[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]


  MODERNIZING ENERGY INFRASTRUCTURE: CHALLENGES AND OPPORTUNITIES TO 
                    EXPANDING HYDROPOWER GENERATION

=======================================================================

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON ENERGY

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 15, 2017

                               __________

                           Serial No. 115-12
                           
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                    COMMITTEE ON ENERGY AND COMMERCE

                          GREG WALDEN, Oregon
                                 Chairman

JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
  Vice Chairman                        Ranking Member
FRED UPTON, Michigan                 BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
TIM MURPHY, Pennsylvania             ELIOT L. ENGEL, New York
MICHAEL C. BURGESS, Texas            GENE GREEN, Texas
MARSHA BLACKBURN, Tennessee          DIANA DeGETTE, Colorado
STEVE SCALISE, Louisiana             MICHAEL F. DOYLE, Pennsylvania
ROBERT E. LATTA, Ohio                JANICE D. SCHAKOWSKY, Illinois
CATHY McMORRIS RODGERS, Washington   G.K. BUTTERFIELD, North Carolina
GREGG HARPER, Mississippi            DORIS O. MATSUI, California
LEONARD LANCE, New Jersey            KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky              JOHN P. SARBANES, Maryland
PETE OLSON, Texas                    JERRY McNERNEY, California
DAVID B. McKINLEY, West Virginia     PETER WELCH, Vermont
ADAM KINZINGER, Illinois             BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia         PAUL TONKO, New York
GUS M. BILIRAKIS, Florida            YVETTE D. CLARKE, New York
BILL JOHNSON, Ohio                   DAVID LOEBSACK, Iowa
BILLY LONG, Missouri                 KURT SCHRADER, Oregon
LARRY BUCSHON, Indiana               JOSEPH P. KENNEDY, III, 
BILL FLORES, Texas                   Massachusetts
SUSAN W. BROOKS, Indiana             TONY CARDENAS, California
MARKWAYNE MULLIN, Oklahoma           RAUL RUIZ, California
RICHARD HUDSON, North Carolina       SCOTT H. PETERS, California
CHRIS COLLINS, New York              DEBBIE DINGELL, Michigan7
KEVIN CRAMER, North Dakota
TIM WALBERG, Michigan
MIMI WALTERS, California
RYAN A. COSTELLO, Pennsylvania
EARL L. ``BUDDY'' CARTER, Georgia

                         Subcommittee on Energy

                          FRED UPTON, Michigan
                                 Chairman
PETE OLSON, Texas                    BOBBY L. RUSH, Illinois
  Vice Chairman                        Ranking Member
JOE BARTON, Texas                    JERRY McNERNEY, California
JOHN SHIMKUS, Illinois               SCOTT H. PETERS, California
TIM MURPHY, Pennsylvania             GENE GREEN, Texas
ROBERT E. LATTA, Ohio                MICHAEL F. DOYLE, Pennsylvania
GREGG HARPER, Mississippi            KATHY CASTOR, Florida
DAVID B. McKINLEY, West Virginia     JOHN P. SARBANES, Maryland
ADAM KINZINGER, Illinois             PETER WELCH, Vermont
H. MORGAN GRIFFITH, Virginia         PAUL TONKO, New York
BILL JOHNSON, Ohio                   DAVID LOEBSACK, Iowa
BILLY LONG, Missouri                 KURT SCHRADER, Oregon
LARRY BUCSHON, Indiana               JOSEPH P. KENNEDY, III, 
BILL FLORES, Texas                       Massachusetts
MARKWAYNE MULLIN, Oklahoma           G.K. BUTTERFIELD, North Carolina
RICHARD HUDSON, North Carolina       FRANK PALLONE, Jr., New Jersey (ex 
KEVIN CRAMER, North Dakota               officio)
TIM WALBERG, Michigan
GREG WALDEN, Oregon (ex officio)

                                  (ii)
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     1
    Prepared statement...........................................     3
Hon. Scott H. Peters, a Representative in Congress from the State 
  of California, opening statement...............................     3
Hon. Greg Walden, a Representative in Congress from the State of 
  Oregon, opening statement......................................     5
    Prepared statement...........................................     6
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     7
    Prepared statement...........................................     9

                               Witnesses

Kieran Connolly, Vice President, Generation Asset Management, 
  Bonneville Power Administration................................    11
    Prepared statement...........................................    13
    Answers to submitted questions...............................   121
Chuck Hookham, Director, New Business Development and Projects, 
  CMS Energy, on Behalf of the American Society of Civil 
  Engineers......................................................    22
    Prepared statement...........................................    24
Dave Steindorf, California Special Projects Director, American 
  Whitewater, on Behalf of the California Hydropower Reform 
  Coalition......................................................    38
    Prepared statement...........................................    40
    Answers to submitted questions...............................   126
Ramya Swaminathan, Chief Executive Officer, Rye Development, on 
  Behalf of the National Hydropower Association..................    48
    Prepared statement...........................................    50
    Answers to submitted questions...............................   140

                           Submitted Material

Statement of American Rivers, March 15, 2017, submitted by Mr. 
  Upton..........................................................   106
Letter of March 14, 2017, from Adam Cramer, Executive Director, 
  Outdoor Alliance, to Mr. Upton and Mr. Rush, submitted by Mr. 
  Upton..........................................................   115
Statement of Sacramento Municipal Utility District, March 15, 
  2017, submitted by Mr. Upton...................................   118

 
  MODERNIZING ENERGY INFRASTRUCTURE: CHALLENGES AND OPPORTUNITIES TO 
                    EXPANDING HYDROPOWER GENERATION

                              ----------                              


                       WEDNESDAY, MARCH 15, 2017

                  House of Representatives,
                            Subcommittee on Energy,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 1:16 p.m., in 
room 2123, Rayburn House Office Building, Hon. Fred Upton 
(chairman of the subcommittee) presiding.
    Members present: Representatives Upton, Barton, Murphy, 
Harper, McKinley, Kinzinger, Griffith, Johnson, Long, Bucshon, 
Flores, Mullin, Hudson, Walberg, Walden (ex officio), Peters, 
Castor, Tonko, Schrader, Kennedy, and Pallone (ex officio).
    Staff present: Grace Appelbe, Staff Assistant; Elena 
Brennan, Legislative Clerk, Oversight and Investigations; 
Jordan Davis, Director of Policy and External Affairs; Wyatt 
Ellertson, Research Associate, Energy and Environment; Adam 
Fromm, Director of Outreach and Coalitions; Tom Hassenboehler, 
Chief Counsel, Energy and Environment; Zach Hunter, Director of 
Communications; A.T. Johnson, Senior Policy Advisor/
Professional Staff, Energy and Environment; Ben Lieberman, 
Senior Counsel, Energy; Brandon Mooney, Senior Policy Advisor, 
Energy; Mark Ratner, Policy Coordinator; Annelise Rickert, 
Counsel, Energy; Dan Schneider, Press Secretary; Hamlin Wade, 
Special Advisor for External Affairs; Everett Winnick, Director 
of Information Technology; Jeff Carroll, Minority Staff 
Director; Jean Fruci, Minority Policy Advisor, Energy and 
Environment; Rick Kessler, Minority Senior Advisor and Staff 
Director, Energy and Environment; John Marshall, Minority 
Policy Coordinator; Dan Miller, Minority Staff Assistant; 
Alexander Ratner, Minority Policy Analyst; Tuley Wright, 
Minority Energy and Environment Policy Advisor; and C.J. Young, 
Minority Press Secretary.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Good afternoon, everyone.
    I don't know if all Members have heard, but our ranking 
subcommittee member's wife passed away this weekend, so why 
don't we have a brief moment of silence for her.
    [Moment of silence.]
    Thank you.
    So today's hearing, ``Modernizing Energy Infrastructure: 
Challenges and Opportunities to Expanding Hydropower 
Generation,'' continues this committee's efforts to examine 
what we need to do to keep our infrastructure the very best in 
the world.
    I want to start certainly by thanking our witnesses for 
appearing before us today. Their testimony is going to continue 
to give us a better understanding of the current state of 
hydropower in the United States so that we can identify ways to 
improve the regulatory process, modernize our aging 
infrastructure, and ensure consumers continue to have access to 
reliable and affordable electricity produced from hydropower.
    Our hydropower fleet is aging. Yes, it is. Hydropower 
plants are among the oldest power plants in the U.S. In fact, 
according to the Energy Information Administration, the average 
hydropower facility has been operating for 64 years--I am 63--
and the 50 oldest electric generating plants in the U.S. are 
all hydropower. Each has been in service since 1908. That was 
the last year until this year the Cubs won the World Series.
    As a result, more than 500 projects, representing about 50 
percent of non-Federal hydro licenses, will begin the 
relicensing process before 2030.
    The regulatory environment for hydropower has become 
increasingly challenging. Licensing new hydropower facilities 
and relicensing existing facilities requires extensive 
consultation with multiple Federal, State, and local government 
entities. The process takes years and costs often tens of 
millions of dollars, and as a result, needed investments are 
too often discouraged or unnecessarily delayed. And in some 
cases the cost to modernize or meet environmental objectives 
outweighs the potential economic benefits of continued 
operation and the plants have to be shut down.
    In many ways, licensing challenges are limiting 
hydropower's potential. So, with sound policy and smarter regs, 
hydropower could have a very bright future.
    Hydro is the Nation's number one renewable, producing 
electricity with negligible emissions. Today, it is responsible 
for providing 7 percent of the Nation's total energy needs, and 
with continued technological advancements and smarter regs, 
hydropower generation could expand by an additional 50 percent 
by the year 2025.
    These are things that Congress could do to maximize 
hydropower's potential. This committee advanced legislation 
last Congress that would improve the licensing process, promote 
efficiency improvements, and encourage pump storage and 
development of nonpowered dams. While we were not able to agree 
on the hydropower reform package in the context of the larger 
energy bill, significant progress was made, and I am hopeful, I 
am encouraged, and I am optimistic that we are going to be able 
to deliver this time around.
    Hydro, as we know, is clean, affordable, reliable. Updating 
and modernizing the hydro infrastructure will incentivize 
economic development, create jobs, and strengthen our energy 
security. I look forward to working with all of my colleagues 
on both sides of the aisle to really see this happen in this 
Congress.
    And I yield back my time and recognize the acting ranking 
member of the powerful Energy and Power Subcommittee, the 
gentleman from California, Mr. Peters, for 5 minutes.
    [The prepared statement of Mr. Upton follows:]

                 Prepared statement of Hon. Fred Upton

    Today's hearing--``Modernizing Energy Infrastructure: 
Challenges and Opportunities to Expanding Hydropower 
Generation''--continues this committee's efforts to examine 
what we need to do to keep our infrastructure the best in the 
world.
    I want to start by thanking the witnesses for appearing 
before us today. Their testimony will give us a better 
understanding of the current state of hydropower in the U.S. so 
that we can identify ways to improve the regulatory process, 
modernize our aging infrastructure, and ensure consumers 
continue to have access to reliable and affordable electricity 
produced from hydropower.
    Our hydropower fleet is aging. Hydropower plants are among 
the oldest power plants in the United States. In fact, 
according to the Energy Information Administration, the average 
hydropower facility has been operating for 64 years, and the 50 
oldest electric generating plants in the United States are all 
hydropower; each has been in service since 1908. As a result, 
more than 500 projects--representing about 50 percent of non-
Federal hydropower licenses--will begin the relicensing process 
before 2030.
    The regulatory environment for hydropower has become 
increasingly challenging. Licensing new hydropower facilities 
and relicensing existing facilities requires extensive 
consultation with multiple Federal, State, and local government 
entities. The process takes years and costs tens of millions of 
dollars. As a result, needed investments are too often 
discouraged or unnecessarily delayed. In some cases, the costs 
to modernize or meet environmental objectives outweighs the 
potential economic benefits of continued operation and the 
plants have to be shut-down. In many ways, licensing challenges 
are limiting hydropower's potential.
    With sound policy and smarter regulations, hydropower could 
have a very bright future. Hydropower is the Nation's number 
one renewable, producing electricity with negligible emissions. 
Today, it's responsible for providing 7 percent of the Nation's 
total energy needs. With continued technological advancements 
and smarter regulations, hydropower generation could expand by 
an additional 50 percent by 2025.
    There are things Congress could do to maximize hydropower's 
potential. This committee advanced legislation last Congress 
that would improve the licensing process, promote efficiency 
improvements, and encourage pumped-storage and development of 
non-powered dams. While we were not able to agree on the 
hydropower reform package in the context of the big energy 
bill, significant progress was made and I am hopeful that we'll 
be able to deliver this time around.
    Hydro is clean, affordable, and reliable. Updating and 
modernizing hydropower infrastructure will incentivize economic 
development, create jobs, and strengthen our energy security. I 
look forward to working with all my colleagues to bring more 
hydro to the Nation. Thank you.

OPENING STATEMENT OF HON. SCOTT H. PETERS, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Peters. Thank you very much, Mr. Chairman.
    It is an honor to stand in today for the ranking member of 
the Energy Subcommittee, my colleague, Bobby Rush. And I too 
want to acknowledge that he couldn't be here today because of 
the passing of his wife of 36 years, Carolyn. And I want him to 
know that my thoughts, and everyone in the room, are with him 
and his family during this difficult time.
    This hearing on modernizing energy infrastructure, and 
specifically expanding hydropower generation, comes at a 
critical juncture in America's energy landscape. Our economy is 
undergoing a rapid transition, with decisive leaps in 
technology happening every day. And front and center in the 
changing economy of this decade is the fundamental shift in the 
way we power our world.
    Transition to a clean economy is happening right now. 
America has an opportunity to diversify our energy sources and 
give our children a future with cleaner air, cleaner water, and 
greater economic opportunities, and hydropower plays an 
important role in that transition, because it is always on.
    Hydropower provides zero-emission base load generation that 
can help our country meet our energy goals and commitments to 
the global community made in the Paris Agreement last year. 
Hydropower offsets over 190 million metric tons of 
CO2 each year, the equivalent of over 40 million 
cars on the road.
    Yet America's aging infrastructure and onerous licensing 
processes are making it harder for States, local governments, 
and the private sector to adopt and expand new forms of energy, 
like hydropower.
    Just 5 days ago, the American Society of Civil Engineers 
report card gave the United States infrastructure a D-plus and 
gave dams a slightly higher grade of D. That is probably still 
not good enough. And this average age of the country's 90,000 
dams--I have 56 years old, which is a little bit closer to my 
age than the chairman's, but still too old. And today, only 
about 3 percent are equipped to generate clean power.
    So the first step forward is to provide sufficient funding 
to modernize our infrastructure. I would like to hear more from 
our witnesses about where they see the greatest need to make 
those long-term investments to expand hydropower generation.
    Another critical step is regulatory reform. Hearing from 
industry, it takes on average 8 years and sometimes as long as 
10 years or more to relicense an existing project. And if the 
time and cost of licensing these projects exceeds the point 
where the project can be profitable, we know that investment in 
this clean energy source will decrease.
    So, in these cases, our regulatory regime is incentivizing 
municipalities and the private sector not to invest in clean 
energy. That is not what any of us want.
    So any kind of regulatory reform, we know, must maintain 
protections for fish, wildlife, natural resources, and water 
quality, and I am confident we can do that, but we can still 
eliminate duplicative processes and enhance interagency 
coordination. It is a false choice that we can't have both a 
clean, safe environment and a regulatory process in place to 
ensure that investment in clean energy remains a cost-
competitive option.
    I look forward to hearing from our witnesses how Congress 
and this committee specifically can act in a bipartisan way to 
modernize our energy infrastructure and facilitate the 
expansion of hydropower energy generation in a way that is 
sustainable.
    And I look forward to the testimony. And I yield back, Mr. 
Chairman. Thank you.
    Mr. Upton. Thank you.
    The Chair would recognize for an opening statement the 
chairman of the full committee, the wonderful gentleman from 
the good State of Oregon, Mr. Walden.

  OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF OREGON

    Mr. Walden. I thank the gentleman from Michigan. I want to 
stand up on his behalf. I was going to potentially move to have 
the gentleman from California's words taken down when he was 
taking the shot at you about age, that his dams were closer to 
your age than his.
    Mr. Upton. The good thing is that I look younger still.
    Mr. Walden. That is right.
    I want to welcome our witnesses, and especially Kieran 
Connolly, who is with the Bonneville Power Administration. We 
are glad you are here. You all do a great job out in Oregon and 
for the Northwest.
    One of the many challenges and advantages, frankly, the 
great advantage of living in Oregon is the plentiful supply of 
affordable, reliable, and clean hydropower. Hydropower is great 
for homeowners as well as job-creating businesses. We know that 
well in the Northwest. However, even in the Pacific Northwest, 
we have additional opportunities, as we do across the country, 
to take greater advantage of this valuable resource.
    This hearing is a crucial step in the Energy Subcommittee's 
efforts to modernize our Nation's electricity infrastructure, 
and today we will focus on the challenges and opportunities in 
expanding hydropower generation.
    For over a century, hydropower has provided electricity to 
millions of Americans across our Nation. The United States and 
Canada led the way in hydropower engineering for the first half 
of the 20th century. In 1936, the Hoover Dam became the world's 
largest hydroelectric plant, generating 1,345 megawatts. Six 
years later, in 1942, the Grand Coulee Dam in Washington State 
surpassed the Hoover Dam in electricity-generation capacity.
    As a footnote, when Richard Nixon came out to The Dalles, 
Oregon, to dedicate The Dalles Dam, my father was the master of 
ceremonies for those day's activities. And so this has gone on 
for generations.
    And, obviously, in my home State of Oregon, hydropower is 
one of the largest sources of electricity generation and 
provides over half of Oregon's electricity-generation needs. In 
fact, Mr. Connolly, representing BPA, his organization is 
responsible for marketing the Northwest's wholesale electrical 
hydropower.
    So I look forward to hearing more about Bonneville's 
balance, how you balance the various objectives while carrying 
out your mission of producing and delivering reliable, 
affordable power to consumers across the Pacific Northwest. You 
get kind of wrapped around the axle by Governors and courts, 
and interest groups of all sides, so it is a challenge.
    The electricity generated from hydropower allows for a 
diverse energy mix, which in turn increases our Nation's energy 
security and reliability. A recent DOE report found that U.S. 
hydropower production could grow by almost 50 percent by year 
2050. I know a lot of that is up in Alaska. This potential 
increase in hydropower production would boost job growth, 
increase economic investment, facilitate the use of wind and 
other intermittent renewables, and avoid harmful emissions from 
the electric power sector.
    In reading through the various testimonies that you all 
submitted, I found it very interesting on the pump storage 
piece and the limits and opportunities on hydro and what is 
involved there, and it is important to get the right balance, 
and how we can harness all those to really work with the 
renewable energy resources as well, because getting that grid 
balanced right is very important. And I have seen the swings in 
the charts of wind energy a thousand megawatts up one hour and 
down the next, and somehow you make all that work.
    Despite the numerous benefits of hydropower, the greatest 
impediment facing its growth is the regulatory process. Take 
the Bowman Dam in Crook County, Oregon, for example. For many 
years, I and some others in the delegation worked to pass 
legislation to help pave the way for future hydropower and jobs 
in central Oregon. Even after the bill was passed unanimously 
and signed into law in 2014, it took more than a year for that 
new law to be implemented.
    But it is not just the delays. The licensing of new 
hydropower facilities and the relicensing of existing 
facilities is really costly and takes forever. The process 
often requires 7 to 10 years to complete and costs tens of 
millions of dollars. We would like to find a way to streamline 
that, frankly, but recognizing the importance of stakeholders 
having an opportunity to make their case.
    As I have stated before, my objectives at the committee 
start with the consumer. If we put the consumer first in our 
discussion, we will end up with really good public policy. A 
diverse energy mix empowers consumers by giving them choices in 
different energy sources. The electricity generated by 
hydropower is as clean and renewable it gets.
    When it comes to improving our Nation's laws regarding 
hydropower development, we in Congress have the opportunity to 
reach across the aisle, and I think we can get some good things 
done for the environment, for reduction of carbon emissions, 
and for the economy.
    And as this subcommittee continues its efforts to modernize 
our Nation's energy infrastructure through technology, neutral 
improvements, and expansion, we have to bring greater 
transparency, efficiency, and accountability to the regulatory 
process affecting hydropower and more.
    So, again, thank you for your testimony. I am juggling 
between two subcommittees. You probably see other Members doing 
that. We do the Nation's work here, and we really appreciate 
your contributing to our public policy debate and discussion.
    With that, Mr. Chairman, I yield back the balance of my 
time.
    [The prepared statement of Mr. Walden follows:]

                 Prepared statement of Hon. Greg Walden

    One of the many advantages of living in Oregon is the 
plentiful supply of affordable, reliable, and clean hydropower. 
Hydropower is great for homeowners as well as job-creating 
businesses. However, even in the Pacific Northwest we have 
additional opportunities-as we do across the country to take 
greater advantage of this valuable resource.
    This hearing is a crucial step in the energy subcommittee's 
efforts to modernize our Nation's energy infrastructure, and 
today we will focus on the challenges and opportunities in 
expanding hydropower generation.
    For over a century, hydropower has provided electricity to 
millions of Americans across our Nation. The United States and 
Canada led the way in hydropower engineering for the first half 
of the 20th century. In 1936, the Hoover Dam became the world's 
largest hydroelectric plant generating 1,345 megawatts. Six 
years later in 1942, the Grand Coulee Dam in Washington State 
surpassed the Hoover Dam in electricity generation capacity. In 
my home State of Oregon, hydropower is the largest source of 
electricity generation and provides over half of Oregon's 
electricity generation needs. In fact, one of our witnesses 
here today, Mr. Connolly, is representing the Bonneville Power 
Administration, the nonprofit Federal organization responsible 
for marketing the Northwest's wholesale electrical hydropower. 
I look forward to hearing how Bonneville Power balances 
multiple objectives while carrying out its mission of producing 
and delivering reliable power to customers across the Pacific 
Northwest.
    The electricity generated from hydropower allows for a 
diverse energy mix, which in turn increases our Nation's energy 
security and reliability. A recent DOE report found that U.S. 
hydropower production could grow by almost 50 percent by year 
2050. This potential increase in hydropower production would 
boost job growth, increase economic investment, facilitate the 
use of wind and other intermittent renewables, and avoid 
harmful emissions from the electric power sector.
    Despite the numerous benefits of hydropower, the greatest 
impediment facing its growth is the regulatory process. Take 
the Bowman Dam in Crook County Oregon, for example. For many 
years, I worked to pass legislation to help pave the way for 
future hydropower and jobs in Central Oregon. Even after the 
bill was passed unanimously and signed into law in 2014, it 
took more than a year for that new law to be implemented. But 
it's not just bureaucratic delays. The licensing of new 
hydropower facilities and the relicensing of existing 
facilities is costly and time consuming. The process often 
requires 7 to 10 years to complete and costs tens of millions 
of dollars.
    As I've stated before, my objectives at the committee are 
to put consumers first in all that we do. A diverse energy mix 
empowers consumers by giving them choices in different energy 
sources. The electricity generated by hydropower is as clean 
and renewable as its gets. When it comes to improving our 
Nation's laws regarding hydropower development, we in Congress 
have the opportunity to reach across the aisle and get good 
things done for the environment, for reduction of carbon 
emissions and for the economy. As this subcommittee continues 
its efforts to modernize our Nation's energy infrastructure 
through technology-neutral improvement and expansion, we must 
bring greater transparency, efficiency and accountability to 
the regulatory processes affecting hydropower.

    Mr. Upton. The gentleman yields back.
    I would note that, because of the weather issues yesterday, 
we have a good number of Members that were stranded in their 
district and not able to get back, juggling flights to get in 
and out, as well.
    Mr. Walden. And, Mr. Chairman, just a point of personal 
privilege. I want to join in my colleagues about paying our 
respects to Bobby Rush at the loss of his wife.
    Mr. Upton. And we had a moment of silence. She was a 
wonderful woman, great partner.
    Mr. Walden. And, you know, I know he expressed--well, he 
was afraid it was going to happen when we were having our 
markup. And that is one of the hardest things people go 
through, is loss of a spouse. So he is in all our thoughts and 
prayers.
    Mr. Upton. Yes. Absolutely.
    The Chair would recognize the ranking member of the full 
committee, the gentleman from New Jersey, Mr. Pallone, for 5 
minutes.

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Pallone. Thank you, Mr. Chairman. And let me also 
express my sympathy for Bobby. I actually had the chance to 
talk to him after his wife passed away, and he seemed in pretty 
good shape. But as our full committee chairman said, it has got 
to be difficult. So I want to express my sympathy as well 
publicly.
    Mr. Chairman, that is Chairman Upton, let me thank you for 
holding today's hearing on the challenges and opportunities of 
modernizing our hydroelectric power infrastructure. As I have 
said before, Democrats strongly support modernizing our energy 
infrastructure, much of which is outdated or on the verge of 
disrepair or inadequate for today's needs.
    Hydroelectric power is among the most mature generating 
technologies providing substantial, virtually carbon-free base 
load energy at low cost to our manufacturing sector and to 
residential and commercial consumers. It is an important asset 
that we need to maintain.
    At the same time, it also has major impacts on fish and 
wildlife populations, water quality, water supply management, 
and other important physical and cultural resources if poorly 
operated or sited. For example, there are numerous examples of 
hydroelectric dams devastating lands and waters sacred to 
Native American Tribes, and this should not happen. While 
hydroelectric power licenses depend on rivers for free fuel, 
those rivers belong to all Americans, not just those who sell 
or buy the power generated from it.
    The Federal Power Act requires the Federal Energy 
Regulatory Commission, or FERC, to balance those competing 
interests in issuing a license. No interest, whether it be 
power, drinking water, irrigation, commercial fishery, 
recreation, or other use, should automatically take precedence 
in the licensing process.
    The Power Act authorizes States and Federal natural 
resource agencies to place conditions on hydroelectric licenses 
to preserve water quality, protect public lands and Native 
American reservations, and ensure proper fish passage to 
preserve healthy ecosystems and fisheries.
    If, for instance, a license might adversely impact a 
protected area, such as a National Park, or cause the release 
of toxic sediment into drinking or agricultural water supplies 
or flood a Native American reservation, the State or Federal 
agency responsible for managing these resources can place 
conditions on the license to ensure that those resources are 
protected.
    And hydroelectric licenses have fixed conditions that 
generally remain unchanged during the 30 or 50 years that they 
are in force. Licenses also benefit from unlimited automatic 
annual extensions after the license has expired if a new 
license has not been issued. As a result, the impacts of these 
hydropower dams often go unaddressed for more than half a 
century.
    For those facilities first licensed before enactment of the 
National Environmental Policy Act or the Clean Water Act and 
the Endangered Species Act, the licensing process certainly can 
be rather rigorous. Sometimes the necessity of addressing these 
complex issues also makes the process time-consuming and 
expensive, as new license conditions will require significant 
upgrades to old facilities to bring them in line with modern 
environmental laws and regulations.
    Now, ironically, climate change has increased the need to 
license new capacity of this carbon-free generating technology 
at the same time it has caused record droughts that have made 
it more difficult to site new works or provide long-term 
relicensing of existing facilities. Climate-induced changes in 
hydrology, including the record drought in the West that just 
ended, are calling into question the reliability of existing 
facilities, and these changes are also upending the economics 
of siting new hydropower capacity and increasing the challenges 
associated with addressing hydropower's environmental issues.
    In addition to the unique challenges faced by the 
hydropower industry, the significant changes in electricity 
markets and relatively flat demand for electricity create a 
difficult financial environment for developing new base load 
generation in many areas of the country. Some of the unique 
benefits that hydropower and pump storage can offer cannot be 
fully compensated by current electricity rate structures.
    So I am glad we are holding this hearing today, and I urge 
the chairman to hold more like this before we begin to discuss 
legislation. We must understand more fully the challenges 
facing the hydropower industry and the rivers the industry 
relies upon before we update our policies. Our goal should be 
to maintain the fundamental principles of balance in the 
process so that we maximize the benefits of hydroelectric power 
and expand it where it is most appropriate to do so.
    I know we have an excellent panel here today to start this 
process, and I thank you for being here. I am sure you have 
been told that we are bouncing back and forth with the other 
subcommittees, so you may not see you us the whole time. But 
thank you.
    Thank you, Mr. Chairman. I yield back.
    [The prepared statement of Mr. Pallone follows:]

             Prepared statement of Hon. Frank Pallone, Jr.

    Mr. Chairman, thank you for holding today's hearing on the 
challenges and opportunities of modernizing our hydroelectric 
power infrastructure. As I've said before, Democrats strongly 
support modernizing our energy infrastructure, much of which is 
outdated, on the verge of disrepair, or inadequate for today's 
needs.
    Hydroelectric power is among the most mature generating 
technologies providing substantial, virtually carbon-free, 
baseload energy at low cost to our manufacturing sector and to 
residential and commercial consumers. It is an important asset 
we need to maintain.
    At the same time, it also has major impacts on fish and 
wildlife populations, water quality, water supply management, 
and other important physical and cultural resources if poorly 
operated or sited. For example, there are numerous examples of 
hydroelectric dams devastating lands and waters sacred to 
Native American Tribes. This should not happen. While 
hydroelectric power licensees depend on rivers for free fuel, 
those rivers belong to all Americans, not just those who sell 
or buy the power generated from it.
    The Federal Power Act requires the Federal Energy 
Regulatory Commission (FERC) to balance those competing 
interests in issuing a license. No interest, whether it be 
power, drinking water, irrigation, commercial fishery, 
recreation, or other use should automatically take precedence 
in the licensing process. The Power Act authorizes States and 
Federal natural resource agencies to place conditions on 
hydroelectric licenses to preserve water quality, protect 
public lands and Native American reservations, and ensure 
proper fish passage to preserve healthy ecosystems and 
fisheries. If, for instance, a license might adversely impact a 
protected area such as a National Park, or cause the release of 
toxic sediment into drinking or agricultural water supplies, or 
flood a Native American reservation, the State or Federal 
agency responsible for managing those resources can place 
conditions on the license to ensure those resources are 
protected.
    Hydroelectric licenses have fixed conditions that generally 
remain unchanged during the 30 to 50 years they are in force. 
Licensees also benefit from unlimited, automatic, annual 
extensions after their license has expired if a new license has 
not been issued. As a result, the impacts of these hydropower 
dams often go unaddressed for more than half a century. For 
those facilities first licensed before enactment of the 
National Environmental Policy Act, the Clean Water Act, and the 
Endangered Species Act in the 1970s, the licensing process 
certainly can be quite rigorous. Sometimes, the necessity of 
addressing these complex issues also makes the process time-
consuming and expensive as new license conditions will require 
significant upgrades to old facilities to bring them in line 
with modern environmental laws and regulations.
    Ironically, climate change has increased the need to 
license new capacity of this carbon-free generating technology 
at the same time it has caused record droughts that have made 
it more difficult to site new works or provide long-term 
relicensing of existing facilities. Climate-induced changes in 
hydrology--including the record drought in the west that just 
ended- are calling into question the reliability of existing 
facilities. These changes are also upending the economics of 
siting new hydropower capacity, and increasing the challenges 
associated with addressing hydropower's environmental issues.
    In addition to the unique challenges faced by the 
hydropower industry, the significant changes in electricity 
markets and relatively flat demand for electricity creates a 
difficult financial environment for developing new baseload 
generation in many areas of the country. Some of the unique 
benefits that hydropower and pumped storage can offer cannot be 
fully compensated by current electricity rate structures.
    So, I'm glad we're holding this hearing today and I urge 
the Chairman to hold more like this before we begin to discuss 
legislation. We must understand more fully the challenges 
facing the hydropower industry and the rivers the industry 
relies upon before we update our policies. Our goal should be 
to maintain the fundamental principles of balance in the 
process so that we maximize the benefits of hydroelectric power 
and expand it where it is most appropriate to do so.
    We have an excellent panel here today to start this 
process. I thank you all for being here to participate in this 
important effort.

    Mr. Upton. The gentleman yields back.
    Again we want to thank our witnesses for being here. I 
appreciate you submitting your testimony early so we had a 
chance to look at it prior to the hearing. And we would like 
each of you now to summarize your statement, taking no more 
than 5 minutes.
    We are joined by Mr. Chuck Hookham, director of NBD 
Services for CMS Energies, on behalf of the American Society of 
Civil Engineers; Kieran Connolly, vice president of generation 
and asset management from the Bonneville Power Administration, 
as Chairman Walden indicated; Ramya Swaminathan, CEO of Rye 
Development, on behalf of the National Hydropower Association; 
and Dave Steindorf, California stewardship director of American 
Whitewater, on behalf of the Hydropower Reform Coalition.
    And we will start in the order that you are at the table.
    Mr. Connolly, welcome. Thank you for being here today.

STATEMENTS OF KIERAN CONNOLLY, VICE PRESIDENT, GENERATION ASSET 
  MANAGEMENT, BONNEVILLE POWER ADMINISTRATION; CHUCK HOOKHAM, 
DIRECTOR, NEW BUSINESS DEVELOPMENT AND PROJECTS, CMS ENERGY, ON 
    BEHALF OF THE AMERICAN SOCIETY OF CIVIL ENGINEERS; DAVE 
   STEINDORF, CALIFORNIA SPECIAL PROJECTS DIRECTOR, AMERICAN 
   WHITEWATER, ON BEHALF OF THE CALIFORNIA HYDROPOWER REFORM 
COALITION; AND RAMYA SWAMINATHAN, CHIEF EXECUTIVE OFFICER, RYE 
 DEVELOPMENT, ON BEHALF OF THE NATIONAL HYDROPOWER ASSOCIATION

                  STATEMENT OF KIERAN CONNOLLY

    Mr. Connolly. Good afternoon, Mr. Chairman. My name is 
Kieran Connolly, and I am vice president for generation and 
asset management at Bonneville Power Administration. I 
appreciate the subcommittee's invitation to be here today, and 
I ask that my written remarks be entered into the record.
    Bonneville is a Federal power marketing administration 
headquartered in Portland, Oregon, and is one of the largest 
providers of low-cost renewable energy in the Nation, marketing 
power generated primarily at 31 Federal hydroelectric dams. 
These dams are owned and operated by the U.S. Army Corps of 
Engineers and the Bureau of Reclamation.
    Bonneville and our partners are able to maintain these 
projects through direct funding of the power portion of the 
costs at the dam. Direct funding allows Bonneville to fund 
operations and maintenance as needed and appropriate. 
Bonneville also direct funds' substantial investments in the 
rehabilitation of the hydropower system as its components 
require replacement.
    Bonneville provides this funding through power sales and 
borrowing from the U.S. Treasury that is fully recovered 
through power ratepayers. The interest on Bonneville's debt is 
at rates comparable to those for similar bonds issued by 
government corporations.
    Bonneville's partnership with the Corps and Reclamation 
provides for a sound program of maintenance and modernization 
of Federal hydro generation assets. In 1999, Bonneville, the 
Corps and Reclamation produced the first asset management 
strategy for the FCRPS. Today, a collaborative team from the 
three agencies builds on that legacy through the use of 
industry-leading asset assessment tools and portfolio 
optimization to efficiently care for these facilities.
    Bonneville and our partners rely on third-party vendors for 
much of our generation rehabilitation work. A promising 
initiative I would like to raise for the subcommittee's 
awareness is recent discussions between the Corps and the 
Federal PMAs to improve the acquisition and delivery process 
for major hydropower equipment.
    Historically, because of its complexity, the acquisition 
process can be cumbersome, resulting in prolonged unit outages 
and cost overruns. These issues reduce generation, resulting in 
lost revenue and increased replacement power expenses for the 
PMAs. In turn, these circumstances contribute to rate increases 
that diminish the product value for power customers.
    The Corps and the PMAs have established a work plan to 
address these challenges, and I appreciate the Corps' 
commitment to this effort.
    The FCRPS is also unique in the extensive modifications and 
operational challenges made for the recovery of fish and 
wildlife. This is a responsibility we take seriously and are 
committed to. Since the 1980 Northwest Electric Power Planning 
and Conservation Act, hydro revenues have committed billions of 
dollars toward structures and revised operations of the dams, 
as well as offsite restoration efforts for watershed health 
that have received broad regional support. The trend of salmon 
and steelhead survival is up, posting returns that by some 
measures approached those before Bonneville Dam was built.
    The Northwest as a whole has engaged in examining the 
science and is committed to long-term strategies. However, some 
parties to litigation of the Federal hydro system continue to 
call for additional spill, when fish are migrating, as a 
presumptive path, foregoing nonpolluting power generation. 
Bonneville believes the Federal hydro system is operating with 
carefully calibrated conditions for fish, defined and guided by 
scientific evidence.
    In the same litigation, we are very concerned about motions 
to suspend specific maintenance and modernization projects at 
the dams. Poorly maintained equipment and the resulting risk to 
generating units is not a trivial matter to the reliability, 
safety, and environmental performance of the system. This issue 
is in litigation in the U.S. District Court in Oregon and was 
the subject of a hearing in that court last week.
    Finally, western electricity markets' design is evolving, 
responding to State mandates, Federal incentives, and the 
declining cost of technology. Much of the new resource 
development is in intermittent generation, particularly wind 
and solar. Hydropower offers flexibility to integrate these 
resources reliably, and Bonneville believes the value of 
hydropower for these types of services needs to be recognized 
in market design.
    An additional development in the evolving electricity 
market is the impact of low natural gas prices and, to a lesser 
extent, renewable resource incentives on the wholesale market 
price for electricity. Under these conditions, Bonneville's 
surplus power sales have not generated the levels of revenue 
historically experienced. Consequently, the appropriate 
valuation of hydropower in the evolving market is important for 
sustaining funding for congressionally authorized programs 
while retaining competitive rates for Bonneville's customers.
    Bonneville is proud of the tradition of collaboration with 
the Corps and Reclamation for operation and maintenance of the 
FCRPS and with numerous other regional partners for the 
sustainability of the Columbia River's Federal hydro system.
    That concludes my testimony, Mr. Chairman. I would be happy 
to answer the subcommittee's questions.
    [The prepared statement of Mr. Connolly follows:]
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    Mr. Upton. Thank you very much.
    Mr. Hookham.

                   STATEMENT OF CHUCK HOOKHAM

    Mr. Hookham. Chairman Upton, Congressman Peters, members of 
the subcommittee, thanks for having me. I am a 36-year-veteran 
professional engineer, worked on quite a few hydro projects, so 
I think I am pretty well qualified to talk about this. I am 
from Michigan. I apologize for the weather. I think I can talk 
on behalf of Congressman----
    Mr. Upton. You should be happy, if you are from Michigan.
    Mr. Hookham. I feel comfortable.
    Mr. Upton. We will give you an extra 10 minutes.
    Mr. Hookham. So I am speaking on behalf of the American 
Society of Civil Engineers. Last week we came out with the 
Infrastructure Report Card, which I hope you have all seen. It 
talks a lot about the infrastructure problems across 16 
different categories, one of which is energy, and talks to the 
troubles we are having getting funding and doing the right 
things.
    ASC is very active finding solutions. Believe me, we are 
not just reporting bad grades; we are trying to come up with 
strategies. And so I would implore on the committee, 
subcommittee to talk to us about strategies, priorities, and 
how to make sure we can correct these things.
    Right now we are reporting about a $4.59 trillion 
infrastructure demand, about $2 trillion of which has been 
targeted, earmarked, some of which has not been appropriated. 
We still have a $2 trillion deficit over the next 10 years. 
This is really critical, that we start getting this right. We 
are hopeful. We hear of what President Trump has laid out. We 
need to make those statements turn into real action.
    As far as hydropower goes, we have quite a few 
recommendations we would like to offer up. I represent a 
utility that has got 13 hydro plants as well as a pump storage 
facility, so we take advantage of that technology.
    To talk about age, our dams are 99 years old. So we are 
talking about some pretty old infrastructure here that we care 
and maintain and have done so successfully. We do that under 
licensure with FERC that requires us to do inspections, so our 
power dams are fairly well taken care of. We need to continue 
that process and take advantage of technology.
    Importantly, we need to fund, fully fund, dam safety 
programs. These are really critical to the operations of our 
facilities both at Federal and State levels. We need to 
continue that funding. We have got some activity going on to 
get that funding appropriated, both on hydropower and 
nonhydropower dams. That needs to continue forward. Our safety 
is really critical. Most of these dams now support or protect 
people downstream.
    Whereas dams supporting hydropower are regularly inspected, 
like I mentioned, we still have this challenge of operating 
licensure, and we have challenges with respect to relicensure 
that are, in our case, many times duplicate or sequential as 
opposed to being collaborative, and that is really causing 
trouble because of the timelines it takes for us to get 
projects approved.
    In reality, since 1950, there have only really been four 
significant dam hydropower project issues that have taken 
place, most of which are dam-related and not hydropower-
related. We need to continue our investment in economical, 
reliable, acceptable hydropower. It is critical to the Nation's 
infrastructure, as has been pointed out by others, and we need 
to continue looking at it from a visionary point of view.
    There are technologies out there now that are enhancing 
fish/habitat survival, that maximize water use efficiency, and 
improve discharge water quality. We need to tap those and 
continue to protect our environment. We are really supportive 
of the sustainability concept here.
    We also have technology, like lidar and drones and things 
like that, that can really be used to avoid problems going down 
in the future, and we think that successfully implemented will 
add to the base of the case to build more hydroelectric.
    Research that directly supports reducing capital costs, 
improves efficiency and impact indication are important. 
Michigan State University is actually doing some work in our 
State to help in that regard, and HydroNEXT by the Department 
of Energy also defines some great things going on there.
    We should look at prioritizing some federally owned dams. 
We think there are areas where that could be a benefit, where 
private-public relationships can be used to maximize the 
benefits and minimize the costs, and then also reduce the 
impacts on environment. Newer technologies like hydrokinetic 
are great as well. We need to keep focusing on that.
    Legislation that purely focuses on improving hydropower 
licensing, it certainly is troublesome. And when we talk about 
the Hydropower Regulatory Efficiency Act of 2013, streamlining 
that, working on Order 2002, we need to look at that. We need 
to avoid having duplicative FERC and Army Corps of Engineer 
Section 408 permitting. It doesn't make sense. It just takes 
tremendous time.
    Our best opportunities for hydropower are where you have 
existing nonpower dams, we have talked a lot about that, or 
closed loop pump storage, where it makes sense, where we can 
align with population mode centers, market pricing.
    We are really driven as a utility to focus on what makes 
sense for our customers as well as being regulated by the 
State. It is a tough box to fit into, so it is a challenge.
    We, as consumers of energy, support hydropower. We are also 
a very sustainable organization. We are trying to do our best 
for our ratepayers, and that is a real primary focus for us 
going forward, competing against other forms of renewables and 
fossil fuels.
    Lastly, we need a national energy policy that works. We are 
really struggling making decisions that make sense from a 
corporate point of view.
    Thank you.
    [The prepared statement of Mr. Hookham follows:]
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    Mr. Upton. Thank you.
    Mr. Steindorf.

                  STATEMENT OF DAVE STEINDORF

    Mr. Steindorf. Chairman Upton, Ranking Member Peters, and 
members of the committee, my name is Dave Steindorf, and I am 
the special projects director for American Whitewater. And I am 
testifying on behalf of the Hydropower Reform Coalition. The 
HRC is made up of more than 160 regional and local 
organizations with a combined membership of over 1 million 
people who work to restore rivers impacted by hydropower dams.
    I have over 20 years of experience working on hydropower 
relicensing. During this time, I have been directly involved in 
the license implementation and relicensing of over 20 
hydropower projects in California. My first relicensing was on 
PGE's Rock Creek and Cresta Project on the North Fork Feather 
River. At that time, I was teaching high school economics, had 
long been an avid fly fisherman, and had recently taken up 
whitewater paddling. I didn't know anything about the process, 
but I knew that I wanted to help restore the river.
    Before this project was built, the Feather was amongst the 
best cold water fisheries on the West Coast and a tourist 
destination for anglers around the country. Afterward, the 
river became a collection of stagnant ponds connected by a 
small trickle of water. The project's operations reduced the 
river's flows to just between 5 and 10 percent of what they had 
been, devastating the fishery and the local economy.
    Through the relicensing process, we restored flows to 30 
percent of their historical average. The result is that we are 
on our way to restoring this section of the North Fork Feather 
River as a robust recreational and economic resource.
    The reduction in power production to make this happen was 
just 6 percent. From my perspective as a ratepayer and as a 
river enthusiast, the benefits gained are well worth the cost.
    To be clear, getting to these types of positive outcomes is 
not easy. FERC relicensing requires collaboration and 
engagement from all stakeholders. Given that hydropower 
licenses last for 30 to 50 years, it makes sense to take the 
time to get it right.
    There are two key elements that lead to positive outcomes 
in relicensing. First, start with a process by collaboratively 
developing studies about the river and the project. That is 
what the intent was behind FERC's integrated licensing process. 
The information collected informs stakeholders as they make 
challenging trade-offs between resource protection and power 
generation. Federal, State, and tribal agencies request these 
studies in order to fulfill their statutory obligations, but 
often these are denied by FERC or the licensee. Often, studies 
are standard elements of successful relicensings. States in 
particular are then forced to wait until FERC has completed its 
process to request information they need to comply with State 
law, leading to delays that last years.
    The HRC recommends two solutions for this problem. First, 
we recommend that at the beginning of the process, FERC include 
resource agency studies requested in its study plan. Second, we 
recommend that FERC and other agencies develop a memorandum of 
understanding to improve coordination throughout the process.
    Second point. It is critical that resource agencies be 
engaged during the relicensing process and implementation. In 
my experience, when Federal agencies are involved with the 
design and construction of recreational infrastructure, these 
projects come in on budget and on time. When they aren't, the 
opposite is the case. Efficiencies are gained by having local 
land managing agencies that are fully engaged rather than 
projects being managed from DC.
    Additionally, FERC's mandate is in energy production and 
has limited expertise in fisheries, recreation needs, tribal 
concerns, or State water law.
    Additionally, we request that Congress evaluate allowing 
licensees to pay a portion of their relicensing fees that they 
now pay to FERC to the land managing agencies for the direct 
cost of implementing their license conditions.
    Finally, I want to make a quick point about the future of 
hydropower in the context of shifting energy markets. As 
renewable energy technologies continue to increase, it no 
longer makes sense just to focus on generating more electrons. 
As highlighted in DOE's Hydro Vision report from last year, 
hydropower's primary value is in its ability to regulate the 
grid. Often this can be done by maintaining or improving 
environmental or recreational values.
    To this end, FERC can improve their analysis of license 
application to better quantify grid regulation capabilities. It 
is this type of smart operation, combined with environmental 
protection, that are the future of hydropower.
    Thank you to the committee for this opportunity, and I will 
be happy to answer any questions.
    [The prepared statement of Mr. Steindorf follows:]
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    Mr. Upton. Thank you very much.
    Ms. Swaminathan.

                 STATEMENT OF RAMYA SWAMINATHAN

    Ms. Swaminathan. Thank you, Chairman Upton, Congressman 
Peters, members of the subcommittee. Thank you for the 
opportunity to testify before you today on this important 
topic. My name is Ramya Swaminathan, and I am the CEO of Rye 
Development, a member of the National Hydropower Association.
    NHA is a nonprofit national organization dedicated to 
promoting clean, affordable, renewable U.S. hydropower. NHA 
represents more than 220 companies, from Fortune 500 
corporations to small family-owned businesses, and I plan to 
supplement this testimony with additional materials provided by 
NHA.
    Rye Development is a member of NHA, and we are the 
developer of the largest portfolio of new hydro development 
projects on existing dams in the United States. We are also 
developing a 393-megawatt pumped hydro storage project in the 
State of Oregon with an affiliate of National Grid. Our 
conventional hydro projects are located in seven States: 
Pennsylvania, Ohio, West Virginia, Indiana, Kentucky, 
Mississippi, and Louisiana. All of these projects are on 
existing dams, and the environmental impacts are broadly 
acknowledged to be mitigable.
    As this committee has recognized, hydroelectric generation 
is the oldest and most reliable form of renewable generation. 
The headline number for the potential for new hydropower 
capacity on existing dams is compelling. There are more than 
80,000 dams in the United States, and only 3 percent of them 
currently have hydropower.
    The benefits of this form of hydropower development include 
meaningful job creation and all the associated economic 
activity, and importantly, private investment into our aging 
dam infrastructure, which provides structural and ongoing 
operational benefits to the dam owner.
    The timeline for a new hydropower development project to 
reach commercial operation is between 10 and 13 years, which is 
almost unmatched in the power generation space. Federal 
permitting can account for 8 to 10 years of that time. And most 
other energy projects can be built in less than half that time, 
which means that investors in the energy space are effectively 
discouraged from investing in new hydropower generation.
    The Federal permitting regime for new hydropower on Army 
Corps dams--and the Army Corps owns several of the best-suited 
dams for this kind of development--has two major parts: the 
FERC process and the Army Corps process. In our substantial 
licensing experience, the FERC process takes 5 to 6 years, and 
FERC recently piloted a 2-year licensing process. One of our 
projects on the Kentucky River, at Lock and Dam 11, was the 
only project selected for this pilot, and in May of last year 
received its license, marking the successful completion of this 
pilot process.
    We believe that it is possible to shorten the FERC 
licensing process to 2 years for a precisely defined yet 
nationally significant set of projects, making this pilot 
process more broadly applicable.
    Next, to the Army Corps process. The duplicative 
application of NEPA, first by the FERC during the licensing 
phase and then subsequently by the Army Corps triggered by the 
Section 404 permit, is a particular problem for a hydropower 
development, because it affects the water quality standard, 
which for a hydro developer determines the amount of water that 
is available for generation and, therefore, revenue, uncertain 
until the 7th or 8th year of a combined Federal permitting 
process.
    Some ideas we have to address this duplication include 
requiring any Federal agency to adopt the NEPA analysis of 
another Federal agency if it has analyzed the same project 
within a certain number of years. Alternatively, we could 
require that the Army Corps adopt the prevailing State 
standards for water quality parameters applicable to that 
particular project.
    The last substantive point I want to leave you with is the 
idea of public-private partnerships. These projects, new hydro 
on existing dams, are an avenue for the Federal Government to 
attract private capital to invest in its dam infrastructure, 
offering measurable benefit to the Federal Government. The 
benefits of the private investment are that it actually 
reinforces the portion of the dam structure with new 
construction, which is the part that the hydro developer 
builds, and takes over the maintenance obligations for that 
portion of the dam and typically that side of the abutment.
    The Federal Government could recognize the value that 
private capital brings in one of a few different ways. Some 
ideas we have are providing a 20-year standard offer for the 
purchase of power pursuant to published rates for these 
projects, or making them eligible for low-cost financing from 
programs such as the Rural Utility Service. Both of these 
actions would effectively lower the cost of electricity 
produced by the relevant hydroelectric project.
    In conclusion, Rye Development thanks you for inviting our 
testimony on this vitally important subject, and we are ready 
to work with you further to resolve challenges and create 
opportunities. Thank you.
    [The prepared statement of Ms. Swaminathan follows:]
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    Mr. Upton. Well, thank you all. Thank you all for your 
testimony.
    I want to start off my 5 minutes. We are each going to do 5 
minutes of questions, and bounce back and forth.
    Ms. Swaminathan--I don't quite have that right, but I am 
trying--you referenced the 2-year process, the 2-year pilot 
program. And, of course, that was actually legislation that one 
of our colleagues, Mrs. McMorris Rodgers, on this committee 
introduced. It has worked, I think. Would you like to see it 
made permanent? Maybe have each of you comment on that.
    Ms. Swaminathan. Absolutely. And, yes, I think it is our 
belief that the process worked very successfully, and we would 
like to see it adopted to a more broadly applicable set of 
projects, still with certain criteria that would separate them 
for projects that legitimately should be analyzed over a longer 
period of time.
    Mr. Upton. Right. And when you talk about the average is 10 
to 13 years to get a project from start to finish, that 
includes the 2-year pilot project, right?
    Ms. Swaminathan. No. So our experience has been that FERC 
licensing typically takes 5 to 6 years. So when I say 10 to 13 
years, I am including our average, not our exceptional 2-year 
licensing experience.
    Mr. Upton. You also talked about the NEPA changes that 
would be helpful. Have you found in your seven States that you 
are working on that the Corps of Engineers is sort of 
interested--I have a meeting with my Corps of Engineers later 
this afternoon in Michigan--have you found that the Corps of 
Engineers has been particularly helpful in working with FERC as 
relates to relicensing dam applications?
    Ms. Swaminathan. Right. So our experience is in licensing 
new projects. And the Corps and the FERC have recently entered 
into an MOU, which is a step in the direction of constructive 
engagement. We welcome that.
    However, from our perspective, the combined Federal 
permitting process is still not right-sized, even accounting 
for legislative and administrative changes such as the MOU, and 
the water quality standard in particular is a particular point 
of pressure for hydro developers on new dams.
    Mr. Upton. Mr. Steindorf, do you have a comment?
    Mr. Steindorf. Yes. So one thing that is interesting about 
this, if they are reviewing the 2-year process, it also seems 
to me that, what I have heard from a number of developers, is 
the big challenge here is actually hooking their projects up to 
the grid. There is a pump storage project in California from 
Sacramento Municipal Utility District, they had an approved 
pump storage project that they were ready to build, but our 
understanding in talking to SMUD was that it was the $100 
million price tag of hooking that project up to existing 
transmission.
    So some type of process whereby those hookup charges are 
consistent across utilities would be a great place to start, 
because in our discussions with developers, that is probably 
the biggest impediment to bringing those projects online.
    Mr. Upton. Wow.
    Mr. Hookham.
    Mr. Hookham. To counter that concept, we develop a lot of 
projects nationally, and infrastructure like transmission is 
important. We factor it in every decision we make.
    To reiterate some comments that were made earlier as well, 
we are doing duplicative permitting. And simply, we can't 
afford to be out there 8, 10 years permitting projects. That 
just can't happen. I can build a gas plant probably in 3, 4 
years tops.
    Mr. Upton. Two.
    Mr. Hookham. So I am competing with this.
    And from a rate point of view, we have to keep our rates 
low, this is really critical, or it is just not going to fly. 
Then I have to marry that up against regulatory pressures that 
are involved with all of our decisionmaking these days.
    So it is really a tough process that we really want to look 
at permitting to make sure it is in the right light and we are 
protecting the human life, we are protecting our aquatic life, 
but we are also moving forward in doing renewable technologies 
that make sense.
    Mr. Upton. And the renewable issue is something that is 
important to both sides of the aisle.
    Mr. Connolly, you cited in your testimony the competitive 
rates that you have got to have, particularly with natural gas. 
So in your view, I would imagine making this 2-year pilot 
project permanent would be a good thing.
    Mr. Connolly. Well, for Bonneville, we are not subject to 
the same licensing process that my comrades here are.
    I would say on the transmission piece, we do interconnect 
and provide transmission service to folks in our service 
territory, and there are well-established processes for folks 
to get in queue and line up for that and understand what their 
costs and impacts will be.
    Mr. Upton. Thank you.
    I will yield to the acting ranking member of the 
subcommittee, Mr. Peters.
    Mr. Peters. Thank you, Mr. Chairman.
    Ms. Swaminathan, I wanted to follow up on this 2-year 
process. First of all, you described limiting projects that 
qualify for the expedited treatment to objective predetermined 
set of criteria applicable to a large number of projects in the 
pilot solicitation. So what kind of projects didn't meet the 
criteria that you think we should expand to have this 2-year 
process cover?
    Ms. Swaminathan. In particular, the pilot project 
solicitation included a requirement that there be a letter from 
the dam owner saying that the project was feasible, and there 
were a number of dam owners, including Federal dam owners, who 
did not want to provide such a letter so early in the process.
    So our view is that the kind of criteria, objective 
criteria that could be applied that would be useful in limiting 
the projects to appropriate ones and yet opening them to a 
nationally significant number would be criteria such as 
projects on existing dams, no change in storage, no material 
change in hydraulic regimes, that all studies should be able to 
be performed in one season, and that it be accompanied by some 
off-ramps, because sometimes it does happen that you start a 
project and something unexpected is either found or experienced 
in the process of studying the project.
    Mr. Peters. Is feasibility generally an objective 
determination?
    Ms. Swaminathan. I think there was some uncertainty about 
the intent behind the word ``feasibility.''
    Mr. Peters. You mentioned also that NEPA is triggered by a 
water quality issue. Can you explain that to me, a second NEPA 
process?
    Ms. Swaminathan. Yes, absolutely.
    So the developer, when you are developing a new hydro 
project, first goes through the FERC licensing process, by 
which FERC staff applies NEPA, and there is a water quality 
element to that analysis. In addition to the FERC's analysis, 
the developer is also simultaneously going through a State 401 
water quality certification, without which the license cannot 
be granted.
    Subsequent to that, the developer will have to apply for a 
404 permit, which is for dredge and fill activities, and that 
triggers NEPA again, this time by the Army Corps.
    Mr. Peters. But we could require that the previous document 
cover--or studies cover the 404 permit.
    Ms. Swaminathan. I think there are a number of ways to get 
at the same result. From a developer's perspective, the issue 
is the duplication and the potentially different result you get 
from a second process.
    Mr. Peters. Different participants, different commenters, 
yes.
    Ms. Swaminathan. Potentially different studies being 
required, and therefore more money, more time, and more 
uncertainty.
    From a developer's perspective, when you are leveraging 
private capital, a short, certain process is best; a long and 
certain process is financeable; a long and uncertain process is 
really not attractive.
    Mr. Peters. I have a sense that Mr. Steindorf is on to 
something when he says get everyone in at the same time and 
conduct an upfront assessment of what the issues are. You are 
suggesting that the FERC process could be condensed to 2 years. 
Is there any way you could see that the entire process for the 
Army Corps could also be concurrent to that, or does that have 
to follow?
    Ms. Swaminathan. I think the primary barrier to concurrent 
processes at the FERC and the Army Corps is a commercial 
barrier, which is that typically the Army Corps analysis 
happens at a higher level of engineering design, at 60 percent 
and 90 percent, which in the case of a hydro project is 
extremely expensive. Licensing is expensive, but final design, 
which includes the ordering of equipment, major equipment, and 
final engineering design, is even more expensive.
    So, typically, an investor will want to have the certainty 
of knowing that a FERC license is either attainable or has been 
attained before committing to invest to get to the 60 percent 
design or 90 percent design mark.
    Mr. Peters. So you have given us some important testimony, 
all of you, with respect to the obstacles to developing new 
hydro, and those of us who would like to see more clean power 
should take this as a challenge. And it is bad news for us if a 
gas plant can be comparably permitted in a 2-year period and we 
are looking at this being 10 years, the power that we want is 
at a disadvantage.
    So I would like to--I am not going to be able to do it in 
my 5 minutes--but I would like to work with you all to see what 
we can do to achieve high standards in regulation to make sure 
that we cover the issues like the ones that Mr. Steindorf 
raised with respect to resources, but that we get these 
decisions made quickly. And that will also help attract more 
private capital to these projects as well. So consider me on 
that team, and I will look forward to working with you. Thank 
you very much for you being here today.
    And, Mr. Chairman, I will yield back.
    Mr. Upton. Thank you.
    The Chair will recognize Mr. Long for 5 minutes.
    Mr. Long. Thank you, Mr. Chairman.
    And, Ms. Swaminathan, you mentioned earlier that there are 
87,000 dams in the United States, but only--or I think your 
number was 80,000--but only 3 percent of the dams are fitted to 
generate hydroelectric power. I have a couple in my district.
    On the 2016 report from the Department of Energy, they 
recommended that we look at utilizing these nonpower dams for 
hydropower generation, which sounds like what you do. What are 
some of the challenges to this approach? Is it technology 
driven, is it cost, is it licensing process? What are your 
challenges?
    Ms. Swaminathan. Thank you for asking that question. It is 
very important.
    I think we approach it from the perspective of how do we 
attract capital to the field of developing new hydropower in 
existing dams. And from an investor's perspective, as a number 
of participants have said today, the choices effectively 
disfavor hydropower, and it is because of a variety of things 
when you look at the entire playing field. It is partly because 
of the FERC licensing process, it is partly because of the Army 
Corps and the duplicative action of NEPA, which lends itself to 
a combined Federal permitting cycle that is difficult and 
uncertain in terms of its financial challenges.
    And then the last part of what I wanted to leave you with 
was the substantive point I made at the end, which is the 
recognition of the public-private partnership, where there is a 
benefit being added to Federal infrastructure that could be 
recognized and supported by the Federal Government.
    Mr. Long. OK. Thank you.
    And Mr. Hookham, could you discuss the complexity of the 
licensing and relicensing process for hydropower dams, and how 
long does the process take?
    Mr. Hookham. Yes. It is really dependent on lots of 
factors. If it is a high hazard dam and it is in an area that 
needs to be revisited in a more detailed fashion, it may take 
longer. And if there is more interest in a particular habitat, 
like if we find something that is living in the reservoir 
upstream that is a protected species, it may take a different 
strategy.
    Effectively, we have repermitted our hydros as a group, and 
it was more effective for us to do this in a singular step, but 
it still took a long time, and it is a difficult process.
    I don't have a definitive timeline for you. I will say that 
since we have a built asset that is existing, generating 
electricity, it only makes sense for us to try to preserve it 
if we can. It is an economical decision, it makes sense to us. 
It is an existing resource that is renewable. So we look at 
that very strongly against other alternatives.
    At the same time, we are very market driven, and so if that 
cost to relicense that dam is just not effective, or if there 
is a sustainability issue, if there is an environmental impact 
that we don't like, we are going to turn our heads and go a 
different direction.
    It is a simple investment decision. If it is more certain 
and more schedule certain to build something different, we will 
build it. And if it is better for our ratepayers and better for 
our citizens in Michigan or wherever we are building, that 
makes a lot of sense.
    Mr. Long. This question I can ask of either of you, Ms. 
Swaminathan or Mr. Hookham. The American Society of Civil 
Engineers' 2017 Infrastructure Report Card notes that many dam 
owners, especially private dam owners, find it difficult to 
finance rehabilitation projects, as you were talking a minute 
ago. Could you discuss how the Federal grant program can be 
utilized to address dam deficiencies? And that is d-a-m on dam 
deficiencies.
    Mr. Hookham. So, probably the simple answer is, because we 
are a private investor looking at investing in building 
hydropower at that dam, we can come in and revisit all the 
maintenance needs, its age, its risks, its perspectives, and 
invest. When we build the hydropower, typically we will work 
with that private owner. Whether it is a Corps dam or Bureau of 
Reclamation, whatever it is, if we are building infrastructure 
at that dam, we can reconstitute it effectively back up to 
today's standards.
    It is a strong benefit for everybody. Everybody wins in 
that scenario, the risks are reduced, the people that live 
downstream will have higher confidence that that infrastructure 
will last longer, and everybody, theoretically, even the 
ratepayers win, because it is a cost-effective addition.
    Ms. Swaminathan. I agree with that.
    Mr. Long. You are OK with that?
    The report also states that innovative approaches to risk 
management have the potential for seeing the cost of 
rehabilitation go down. Could either of you expand on what 
these approaches are and the extent to which they could lower 
rehabilitation costs?
    Tag. You are it.
    Ms. Swaminathan. I am not a dam safety expert.
    Mr. Hookham. Yes. So dam safety, emergency action planning, 
all those things are benefited by that process. And so 
investments through grants and things of that nature----
    Mr. Long. OK. And, Ms. Swaminathan, how many of these have 
you done where you convert them to hydropower?
    Ms. Swaminathan. We are pursuing 23 projects.
    Mr. Long. Twenty-three. And, again, 80,000 to 87,000, 
depending on who is counting, dams, only 3 percent now are 
fitted to generate hydropower power.
    Ms. Swaminathan. Yes.
    Mr. Long. And you are doing how many again?
    Ms. Swaminathan. Twenty-three.
    Mr. Long. What is the world out there? How many do you 
think could be converted?
    Ms. Swaminathan. Even discounting half of the 80,000 to 
87,000, that is essentially an unbounded supply set.
    Mr. Long. Isn't it extremely difficult to go in and take a 
dam that is not--wasn't hydropower in the first place? Is that 
what we are talking about?
    Ms. Swaminathan. Yes. So, a nonpower dam that was built for 
another essential purpose, navigation, drinking water.
    Mr. Long. Right, yes, but you think half of them could.
    Ms. Swaminathan. We haven't looked in the detail to support 
that, but, you know, I think there----
    Mr. Long. I know, but----
    Ms. Swaminathan [continuing]. Is a significant universe 
of----
    Mr. Long. This is Washington. We are doing ballpark guesses 
here.
    Ms. Swaminathan. Yes.
    Mr. Long. OK. OK. If I had any time, I would yield it back, 
but I don't.
    Mr. Murphy [presiding]. Thank you. I recognize Mr. Pallone 
for 5 minutes.
    Mr. Pallone. Thank you, Mr. Chairman.
    Based on what I have heard from our witnesses today, it 
seems that many of us can agree that there is room for 
improvement in the hydropower relicensing process. The 
licensing landscape has drastically changed in the time since 
many of our Nation's hydropower dams were first constructed, 
and landmark environmental laws have since been passed altering 
the framework by which these projects are licensed.
    I don't want to see this process drag out unnecessarily, 
but I do feel that there are important natural resource 
considerations that must be reviewed and adequately satisfied 
before a dam is given the stamp of approval to operate for 
another several decades. And one of my main concerns during the 
licensing and relicensing process is ensuring appropriate 
consultation with Native American Tribes. Hydropower dams have 
a legacy of great impact on tribal communities, and it is 
critical that Tribes have a voice in the licensing and 
relicensing process.
    So, Mr. Steindorf, I wanted to issue a couple questions. 
You discussed a proposal to grant Tribes conditioning authority 
whereby Tribes themselves would protect their resources rather 
than the Department of Interior. I understand this model is 
used under the Clean Water Act. Can you give us more detail 
about how it would work and why it would speed up the 
relicensing process?
    Mr. Steindorf. Well, in our opinion, we think that Tribes 
having direct knowledge about the lands that they have out 
there, they can provide an important voice within the 
relicensing process. And it really only makes sense to give 
them the same statutory authority that other agencies have, 
given their particular knowledge and interest in those lands.
    Mr. Pallone. Right. And then you--well, let me mention 
this. The integrated licensing process, or ILP, was created by 
FERC as a reform to address problems resulting from lack of 
communication and coordination amongst various State, Federal, 
and Tribal organizations involved in the licensing and 
relicensing process. However, my understanding is that most 
licenses, as many as 90 percent, according to FERC, continue to 
choose the traditional license process.
    So, in your opinion, why hasn't the creation of this 
process, the ILP, been more successful? Why have licensees 
continued to prefer the traditional process? What can be done 
to improve the ILP?
    Mr. Steindorf. I can't really speak to the reasons why 
licensees are choosing to use the traditional licensing 
process. That would be a question for them. I do think that the 
ILP has offered significant improvements in the licensing 
process by setting a set schedule that all the stakeholders 
know when their homework is due and how they have to get it 
done.
    But let's be clear about licensing and why it takes a 
while. A project that I recently completed covered an area 30 
percent larger than the State of Rhode Island. These are huge 
projects covering multiple stream reaches, multiple dams. 
Getting the information that you need necessary to evaluate 
what should happen in each of those individual stream reaches 
takes a significant amount of time. It is important to get it 
right. And the idea that we are somehow not using our time 
effectively is simply not accurate.
    I also think that I would like to reiterate some things 
that were said up here about other projects, particularly Corps 
projects.
    We support, as our other witnesses did, having the Corps 
deal with their own process and really getting FERC out of that 
jurisdiction. Ann Miles also said that from FERC last year in 
her testimony, and that is certainly something that we support.
    And the last thing is I think we do need to look at power 
production, particularly renewable power production as a whole 
and how hydro fits into that. Last year alone--or, I just read 
a report yesterday--wind power this last year surpassed 
hydropower in terms of its total installed capacity. In the 
last 6 months of last year, more wind and solar was brought 
online than what the DOE Hydro Vision report said is 
potentially capable of coming online by 2050.
    So let's put the additional hydropower development 
perspective in line with what is actually coming online and 
being permitted. And that is happening largely because those 
projects can be done with lower impacts than what we are 
looking at with most hydro operations.
    Mr. Pallone. All right. Ms. Swaminathan, did you want to 
comment on any of this with regard to Native Americans or this 
ILP process?
    Ms. Swaminathan. Well, what I can say is that for our 
projects we have chosen the traditional licensing process. All 
our projects are original licenses, meaning they are not 
relicensings, they are for new projects on existing dams. And 
our choice of the traditional licensing process reflects the 
fact that they were generally and broadly acknowledged to have 
mitigable impacts and generally low controversy, which is one 
of the criteria for choosing the TLP.
    Mr. Pallone. I see. All right. Well thank you. It certainly 
sounds, Mr. Chairman, like there are ways we can increase 
collaboration. And I would like to talk to the Republicans more 
about that. So thank you all.
    I yield back.
    Mr. Murphy. Thank you. I now recognize the gentleman from 
Ohio, Mr. Johnson, for 5 minutes.
    Mr. Johnson. Thank you, Mr. Chairman. And thanks for this 
hearing, a really important hearing.
    And let me start with Mr. Hookham and Ms. Swaminathan. You 
know, the Federal Power Act allows FERC to issue a preliminary 
permit to maintain priority of an application for a license. 
The preliminary permit does not allow construction, but it 
allows the applicant to study the site as they prepare to apply 
for their license. While FERC has some discretion to grant 
extensions for applicants acting in good faith to obtain the 
necessary permits and commence construction of a hydropower 
project, Congress often has to step in and waive the strict 
Federal Power Act time limits. In fact, there were nine 
separate hydropower extension bills that were included in the 
energy conference last Congress. Unfortunately, these bills 
were never signed into law.
    So my question to both of you, and you can choose who goes 
in what order, should Congress amend the Federal Power Act to 
give FERC more discretion to extend the period of preliminary 
permits and time limits for construction of a project so they 
don't have to come back for congressional approval?
    Ms. Swaminathan. I think the incidence of projects and 
developers needing additional extensions is actually supportive 
of the overall point that we are making, which is that looking 
at any particular point in this process as being the problem is 
probably not going to solely result in more investment in 
hydropower. It is because there are multiple pain points for a 
developer along the way.
    So somebody gets through the rather extensive FERC process, 
but then there are still challenges to face through the Army 
Corps process, and then ultimately in the commercialization of 
the project. And without knowing the circumstances of the 
specific projects that are asking for extension, I would 
surmise that one of the reasons, one of the common reasons that 
further extensions are needed is because the subsequent parts 
of the process are not falling into place with ease. Because 
when you look at the overall process, we are not caught in a 
virtuous cycle.
    As to the specifics of modification of the Federal Power 
Act, we would have to study that. I don't have a position on it 
at the moment. But I think it supports the underlying problem 
which ripples through the entire process of developing 
hydropower.
    Mr. Johnson. Well, let me rephrase it then. I mean 
disregard the modifying the Federal Power Act. If Congress 
didn't have to come back and approve the extensions, things 
would move a lot faster, wouldn't they? Especially if you reach 
a time limit and you wind up in a partisan situation like we so 
often see here in the Capitol where you can't get the 
legislation through and signed into law. Then it might be a 
problem.
    Mr. Hookham, do you have an opinion?
    Mr. Hookham. Yes. I think maybe just to add to that, I have 
heard other people mention this too, having precise 
understanding going into a project, which the preliminary 
permitting lets us do, lets us screen out projects that don't 
make sense. And it will help us make a decision that will help 
shorten the timeline.
    We really need to focus on the timeline from the time we 
think a project is real to the time it can get permitted to 
have clarity, because that uncertainty is impossible to 
finance, it is impossible to really put the resources together 
to make a project like that work.
    Mr. Johnson. OK. Along the same lines, FERC is generally OK 
with congressional approval to relicense a hydro project that 
did not begin construction within FERC's specified construction 
time, assuming that the congressional relicensing occurs within 
10 years of the original license issued by FERC. So a follow-on 
question. In your opinion, should FERC or Congress allow that 
10-year window to be extended? And why or why not?
    Ms. Swaminathan. I would answer it by saying anything that 
allows private capital to not perceive a cliff coming, and that 
essentially is the problem, which is that you might have a 
project which gets through its licensing, still has some fairly 
sticky permitting to go through with the Army Corps or other 
processes, and as the begin-construction-window end comes 
closer and closer, that project becomes more and more difficult 
to finance even though there may be nothing particularly wrong 
with it. But from a capital perspective, that itself becomes a 
constraint.
    Mr. Johnson. I get it. And my time is about to expire. So 
let me just say this and see if you agree, and it is a short 
answer. Really what we need is efficiency in the entire front 
end of the project. The 10-year window would be less of an 
issue if we had efficiency in the permitting and the 
development up front.
    Ms. Swaminathan. Yes.
    Mr. Johnson. Thank you. I yield back.
    Mr. Murphy. The gentleman's time has expired.
    Now Mr. Tonko, you are recognized for 5 minutes.
    Mr. Tonko. Thank you, Mr. Chair. And welcome to our 
panelists.
    I believe we all want to see more emission-free base load 
energy generation added to our mix, especially if it 
complements intermittent resources. But it must be done in a 
way that is also respectful of other resources, ecological and 
recreational.
    So Mr. Hookham, your testimony states active hydroelectric 
plants have a median age over 55 years old. It seems that there 
is a great opportunity to upgrade performance of existing hydro 
generation. Since the construction of many of these sites 
decades ago, what types of advancements in technology have been 
developed to most improve efficiency?
    Mr. Hookham. So Consumers Energy is in the process of 
relicensing and repermitting and investing in Ludington, which 
is a huge asset to this country. It is a 1,900-megawatt plant 
that is going to over 2,000 megawatts of pumped storage, which 
gives us that energy and storage capacity.
    The efficiencies we are getting are basically to push the 
limits of how much water we can fit through the turbine section 
to generate electricity. There are thermal limits and 
mechanical limits that we are up against. But we have worked 
with the OEMs, and we are working with OEMS virtually every 
time we relicense a dam to see if we can get more out of that 
hydro engine.
    Mr. Tonko. And what is the process for putting the newest 
technologies on these old sites?
    Mr. Hookham. It really varies. And we try to work with the 
original OEM, if they are still in business, to see what 
technologies they brought to the table, using different 
materials like permanent magnets or different seal materials 
that can allow more efficient generation. But we will work with 
whoever.
    Mr. Tonko. And is there anyone estimating how much capacity 
could be added by upgrading and retrofitting these older sites?
    Mr. Hookham. So there is always a transmission limit that 
we have to worry about. But generally speaking, if we can 
generate more electricity efficiently out of a specific site, 
we will do that.
    Mr. Tonko. And what are the regulatory challenges to doing 
these upgrades?
    Mr. Hookham. So I mentioned it earlier. It is an economic 
challenge for the most part, where if we invested a dollar 
today in a new hydro addition or a retrofitted hydropower 
plant, is that worth spending that dollar for our ratepayers 
and our shareholders versus spending that dollar on something 
else? We have to weigh that every time.
    Mr. Tonko. Are there sufficient incentives in place to make 
these investments economically worthwhile?
    Mr. Hookham. It is a long answer, unfortunately, but yes.
    Mr. Tonko. OK.
    And Mr. Steindorf, generally speaking, do retrofits have a 
smaller environmental impact than new constructions?
    Mr. Steindorf. We typically support retrofits on existing 
projects, certainly as opposed to building new ones.
    I personally have been involved in a number of retrofits on 
some existing licenses that I have worked on. And we have 
worked with various utilities, including Pacific Gas and 
Electric Company and others, to not only see that those 
projects get retrofitted, but also to see that they are 
eligible for a renewable energy credit.
    Mr. Tonko. Thank you.
    And Ms. Swaminathan, when you put power generation on an 
Army Corps dam, what responsibilities do you inherit? In other 
words, do you pay, for instance, for dam inspections or 
maintenance? What are some of those responsibilities?
    Ms. Swaminathan. So the Army Corps maintains responsibility 
for dam safety, and they have a fairly developed program. We of 
course participate in that program and are subject to all its 
conditions.
    The developer typically will take maintenance 
responsibility for the portion of the dam that is the new 
construction up to the point of tie-in. Maintenance 
responsibility including for erosion, sedimentation control on 
the abutment side that adjoins the new construction. A lot of 
debris and trash handling is handled through the hydro project 
and its trash racks and debris handling mechanisms. And, of 
course, there are upgrades to existing facilities or 
potentially new facilities, typically recreation, that are 
associated with projects.
    The last point I will make is the applicant or the 
developer also typically will provide electricity to the dam 
facility itself.
    Mr. Tonko. OK. And I take it that partnership works rather 
well?
    Ms. Swaminathan. Yes.
    Mr. Tonko. Great.
    And for the 2-year licensing process to work as intended, 
how important was it to provide all the necessary info and 
study requests at the beginning of the process?
    Ms. Swaminathan. It is important for all sides to have a 
clear understanding of what both is needed, the characteristics 
of the existing condition, the characteristics of the proposed 
condition, and to adhere to timelines that are clear to all 
involved. So we would be supportive of a process that included 
all that.
    Mr. Tonko. OK.
    Mr. Chair, I will yield back.
    Mr. Murphy. Thank you. The gentleman yields back.
    And I will recognize myself for 5 minutes.
    So I wanted to ask you about your project because you have 
one near my district. In Charleroi, Pennsylvania, a lock and 
dam is being rebuilt. These dams are over a century old. As I 
watch it being rebuilt early on, we would note that the lock 
was so old that when water went in and out the concrete shifted 
a little bit. So it is much more stable.
    And so Rye Development is developing this conventional 
hydropower plant in Monongahela Lock & Dam number four in North 
Charleroi, Washington County. I was just reading over some of 
the list of permitting. It is pretty massive, as it should be. 
This is a big project.
    But I am curious here, the timeline for hydropower 
licensing, how does that compare to acquiring permits for 
example for other renewable energy projects like wind and 
solar? And what benefits does hydropower have to offer that may 
be complementary to other renewable energy resources?
    Ms. Swaminathan. That is an important question.
    So, relative to other renewable resources, and even 
relative to other fossil resources, hydropower generation's 
permitting cycle is almost unmatched. So you can put up a solar 
project in 9 to 12 months, a wind project in maybe 2 to 3 
years, a gas plant in probably a similar timeline, 2 to 3 
years. And a combined permitting process for non-Federal 
hydropower on Federal facilities is close to 10 years. It is 
between 8 and 10 years. So that disparity in timelines 
effectively discourages investment into non-Federal hydropower 
development.
    And to answer the second part of your question, the 
importance of hydropower, certainly it is a clean, renewable 
form of generation, it has associated job creation and 
associated economic impact. And we talked about public-private 
partnerships and the potential for these projects to bring 
benefits to the dam owner.
    But in addition to that, and I believe a number of parties 
here have spoken about it today, hydropower adds a significant 
amount of reliability and stability to the grid, which actually 
also benefits intermittent sources of power such as wind and 
solar. And that needs to be recognized.
    Mr. Murphy. Let me read over some of these things with this 
permitting process. I am reading here from the Pennsylvania 
bulletin alone, is that we are dealing with ``discharge 
permits, erosion and sediment control permits, water 
obstruction encroachment permits, submerged land license 
agreements, water resources planning and registration, limited 
power permits, water quality monitoring, preparedness 
prevention and contingency plans, operations inspections, 
transfer projects, correspondence''--they even tell you who you 
have to write to. Quite a few things there with that. And you 
said in your testimony that there are redundancies--that was 
just some of the State ones, too--between the processes that 
happen with FERC, Army Corps of Engineers permitting. And you 
suggested NEPA should only be applied once during the 
construction.
    So can you get at some details of this as to how, on an 
Army Corps of Engineers-owned dam, how would that Federal 
permitting process benefit with less duplication?
    Ms. Swaminathan. I think it could be streamlined and 
increase coordination among all the participants. It would 
certainly benefit the overall timeline and bring investors to 
the table to invest in this sector. But I think it also would 
benefit some of the stakeholders who are going through some of 
the these duplicative processes and going through multiple 
permitting processes for the same project in having to review, 
comment, and provide studies and study requests multiple times 
along the process.
    Mr. Murphy. It is fascinating to me because through that 
lock and dam passes millions of tons of coal. There is a barge 
manufacturing company just upriver that sends barges downriver. 
We have natural gas. And so the supplies for fracking go 
through there, so it is really quite an energy hub.
    Do any of the panelists--perhaps I will let you speak on 
this--but, given that many American dams have exceeded their 
design life, where do you see modernization fitting in with 
regard to the President's plan and discussing infrastructure 
development and the private sector? Anybody want to comment on 
that?
    Mr. Steindorf, go ahead.
    Mr. Steindorf. Again, I think it is really important to 
recognize the importance that we have seen with hydropower, 
which is its grid-regulating capability. So, increasingly, we 
are in a situation where, believe it or not, we are awash in 
electrons out there. Curtailment of wind and solar projects in 
California is becoming a reality. And those developments, 
again, are happening across the United States, with Texas and 
Oklahoma leading the way in wind, and places like California 
leading the way in solar.
    It is not a question of enough energy out there, it is how 
do we regulate the grid. So really specifying and using hydro 
to its highest potential, rather than really specifying that we 
want to have more base load generation, I don't think that is 
what we actually need at this point.
    Mr. Murphy. I know many in that area who think the EPA's 
regulations, they shut down two power plants within a few miles 
of this one being proposed down there. Put a lot of people out 
of work. But you are right, we need to find out how we 
modernize the grid and be more efficient with that.
    But I see my time is up. And next is Mr. Schrader. You are 
recognized for 5 minutes.
    Mr. Schrader. Thank you very much, Mr. Chairman. I 
appreciate the panelists for being here. A great group to get 
some insight from.
    Mr. Connolly, I want to thank you and BPA for doing such a 
great job of providing low cost power to the entire Pacific 
Northwest, and a great regional compact that I think other 
areas of our great country would like to emulate. We are very, 
very fortunate. And I want to thank you for the great work that 
you do.
    We spend a lot of money making sure that we meet our 
requirement to make sure there is equal consideration to fish, 
wildlife habitat preservation on our dams. You guys spend a lot 
of money. How much money do you spend for fish protection and 
restoration right now in the Bonneville footprint?
    Mr. Connolly. Thank you, Mr. Schrader. About 30 percent of 
our rates go into our fish and wildlife mitigation program. And 
then there is also another fraction of the Corps' and Bureau's 
O and M costs that is tougher to break out. You could say 
probably over a third of our costs are related to fish and 
wildlife.
    Mr. Schrader. Wow that seems like a pretty high number. Is 
that common through most utilities and power generating 
facilities, they spend that much on mitigation of habitat and 
wildlife?
    Mr. Connolly. I would have to defer to the other folks here 
about fish and wildlife costs that they face. We do believe 
that we have one of the largest programs in the country, if not 
the world.
    Mr. Schrader. Is the ratepayer aware of how much of their 
rates go toward--30 percent of the rates they pay go towards 
that?
    Mr. Connolly. I know certainly our power customers are 
aware, and I believe they talk to their ratepayers about it.
    Mr. Schrader. I don't see it on my bill. I guess I would 
like to see it on my bill. Some would like that. Maybe that is 
a huge success that you are spending that much money. And we 
are getting some success, aren't we, as I recollect. Fish 
passages, especially downriver, what is it now?
    Mr. Connolly. Certainly, we feel like we have made 
significant progress under the programs we have in place to 
have survival of juvenile fish moving past the dams and 
returning. Just last week, the Federal agencies released a 
comprehensive evaluation on our progress for salmon and 
steelhead that we think shows significant progress that we are 
making in the area.
    Mr. Schrader. I heard some figures, at least the fry going 
downriver are some 90-plus percent survival rate. Is that 
accurate?
    Mr. Connolly. That is right. It depends on the species, but 
yes.
    Mr. Schrader. Sure. I would call that a success. I am 
surprised that we are having problems getting our biological 
opinion through a certain judicial group here in the great 
Pacific Northwest. That would seem like an unqualified success. 
Wouldn't you agree, Mr. Steindorf, having that sort of passage 
downriver is pretty good for an anadromous stream of that 
caliber.
    Mr. Steindorf. Anadromous fish passage is good. I believe 
we support that. But let me give an example from my testimony. 
The Rock Creek-Cresta Project that I first started working on, 
back in 1947 the U.S. Fish and Wildlife Service recommended a 
minimum instream flow of about 400 CFS on that project. Because 
there wasn't the equal protection clause in the Federal Power 
Act, the ultimate flow that they ended up deciding on was 50 
CFS for one project, 100 CFS for the other. As I said in my 
testimony, it completely devastated that river and that 
recreation economy.
    Mr. Schrader. I have short time. I am sorry. You also said 
you were able to restore a lot of that. It adds to your credit 
and the work you did. And I think Bonneville and many others 
are working along that line.
    Can I switch to Ms. Swaminathan? I am sorry. I had to step 
out. You talked, I am sure, about your pilot project and the 
success you had. What agencies objected to the shorter 
timeline? What outside groups were upset with what you did?
    Ms. Swaminathan. It is good to see you again, Congressman. 
Actually, we had no objections. So I think one of the successes 
of the 2-year process was that the stakeholder agencies bought 
in. And it was an extremely collaborative process.
    Mr. Schrader. So for certain projects that are very 
contained, that don't have the fish passage issues maybe that 
we were maybe just talking about, there certainly seems like 
there is an opportunity, if no one objects, to a shorter, 
clearer, nonduplicative timeline.
    Ms. Swaminathan. That has been our experience.
    Mr. Schrader. Very good. Very good.
    Back to Mr. Connolly. In your testimony, you talk about 
concerns with regard to scheduled investments and not being 
able to recoup opportunities in those areas. Could you 
elaborate a little bit on that?
    Mr. Connolly. Well, certainly with the litigation that we 
face currently, there are motions for injunctive relief to stop 
investments in a number of the dams. And we are concerned about 
those from a reliability, safety, and in fact environmental 
performance of the facilities. Loss of generating equipment in 
an uncontrolled manner presents all kinds of----
    Mr. Schrader. What would that do to the ratepayers 
potentially?
    Mr. Connolly. Well, certainly stopping that work would 
have--needing to cease capital projects would force us more 
than likely to have to expense those costs. So that would be an 
immediate hit to ratepayers, in addition to the lost generation 
that would occur from having units out of service.
    Mr. Schrader. Great. Thank you all very much.
    And I yield back.
    Mr. Upton [presiding]. Thank you. Mr. McKinley.
    Mr. McKinley. Thank you very much, Mr. Chairman. I am 
sorry, I missed a lot of the testimony because I was upstairs 
in another one, another meeting on this. I heard some of the 
comments. And when I read Ms. Swaminathan--am I close?
    Ms. Swaminathan. Yes.
    Mr. McKinley. And since I arrived here, there have been 
several other questions along this idea of this timeline of 
approvals. And I thought I was just confused because of the 
last response you made that perhaps some hydro can be shorter.
    Ms. Swaminathan. Right. So I think the last question that 
Congressman Schrader was asking me was about a pilot process 
that FERC set up pursuant to the HREA passed in 2013, where 
they were directed to have a 2-year licensing process as a 
model, as a pilot to see if it was possible. There was a 
solicitation, and our project on Kentucky Lock and Dam 11 was 
the only project chosen nationwide to be in that pilot process.
    Mr. McKinley. So have the projects that you have in mind in 
Morgantown, Cumberland, and----
    Ms. Swaminathan. Opekiska.
    Mr. McKinley. Opekiska. How long have they been in the 
pipeline?
    Ms. Swaminathan. So we are awaiting licensure on Opekiska 
and Morgantown, and we have been working on those projects 
since 2010 to 2011.
    Mr. McKinley. So it has been 5 to 6 years.
    Ms. Swaminathan. Yes.
    Mr. McKinley. It just begs the question. Everyone in 
Washington is interested in renewables. Why something like 
hydro would go 7 to 10 years or longer, as compared to solar 
and wind? I don't think you kill any birds, do you? OK. And I 
don't think you create any sound problems that people have with 
wind. Personally, I love wind. And I am fascinated with the 
solar panels. But I don't know why the hydro facility would 
take so long.
    So can you give me some perspective on why you think 
government drags out the permitting for hydro facilities? 
Because surely they understand the impact they have on--
eventually they are going to approve them, and they have an 
impact on people's economy in those communities. Look at what 
is happening to Martinsville. They were able to build a new 
courthouse and school building down there. Why is this?
    Ms. Swaminathan. Absolutely. We couldn't agree with your 
question more. I think it points to the need to modernize a 
process that is potentially antiquated and does not distinguish 
between projects that have potentially legitimate issues or 
need analysis that spans many years.
    But the kinds of projects that we work on, including 
Morgantown and Opekiska, by and large have relatively limited 
impacts, both hydraulic and terrestrial. The physical footprint 
is very small, and the hydraulic impacts are very limited. And 
I think that is fairly broadly acknowledged, as evidenced by 
the fact that typically stakeholders in our licensing process 
don't generate a lot of controversy. I think there is a fair 
amount of collaborativeness in the process. However, it does 
stretch out for a very long time.
    Mr. McKinley. Joe Barton and I are the only two licensed 
engineers in Congress. So this is something that I have been 
fretting with for 40-some years in my practice in engineering. 
And that was why our dams, our low head dams, why we are not 
using low head turbines on every one of them.
    So is it bureaucracy that is holding it up? Why don't we 
have more?
    Ms. Swaminathan. Well, we don't have more of these across 
the board because when you look at the entire playing field for 
new hydro development on existing dams relative to other 
generation sources, investors look at this playing field and 
the timeline and the fact that the risks are not sequentially 
taken off the table effectively discourage investors from 
investing in hydropower.
    Mr. McKinley. So in the 50-some seconds, what would be the 
first step you would take to shorten the timeframe?
    Ms. Swaminathan. So I think in terms of the FERC licensing 
process it is possible to adopt that pilot 2-year process, with 
some cleanups and tweaks, to be more applicable to a precisely 
defined but nationally significant group of projects and make 
that more applicable.
    All of these projects, including Morgantown and Opekiska, 
on Federal facilities, on Army Corps facilities go through 
additional permitting by the Federal Government at the Army 
Corps. And some part of that is absolutely essential. But there 
are parts of that process that are duplicative, and 
importantly, from private capital's point of view, leave 
unresolved very important parameters until very late in a 
combined permitting cycle.
    And finally, I think there is space for the Federal 
Government to recognize the value of public-private 
partnerships, because these projects are ways to bring private 
capital to invest in our aging dam infrastructure.
    Mr. McKinley. Thank you very much. I yield back.
    Mr. Upton. The gentleman's time has expired. The Chair will 
recognize the gentlelady from Florida, Ms. Castor.
    Ms. Castor. Well thank you, Mr. Chairman. Thank you for 
calling this hearing. And thank you to our hydropower experts 
for being here and being willing to share your expertise with 
us.
    Very interesting, because hydropower continues to be an 
important component of how we generate electricity in America. 
And I think you have heard from a number of our colleagues here 
that we have got to do more to incentivize clean energy. And it 
is not so simple sometimes as saying, boy, let's put all of our 
eggs in one basket or not. We can't do that. We have got to 
continue to be as diversified as possible.
    Coming from the State of Florida, where we really don't 
have hydro, we don't have a lot of dams, I am still very 
interested in how we incentivize clean energy, including hydro. 
Because my State, as most communities in the country, we are 
facing significant rising costs due to the changing climate. 
And we know we have got to do more in the clean energy sector, 
including hydro.
    So I have heard you all mention a number of challenges here 
today, how we modernize the grid across the country and get 
these clean power sources connected to the grid. I have heard 
you talk about incentives and some regulatory relief as well. 
Mr. Steindorf, California is often the national leader when it 
comes to clean energy. You have a very bold renewable portfolio 
standard. You have a wide mix of energy sources. Can you help 
us prioritize a few of these from the--knowing that at the 
Federal level we can put certain incentives, whether it is tax 
incentives or regulatory relief or funds into modernizing the 
grid from the Federal perspective, help us prioritize how we 
bring more clean energy projects, including hydro, to the 
benefit of consumers.
    Mr. Steindorf. Well, believe it or not, you know, some of 
the things that need to be done aren't actually at the Federal 
level. You know, again in the hydro vision report that was put 
out by DOE last year said that one of the issues is that 
utilities are not properly compensated for their grid-
regulating services that they provide. Might surprise my 
colleagues that I am actually advocating for the fact that they 
get paid more for the services that they do provide out there. 
But I think that is significant.
    So, if you want to incentivize those types of projects that 
actually provide those important services that allow you to 
bring wind and solar onboard, which is coming onboard at, 
again, ever-increasing rates, that is important, with the 
caveat that we are able to do that in ways that are 
environmentally protective.
    I am working on a project right now in Northern California 
where we have actually done that. We have done the analysis, 
which again isn't an analysis that FERC typically does, where 
we have shown that we can actually increase the grid-regulating 
services that the project provides while increasing stream 
flows. Now, that is a win-win that we should all be pursuing 
out there. And there are a number of different ways we can do 
that by looking at existing facilities and find ways to give 
them more flexibility.
    Also in my backyard is another project that PG & E, after 
spending $30 million during relicensing, has just said that 
they would like to hand over that project to anybody who wants 
to take it. Now, part of the problem there is that that project 
just doesn't have that grid-regulating capabilities.
    And the other part is that, because of community preference 
aggregation, utilities can no longer pass along the cost of 
noneconomic projects to the ratepayer. So part of this 
discussion really needs to be about what are we going to do 
with those projects that are no longer economic, some of these 
projects that are a hundred years old and they just don't fit 
in today's energy mix? That is going to be a big situation that 
we need to grapple with, because the last thing we want is to 
have a bunch of outdated unused energy infrastructure sitting 
the on the landscape.
    Ms. Castor. So Mr. Hookham, how would you answer my 
question on priorities from the Federal level on grid 
modernization, incentives, tax incentives included in 
regulatory relief?
    Mr. Hookham. We have talked a lot about wind and solar. 
They are great attributes, clean energy sources, but they are 
intermittent. They don't operate all the time. And a lot of 
times, as was pointed out earlier, they fluctuate quickly. We 
need to have storage capability. That is a huge component. PGM 
has proven that that has worked for them in their ISO grid 
section that they have introduced fast frequency regulation. 
That is great, because we can then ramp up quickly resources 
that exist so we can bring in more renewables.
    And if you look at countries like Germany, the research 
they have done in other countries where they ramped up their 
clean energy, they really have some stability issues going on. 
And part of that is just that, there is no storage. There is no 
ability to offset those penetrating intermittent renewables 
that exist.
    So, you know, I hesitate against saying an RPS from a 
national point of view because one size fits all doesn't work 
with me personally. And I think we need to look at what incents 
us as a utility to build more clean energy, as opposed to 
market conditions which may incent me to build more gas.
    Ms. Castor. Thank you. I yield back.
    Mr. Upton. The Chair would recognize the senior Mr. Barton 
versus the good-looking Barton junior.
    Mr. Barton. Well, I have to admit, Mr. Chairman, that he is 
a lot better looking than I am, and he is a lot smarter than I 
am, and he is also a lot more attentive than I am. Although as 
soon as he got here, he asked how long it was going to last.
    Mr. Upton. The gentleman is recognized for 5 minutes.
    Mr. Barton. I appreciate that. I do want to point out, Mr. 
McKinley indicated that he and I are both registered 
professional engineers. I was at one time a registered 
professional engineer, but I am not currently licensed. I don't 
want to get the Texas State Board of Professional Engineers all 
upset.
    Mr. Upton. Your $125 would be good, though.
    Mr. Barton. I should get on the stick and get relicensed, I 
admit to that.
    I appreciate Mr. Chairman holding this hearing on our 
hydropower sector of the energy sector of our economy.
    I have got two basic questions. My first question: Do we 
have the capability still in this country to build brand-new 
hydropower projects, given all the complexity of the 
environmental regulations that are now in place? Anybody. Ms. 
Swaminathan?
    Ms. Swaminathan. Thank you.
    Mr. Barton. How close was I? Not at all?
    Ms. Swaminathan. Very close.
    Mr. Barton. She is going to go far.
    Ms. Swaminathan. I think we certainly have the technical 
capability. I think what holds us back from having more 
hydropower development on existing dams, the kind of 
development that Rye Development does, is really when investors 
look at the entire landscape, what they see is a pretty 
forbidding chain of an extremely long process that leaves risks 
open until relatively late in the process.
    And then combined with a number of things that my fellow 
witnesses have talked about, the prevailing price of 
electricity, the lack of recognition for the qualities that 
hydropower brings in terms of grid reliability and stability. 
Those all make for a challenging business environment. But I 
think when you put both of those together, if you are an 
investor you have choices. And I think the collective challenge 
here is to make this as an investment proposition more 
attractive relative to what investors could otherwise invest 
in.
    Mr. Barton. I guess I will ask a more general question, and 
everybody just give a brief yes or no answer. Will we ever 
build another major hydropower project in the United States? 
Mr. Connolly?
    Mr. Connolly. That would be tough. Perhaps. Storage has 
value, but it is going to be a long climb.
    Mr. Hookham. There are opportunities, but it is a long 
proposition, and I can build a battery storage project that can 
inject faster than I can build some hydro projects, so probably 
not. As an investment point of view, I don't have that 
incentive.
    Mr. Steindorf. And I would say with the exception of there 
is some potential with pumped hydro, and as I said earlier with 
the increase in wind power, which this year exceeded the entire 
installed capacity for hydro, with your State leading the way, 
the short answer is no.
    Ms. Swaminathan. Our average project size in our portfolio 
is 12 megawatts. And there are 23 projects. But obviously from 
an energy perspective, those are small projects. So in terms of 
major projects, the way we get to scale is to accumulate 
projects in clusters.
    Mr. Barton. These big wind turbines, aren't they about 12 
megawatts?
    Ms. Swaminathan. One turbine.
    Mr. Barton. Yes. In the 2005 Energy Policy Act that passed 
this committee, we, at some point in the process, tried to make 
the FERC the lead agency for hydropower. We weren't able to 
make that happen. But this is a new Congress.
    We have a new subcommittee chairman who is very 
experienced, a new full committee chairman who is a proponent 
of hydropower, and a few old goats like me that are still 
around. Is that something we ought to make another run at?
    And again, we will just start with Mr. Connolly.
    Mr. Connolly. As a Federal PMA, we are not as exposed to 
FERC, so I am going to defer to the rest of the panel.
    Ms. Swaminathan. So, you know, the majority of our projects 
are on Army Corps dams, so we are subject to FERC licensing and 
then the Army Corps processes. I think each part of the process 
has some virtues and essentiality, and each part of the process 
has some real challenges.
    So the virtues of the FERC process, setting aside for a 
moment that it is very long, are that it is clear, it is set up 
as a process with clearly defined steps. FERC has some open 
dockets, so you can look at other dockets and refine your game 
as a developer or potentially as a stakeholder. The Army Corps 
process' virtues are, for one, for projects on Army Corps dams 
it is absolutely essential, to make sure that the hydropower 
project doesn't interfere with the dam structure.
    However, I think the Army Corps process comes with its own 
challenges. It is duplicative when it comes to NEPA, it can 
become opaque. It is variable across different regions of the 
country and districts. And so what we would like to see is a 
solution that addresses all parts of that chain with respect to 
regulatory modernization.
    Mr. Barton. My time has expired, Mr. Chairman. Thank you.
    Mr. Upton. Thank you, Mr. Barton and Mr. Barton. The Chair 
will recognize the gentleman from the great State of Michigan, 
Mr. Walberg.
    Mr. Walberg. Thank you, Mr. Chairman, from the great State 
of Michigan.
    And Mr. Hookham, good to see you here. We are proud of CMS 
Energy in Jackson, Michigan, and appreciate what you provide. 
In fact, I stepped out to meet with the mayor of Jackson for a 
little bit here and one of his city council members.
    I spent a lot of wonderful time below hydro project dams 
fly fishing myself. Either Tippy dam in Michigan or the Bull 
Shoals dam and hydro project in Arkansas on the White River. 
And some of the greatest fish stories of my life have developed 
from those spots at the end of my fly rod. But I also know that 
there is a significant power potential.
    And so Mr. Hookham, I would like to ask you what reforms 
could the Congress undertake to help ensure that this clean 
source of energy remains cost competitive in today's markets?
    Mr. Hookham. I think the short answer is we need less 
governance. We need maybe a more concise approach. So, if you 
could find out a way to reduce or collaborate between State and 
Federal and reduce the number of parties that are involved in 
the process and focus it so that the parties to a license are 
clearer, and they have clear objectives, and we understand 
where they are headed, it will add a lot of clarity to us to 
invest. Because right now the uncertainty is really a problem.
    Mr. Walberg. That is the key. Anything else?
    Mr. Hookham. No.
    Mr. Walberg. Give me hope. Talk about getting government at 
all levels to work together, that is a challenge. But I am 
delighted you said that. At least it tells us where the 
bottleneck is.
    Mr. Hookham. The other part is the market side of it, 
because we are in a situation as a regulated utility where we 
buy and sell power through an ISO that was set up through FERC. 
So we have an opportunity to make revenues through cost 
efficient generation, but also to have to buy that power back 
for our constituents. So it is a very tight market in terms of 
making profits as an investor-owned utility, and at the same 
time keeping our rates down, because that is really what we are 
all about.
    And also managing the sustainable piece of being an 
environmentally friendly company. So we live in a really 
difficult world. So the less wires or nooses around our neck, 
the better off we are going to have a path forward.
    Mr. Walberg. Good admonition. Any of the rest of you want 
to add to that?
    Ms. Swaminathan. I would just like to chime in on the 
commercial aspects of this. We are in a different position 
because we are funded by private capital, which is a different 
source of capital and a different pool with different 
constraints and different return thresholds than a regulated 
utility.
    So, certainly, we support regulatory modernization across 
the whole range of regulation that we face. But low cost 
financing through some of the Federal instruments that can do 
that, as well as potentially a Federal standard offer that 
would provide certainty pursuant to published rates would be 
measures that the Federal Government could adopt that would 
significantly galvanize private investment because they would 
provide certainty on the market side.
    Mr. Walberg. Yes.
    Mr. Steindorf. One thing I was going to recommend that we 
put in our testimony and that our coalition has been actively 
supporting is the developing of MOUs between FERC and State 
water agencies, particularly those with section 401 authority.
    What we worked on and what I personally worked on in 
California was an MOU that made that process happen in 
conjunction with the ILP process rather than happen in series. 
And this is something that we really learned after going 
through a round of relicensings, where after the ROP would 
finish, then the State board would take up their process.
    Having those both happen concurrently is a great idea, and 
really it is the way to ensure that these happen in a timely 
manner. And it is a far better answer than having FERC taking 
over State water law, which is something that is not supported 
by the National Governors Association.
    Mr. Walberg. Right. Or many of us in Congress as well. Mr. 
Connolly, did you have--I saw your hand reaching out.
    Mr. Connolly. I guess the only thing I was going to say is 
the investment projects that we look at on behalf of our 
customers tend to be very economic in the long haul. But I 
would echo the comments about the current market conditions and 
the ability for hydro to be compensated for the services it 
does provide to the grid.
    For Bonneville being a not-for-profit entity, those 
benefits where they compensated, those would go back into 
driving down the rates of our customers and to enable us to 
continue to provide the services that Congress has asked us to 
provide to the region. And so, both of those are of course very 
important to us.
    Mr. Walberg. Thank you.
    Mr. Upton. Thank you. The Chair will recognize Mr. Griffith 
for 5 minutes.
    Mr. Griffith. Thank you very much, Mr. Chairman. Thank you 
all for being here today.
    Mr. Hookham, in your testimony you discuss the great 
potential for additional development of pumped storage 
hydroelectric generation on pages six and seven. In particular, 
you note opportunities for these facilities at abandoned mine 
sites. Representing a district in coal country in southwest 
Virginia, this is welcome news.
    And so we are looking for ways that we can promote economic 
development in our communities and help out, particularly when 
we can reuse some of our abandoned mine locations. In fact, the 
Virginia Department of Mines, Minerals, and Energy had put 
forward such a proposal for the Department of Energy's 
HydroNEXT grant, which funds innovative projects such as this. 
In particular, the sites that are being considered in southwest 
Virginia are especially attractive since they use clean, 
nonacidic water for use in the system. While they were not 
chosen for this round of grants, I am hopeful that DOE and 
other agencies will see the importance of supporting these 
types of projects.
    So here is my question to you, and others may want to jump 
in: Can you expand on what you see as the potential for pumped 
storage hydro, particularly for abandoned mine sites, and 
discuss what regulatory barriers you think we need to address 
to streamline these sorts of projects?
    Mr. Hookham. So we are always looking to take advantage of 
what we call brownfield sites, sites that were used for 
something else that we can reuse for a better use. So like 
landfills with solar caps makes perfect since to us, so we can 
cap over and protect the environment and at the same time 
generate electricity.
    A mine site is a classic example where we can create 
vertical head, where we have got an opportunity to use a pool 
that potentially is underground, contained, not contaminating 
groundwater, with a good clean source of water, and then be 
able to pump that back up and reuse that power on both sides. 
It makes a total amount of sense, particularly where we can 
align that with demand and where the grid infrastructure 
supports it.
    So, in an opportunity where there is a mine site where we 
have power lines and everything else aligned, I think we need 
to really take a close look at this.
    Mr. Griffith. Regulatory burdens or barriers that we may 
need to move aside?
    Mr. Hookham. I would say it is the old first of a kind 
mind-set. We have to be careful what we are doing. So, 
environmentally, we have to look and see if there is any 
impacts, because we don't have a lot of those investments right 
now.
    So I think we have to do a little homework. We have to do 
that prescreen to make sure it is a viable approach, but I 
think it should be done right away as part of this research 
mind-set we need to take on.
    Mr. Griffith. OK. Anybody else want to touch on that 
subject?
    Mr. Steindorf. One thing that I think, again looking at the 
perspective of the energy landscape, a lot has been said today 
about if an investor looks at a project like this, they have to 
look at what are the other alternatives. To be honest, we have 
been somewhat surprised that there hasn't been more interest in 
pumped storage given the need for good regulation, et cetera.
    However, it needs to be said that if you are an investor 
looking at other storage technologies that are being developed 
right now, do you want to spend a billion dollars on a pumped 
storage project that could easily be leapfrogged by some new 
battery storage technology that is in the near future? I think 
that is the question.
    And in terms of pumped storage, we think it is possible to 
site them correctly. But I think you need to acknowledge the 
reality that that are other technologies that are being 
developed that may be better answers.
    Mr. Griffith. And then you--yes Ms. Swaminathan.
    Ms. Swaminathan. If I can chime in on that, we are 
developing a project in the State of Oregon, which is a sizable 
pumped storage project. The challenge on pumped storage has 
been on the market side, on the commercial side, which is that, 
you know, the conventional wisdom is that you can arbitrage on-
peak and off-peak power.
    In an environment of very depressed prices, that is very 
difficult. And the capital costs of pumped storage are very 
high, because they tend to be sizable projects. And so, what we 
would like to see is movement on the market side. How do you 
pay for pumped storage in recognition of all the grid benefits 
that it gets? Not just the generation.
    Mr. Griffith. I appreciate that. And then we had some 
conversation earlier about the length of time in getting these 
projects approved, and we do note need to cut that.
    I have two dams proposed already in my district for some--
small dams, small projects, but it is taking a long time to get 
everything done. And we need more time to do it. I also should 
bring up that I have got a little bill coming in, because a lot 
of these larger projects were sold to the public as you also 
have recreational facilities. And yet FERC has been very 
aggressive in some of our lakes in our areas in telling the 
property owners on the size of the lakes what they can and 
cannot do.
    I do not know the laws of other States, but as a trained 
Virginia lawyer, although like my friend Mr. Barton, I am no 
longer practicing, but I think there are also some taking 
issues. But one of the things I think we need to work on is 
making sure that FERC considers that usage and considers the 
property owners on the size of the lakes as well.
    My time is up, so I am going to have to yield back. But we 
will keep that in mind. Thank you so much for your time today. 
And I yield back, Mr. Chairman.
    Mr. Upton. The gentleman yields back. The Chair would 
recognize the senior Mr. Mullin for 5 minutes.
    Mr. Mullin. Thank you. And thank you for allowing me to 
have my oldest son sit up here with me. It is his spring break. 
I don't know why he would rather come here than Disney World, 
because his other siblings went to Disney World. You didn't 
know that, did you? No, I am kidding.
    As we are wrapping up this hearing, and I appreciate the 
chairman for bringing it to our attention, hydropower is 
extremely important to our State. In the eastern part of the 
State where I represent, we have a tremendous amount of water 
and hydropower. And forgive me, ma'am, if I mess your name up, 
but is it Ms. Swaminathan?
    Ms. Swaminathan. That is right.
    Mr. Mullin. I said that right? Wow. That is a first. 
Anyway, I appreciate you being here. I have a couple questions. 
One, your company has the largest portfolio of hydropower, 
right?
    Ms. Swaminathan. Of development projects.
    Mr. Mullin. Of development projects. Right. So why aren't 
there more companies like yours?
    Ms. Swaminathan. That is a question we ask ourselves all 
the time. I think that when you are looking at companies like 
ours who leverage private capital, investors in the energy 
space have lots of choices. They can invest in hydropower, they 
can invest in wind, solar, fossil fuels, potentially 
geothermal, et cetera.
    So, what is important to look at from an investors' point 
of view is the totality of the attractiveness of that 
investment proposition. And what they see in general terms when 
they look at hydropower is a very long process that not only is 
long, but leaves unresolved many important parameters until 
very late in the process, which is difficult.
    Mr. Mullin. What is a long process?
    Ms. Swaminathan. So the combined Federal permitting process 
for non-Federal hydropower development on Army Corps dams can 
extend as far as 10 years.
    Mr. Mullin. For just the permitting process. That is before 
you even start the project?
    Ms. Swaminathan. Yes.
    Mr. Mullin. And then the project length is?
    Ms. Swaminathan. The construction cycle, our average 
construction time for a project on an existing dam is anywhere 
from 12 months to 2, 2\1/2\ years, depending on the size and 
the complexity of the project.
    Mr. Mullin. So you are talking about 11, 12 years before an 
investor would even be able to start seeing a return?
    Ms. Swaminathan. Yes.
    Mr. Mullin. How do you even raise capital? I am serious. I 
mean, I used to invest quite a bit. We kind of have restraints 
now that we are in office. There is no way. That is a long way. 
So how do you do that?
    Do you have a certain group that you go after? Because 
hydropower is something that is sustainable for us. It is 
clean. It is one thing that you can see both sides. Republicans 
and Democrats both agree on when it generates--when we are 
talking about generating power. And it is reliable to the point 
that it can help bring the grid back up, too, in certain 
circumstances.
    I mean we have GRDA in my district that we are constantly 
working close with them. So if we are not developing, then we 
are behind.
    Ms. Swaminathan. Right. Absolutely. And you are right, 
access to capital is a real challenge in hydropower 
development. And hydropower construction and projects being 
what they are, capital cost is everything.
    Mr. Mullin. What does it cost just to go through the 
permitting process, the regulatory process before you start 
your project? What is the cost on that?
    Ms. Swaminathan. It can cost about a million dollars a 
project to get through the FERC licensing process.
    Mr. Mullin. Is that from the research you have to do, or is 
that just the cost of the permits?
    Ms. Swaminathan. It is not the cost of the permit itself or 
the license itself. It is the cost of the studies, the cost of 
maintaining a technical staff to develop the application, the 
cost of the engineering work, the environmental studies, the 
field work, assembling all of that into a license application, 
as well as the ancillary permits that need to be put together, 
again supported by study work such as the 401 water quality.
    Mr. Mullin. When you are just beginning a project, before 
you even can get clear to start building it, you have to have a 
million-dollar investment?
    Ms. Swaminathan. Right. That is not even to start building 
it. That is just to get the FERC license.
    Mr. Mullin. That is what I am talking about.
    Ms. Swaminathan. And then, if the project is located on an 
Army Corps dam, there is more process, more Federal permitting 
to go through, which is actually significantly more expensive 
than the environmental studies because it includes the final 
engineering----
    Mr. Mullin. So what does that cost?
    Ms. Swaminathan. That is on the order of several million 
dollars more. It depends on the size and complexity of the 
project. And every project is a little different. It can be up 
to $8 million.
    Mr. Mullin. Eight million dollars just to go through the 
process to begin the project.
    Ms. Swaminathan. It can be, yes.
    Mr. Mullin. And see, that is where I think we can do a 
better job here in Congress. Because we in Congress should be 
creating an environment for entrepreneurs like yourself and 
your company to be able to thrive and be able to get through 
that process. And when we create hurdles like that, it can be 
as expensive as $8 million just to go through the regulations 
we put in place, and we can do better than that.
    So thank you so much. I appreciate it.
    Ms. Swaminathan. I appreciate it.
    Mr. Upton. The gentleman's time has expired.
    Seeing that there are no further Members wishing to ask 
questions, I want to thank you all very much for appearing with 
us today, sharing your testimony.
    I am going to ask unanimous consent to submit the following 
documents for the record: testimony of the American Rivers, 
testimony of Outdoor Alliance, testimony of Sacramento 
Municipal Utility District.
    [The information appears at the conclusion of the hearing.]
    Mr. Upton. Pursuant to committee rules, I remind Members 
that they have 10 business days to submit additional questions 
for the record, and would ask the witnesses submit their 
response within 10 business days upon receipt of the questions.
    And without objection, the subcommittee is adjourned.
    [Whereupon, at 3:10 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

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