“We simply cannot afford to lose existing hydropower capacity without threatening to miss emission reduction goals and grid resiliency,” Waterhouse wrote.

APPA commended McMorris Rodgers’ recognition of the importance of hydropower and her efforts to protect and expand its use in her bill, H.R. 4045, the Hydropower Clean Energy Future Act.

The bill would establish a sense of Congress that hydropower “is a renewable resource for purposes of all Federal Programs and is an essential source of energy in the United States,” ensure any “mandatory conditions” are directly relevant to the project, and designate FERC as the lead agency for purposes of National Environmental Policy Act review with respect to all federal authorizations required for licensing.

Federal Power Marketing Administrations

The Statement for the Record also addressed the key role that federal hydropower and federal Power Marketing Administrations play as “critical, though often overlooked, elements of the nation’s power supply.”

“APPA supports the continued existence and federal ownership of the PMAs and the sale of federally generated hydropower at cost-based rates,” wrote Waterhouse.

“APPA strongly opposes any efforts to disproportionately assign costs to federal hydropower users for which they receive no additional benefit,” Waterhouse said.

In the statement, APPA highlighted a May 2023 letter from the four PMA administrators to Assistant Secretary of the Army for Civil Works Michael Connor regarding Corps policies and practices that are impacting the economic viability of federal hydropower and are leading to permanent reductions in generation capability.

APPA also submitted a policy resolution approved by APPA’s membership, “In Support of Hydropower, the Federal Columbia River Power System, and Opposing Breach of the Lower Snake River Dams.”

Details from Hearing

Witnesses at the hearing on Sept. 20 were Terry Turpin, Director of the Office of Energy Projects, FERC, John Hairston, Administrator, Bonneville Power Administration, Thomas Smith, Chief of Operations and Regulatory Division, Army Corps of Engineers and Matt Lee-Ashley, Chief of Staff, Council on Environmental Quality.

Subcommittee members unanimously said that they supported hydropower and highlighted its benefits to grid reliability.

But Democrats and Republicans split when discussing the specific provisions of H.R. 4045.

Republicans said the legislation is urgently needed to reform and streamline the licensing/relicensing process, noting that nearly half of the non-federal U.S. hydropower fleet will be up for relicensing by 2035 and citing the fact that only three percent of the nation’s 90,000 dams provide hydropower.

Democrats said that H.R. 4045 would create significant exemptions that bypass some of the most important environmental laws.

Democrats, including Subcommittee Ranking Member Diana DeGette, D-Colo., expressed concern with certain provisions of the bill including its exemption of projects 40 megawatts or less from certain licensing and environmental reviews from the previous exemption level of 10 megawatts.

FERC’s Turpin said that about 80% of the existing dams regulated by FERC are 40 megawatts or less.