U.S. Senate Hearing Yields Bipartisan Support for Advancing Hydropower

U.S. Senate Hearing Yields Bipartisan Support for Advancing Hydropower

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Clean Currents 2022

At its first hearing of 2022, the U.S. Senate Energy & Natural Resources Committee raised hydropower’s visibility as part of a reliable, renewable energy solution for the challenges facing the nation’s electricity grid. At the hearing, which examined the challenges of maintaining existing hydropower capacity and adding hydropower to non-powered dams, Senators on both sides of the aisle expressed broad support for expanding hydropower generation and protecting the existing U.S. fleet through improving the licensing process.

Leading the chorus of support was Committee Chair Senator Joe Manchin (R-WV), who noted in his opening remarks that hydropower is flexible and available when its needed. “That makes hydropower unique and valuable to grid reliability as more intermittent resources come on-line.”

Testifying on behalf of the hydropower industry, NHA’s President & CEO Malcolm Woolf emphasized that hydropower is an essential part of a reliable and zero-carbon grid, and highlighted the need for federal tax incentives to preserve the existing fleet, identified ways to modernize the licensing process, and encouraged new development at existing dams and new closed loop and off-river pumped storage through a two-year licensing process.

Advocating for Federal Hydropower Tax Incentives

Two key pieces of legislation served as a backdrop to the hearing: the Bipartisan Infrastructure Investment and Jobs Act and Build Back Better Act.

The Bipartisan Infrastructure Investment and Jobs Act, signed into law by President Biden in November, contained over $750 million to support grid resilience, environmental enhancements and new development at existing hydropower facilities. During his testimony, Woolf noted that while that funding is vitally needed, the industry views it as “just a down payment.”

“That money will stretch to cover investments in perhaps 150 to 200 facilities across the nation, but there are about 2,200 [hydro facilities] in the U.S.,” Woolf said.

The Build Back Better Act, which has not cleared Congress, includes a 30% investment tax credit (ITC) for critical environmental enhancement, a 30% ITC for pumped storage, and a long-term extension of the now-expired tax credits for incremental new hydropower generation. Woolf expressed to the Committee that the tax incentives would be transformative for the hydropower industry, and he encouraged the Senate to include dam safety, grid resilience, and dam removal to the tax provision.

Modernizing the Licensing Process

A large portion of the hearing was devoted the licensing and relicensing of hydropower facilities. Notably, Sen. Manchin recognized the process is putting existing hydro projects at risk. “Between low hydroelectricity prices and the high capital cost of maintenance and retrofits required for relicensing, there is a real possibility these plants could face closure.”

Woolf highlighted the critical need to modernize the process. “We need some process discipline in order to be able to make sure that the deadlines established are honored, and the second thing we need is to rein in the agency over-reach.” He also called for a two-year licensing process for developing new hydro on existing non-powered dams and new closed-loop pumped storage facilities that would allow “facilities that do not have significant environmental issues” to move forward.

Ranking Member Sen. John Barrasso (R-WY) echoed Woolf’s concerns saying “the glacial pace of permitting is a significant barrier to private sector investment in hydropower. It reduces the likelihood of investment in upgrading existing hydropower facilities such as installing turbines in non-powered dams.”

As a way forward, Woolf explained to the Committee that through Stanford’s Uncommon Dialogue process, NHA has been working to develop a set of recommended reforms to the Federal Power Act in collaboration with numerous environmental, river advocacy, and native American tribal organizations. He noted that they are aiming to provide the Committee with a legislative proposal that can win bipartisan support in February.

Why this Matters?

With the uncertain future of the Build Back Better Act, the hearing demonstrated that:

  • There is bipartisan support for hydropower as a reliable, zero-carbon electricity source
  • Congress recognizes that in order to protect hydropower assets that are at risk, changes to licensing processes need to be made
  • Committee members express support for adding generation to existing non-powered dams

Digging Deeper

Hearings to examine the opportunities and challenges for maintaining existing hydropower capacity, expanding hydropower at non-powered dams, and increasing pumped storage hydropower. (Official U.S. Senate photo by John Shinkle)

NHA’s Six Key Takeaways for Senate consideration:

  1. Hydropower is an essential part of a clean, reliable, and affordable 21st Century grid
  2. The baseload renewable electricity provided by the existing U.S. hydropower fleet is at risk
  3. Stanford’s “Uncommon Dialogue” process has created a historic new opportunity for bipartisanship – 21st Century Dam Act
  4. Building upon the recent Bipartisan Infrastructure package, Congress should advance the 3Rs by enacting S.2306, the Maintaining and Enhancing Hydropower and River Restoration Act and S.2356, the 21st Century Dam bill
  5. Congress needs to address the lack of certainty involved in the hydropower license and relicensing process
  6. Congress should promote new renewable generation at existing non-powered dams, and support DOE’s Water Power Technologies Office (WPTO), as well as investments to maintain and expand the existing federal hydropower fleet