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In 2025, Washington, D.C. will be awash in a sea of red, as Republicans held the House of Representatives, flipped control of the United States Senate, and re-elected Donald Trump to the White House.
The re-election of Donald Trump and Republican control of Congress could have significant implications for the hydropower industry, particularly as the sector seeks to expand its role in the U.S. energy landscape. Hydropower could benefit from policies that align with Republican priorities, such as: grid reliability, energy dominance, and reinvestment in American infrastructure.
Hydropower has long been the foundation of the American energy grid, providing both consistent and dispatchable energy generation which supports baseload and peak demand. In an era increasingly focused on decarbonization, hydropower has the advantage of being both renewable and capable of stabilizing grids reliant on intermittent energy sources like solar and wind.
Despite hydro’s numerous grid and community benefits, the industry faces challenges, such as:
- Lengthy licensing and relicensing processes
- Aging infrastructure
- Competition from other renewables
Federal policy plays a critical role in addressing these hurdles, and a Republican-controlled government could bring about positive changes conducive to the industry’s growth. For instance, the previous Trump Administration’s focus on rural development bodes well for hydro, as many facilities are located in rural areas, so increased investment in these regions could support job creation, economic growth, and energy resilience. Programs prioritizing rural electrification and water resource management could dovetail with hydropower initiatives, making them a focal point of broader infrastructure efforts.
A PRO-BUSINESS, DEREGULATORY APPROACH
Donald Trump’s first term as president emphasized deregulation across multiple sectors, including energy. His administration rolled back numerous Obama-era environmental regulations, like the Clean Water Act rules, arguing that such measures stifled economic growth and innovation. A second Trump term would likely continue this trajectory, emphasizing the reduction of ‘red tape’ in energy development.
For the hydropower industry, the most pressing regulatory issue is the Federal Energy Regulatory Commission’s (FERC) licensing and relicensing process, which can take years to complete and represents an enormous industry obstacle, one that could lead to a potential wave of facility retirements if license holders opt to surrender rather than pursue relicensing.
Industry advocates have long pushed for streamlining the licensing and relicensing process to expedite the development of new projects, as well as the modernization of existing facilities. A Republican-led Congress is more likely to support reforms reducing bureaucratic hurdles, such as passing legislation to simplify permitting timelines and enhance coordination among federal and state agencies.
In addition, a pro-business administration would favor policies prioritizing domestic energy production, positioning hydropower as a key component of President Trump’s energy dominance strategy. A key component of the “energy dominance strategy” is the promotion of an “all-of-the-above” energy strategy to bolster domestic capacity, the focus of which is on baseload resources like hydropower, nuclear, and natural gas generation.
PERMITTING REFORM, INFRASTRUCTURE INVESTMENT AND HYDROPOWER EXPANSION
Infrastructure development has been a longtime bipartisan priority; in 2021, Republicans and Democrats worked to pass the Bipartisan Infrastructure Law under President Joe Biden which provided over $1 billion in grant funds for the hydropower industry.
One factor that needs to be considered on how Republicans will choose to move forward in the 119th Congress regarding permitting depends on the fate of the Energy Permitting Reform Act (EPRA, Manchin-Barrasso) in the current 118th Congress, which as of the writing of this article, still stands a chance of becoming law before the end of the year.
The EPRA bill has several reforms for the hydropower industry. The reforms, while smaller when compared to the comprehensive bills the water power industry had pushed over the past two years, would still be good wins for the industry and would demonstrate incremental progress on our issues.
If the Energy Permitting Reform Act is not signed into law in the 118th Congress, then the new Republican Senate majority could push forward on their own permitting reform package, which is more expansive, i.e., conservative, than the current Manchin-Barrasso deal.
An all-Republican energy permitting bill would include licensing reforms critical for the hydropower industry, allowing for the expansion of the industry by pushing for new development of non-powered dams and pumped storage projects across the country. The bill could also contain provisions from previous hydropower reform legislation looking to limit mandatory conditioning to project effects under sections 4e and 18 of the Federal Power Act, which are the key reforms that the hydropower industry has been seeking in legislation for the past several decades.
Tennessee Valley Authority’s Raccoon Mountain Pumped-Storage Plant
The previous Trump Administration’s focus on rural development bodes well for hydropower. Many hydropower facilities are in rural areas and increased investment in these regions could support job creation, economic growth, and energy resilience. Programs prioritizing rural electrification and water resource management could dovetail with hydropower initiatives, making them a focal point of broader infrastructure efforts.
TAX INCENTIVES
The hydropower industry has benefited from federal tax incentives designed to promote renewable energy, such as the Production Tax Credit (PTC) and Investment Tax Credit (ITC) from the Inflation Reduction Act (IRA). While these incentives have primarily supported wind and solar there has been growing recognition of hydropower’s role in achieving renewable energy goals.
With the enactment of the IRA and subsequent Internal Revenue Service (IRS) implementation guidance, hydropower has qualified for the new technology neutral PTC and ITC, as well as other tax provisions, such as: elective pay for public power and domestic content for the manufacturing of hydropower equipment – e.g. turbines and generators.
However, Democrats, during the drafting of the IRA, failed to include tax support for existing hydropower, putting the existing fleet at risk of retirement, as projects are faced with mounting capital investment needs to meet relicensing conditions and dam safety requirements to harden dams for climate resiliency.
A Republican-controlled Congress could enact tax provisions to support the United State’s existing hydropower fleet by:
- Investing in the country’s existing dam infrastructure
- Maintaining the hydropower fleet
- Supporting the technology serving as the foundation of our energy grid.
Some Republicans in Congress have expressed their interest in repealing the IRA to help pay for an extension of the Tax Cuts and Jobs Act while others have indicated they would prefer to keep the law in place due to the significant investments in clean energy projects across the country happening predominantly in red districts.
Whatever happens to the IRA, the 119th Congress will undergo a budget reconciliation effort to extend the Tax Cuts and Jobs Act. With that effort comes an opportunity for the hydropower industry to lobby for the existing hydropower ITC and its inclusion in any tax package that moves through Congress.
NATIONAL SECURITY AND ENERGY INDEPENDENCE
Republicans often frame energy policy within the context of national security, emphasizing the need for a resilient and independent energy system. Hydropower’s ability to provide baseload power and enhance grid stability aligns with these goals. Moreover, its role in managing water resources, such as flood control, irrigation, and navigation, adds another layer of strategic importance.
A Trump administration and Republican Congress could prioritize policies that enhance the reliability of the energy grid, potentially increasing federal investment in hydropower as a secure and domestically sourced energy option. This would include modernizing existing infrastructure to protect against cyberattacks and other vulnerabilities, as well as stopping the effort to remove the Lower Snake River Dams, which hold economic importance to the Pacific Northwest.
Ice Harbor Dam on the lower Snake River.
ENVIRONMENTAL STEWARDSHIP WITH A CONSERVATIVE LENS
While environmental concerns are often associated with Democratic platforms, Republicans have increasingly embraced conservation initiatives in alignment with the party’s broader policy goals. Hydropower, as a renewable energy source, offers a middle ground where environmental stewardship and economic development intersect.
A Republican majority may promote hydropower as part of a pragmatic approach to addressing climate concerns without imposing stringent regulations on other sectors. Initiatives to improve fish passage technologies, enhance water quality, and restore ecosystems could receive bipartisan support, particularly if framed as part of a broader effort to modernize hydropower facilities.
WHAT COMES NEXT?
The re-election of Donald Trump and the Republican control of Congress in 2025 could create a favorable environment for the hydropower industry to advance its goals. From streamlining regulatory processes to investing in infrastructure and promoting energy independence, a Republican-led government offers opportunities to address many of the industry’s longstanding challenges.
However, realizing these benefits will require strategic advocacy and collaboration. By positioning itself as a key player in America’s clean energy future, the hydropower industry can capitalize on this political landscape to achieve lasting growth and innovation. In doing so, it will not only enhance its own prospects but also contribute to a more resilient, sustainable, and secure energy system for the nation.
