NHA Sends Hydropower Economic Recovery Package to the Hill
Washington, D.C. (May 7, 2020) – The National Hydropower Association (NHA), the leading voice for the nation’s hydropower and marine energy industry, urged Congress to consider infrastructure and tax measures that invest in our nation’s power generation infrastructure which will help support a strong economic recovery and a clean energy future.
Investment in the waterpower sector is an investment in a critical piece of our nation’s infrastructure. Today, the federal hydropower fleet is sitting on a backlog of operation and maintenance needs – from new turbines to improving environmental performance and efficiency. Upgrading our existing federal hydropower fleet creates jobs, strengthens our supply chain and deepens our nation’s energy resource diversity. At the same time, we can leverage existing Department of Energy and other federal programs to develop the next-generation of energy manufacturing and innovation, such as marine energy, along with job training. NHA’s $1.5 billion Water Power Infrastructure and Innovation Strategy recommended actions include:
- Hydropower Facility Improvement Program – $850 million: National program to modernize the hydropower fleet and address the backlog of operation and maintenance (O&M) needs, increasing capacity, improving efficiency, and advancing environmental performance at federal and non-federal dams.
- Marine Energy Infrastructure and Demonstration Program – $550 million: Investing dedicated funding for offshore testing and infrastructure for wave, tidal and ocean current precommercial demonstration projects with additional support for DOE’s “Powering the Blue Economy” initiative.
- Workforce Development and Job Training – $100 million: Investment in university and community college technical training grants, paid internships, and placement programs at businesses and National Labs.
Tax Policy Recommendations
On tax policy, the hydropower industry needs long-term certainty to accommodate the lengthy development lead times for these infrastructure projects that often last for 50 years or more. Also, tax incentives for new facilities on existing dams, in particular, are important in light of the capital-intensive nature of these projects. In addition, we strongly request you ensure that Congress enacts policies that provide a level playing field for all hydropower, marine energy, and pumped storage, which will attract substantial private investment and foster job growth and economic benefits throughout the country. NHA’s tax policy recommendations include:
- Extend and Expand the Production and Investment Tax Credits: Long‐ term extensions of the Production Tax Credit (PTC) and Investment Tax Credit (ITC) for hydropower projects are needed to accommodate the longer regulatory and development lead time associated with these projects.
- Allow Energy Storage to Qualify for the ITC: Expanding our nation’s energy storage capacity is essential to ensuring a secure and stable grid as well as integrating more renewable energy – and today, pumped storage technology is the most cost-effective, large-scale storage method. The enactment of an elective payment provision for energy storage will help foster pumped storage development and help secure the resilient grid we need in these challenging times.
- Extend the Safe Harbor Provisions: Once physical work on a qualified facility has begun, it can take the project several years to complete the construction process and be placed in service. Hydropower projects – like those of other renewable technologies – would benefit from an extension of the continuity safe harbor for projects that have already commenced, but experienced delays due to supply chain disruptions from the pandemic.