FERC reports progress on implementing 2013 hydropower bill

Federal Energy Regulatory Commission staff at the Jan. 16 commission meeting provided an update on implementation of the Hydropower Regulatory Efficiency Act of 2013.

In August 2013, the Hydropower Regulatory Efficiency Act was signed into law by President Obama. Hydropower is the largest source of clean, renewable electricity in the United States, and provides nearly 7% of the nation’s electricity and about 100,000 MW of the nation’s electric capacity, the presentation noted. In section 2 of the Act, Congress finds that there is substantial potential for adding hydropower generation to non-powered dams given that only 3% of the 80,000 dams in the United States generate electricity.

The Act affects hydropower development in four ways:

  • For projects at existing dams that qualify for a small hydropower exemption, Section 3 of the Act amended PURPA by increasing the maximum allowable capacity for such projects from 5 MW to 10 MW.
  • Section 4 provides that conduit hydropower facilities with an installed capacity that does not exceed 5 MW and which meets the Act’s other qualifying criteria, are not required to be licensed under the Federal Power Act. It also increases the maximum installed capacity from 15 MW to 40 MW for a privately developed hydropower facility that qualifies for a conduit exemption. Previously, the 40-MW maximum was available only to municipal projects.
  • Section 5 of the Act provides the commission with the authority to extend preliminary permits for up to two additional years beyond the three years previously allowed under Section 5 of the Federal Power Act.
  • Lastly, section 6 requires the commission to investigate the feasibility of a two-year licensing process for hydropower development at non-powered dams and closed-loop pumped storage projects.

Soon after the Act was passed, FERC staff updated the commission’s website to provide guidance on how to apply for conduit and 10-MW small hydropower exemptions, qualifying conduits, and preliminary permit term extension. To date, the commission has received no applications by a private developer for a 40-MW conduit exemption, and it has received no applications for a 10-MW small hydropower exemption, but it has approved requests for a number of qualifying conduits and preliminary permit term extensions.

In addition, staff has begun investigating a two-year licensing process in compliance with Section 6 of the Act. Staff held an initial workshop, solicited written comments on the process, and issued a recent notice soliciting projects to test a two-year process.

To date, 18 notices of intent to construct qualifying conduit facilities have been filed. Out of those, 16 have been approved, one was rejected because it did not meet the criteria, and one is pending. The approved projects range in size from 10 kW to 4.8 MW and are projected to produce about 31,000 MWh annually. They are mostly located in the western U.S. The one project that was rejected was proposed to be located in Maryland and the pending project is located in Utah. Staff expects to see a significant number of these filings in the future based on industry inquiries and comments.

Currently, there are 270 issued preliminary permits. FERC staff has received seven applications for extensions of permit terms. Of these permit term extension applications, two were granted, three were denied due to lack of diligence during the three-year initial permit term, and two are currently pending.

Under Section 6 of the Act, staff conducted a workshop on Oct. 22, 2013, to solicit input on the feasibility of a two-year licensing process for projects that are located at existing, non-powered dams or are closed-loop pumped storage projects. Based on the workshop testimony and written comments, staff developed a two-year process and issued a notice on Jan. 6 soliciting prospective license applicants to file a request to test it. The project criteria includes that: the project must cause little to no change to existing surface and groundwater flows and uses, it must be unlikely to adversely affect federally listed threatened and endangered species, and for a closed loop pumped storage project, the project must not be continuously connected to a naturally-flowing water feature. The window for filing a request to test a process begins on Feb. 5, which, under the Act, is the date the commission is required to implement pilot project testing. The filing window ends on May 5.

Also, in a side note, FERC staff is anticipating a substantial increase in the filing of relicensing applications beginning in 2019 and continuing through 2025. Together, these relicense applications represent over 9,500 MW of installed capacity. Even though the first of the relicense applications are not due to be filed until 2019, staff anticipates experiencing the effects of this workload as early as the latter half of 2015, due to the beginning of pre-licensing activity.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.