President Obama Signs Pivotal Hydropower-Boosting Bills into Law

President Obama on Friday signed into law two bills that are designed to boost hydropower production in the U.S.

H.R. 267, the “Hydropower Regulatory Efficiency Act of 2013,” modifies the Federal Power Act and the Public Utility Regulatory Policies Act to promote and facilitate the development of hydroelectric power capacity. The law directs the Federal Energy Regulatory Commission (FERC) to explore a potential two-year licensing process for hydropower development at existing non-powered dams and closed-loop pumped storage projects. It also raises the small-hydro FERC license exemption from 5 MW to 10 MW. Additionally, it removes conduit projects under 5 MW from FERC jurisdiction while preserving public review and increases the FERC conduit license exemption to 40 MW for all projects.

Significantly, the law also directs the Department of Energy to study pumped storage project opportunities to support integration of intermittent renewable resources and reliability benefits, and to study increased hydropower potential from existing conduits.

H.R. 678, the ” Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act,” amends the Reclamation Project Act of 1939 to authorize the secretary of the interior to contract for small conduit hydropower development at Reclamation facilities.

Both bills were unanimously cleared by the Senate before members adjourned for the August recess. The House also passed both measures earlier this year with overwhelming bipartisan support.

According to the Energy Information Administration (EIA), conventional hydropower sources generated 218,787 GWh (8% of the nation’s total generated power) in 2012, 13% more than in 2011 (when hydropower made up a 9% share of total generation). The agency notes that hydropower production depends on water availability and can vary significantly from year to year. In October 2012, for example, power generation from non-hydro renewables surpassed conventional hydroelectricity generation for the first time.

Drought-like conditions that reduce reservoir levels and stream flow can affect electric reliability in areas with a high reliance on hydroelectric capacity. Meanwhile, common impacts of high hydro generation include low power prices due to hydro’s relatively low operating costs, low demand for natural gas for power generation, and sometimes an oversupply of generation during periods of low electricity demand.

The Energy Department last year suggested that if outfitted with hydroelectric power plants, more than 80,000 dams in the U.S. that do not currently produce electricity could generate an estimated 12 GW and increase existing conventional hydropower capacity by roughly 15%.

The EIA says there are 40 pumped storage plants operating in the U.S. totaling more than 22 GW of storage capacity—or roughly 2% of U.S. generating capacity. Interest in building new pumped storage plants has been gaining in recent years, although construction has not yet been authorized. As of January 2012, the Federal Energy Regulatory Commission had granted preliminary permits for 34 GW of pumped storage capacity over a total of 22 states, which would more than double existing capacity. There are, however, significant challenges to building new pumped storage plants, including licensing, environmental regulations, and uncertainty in long-term electric markets.

Sources: POWERnews, whitehouse.gov, NHA, EIA