Hydropower Draws Bipartisan Support as Renewable Energy Source

Drought, expensive facility upgrades, and a slow permitting process threaten the country’s ability to harness and expand hydropower to generate electricity, witnesses and lawmakers agreed at a Senate hearing that sought solutions to overcome the challenges.

Democrats and Republicans both view hydropower as a unique and valuable renewable energy because it provides baseload electricity and can repower grids that collapse—an increasing concern after last winter’s devastating power outage in Texas. Hydropower provided 7.3% of total U.S. electricity generation in 2020, most of it generated at federal dams operated by the Army Corps of Engineers and Bureau of Reclamation. It’s a critical complement to other forms of renewable energy, but advocates say it lacks significant federal incentives for investors and industry that alternative sources like wind and solar enjoy.

“I think we have taken it for granted for far too long on hydropower, and really paying attention to it and developing it the way it should be developed,” said Senate Energy and Natural Resources Chairman Joe Manchin (D-W.Va.) during Tuesday’s hearing.

The bipartisan infrastructure law (Public Law 117-58) invests more than $750 million for new and existing incentives—including tax credits—for hydropower production and improvements. It also provides $8.2 billion to the Bureau of Reclamation for western water infrastructure, including upgrades.

Bipartisan Appeal

Lawmakers on both sides of the aisle want to do more to make the energy source more attractive to investors and operators through greater incentives and a less burdensome licensing process.

Sens. Maria Cantwell (D-Wash.) and Lisa Murkowski (R-Alaska) are co-sponsoring legislation (S. 2306) that would create new federal tax incentives to promote environmental grid resiliency upgrades for hydropower dams. Murkowski on Tuesday said she hopes the bill will move this Congress. “I think that will be a big step forward.”

Montana Sens. Steve Daines (R) and Jon Tester (D) along with Rep. Matt Rosendale (R-Mont.) on Monday introduced legislation (S. 3450) to authorize hydropower for the Sun River Project, including the Gibson Dam, in the state. Hydropower provides nearly half of all the electricity in Montana, Daines said.

Sen. James Lankford (R-Okla.) on Tuesday told Cantwell he is interested in working with her on streamlining the federal re-licensing process. Hydropower has been “a good source of power” in Oklahoma, which has 10 facilities, but the re-licensing process has been a challenge, he said. Other federal agencies don’t always follow permitting and re-licensing guidelines by the Federal Energy Regulatory Commission, drawing out the process, Lankford said.

Maintenance upgrades and retrofits at non-federally operated facilities, necessary to remain in line with FERC, are expensive. Nearly 300 facilities are up for federal re-licensing before 2030, which requires them to meet certain federal standards that cost money to implement. “There’s a real possibility that many of these plants could face closure,” said Manchin.

Industry interest is high in hydropower, said Malcolm Woolf, president and chief executive officer of the National Hydropower Association, but the “crazy” permitting process is a deterrent. He said there needs to be greater “process discipline” to make sure agencies honor FERC deadlines and rein in “agency overrun” related to non-germane projects that get tacked onto hydropower initiatives. Woolf said NHA and other groups would submit to Congress next month recommended reforms to the Federal Power Act.

Just 3% of the country’s 80,000 dams currently generate electricity, meaning there’s an untapped opportunity to get non-powered dams, including Montana’s Gibson Dam, to produce energy, said Woolf.

Sen. Angus King (I-Maine) said expediting the permitting and licensing processes for those dams that don’t involve environmental issues could be one way of expanding hydropower. One of the major environmental concerns related to dams, which are essential to hydropower, is how they impact fisheries because they disrupt the natural flow of water.

Drought Concerns

The record low water levels in the Colorado River as well as Lake Mead has “immediate impacts on hydropower production,” said Bureau of Reclamation Commissioner Camille Touton during the hearing.

A multi-state partnership in the West, known as the 500+ plan, would conserve and store water to Lake Mead across the Lower Colorado River Basin. That plan, which received funding in the infrastructure law, ultimately will benefit hydropower production, Touton said.

Touton told Sen. Catherine Cortez Masto (D-Nev.) that all the partners and users agree on the plan’s water conservation goals, and “we are ready to work.”

She added that the federal government and the participating states have committed significant financial resources. “The Bureau of Reclamation has already found the $50 million of $100 million of the cost-share that we have with the states and the states have gone to their boards and brought those monies to bear as well.”

To contact the reporter on this story: Kellie Lunney in Washington at klunney@bloombergindustry.com

To contact the editors responsible for this story: Zachary Sherwood at zsherwood@bgov.com; Michaela Ross at mross@bgov.com