Side by Side: New Hydropower Licensing Report and EPA’s 2020 401 Certification Rule

Side by Side: New Hydropower Licensing Report and EPA’s 2020 401 Certification Rule

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If there’s one takeaway from the new report “An Examination of the Hydropower Licensing and Federal Authorization Process” released in October 2021 during the Clean Currents Conference + Tradeshow, it’s that hydropower licensing takes a long time. On average, it takes more than seven and a half years to obtain a new license (relicense) for single hydropower project from the Federal Energy Regulatory Commission (FERC).

In general, the report – authored by researchers at the National Renewable Energy Laboratory (NREL) and Oak Ridge National Laboratory (ORNL) via a U.S. Department of Energy contract — finds the greater the complexity of environmental issues, the longer the relicensing process.

However, another key reason behind a lengthy process is the time it takes to obtain a state water quality certification:

“Both the statistical timeline analysis and the FERC 603 report found the Clean Water Act 401 Water Quality Certification process was a driver of longer hydropower licensing timelines”

The NREL/ORNL report found one out of three state water quality certifications take longer than the one-year maximum timeframe, and one out of six water quality certifications take longer than two years.

In 2020, the Environmental Protection Agency (EPA) took a stab at reforming the water quality certification process, which hadn’t been updated since 1971, and created the 401 Certification Rule. Several of EPA’s reforms directly address issues identified by NREL as a source of delay.

As the EPA considers revisions to the 401 Certification Rule, it’s worth comparing the rule to the data compiled by DOE’s national labs and seeing if aspects of the rule are worth preserving.


Clean Water Act (CWA) Section 401 grants states a one-year timeframe to issue water quality certifications for federal actions that effect the water within their state.

Since the passage of the CWA in 1972, hydroelectric facilities licensed by FERC have had to request water quality certification from the states. However, the NREL-published licensing report identifies disagreements between applicants and certifying authorities over a few issues, including:

1) What starts the one-year clock

2) The scope of a water quality certification

3) The end of the one-year clock

The 401 Certification Rule attempts to address all three of these concerns.

Start of the one-year clock

Unlike consultation under the Endangered Species Act, requests for water quality certifications are not required by federal statute to be “complete”. Instead, they are only required to be a “request”.

NREL found this creates tension between applicants and certifying authorities:

“Anecdotal information suggests that incomplete and/or inadequate information is one reason for longer timelines in [the water quality certification] process… However, it is important to note that what constitutes complete and adequate information for these authorizations is also a source of disagreement between agencies and some license applicants.

On the extremes – does a one sentence email with no information about the project count as a “request”? Or can a certifying authority repeatedly request more information to delay the start of the one-year clock?

The 401 Certification Rule attempted to remedy this disagreement by providing objective criteria for a request, including identifying the project and its characteristics, proposing monitoring and treatment to manage any effects, and several other administrative requirements. Here are a few of the requirements:

  1. identify the location and nature of any potential discharge that may result from the proposed project and the location of receiving waters;
  2. include a description of any methods and means proposed to monitor the discharge and the equipment or measures planned to treat, control, or manage the discharge;
  3. include a list of all other federal, interstate, tribal, state, territorial, or local agency authorizations required for the proposed project, including all approvals or denials already received;

This objective definition provides clarity and certainty. It holds the applicant to a higher standard, while preventing the certifying authority from repeated requests for information.

Scope of Certifications

The NREL-published report finds stakeholders are often in disagreement about the scope of the effects of a project and therefore what gets studied and eventually included in a certification:

“Stakeholders from across sectors described the process of determining project impacts and deciding how to study them as a primary source of disagreement in the licensing process.”

This is especially true for conditions included in water quality certifications, which from 1971 to 2019 only had to be “appropriate”, which is a notoriously broad standard that has led to some questionable conditions. In addition, the unpredictability of what is “appropriate” makes it difficult for applicants to predict and propose mitigation measures early on in the process.

Instead, the new 2020 EPA rule says conditions in water quality certifications must be directly related to state water quality standards:

“To give more specific meaning to this ambiguous and undefined language, the final rule defines the term ‘water quality requirements’ as follows: Water quality requirements means applicable provisions of sections 301, 302, 303, 306, and 307 of the Clean Water Act, and state or tribal regulatory requirements for point source discharges into waters of the United States.”

Since a state has complete control over its water quality standards (as long as it meets an EPA minimum threshold), the state can determine that things such as fish passage, recreation, or other beneficial uses of water are eligible conditions to include in a water quality certification, but they must first be officially adopted through formal state processes, which occur every three years.

From a project proponent’s perspective, having the certainty that conditions will correspond to publicly available water quality standards helps the development of specific mitigation strategies early on in the process. It is also makes it clear that if something is listed in a state’s water quality standards, its fair game for states to impose conditions to protect it.

One year means one year

In Washington D.C., there’s a popular saying “if it wasn’t for the last minute, nothing would ever get done.” Imposing deadlines is a means of prioritizing. In a world with so much to do and so little time, something without a deadline simply is not a priority.

A licensing process without deadlines, or with easily avoidable deadlines, ensures a lengthy process. The NREL report notes that longer processes are a challenge for everyone:

“Length and Complexity of the Licensing Process Is Challenging for All Stakeholder Sectors, Including Regulatory Agencies… Responses to email elicitations and phone interviews with stakeholders from all sectors point to turnover and limited bandwidth among state and federal agency staff and NGOs as primary sources of these challenges.”

To avoid having permitting decisions extend beyond the one-year deadline, the 2020 EPA rule gives a certifying authority four clear options at the end of one year:

“under the final rule a certifying authority may take one of four actions pursuant to its section 401 authority: grant certification, grant certification with conditions, deny certification, or waive its opportunity to provide a certification”

This hard and fast definition is a challenge for both applicants and certifying authorities alike: For applicants, it increases the chances a project’s water quality certification gets denied. For certifying authorities, it increases the chances that their authority will be waived if not exercised on time.

The deadline forces applicants and states to engage early on in the process. When combined with the first two reforms – a clearly defined standard for a request and a clearly defined scope of conditions – meeting the one year should be easier.

What doesn’t the 401 Certification Rule address?

The NREL report identifies several other challenges applicable to water quality certifications:

1) Limited staffing at federal and state agencies

2) The relevance, accuracy, and availability of scientific data

3) Smaller projects on average had higher licensing costs under a costs/kW metric

The National Hydropower Association’s Conclusion

The EPA’s 401 Certification Rule was developed and written prior to the issuance of the NREL study. Now, as EPA looks to revise the rule, the availability of the NREL data is a useful tool when considering the pros and cons of specific sections of the rule.