[Senate Hearing 117-458]
[From the U.S. Government Publishing Office]
S. Hrg. 117-458
THE OPPORTUNITIES AND CHALLENGES FOR
MAINTAINING EXISTING HYDROPOWER
CAPACITY, EXPANDING HYDROPOWER AT
NON-POWERED DAMS, AND INCREASING
PUMPED STORAGE HYDROPOWER
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HEARING
BEFORE THE
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION
__________
JANUARY 11, 2022
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the
Committee on Energy and Natural Resources
Available via the World Wide Web: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
46-844 WASHINGTON : 2024
COMMITTEE ON ENERGY AND NATURAL RESOURCES
JOE MANCHIN III, West Virginia, Chairman
RON WYDEN, Oregon JOHN BARRASSO, Wyoming
MARIA CANTWELL, Washington JAMES E. RISCH, Idaho
BERNARD SANDERS, Vermont MIKE LEE, Utah
MARTIN HEINRICH, New Mexico STEVE DAINES, Montana
MAZIE K. HIRONO, Hawaii LISA MURKOWSKI, Alaska
ANGUS S. KING, JR., Maine JOHN HOEVEN, North Dakota
CATHERINE CORTEZ MASTO, Nevada JAMES LANKFORD, Oklahoma
MARK KELLY, Arizona BILL CASSIDY, Louisiana
JOHN W. HICKENLOOPER, Colorado CINDY HYDE-SMITH, Mississippi
ROGER MARSHALL, Kansas
Renae Black, Staff Director
Sam E. Fowler, Chief Counsel
Adam Berry, Professional Staff Member
Richard M. Russell, Republican Staff Director
Matthew H. Leggett, Republican Chief Counsel
Jake McCurdy, Republican Professional Staff Member
C O N T E N T S
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OPENING STATEMENTS
Page
Manchin III, Hon. Joe, Chairman and a U.S. Senator from West
Virginia....................................................... 1
Barrasso, Hon. John, Ranking Member and a U.S. Senator from
Wyoming........................................................ 3
WITNESSES
Garson, Jennifer, Acting Director of the Water Power Technologies
Office, U.S. Department of Energy.............................. 10
Touton, Hon. Camille, Commissioner, Bureau of Reclamation........ 24
Corwin, Scott, Executive Director, Northwest Public Power
Association.................................................... 31
Woolf, Malcolm, President and CEO, National Hydropower
Association.................................................... 42
ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED
American Public Power Association:
Statement for the Record..................................... 141
American Rivers and Hydropower Reform Coalition:
Statement for the Record..................................... 144
American Rivers et al.:
Letter for the Record........................................ 151
American Whitewater:
Letter for the Record........................................ 155
Barrasso, Hon. John:
Opening Statement............................................ 3
Letter from Democratic Members of Congress to the Federal
Energy Regulatory Commission, dated January 5, 2022........ 4
Cat Creek Energy, LLC:
Letter for the Record........................................ 162
Colorado River Energy Distributors Association:
Letter for the Record........................................ 167
Corwin, Scott:
Opening Statement............................................ 31
Written Testimony............................................ 33
Responses to Questions for the Record........................ 124
Garson, Jennifer:
Opening Statement............................................ 10
Written Testimony............................................ 13
Responses to Questions for the Record........................ 100
InPipe Energy:
Letter for the Record........................................ 169
Manchin III, Hon. Joe:
Opening Statement............................................ 1
Murkowski, Hon. Lisa:
Comments on July 2021 DOE RFI from the following
organizations:
Alaska Independent Power Producers Association........... 81
Juneau Hydropower........................................ 84
Renewable Juneau......................................... 88
Natel Energy:
Letter for the Record........................................ 172
NuSTREEM, LLC:
Letter for the Record........................................ 176
Touton, Hon. Camille:
Opening Statement............................................ 24
Written Testimony............................................ 26
Responses to Questions for the Record........................ 113
Trout Unlimited:
Letter for the Record........................................ 179
Report entitled ``Why We Need a Free-Flowing Lower Snake
River''.................................................... 185
Statement for the Record..................................... 212
Western Governors' Association:
Letter for the Record with attached policy resolutions....... 219
Woolf, Malcolm:
Opening Statement............................................ 42
Written Testimony............................................ 44
Responses to Questions for the Record........................ 131
Yuma County Agricultural Water Coalition and Colorado Energy
Distributors Association:
Statement for the Record..................................... 237
THE OPPORTUNITIES AND CHALLENGES FOR
MAINTAINING EXISTING HYDROPOWER
CAPACITY, EXPANDING HYDROPOWER AT
NON-POWERED DAMS, AND INCREASING
PUMPED STORAGE HYDROPOWER
----------
TUESDAY, JANUARY 11, 2022
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The Committee met, pursuant to notice, at 10:03 a.m. in
Room SD-366, Dirksen Senate Office Building, Hon. Joe Manchin
III, Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. JOE MANCHIN III,
U.S. SENATOR FROM WEST VIRGINIA
The Chairman. The Committee will come to order.
I would like to start by welcoming everyone back to the
Committee as we begin this new year. The Committee has done
incredible work to advance priorities for our nation's energy
sector and public lands over the past year. We kicked off the
117th Congress last year with a hearing on global climate
trends that established a baseline of facts for our work to
address climate change through innovation while maintaining
affordable and reliable power and American energy independence.
What we have achieved over the past year reflects that
imperative. We came together to develop and pass the bipartisan
Energy Infrastructure Act, which has now been signed into law
as part of the Infrastructure Investment and Jobs Act.
This once-in-a-generation investment in the nation's
infrastructure includes crucial funding to advance carbon
capture, utilization, sequestration, and removal; hydrogen;
critical minerals and battery recycling; upgrading transmission
infrastructure and modernizing the electric grid; energy
efficiency and weatherization; cleaning up and developing clean
energy on abandoned mine lands and orphaned wells; and so much
more. In total, the Committee held 44 Committee and
Subcommittee hearings as well as 10 business meetings where we
reported out the Energy Infrastructure bill and 24 pieces of
public lands legislation, and we advanced 19 of President
Biden's nominees. I look forward to another productive year
ahead for this Committee, working together across the aisle as
we have become known for, to do important work for the American
people.
With that, I will now turn to today's hearing topic of
hydropower.
Hydropower is one of the oldest sources of power generation
in the country. Until 2019, it was also the largest source of
renewable generation. In 2020, hydropower provided over seven
percent of the total U.S. electricity generation, coming in
fifth behind natural gas, nuclear, coal, and wind. Unlike most
other renewable energy resources, hydropower generation
provides baseload electricity. It is also flexible, which means
the generation capacity is available when we need it, and it
has the ability to respond to changing grid conditions and
adjust output accordingly. That makes hydropower unique and
valuable for maintaining grid reliability as more intermittent
resources come online. Given the baseload attributes of
hydropower, we need to make sure our existing capacity remains
operational. Much of the nation's hydropower is generated at
large federal dams operated by the U.S. Army Corps of Engineers
and the Bureau of Reclamation.
I am pleased that we have the Commissioner of Reclamation,
Camille Touton, here to discuss how Reclamation, as the second
largest hydropower producer, is tackling this challenge. One of
the greatest challenges for nonfederal hydropower operators is
the extensive cost of upgrades and improvements that many
facilities need in order to be brought in line with federal
standards. Between now and 2030, 281 facilities that represent
nearly 14 gigawatts of hydropower generation and pumped storage
hydropower capacity are up for Federal Energy Regulatory
Commission (FERC) relicensing, which is close to a third of all
U.S. nonfederal hydropower capacity. Between low
hydroelectricity prices and the high capital cost of
maintenance and retrofits required for relicensing, there is a
real possibility that many of these plants could face closure.
A 2021 report from the Department of Energy (DOE) cited
cost of necessary upgrades and improvements as a leading factor
in many operators' decisions to surrender their licenses. The
bipartisan infrastructure bill that President Biden signed into
law in November made a historic investment in new and existing
incentives for new hydropower production, efficiency upgrades,
and infrastructure and environmental improvements. The bill
also included $8.2 billion for western water infrastructure at
the Bureau of Reclamation, which included investments in aging
infrastructure and hydropower facilities. These resources will
help to ensure that we keep vital hydropower capacity online. I
know agencies are only beginning to get these resources out the
door, but I look forward to hearing from our panel about how
they view these investments.
Finally, in addition to maintaining our existing
hydropower, most of which is located in the West, we also have
an opportunity to develop new hydropower generation and pumped
storage hydropower resources in the West and in other regions.
Less than three percent of the dams in the U.S. produce power,
leaving thousands that were built for flood control or
irrigation that could be retrofitted for hydropower, including
several that the Army Corps has identified in my State of West
Virginia. In 2012, Oak Ridge National Laboratory did an
assessment of non-powered dams in the U.S. and determined that
there is at least 12 gigawatts of untapped hydropower
potential. Development of non-powered dams and new pumped
storage hydropower systems can support additional intermittent
renewable generation and create many new, well-paying jobs. So
I look forward to hearing from our witnesses today about the
need to maintain and grow this very valuable resource and the
challenges that we face in doing so.
With that, I am going to turn to Senator Barrasso for his
opening remarks.
OPENING STATEMENT OF HON. JOHN BARRASSO,
U.S. SENATOR FROM WYOMING
Senator Barrasso. Well, thanks so much, Mr. Chairman, and
thanks so much for holding this important hearing because we
are, once again, discussing the need for affordable, reliable,
and resilient energy.
Before turning to today's hearing topic, I would like to
address a letter that dozens of Democrats sent to the FERC, the
Federal Energy Regulatory Commission. They did it last week and
it was interesting because it was in yesterday's Wall Street
Journal under the headline, ``No Climate Warriors in Frozen
Foxholes.'' I will show this to you, Mr. Chairman, because,
like the Wall Street Journal, I found it ridiculous that there
are members of Congress and members of the Senate who have
worked to undermine our nation's ability to produce natural
gas, and they are now expressing their concern about its high
prices. These are the same members who want to impose a new
natural gas tax on American families, the same members who
oppose new domestic natural gas production, and they include
many northeastern members who oppose new pipelines which would
give their own states access to some of the nation's cheapest
natural gas--specifically, natural gas from West Virginia. If
these Democrats want to reduce energy prices, they need to work
with Republicans to make it easier, not more difficult, to
produce American energy.
[The letter referred to by Senator Barrasso follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Barrasso. That includes developing and using all
forms of energy, which brings us to the topic of today's
hearing for which you brought together these experts, Mr.
Chairman, because hydropower does produce more than seven
percent of our nation's electricity. It is critical. Until
recently, hydropower was our nation's largest source of
renewable energy. Unlike other sources of renewable energy,
hydropower is available when it is needed. That means that
hydroelectric dams can provide power whether it is day or
night, whether the wind is blowing, the sun is shining, no
matter what. Hydropower can once again be our largest source of
renewable energy if we maintain our existing hydroelectric dams
and encourage the installation of turbines on our nation's non-
powered dams, because, Mr. Chairman, the overwhelming majority
of our dams do not produce any hydropower. More than 90,000
dams exist, yet fewer than 2,300 produce electricity. That is
less than three percent. Clearly, not every dam is well-suited
to energy generation. There are many important considerations
beyond energy production. These include preserving and
enhancing recreation, farming, ranching, and wildlife habitat,
but with only three percent of our dams producing energy, that
does leave a lot of room for growth.
According to the Department of Energy, installing turbines
on some of these dams would provide at least 12 gigawatts of
additional electricity. That is enough renewable energy
electricity to power nine million homes. Growing our nation's
hydropower capacity would help our country reduce or avoid new
greenhouse gas emissions. It would also increase the
reliability and resiliency of our nation's electric grids. Now,
this is especially important in light of the blackout events in
California and across the Midwest in recent years. Hydropower
can be used to repower an electric grid which has collapsed.
This is known as a black start capability. To provide this
service, an electric generation unit cannot rely on any power
from the collapsed grid. The Texas grid came dangerously close
to requiring a black start last year. Roughly 40 percent of the
electric generating units which are maintained for black start
services are hydropower units. That is why they are so
critical.
This attribute makes hydropower a particularly attractive
resource in light of the increasing threats to the electric
grid from cyberattacks. Hydropower is clearly an important
component of an all-of-the-above energy strategy. We should
encourage more hydropower generation, and if we are going to
grow our nation's hydropower capacity, we must address the
permitting process. This is especially important for utilities
that are deciding whether or not to relicense existing
hydropower units. Streamlining the permitting process is also
necessary to promote the installation of hydropower turbines on
some of these non-powered dams. Currently, hydropower faces one
of the most complex and time-consuming permitting processes.
The glacial pace of permitting is a significant barrier to
private-sector investment in hydropower. It reduces the
likelihood of investment and upgrading existing hydropower
facilities as well and installing turbines on non-powered dams.
According to the 2017 testimony of one hydropower
developer, quote, ``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.'' He goes on to say that most of this time is taken by
permitting--not by construction, by permitting. Well, little
has changed since 2017, and for that reason, I encourage this
Committee to explore meaningful reforms to the hydropower
licensing process. To do that, the Committee should also get
input from the FERC and additional agencies within the
Department of the Interior on this topic. I hope we can do that
soon.
Mr. Chairman, I just want to thank you again for holding
this important hearing and would like to extend a warm welcome
to all the witnesses. I look forward to the testimony on the
topic. Thanks, Mr. Chairman.
The Chairman. Thank you, Senator Barrasso.
I would like to turn to our panel of witnesses. With us we
have Ms. Jennifer Garson, Acting Director of the Water Power
Technologies Office at the Department of Energy, who is joining
us virtually today.
Ms. Camille Touton, the Commissioner of Reclamation, who is
also with us virtually.
Mr. Scott Corwin, Executive Director of the Northwest
Public Power Association.
And Mr. Malcolm Woolf, President and CEO of the National
Hydropower Association.
I want to thank all of you for joining us today, and Ms.
Garson, we will begin with your opening remarks.
STATEMENT OF JENNIFER GARSON, ACTING DIRECTOR OF THE WATER
POWER TECHNOLOGIES OFFICE, U.S. DEPARTMENT OF ENERGY
Ms. Garson. Chairman Manchin, Ranking Member Barrasso, and
members of the Committee, thank you for the opportunity to
testify before you today. My name is Jennifer Garson and I am
the Acting Director for the Water Power Technologies Office in
the U.S. Department of Energy's Office of Energy Efficiency and
Renewable Energy. As Acting Director, I direct applied
research, development, demonstration, and deployment activities
for the Water Power Technologies Office.
Hydropower has provided clean, low-cost electricity for
over a century. In 2020, hydropower provided 7.2 percent of the
electricity on the grid, accounting for 37 percent of renewable
electricity generation. Pumped storage is the largest
contributor to U.S. energy storage, including the largest
source of commercially available long-duration energy storage.
Today's evolving power system has created new opportunities for
hydropower to play an important role in a 100 percent clean
energy future using existing and new technologies and
infrastructure. Hydropower, including pumped storage, provides
key services to support the integration of variable renewable
energy resources. Through modernization of the existing U.S.
hydropower fleet, adapting to the changing needs of our
nation's power system, and meeting the challenges of climate
change head-on, hydropower can be a keystone to a fully
decarbonized power system by 2035.
However, the U.S. hydropower fleet contains some of the
oldest electricity generation facilities in the world and will
continue to require innovations and investments to meet the
evolving needs of the grid. Additionally, much of the fleet is
up for relicensing over the coming decades, representing an
immediate need to both measure and evaluate hydropower's role
in the grid. And while there are opportunities to expand and
deploy more hydropower, including a significant pipeline of
pumped storage, significant challenges exist in bringing new
facilities on the grid. DOE recognizes the need for robust
hydropower research, investment, and innovation in existing and
potential new hydropower resources. The Water Power
Technologies Office administers a broad portfolio of research
activities and supports industry efforts to maintain, develop,
and deploy new hydropower. These efforts are directly aligned
with the Biden Administration's goal of a carbon pollution-free
electricity sector by 2035.
With the advent of a greater level of invariable renewable
energy generation on the U.S. grid, hydropower's role is more
critical than ever. Our HydroWIRES initiative, launched in
2019, addresses both the existing and future roles of
hydropower in serving the grid. The goal of this work is to
fund the analysis and technologies to understand, enable, and
improve hydropower and pumped storage as contributions to
reliability, resiliency, and integration into the rapidly
evolving U.S. electricity system. The Water Power Technologies
Office also develops new technologies, tools, and data to
understand and improve the environmental performance of
hydropower facilities. These advancements help inform and
streamline the environmental evaluations and studies associated
with the licensing process and make it easier and more cost-
effective to mitigate any long-term impacts of operations. Our
work focuses on fish passage and migration, water quality and
water release management, and we are building the analytical
capabilities to better understand and quantify the hydrologic
impacts of climate change on the fleet. Our office also
supports the development of technologies and analysis to
develop new low-impact hydropower to power non-powered dams for
infrastructure. This includes evaluating adding hydro to
existing infrastructure to support multiple benefits, such as
irrigation modernization to serve agricultural end-users.
Community-centered development is a critical emphasis of
our work, particularly in the instances of remote, underserved,
tribal, and isolated communities. These communities are deeply
reliant on and connected to their water systems as part of
their economy and culture. Recognizing and being respectful of
these factors, we endeavor to build connections to communities
as well as industries who use the technologies developed
through our funding. And with the passage of the bipartisan
infrastructure law, the Water Power Technologies Office will
administer almost $800 million to support adding capacity to
non-powered dams, investing in efficiency gains at existing
facilities, and will address grid capabilities, environmental
improvements, and dam safety in our nation's nonfederal
hydropower fleet. This historic level of funding for these
programs will have an immediate impact on the U.S. hydropower
sector and help address some of the critical capital gaps that
industry faces in making key improvements for hydropower to
continue to serve the grid.
Thank you for the opportunity to appear before the
Committee today. I look forward to working with you to address
both the challenges and opportunities for hydropower and pumped
storage while ensuring equitable access to low-cost, reliable,
and resilient clean energy. I look forward to your questions.
[The prepared statement of Ms. Garson follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Ms. Garson.
Now we will have Commissioner Touton.
STATEMENT OF HON. CAMILLE TOUTON,
COMMISSIONER, BUREAU OF RECLAMATION
Ms. Touton. Chairman Manchin, Ranking Member Barrasso, and
members of the Committee, good morning and Happy New Year.
First, thank you for consideration of my nomination in support
of my confirmation. I am honored to be joining you today as the
Commissioner of the Bureau of Reclamation, the second largest
producer of hydropower in the country.
Hydropower is unique. It is a baseload, deployable resource
with black start capability. My remarks today summarize my
testimony and focus on Reclamation's efforts to protect,
enhance, and promote hydropower and the challenges that we face
because of drought. Hydropower production in an environmentally
responsible manner is an important source of renewable energy
and supports the Administration's and the Department's clean
energy and climate-change initiatives. Development of
hydropower across the West has created significant benefits but
it also has significantly impacted the environment in the
riverine communities, including tribal communities. The
Reclamation of the 21st century continues to recognize the
value of hydropower while also working with our partners on
solutions to these challenges.
On average, Reclamation produces enough power equivalent to
the demand of 3.7 million homes annually, produces $1 billion
in power revenues, and displaces approximately 1.7 million tons
of carbon dioxide, but our fleet is aging. To ensure the
continued reliability, efficiency, and safety of our aging
hydropower assets, Reclamation continues to look for
opportunities to upgrade and modernize. Since 2009, Reclamation
has replaced 35 turbines. This has allowed for an additional
340 million kilowatt-hours annually. During that same period,
we have upgraded six generators, increasing capacity by 40,000
kilowatts. Last month, Reclamation and Bonneville Power
Administration completed the overhaul of several generating
units inside the Nathaniel Washington Power Plant from Grand
Coulee Dam, the largest hydropower facility in the nation.
Reclamation is committed to facilitating the development of
nonfederal hydropower at our existing federal facilities. In
2020, Reclamation signed the Federal Hydropower Memorandum of
Understanding (MOU) with the Department of Energy and the U.S.
Army Corps of Engineers. Coupled with our hydropower strategic
plan, we ensure hydropower remains cost competitive while
delivering value to our customers and stakeholders. Through our
streamlined Lease of Power of Privilege (LOPP) permitting
process, Reclamation is facilitating the development of
nonfederal renewable hydropower by existing federal projects.
And currently, 14 facilities operate on Reclamation projects,
ten that were brought online since 2009.
Western hydropower faces tremendous challenges due to the
unprecedented drought--most prominently seen in the Colorado
River Basin. Lakes Mead and Powell are at their lowest levels
since initial filling. In the Lower Basin, as Lake Mead's
elevation drops, the effectiveness of Hoover Dam turbines is
reduced. So in 2017, Reclamation replaced five of the 17 power
generating turbines with what are called wide-head turbines,
creating efficiencies at lower lake levels. Reclamation also
signed an MOU with the Lower Basin states to collectively
conserve one million acre-feet of water over the next two years
at Lake Mead and keep that water in Lake Mead. In the Upper
Basin, hydropower production at Glen Canyon Dam has dropped
about 16 percent. Recent forecasts show the possibility of Lake
Powell dropping below a designated target elevation of 3,525
feet as early as next month. This elevation is critical because
it is just 35 feet above the minimum power pool elevation of
3,490 feet. Extremely dry hydrology combined with low reservoir
levels means new and unpredictable operational conditions at
Glen Canyon Dam, among others. Reclamation is working with our
Upper Basin partners to protect elevations at Lake Powell, but
we cannot do this alone. Working together is the best way to
protect our water and power resources across the West.
While challenges exist, so do opportunities through
investments and the bipartisan infrastructure law, which
includes new pumped storage authorities for Reclamation. Thank
you for the leadership of this Committee for including
Reclamation as part of this law. We anticipate the release of
our FY22 infrastructure spending plan later this month. Thank
you for the opportunity to discuss our work. I would also like
to recognize Max Spiker and our hydropower team in Denver and
across the regions for their work on this issue. Reclamation is
committed to leading our mission of delivering water and
producing hydropower, and I am pleased to answer any questions
you may have.
[The prepared statement of Ms. Touton follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Commissioner.
Now we have Mr. Corwin.
STATEMENT OF SCOTT CORWIN, EXECUTIVE DIRECTOR, NORTHWEST PUBLIC
POWER ASSOCIATION
Mr. Corwin. Thank you. Good morning Chairman Manchin,
Ranking Member Barrasso, and members of the Committee. Thank
you for holding this hearing on hydropower today. While
hydropower is one of our oldest forms of generating
electricity, it is also a resource for the future--renewable,
emission-free, with a flexible capacity to add stability to the
grid at critical times.
The Northwest Public Power Association's members are
consumer-owned electric utilities that use a wide range of
generation resources. Many, like Lower Valley Energy in
Jackson, Wyoming, rely significantly on hydropower.
Multipurpose dams can be critical, not just for power, but also
for transportation, irrigation, flood control, water supply,
and recreation. Losing any part of this network would be
devastating to communities and would destabilize the electrical
system.
While hydropower provides as much as 90 percent of
electrical capacity in some areas we serve, it is only seven
percent of our capacity nationally. Why? Public policy and
market design have not kept up with the need--and it is a need
that is very real for regions adding types of generation
resources that do not have adequate storage and flexibility,
where hydropower can provide reliability through services like
spinning reserves.
One challenge for hydropower is that traditional energy
markets were not designed to provide proper price signals for
its values, like ramping capacity and ancillary services. We
need more market mechanisms that can create price formation to
compensate hydropower so it is available for dispatch when
needed most. Another challenge is that hydropower has not
received the same financial incentives as other sources.
I would like to thank Senators Cantwell and Murkowski for
introducing S. 2306, to create a 30 percent clean energy tax
credit to support upgrades at existing hydropower projects.
Importantly, it does include a direct-pay option, allowing use
by cooperatives, municipalities, and public utility districts
who serve almost a third of all retail customers nationally.
Our thanks also to Senator Wyden for his support on this issue
and pending tax legislation.
We also appreciate Congress acting to fund grant programs
for hydropower projects, including pumped storage that can make
an enormous difference, especially in rural communities and
those not connected to the traditional grid--areas like in
Alaska, where small projects can have a big impact. A
demonstration of grid resiliency and black start situations--
Idaho Falls Power and the Idaho National Lab used new
operational approaches to in effect create a new micro-grid out
of small, run-of-the-river projects during emergencies. Non-
federally owned hydropower, like those small, run-of-the-river
projects are subject to FERC licensing and relicensing. So
another challenge for hydro is whether projects can navigate
this arduous federal process in time to help meet our
increasing needs.
It is astounding that Energy Northwest, a public power
joint operating agency, experienced a quicker, more predictable
process to renew the license of their 1,200-megawatt nuclear
plant than it did for their 27-megawatt hydro project, and that
the Okanogan County Public Utility District in Washington saw
costs triple over a decade before abandoning a proposal to
energize an already existing dam. A DOE report on this process
released in October noted that 90 percent of projects seeking
original licenses are abandoned prior to receiving the license.
Members of this Committee have led strong efforts to address
process delays and costs. Thank you.
My full testimony lists other proposals that could really
make a difference to eliminate redundancy and delay among
federal agencies, such as clearly establishing FERC as the
strong lead agency with authority over timelines. A few other
areas I note where the Federal Government could support
hydropower capacity include having FERC allow more operating
flexibility so operators, like Seattle City Light, that see
hydrograph changes in critical needs can address those without
the unwieldy license amendment process.
DOE should continue to support data-driven collaboration by
entities like the Hydropower Research Institute to maintain
capacity and reduce forced outages. FERC Dam Safety Regulators
should not add unnecessary or redundant requests that distract
staff and other resources. And the ``Special Use Permit''
process for relocating sediment from U.S. Forest Service lands
should be amended so operators can get timely resolution to
maintain project capacity and safety.
With energy policy priorities and system stability hanging
in the balance, hydropower is uniquely positioned to lead us
into the future if our state and federal policies will allow it
to do so by streamlining regulation, creating more equitable
incentives, and sending better market signals. Thank you for
your leadership and holding this hearing today. I am happy to
answer any questions.
[The prepared statement of Mr. Corwin follows:]
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The Chairman. Thank you, sir.
And now Mr. Woolf.
STATEMENT OF MALCOLM WOOLF, PRESIDENT AND CEO, NATIONAL
HYDROPOWER ASSOCIATION
Mr. Woolf. Thank you. It is a great pleasure that I join
you today to discuss maintaining and expanding the U.S.
hydropower fleet as we work to develop a reliable, affordable,
carbon-free electricity grid. While the contribution of
hydropower may be underreported in the news, hydropower quietly
supplies enough electricity to power over 30 million homes and
businesses, provide 38 percent of the nation's renewable
electricity, delivers 94 percent of energy storage capacity in
the U.S., and provides well-paying jobs to 68,000
professionals. Hydropower also plays an essential, yet often
overlooked role in enhancing grid reliability by, for example,
providing nearly half of the nation's black start capability,
which is vital in restarting the grid in the event of a
blackout.
Mr. Chairman, a few years ago in West Virginia, American
Municipal Power started the Willow Island Hydropower Facility
near the city of Saint Marys. It was built on an existing non-
powered dam, which is proof-positive that there is ample
opportunity for our industry to grow.
Ranking Member Barrasso, there are 21 hydropower facilities
currently operating in Wyoming, providing about 10 percent of
the state's renewable energy. There is also an ongoing
feasibility study for a 900-megawatt Seminoe pumped storage
facility located approximately 30 miles outside of Rawlins,
Wyoming.
I am pleased to report that the hydropower industry and our
former adversaries of the environmental community are working
together to accelerate the rehabilitation, retrofit, and
removal of our nation's more than 90,000 dams. Facilitated by
Stanford University's ``Uncommon Dialogue'' process, this
collaboration points the way for Congress itself to take
bipartisan action to advance both the clean energy benefit of
hydropower and the environmental benefits of healthy rivers.
Let me highlight my three specific recommendations for
Congress.
First, Congress should advance the three R's by enacting
the pending tax provisions--specifically, the Enhancing and
Maintaining Hydropower and River Restoration Act, championed by
Senator Cantwell and Senator Murkowski, as well as the 21st
Century Dam bill sponsored by Senator Feinstein. A critical
down payment toward these goals was included in the recent
bipartisan infrastructure package, thanks to the leadership of
Chairman Manchin and Senator Portman. Further thanks goes to
Senators Wyden and Cantwell for including an environmental
improvement tax credit in the pending Build Back Better package
with a direct-pay for public power. The industry looks forward
to working with the Senate and Congress to further clarify
these provisions to encourage dam safety, grid resilience, and
dam removal. We also urge Congress to enact important tax
incentives for new pumped storage and an extension of the now-
expired hydropower and marine energy tax credits and providing
these credits at full value.
Secondly, Congress needs to address the hydropower license
and relicensing process. The uncertainty about the time and
cost involved is dramatically at odds with the urgency of
addressing climate change and the upcoming wave of hydropower
relicensing proceedings, as roughly 30 percent of FERC
hydropower licenses expire in 2030. Relicensing, on average,
takes 7.6 years to complete, with relicensing for many
facilities lasting over a decade. At the same time, the
paperwork costs associated with relicensing typically exceed
$10 million, with the actual work in upgrades costing many
millions more. Not surprisingly, a recent industry survey found
that over one-third of hydropower owners were actively
considering decommissioning a facility. The groups involved in
the Uncommon Dialogue are working together to provide the
Committee a legislative proposal in February that can win
bipartisan support, with the goal of enacting such a package
before the end of this Congress.
Finally, my testimony offers several suggestions to promote
renewable generation at existing non-powered dams. In
supporting funding for DOE, the Corps, and the Bureau, we urge
Congress to provide the flexibility these agencies need to hire
full-time staff to fulfill their respective missions. As I
conclude, let me share just a brief final anecdote. A year ago
in New England, a nuclear facility tripped offline, and with it
a staggering 17,000 megawatts of power. The lights in
Massachusetts and New Hampshire did not flicker, because two
pumped storage facilities quickly dispatched the electricity
needed to make up the shortfall. Hydropower is, without
question, an essential part of a clean energy future, and I
look forward to working with the Committee today.
[The prepared statement of Mr. Woolf follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, sir. Now we are going to start our
questions. I will begin, and this will go to Ms. Garson and Mr.
Woolf, if they want to reply. The bipartisan infrastructure
bill that was signed into law by President Biden includes over
$750 million for new and existing incentives to support
nonfederal hydropower operators. What kind of impact do these
incentives have for hydropower operators, particularly those
who are or soon will be undergoing FERC licensing, relicensing,
or considering ceasing operations? Do you expect that we can
keep them open? Does this do enough, or what more needs to be
done?
Ms. Garson.
Ms. Garson. Sir, I can take that first.
The almost $800 million provided through the infrastructure
bill is a really critical first down payment to providing both
investor certainty as well as de-risking some of the projects
that are really critical from an environmental grid or dam
safety perspective. The 247 program, which is new for our
office, will make a big difference. If we are talking about the
distribution of funding, it is going to impact hundreds of
projects nationwide. And then for our 242 program and 243, this
is increasing efficiency gains at existing hydropower
facilities and incentivizing the development of non-powered
dams nationwide. So while we are still designing and
implementing the program, it will involve intense stakeholder
engagement. We believe that this is a very big and important
first step at de-risking some of the investments that are
really critical for the services to be kept online.
The Chairman. Mr. Woolf.
Mr. Woolf. Agreed. Thank you, Chairman, for your leadership
in getting the bipartisan infrastructure provisions enacted.
Those provisions will go a long way in preserving and
maintaining the hydropower fleet, but they are just a down
payment. We think that money will stretch to cover investments
in perhaps 150 to 200 facilities across the nation, but there
are about 2,200 in the U.S. So a great down payment, but there
is more work to be done.
The Chairman. With so much regulation, the Army Corps of
Engineers, and all the different things they have to go through
for permitting, how interested is private industry in
developing the dams that we have been talking about, with
thousands and thousands that could be producing so much more
hydropower? Is there an interest in the private sector?
Mr. Woolf. There is significant interest in the private
sector in developing non-powered dams. As you noted, 97 percent
of dams in this country do not provide power. And if we are
going to have dams, we might as well provide the clean,
dispatchable power that is out there. Because it is
dispatchable, renewable energy, there is a renewed interest in
non-powered dams.
The Chairman. What about pumped storage? I have had a
fellow in my state, and we have tried like the dickens and
could not get through the permitting process.
Mr. Woolf. The permitting process is crazy. You have so
many cooks in the kitchen, none of which have ultimate
authority to issue the permits. But there is tremendous
interest in pumped storage. There's over 50 gigawatts of pumped
storage in the pipeline, but no new pumped storage has been
built in over 20 years in this country, and we are not going to
be able to keep the lights on with just wind and solar. We need
more batteries. We need long-duration energy storage, which is
what pumped storage is providing.
The Chairman. I can only imagine the private sector, what
they would go through if they had a brand new turbine they
wanted to use, you know, a more efficient turbine. To go
through the permitting process to get it implemented or get it
basically installed--you are talking years.
Mr. Woolf. It is years, and it has a huge chilling effect
in investment.
The Chairman. Do any of you have a recommendation for how
we could accelerate this?
Mr. Woolf. NHA does have a number of recommendations. A few
are in our testimony. One of the most significant is that for
those facilities that do not have significant environmental
issues, particularly closed-loop or off-river pumped storage
facilities, where they are not on the river, not having that
environmental impact, or non-powered dams where the existing
infrastructure--the civil work--already exists, we should have
a streamlined permitting process, something within two years.
You should not need a seven-or ten-year licensing process where
you don't have those environmental impacts. The other
critical----
The Chairman. If they are taken to court, I mean, the court
actions go on for years and years.
Mr. Woolf. That is true, which is why we need to have the
permit conditions limited to things that are directly related
to the facility. It has become an open-ended process for
addressing everything in the basin. Tax incentives so that they
can compete with other zero-carbon technologies are also
critical.
The Chairman. Is hydropower one of the lowest-cost
generators of electricity?
Mr. Woolf. Absolutely. Particularly when you realize that
the facilities can last 50 years, some of which are
successfully operating over 100 years later, whereas wind and
solar after 10 or 15 years need to be replaced. So the life
cycle of hydropower makes it one of the best that exists.
The Chairman. It is a shame we have not done more.
Mr. Woolf. Agreed, Mr. Chairman.
The Chairman. Senator Barrasso.
Senator Barrasso. Well, I agree with you, Mr. Chairman. I
really appreciate your line of questioning and your thought
process on this. So I would like to just ask all of the
witnesses whether you believe hydropower is renewable energy, a
clean source of energy, and a sustainable source of energy that
helps reduce or avoid greenhouse gas emissions? A simple yes or
no. Let's start with Mr. Woolf.
Mr. Woolf. Yes.
Mr. Corwin. Yes, absolutely.
Senator Barrasso. The others.
Ms. Garson. Yes.
Ms. Touton. Yes.
Senator Barrasso. Thank you.
So in light of all your answers to my first question, I
would like to ask each of you about public and private-sector
financing of hydroelectric projects. Specifically, do you
believe that these projects here in the U.S. should enjoy the
same access to financing that other renewable energy sources
enjoy? In other words, do you believe hydropower projects here
in the U.S. can and do meet what are known as environmental,
social, and corporate governance, or the ESG standards? A
simple yes or no and let's start with Mr. Woolf.
Mr. Woolf. Yes.
Senator Barrasso. Mr. Corwin.
Mr. Corwin. Yes.
Senator Barrasso. The others.
Ms. Touton. Certainly, investments in hydropower within the
public-private sector are of interest to Reclamation.
Senator Barrasso. Yes, one more.
Ms. Garson. Yes.
Senator Barrasso. Thank you. All right, so, Mr. Corwin and
then Mr. Woolf, the costs and timeline of licensing and
relicensing hydropower projects are burdensome on developers
and, more importantly, on consumers, and the Chairman made
mention of this. A report by the Department of Energy released
just a few months ago regarding the hydropower regulatory
structure stated that, quote, ``The length and complexity of
the licensing process is challenging for all stakeholder
sectors.'' Now, I agree with that statement. I would take it a
step further because I think any regulatory regime that takes
nearly a decade to license or relicense critical infrastructure
projects is in need of reform.
What reforms would the two of you propose to federal
permitting, licensing, and the relicensing process? Maybe start
with Mr. Corwin.
Mr. Corwin. Thank you, Senator, and yes, that was a good
report that also points to some recommendations. DOE and the
labs have done some really good work in recent years along
these lines on these issues. One thing I would note, an example
I use, the difference between regulating on the nuclear plant
and the hydro plant is you have the Nuclear Regulatory
Commission (NRC) as the clear lead agency, able to control the
timelines and to enforce those timelines.
The other recommendation, so clearly, establishing FERC as
a lead agency, giving them authorization to control the
timelines, requiring other agencies to use relevant, existing
studies and not duplicate studies where you already have the
work done. A lot of these are existing projects. We know what
they do. And then, resolving agency disputes in a timely manner
by referral to OMB and CEQ, and then allow trial-type hearings
on these mandatory conditions so we can have resolution in a
timely way.
Senator Barrasso. And Mr. Woolf.
Mr. Woolf. I agree with Mr. Corwin. The role of state and
federal resource agencies and tribal authorities needs to be
respected, but so do the deadlines established by Congress, and
so we need some process discipline in order to be able to make
sure that the deadlines established are honored. And the second
thing we need is to rein in the agency overrun. They are
imposing requirements on our facilities that are not related to
the facilities effects--building an amphitheater for the Boy
Scouts or feeding a third party's livestock. There are examples
that have nothing to do with the hydropower facility that are
becoming mandatory conditions, and that needs to be reeled in.
Senator Barrasso. Thank you.
Commissioner Touton, less than three percent of all the
dams in the U.S. produce power. The Bureau of Reclamation
previously identified about 200 dams that it felt are suitable
for hydroelectric development. What are the principal obstacles
inhibiting the Bureau from installing turbines on its non-
powered dams?
Ms. Touton. Good morning, Ranking Member. Thank you for
that question.
With regard to your question about process in permitting,
between our administrative changes and our changes in federal
statutes, we have been able to decrease that processing time
and increase interest awarding our Lease of Power of Privilege
contracts 70 percent faster. Certainly, investments from
developers--most of our hydropower is produced or the interest
is produced by our stakeholders who operate and maintain those
facilities. And so, their ability to access capital to be able
to develop those are part of it. So we are working through that
with them, recognizing the tremendous value of additional
hydropower at existing federal facilities.
Senator Barrasso. So the Chairman asked about all of the
money that was in the bipartisan infrastructure bill in terms
of how that money--it has already been appropriated. Will the
Bureau use that money to install turbines on some of the non-
powered dams?
Ms. Touton. One of the challenges that we have with our
facilities, as I mentioned, is that they are aging. A
significant portion of our money from the infrastructure law is
for aging infrastructure. So certainly, advancements and
enhancements to our structures will also be of service and of
use to hydropower development.
Senator Barrasso. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
Senator Heinrich.
Senator Heinrich. Thank you, Chairman.
Mr. Woolf, as you know, legacy dams had a pretty
devastating effect on salmon and steelhead populations in this
country. So as we look to (1) build new dams, (2) modify
existing dams, and in some cases remove legacy dams, what do
you see as some of the opportunities to avoid the fisheries
impacts of the past, or for that matter, improve opportunities
for recovering fish populations?
Mr. Woolf. Thank you for your question, Senator.
There are really not a whole lot of major new dams being
built in this country. That ended generations ago, maybe 40, 50
years ago. So the real opportunities for growth now are in non-
powered dams where dams already exist. Let's better use them
for their carbon potential. And there is off-river or closed-
loop pumped storage. Neither of those have the kind of
environmental impacts that we may have seen from the big dams
of 100 years ago. There has also been tremendous innovation in
environmental improvements and stewardship. There are fish-
friendly turbines and fish bypass technologies that help ensure
that migrating fish and others can survive. So this is not your
grandfather's hydropower industry. We pride ourselves in being
part of a climate solution and being sustainable.
Senator Heinrich. I will let Senator King speak to what he
was able to do in Maine, but I know there was an example there
where they removed a legacy dam that was no longer providing
services, opening up an enormous amount of habitat to
fisheries, and at the same time, using that same moment to
increase hydropower potential. So I think it is something we
need to look more at, given how many fisheries we have lost in
this country and the economic potential for recovering some of
those.
Ms. Touton, you mentioned unprecedented drought, and I do
not want to quibble with your language, but drought is a
temporary condition. There is substantial evidence that what we
are experiencing right now in New Mexico and in other parts of
the West--in the Colorado River Basin, in the Rio Grande River
Basin--is maybe more accurately termed aridification. In other
words, it is a permanent impact of the changing climate. We are
simply not seeing the snowpacks and the precipitation that we
used to see, and it does not look like it is coming back.
In your position, how do you change your hydropower
operations in response to lower storage levels, lower overall
precipitation, and what is effectively a dwindling supply in a
number of these basins?
Ms. Touton. Good morning, Senator. Thank you for that
question.
As you mentioned, when we constructed these facilities over
a century ago, it was on a premise that our biggest reservoir
is snowpack, and that has significantly changed within the last
few years, within the last decades of how much snowpack would
we see and therefore, how much water comes into our reservoirs.
When you have low elevations coupled with low flow, that
significantly impacts hydropower. So some of the things that we
are doing are installing new technologies, new turbines that
take advantage and that can operate at lower lake levels, like
we did at Hoover Dam. And certainly, conservation efforts to
keep more water behind our reservoirs helps with hydropower
production. But we cannot do this alone, and really look
forward to working with our partners on how we continue to
conserve water supplies but also protect our hydropower
resources.
Senator Heinrich. Can you talk a little bit about the
reductions in capacity that you have seen as a result of the
changing climate and what impacts those have on western states'
economies?
Ms. Touton. I will speak specifically to Glen Canyon Dam
because that is a good example. It is at 27 percent of
capacity, the lowest since filling, and we anticipate that this
year we will generate the least amount of power since 1965 at
the CRSP (Colorado River Storage Project) facilities. And 1965
was when Glen Canyon came online. And so a lot of the
challenges that we are seeing are, when your fuel is based on
water, you need to be able to look at it from both the water
supply and also hydropower perspective on how you keep those
reservoirs up to protect both of those resources.
Senator Heinrich. Mr. Woolf, New Mexico recently joined the
Western Energy Imbalance Market, and we have seen that
Bonneville Power plans to join, I think, this year, and WAPA
joined in 2021. Are there opportunities to compensate
hydropower's capability to play a greater role in maintaining
reliability and balance on the grid?
Mr. Woolf. Absolutely, and that is not currently being done
now. Hydropower provides flexibility, it provides spinning
reserves, black start capabilities, and it is not properly
compensated for providing those grid reliability services.
Senator Heinrich. Whose job is it to figure out that market
structure? Is that a FERC thing? Is that a Congress thing?
Like, who should be focusing on creating a market to compensate
those values?
Mr. Woolf. Yes, I think it goes to keeping the lights on,
so it is all of our jobs, but it is in organized markets, it is
these regional transmission organizations that have that
primary responsibility.
Senator Heinrich. Thank you, Chairman.
The Chairman. Thank you, Senator.
We have Senator Daines.
Senator Daines. Chairman Manchin, thank you, as well to
Ranking Member Barrasso.
Montana is one of the largest hydropower producers in the
United States. Hydropower provides nearly half of all the
electricity generated in Montana. Hydropower provides clean,
reliable, affordable energy. It is important that we continue
to increase hydro production as well as the jobs and the
revenues that come from it. And that is why, just yesterday, I
introduced the Sun River Hydropower Authorization Act, which
will allow hydropower production on Bureau of Reclamation dams
in the Sun River project, including the Gibson Dam near
Augusta, Montana.
In August of last year, when Greenfields Irrigation
District, who operates the Gibson Dam, asked me to introduce
legislation to authorize hydropower on the Sun River project,
we got to work. The proposed project would create good jobs--
high-paying jobs--and generate $2 million per year for the
irrigation district. This will also help bolster and sustain
irrigation for the 750 farmers, ranchers, and water users in
the region. This is a clear win-win.
Commissioner Touton, the Sun River project is under the
Bureau of Reclamation. Could you explain how powering non-
powered dams like the Gibson Dam helps generate jobs, revenue,
and sustains irrigation?
Ms. Touton. Good morning, Senator. Thank you for that
question. You know, Greenfields Irrigation District is a great
example of the types of partnerships we have in developing new
hydropower at our facilities. In fact, they are a transferred
work operator, which means they operate and maintain that
project and have developed small conduit hydropower, which is
roughly equivalent to $180,000 per year of revenue that they
immediately use to pay for operation and maintenance and
enhancement of that project. So we certainly see a benefit
there and look forward to working with you on your legislation.
Senator Daines. Thank you for that.
Mr. Corwin, the power produced at the Gibson Dam will run
through the rural electric cooperatives in Montana. How will
increasing hydropower help local Montana cooperatives as well
as the energy consumers?
Mr. Corwin. Yes, again, it is a great resource to add to
any energy mix because of those qualities--emission free and
flexible--and I know there are also with that cooperative in
Montana some synergies on being able to enhance the
transmission lines needed as well. So I think there's a good
win-win situation there.
Senator Daines. Thank you.
I am really concerned--I would say very concerned--about
recent calls to breach hydropower dams on the Columbia and
Snake River systems. The hydropower produced by these dams
provides important, affordable, renewable energy to western
Montana and any breach of dams would negatively impact Montana.
Mr. Corwin and Mr. Woolf, can you elaborate on why
breaching hydropower dams harms communities, jobs, and puts
strain on electric production and the reliability of the grid?
Start with Mr. Corwin.
Mr. Corwin. Thank you, Senator.
With that example, specifically, you are talking about over
2,500 megawatts of total capacity, which is that flexible
capacity we were discussing earlier, so critical to balancing
the grid, and it has come in handy at times. It is about 1,000
average megawatts, which is enough to power, on average, a very
large city, like the size of Seattle. So there is a lot of,
again, clean, flexible capability right there. You also have,
as I mentioned earlier, the other values, economically and
around the community tied to that specific part of the system
for irrigation, navigation, recreation--a lot of benefits that
are at stake there.
Senator Daines. Mr. Woolf.
Mr. Woolf. There may be circumstances where breaching non-
powered dams that no longer serve a purpose will make sense,
but where you have powered dams that are providing power to the
community, I think you have to answer a few key questions
before--particularly for the Snake River, you have nameplate
3,000 megawatts of carbon-free generation. So where are they
going to get the replacement power? How is it going to be
reliable? Because you can't do it with just wind, solar, or
batteries. What is the economic impact on household rates? How
are the communities that rely on those for jobs, for
agriculture? And then the environmental impact--we know that
climate change is the biggest threat to salmon in the region.
Senator Daines. So when you take a look at the grid and
power creation, power production, it is not about average, it
is about peak. And according to recent projections, the Pacific
Northwest may face shortages of power supply to meet peak load
conditions. If we breach hydropower dams that provide strong,
baseload energy, that possibility becomes a reality and Montana
may see the rolling blackouts that we have seen happen in other
states.
Mr. Corwin, Mr. Woolf, how is hydropower important to
meeting peak energy demands and how could reducing baseload
power, like hydro and coal, cause a shortage of power supply?
Mr. Corwin. Thank you, Senator.
Yes, as you know, you already have some of the coal plants
scheduled to come offline. So you are already going to be down
on that baseload capability in the West. At the same time, you
have an interesting shape of peak loads, especially when it is
really hot in the afternoon--big peak--just as the solar energy
that has come online is coming offline in the evening. So we
have already seen this where it has been right up against the
edge in the Western Interconnection, and hydropower being able
to provide spinning reserves is incredibly important to be able
to balance that at the peak, as you mentioned.
Senator Daines. Mr. Woolf, I am about out of time. I will
probably have to have your answer be brief. Thank you. Go
ahead.
Mr. Woolf. Sure. Hydropower is the dispatchable renewable.
So given the resource constraints in the Pacific Northwest, it
is essential to keep the lights on.
Senator Daines. All right, thank you. I appreciate that.
The Chairman. Senator Cantwell.
Senator Cantwell. Thank you, Mr. Chairman. Thank you,
Chairman Manchin and Senator Barrasso for this very important
hearing. As the most hydro-reliant state in the union, I can
tell you--I can sit here all day and we could have a very broad
discussion, but I really appreciate the witnesses mentioning
the work that Senator Murkowski and I and Senator Wyden have
been doing on hydro, and the tax credits, and how essential it
is.
I have a question for all four of you, and if you could
just take a minute, each of you, to answer, that would be
great.
Mr. Corwin, how important is it to have the direct-pay
option for any tax credit, and how essential is it to have
municipal and cooperative utilities take advantage of the tax
credit?
Mr. Woolf, if you could talk about why the production tax
credit, specifically, and what we need to do to keep that 38
percent of hydro and pumped storage capacity that is about to
expire, and expand on why that is so critical?
Commissioner Touton, if you could talk about--my colleague
was mentioning this aridification issue. How important is it to
get the aquifer recharge program going? What number should we
be looking at to put into aquifers since we are having less
snowpack, and how does that help the system?
And Ms. Garson, what can we do, and how are you looking at
the value of hydro for integration with renewables into the
grid, including pumped storage?
Mr. Corwin. Well, thank you, Senator and once again, thank
you for your work on this because it is very important, and the
direct-pay piece, specifically, is incredibly important if the
goal is to have a market-wide, industry-wide approach to
promote and encourage investment in hydropower, which is sorely
needed, and there is a long backlog. Then making sure that the
30 percent of utilities that are consumer-owned are able to use
that tool is important. Otherwise, you are missing a large
piece of it. And in the State of Washington, as you know, it is
a lot more than 30 percent that are consumer-owned. So it is
very important to the effort of getting this work done on these
projects to maintain this capacity.
Senator Cantwell. Thank you.
Mr. Woolf.
Mr. Woolf. Thank you, Senator Cantwell, for championing the
existing hydropower fleet. There is a now-expired tax credit
for new development at non-powered existing dams, but there are
no tax credits to preserve and maintain the existing carbon-
free fleet. So that is why the tax credit that you and Senator
Murkowski have been championing is so critical to keep that
fleet alive and operating. And we thank Senator Wyden for
including a portion of that in Build Back Better to encourage
environmental investments in the existing fleet.
Senator Cantwell. Ms. Touton--Commissioner Touton, Sorry.
Ms. Touton. Good morning, Senator.
As we see changing conditions across the West, we have to
use all those tools. So thank you to you and Senator Risch for
the inclusion of the aquifer storage program as part of the
infrastructure law, because if you are able to store it in the
ground, that is less water than you might be reliant on behind
the dam and it provides more stability within the region, and
certainly a benefit to Washington State. We are working through
the specifics of that program now, and I am happy to follow up
with you and your staff as we finalize numbers.
Senator Cantwell. So we are talking about more than tens of
millions, right?
Ms. Touton. Perhaps, Senator, absolutely. There is
certainly a demand.
Senator Cantwell. Okay.
Ms. Garson, how important it is to get all this integrated
into the grid of the future, particularly as it relates to
hydro and pumped storage?
Ms. Garson. It is critical. We have been conducting
analysis with the National Renewable Energy Laboratory to
better understand how much additional wind and solar can be
brought on.
Senator Cantwell. At PNNL, right? At Pacific Northwest
National Laboratories?
Ms. Garson. PNNL is also helping us do an analysis about
the alternative values of hydropower. So not just capturing how
much electricity generation could we bring online, but what are
the other values derived. PNNL is also working with us on our
pumped storage valuation analysis, which we actually applied to
the Goldendale facility in the State of Washington to better
understand and articulate the values of pumped storage projects
for developers to have better ease of access either to
investment or to work with regulators who advance pumped
storage.
So we are working on a myriad of analyses that show both
the quantitative measures of additional variable renewable
energy that can be brought online and to better articulate the
entirety of the values, including recreation and economic
benefits that hydropower provides.
Senator Cantwell. Will that be a national analysis?
Ms. Garson. The alternative values analysis will be a
national analysis. We are doing stakeholder engagement and
workshops right now with PNNL and Idaho National Laboratory and
the valuation project is already out and is available to
developers nationwide for pumped storage.
Senator Cantwell. Mr. Chairman, I think this will be so
helpful to other states, you know, on understanding the value
that we can get out of hydro. It is just one more level of
efficiency--using pumped storage. Thank you.
The Chairman. How much electricity do you get?
Senator Cantwell. Well, 62 percent right now of our
electricity is generated by hydro. It is down a little bit from
70, probably, 71 or 72 percent over the last decade or so. For
us, that is not a bad idea given the fact that we have
challenges with the hydro system and less snowpack. So it gives
us a little more flexibility.
The Chairman. Have any been closed because of relicensing
or are you having any challenges there?
Senator Cantwell. Senator Craig and I, more than a decade
ago--whenever Senator Craig was here, so it tells you how long
ago it was--worked on a program on hydro relicensing that we
got passed into law. Basically, it allowed the participants to
come to the table and bring up issues earlier in the process
because you have so many agencies that were participants. That
way you did not have two agencies agree and then now you get
down the road and a third agency says, ``Oh, I do not like
this.'' So basically, it allowed everybody to put their cards
on the table early without penalty and I think it was an
improvement in the system, but certainly we could discuss more
about the fact that the tribes are willing to look at some of
these issues.
I think it is a very important aspect of Mr. Woolf's work,
if they are willing, you know, to discuss what is a smoother
process. But obviously, these are huge resources in the
Northwest, I mean, but I do think--and I do not know what all
the other issues are that Mr. Woolf could probably address--but
I do think that it is an underused resource in general, but we
also have environmental impact. So you have to figure out all
of this and the best way to do that is to dialogue, get all
those issues on the table early.
The Chairman. Senator Lankford.
Senator Lankford. Senator Manchin, thank you.
Senator Cantwell, I would be glad to be able to partner
with you to be able to look at some of those areas and the
relicensing as well. I thank you for your work in the past on
that. You know there are obvious issues on this as well.
Oklahoma has ten hydro facilities, and that is a small dot of
what you have in the Northwest for hydro facilities. But we use
hydro as well, and it has been a good source of power, but our
challenge has been the relicensing process.
Actually, we have some of our facilities that took five
years from when they first dreamed of doing it to when they
were done with the construction. Those same facilities now are
going through relicensing. It is eight years just to be able to
relicense a facility that only took five years to build at the
very beginning. And so there have been some real challenges.
And some of that has been that agencies do not follow FERC's
guidelines, and it is one of the areas I want to be able to ask
Mr. Woolf about as well, is that FERC will set a guideline of
when agencies have to give a response and agencies say, ``We'll
give you a response when we feel like it'' and are not
following through on those timelines. And so giving agencies a
set structure of when they have to actually respond would also
be helpful, I think.
Senator Cantwell. Okay, happy to work with you, Senator.
Senator Lankford. That would be great. Glad to be able to
do that.
Mr. Woolf, let me come back to you on that. It is now
longer to be able to relicense a hydro facility than it is a
nuclear facility, to be able to relicense. It has grown to be
absurd in the process. What are the big rocks that you would
look at that are really driving this very lengthy process for
relicensing?
Mr. Woolf. I think there are two big problems, one of which
you just mentioned, which is there is no process discipline.
State and natural resource agencies and tribes have critical
roles, but if they do not abide by the Congressional deadlines,
there is no consequence. FERC cannot do anything about it.
There is no--you can't play football if everyone is a
quarterback. The second challenge is that some of these
resource agencies are going far beyond project effects. It is
absolutely legitimate to require a facility to address the
effects of the facility, but they see this is as the only
mechanism they have to address unrelated issues, and over the
decades, it has gone to just absurd lengths.
Senator Lankford. So let me ask a more specific question on
that as well. Do you have recommendations out there for what
you would look at to say how you address this whole issue of
some federal entities saying ``I am not going to follow the
guidelines of FERC?'' FERC sets a timeline. Other entities are
like, ``We'll do it when we feel like it'' and it may stretch
on forever. Is there some way to be able to do that that you're
making a recommendation on?
Mr. Woolf. So I do have recommendations in my written
testimony, but I am excited to be able to say that we have been
talking with the environmental and river community and we hope
to be able to bring a package of reforms to the Federal Power
Act to this Committee in February--hopefully in time to be able
to move something in a bipartisan way this Congress.
Senator Lankford. That shouldn't be a problem. This
Congress has been great at moving bipartisan things, so that
shouldn't be an issue.
Let me ask another question on this. You bring up some of
the other things--that every time the relicensing happens it
seems to draw on every issue in the entire region in the
process. That is a discouragement to doing additional hydro
that is out there. We have 90,000 or so locations in the
country that could do hydro, but only a fraction of them
actually do. Do you see that as some facilities and locations
that would say, ``We do not want to go through and actually put
hydro in this area because it also affects everything else in
the area?'' Do you see that as an ongoing discouragement that
should be addressed?
Mr. Woolf. Absolutely. Particularly for low-hanging fruit
where the dam already exists, that doesn't have significant
environmental impact, or off-river or closed-loop pumped
storage does not have significant environmental impact. So we
are recommending a two-year licensing process, start to finish,
for those facilities as they should not be that complicated.
Senator Lankford. So why do we see some of these locations
that have additional capacity not actually expanding? We see
that in Corps areas, especially where there is additional
capability but not actually an expansion to add additional
power. Why would that be?
Mr. Woolf. Three reasons. First is the licensing process
that they would have to go through. The second is the lack of
tax parity. They get incentivized to invest in other zero-
carbon technologies. And then third, the markets themselves.
They don't get paid for the flexibility and the various grid
reliability services they provide. So it is a real market
failure.
Senator Lankford. Do we have an issue with startup costs on
this as well? Has anyone voiced that and said, ``Okay, we still
don't have enough money to be able to do that expansion, so we
are just not going to do it?''
Mr. Woolf. Absolutely. It's all upfront costs because the
resource is free. The water is there.
Senator Lankford. Right.
Mr. Woolf. So it's all upfront startup costs, which is a
challenge.
Senator Lankford. But obviously, it pays for itself over
time, with just actually income from that coming out.
Mr. Woolf. And these facilities last 50, sometimes 100
years, so they are amazing investments.
Senator Lankford. Do you see an issue that Congress needs
to address how we handle the upfront costs and the payback on
that, because often in our appropriation process we will
actually say, ``Okay, if it doesn't pay for itself in a year,
then we're not going to be able to do it.'' And so literally,
you do not allocate money to something when other bonds, other
issues actually do pay for themselves over time.
Mr. Woolf. We need to think of hydropower like other
infrastructure, like bridges and roads. It shapes communities.
It lasts for generations. We can't expect to finance it like a
wind or solar project that are going to have a short life span.
Senator Lankford. Okay.
Mr. Chairman, may I ask one additional question? And I am
over time.
I have this understanding. I heard this rumor as well, that
you might be from Tulsa, Oklahoma.
Mr. Woolf. I am.
Senator Lankford. Is that true or false?
Mr. Woolf. That is true.
Senator Lankford. You still live in Tulsa, Oklahoma?
Mr. Woolf. I do not, unfortunately.
Senator Lankford. There are homes for sale in Tulsa. You're
welcome to be able to come back any time. So thank you.
[Laughter.]
Thank you, Mr. Chairman.
Mr. Woolf. Thank you.
The Chairman. Thank you.
Now we have Senator King, by virtual. Senator King, are you
still there?
Senator King. I am. Thank you very much, Mr. Chairman. And
I want the record to show that I do have a tie on, but I am
wearing this sweater today in honor of my constituents in
northern Maine. I talked to one this morning. It was 20 below
zero absolute temperature and 39 below with the wind chill.
So----
The Chairman. You would feel right at home here in this
Committee room right now.
[Laughter.]
Senator King. Oh yes, I just wanted to express solidarity
to my constituents.
First, I do want to emphasize--and I think it would be
worth the Committee's while to really do some work on pumped
storage. Storage is the key to a carbon-free energy future. And
batteries, as we know, are an important part of that, but they
involve mining and rare minerals and rare earth and all kinds
of other issues, and a lot of technology to be developed.
Pumped storage is a clean alternative, and I think it is one
that deserves some additional attention in terms of permitting
and support, in terms of tax credits and those kinds of things.
Second, on the issue of permitting, an appalling 39 years
ago I began in the hydro industry as a lawyer working on
permitting. And I have, in a sense, been waiting for this
hearing for 39 years. And here are a couple of the issues. One
is, I believe there needs to be a strong lead agency. And
obviously, that agency is FERC. But the important word is
``strong.'' And as Mr. Woolf has testified, they have to have
the ability, and Congress has to have the ability to set
deadlines and mean it and have those deadlines mean something.
This idea that it takes longer to permit a hydro project than a
nuclear plant is absolutely preposterous. And so a lead agency,
one-stop shopping, that can control the process and who can set
reasonable deadlines, I think, is incredibly important.
The other thing that I observed at the time is that, and I
suspect this is still true, that FERC is reluctant to make
decisions when there are conflicts between agencies or between
the developer and the agency. FERC basically says, ``go and
work it out and then we will bless what you agree to.'' The
problem is that creates a kind of veto power in various parts
of the system. FERC really, I think--and maybe I am behind the
times and they are much better at this--but my sense is that
FERC would rather have a settlement than make a decision. FERC
has to be ready to make those decisions on a timely basis.
Mr. Corwin, am I correct about that assumption?
Mr. Corwin. Yes, that's a good description. Having their
ability to make a strong decision and be the strong lead agency
and hold to timelines would really change the process and make
it a lot more manageable.
Senator King. And Mr. Woolf, how about this? How about an
expedited permitting process for repowering or powering
existing dams that did not have power before because the
ecological impact of that dam has already taken place and the
incremental environmental impact of powering that dam is
insubstantial? Should we think about that as a special category
that would be entitled to some kind of expedited permitting and
studies and those kinds of things?
Mr. Woolf. Yes, expedited permitting for existing non-
powered dams is a great idea, a great way to get more carbon-
free generation on the grid.
Senator King. And the dams are already there. The
environmental impact of the dam has already taken place. One of
the things that used to frustrate me was that when you are
permitting a hydro project, it is treated as if it were a strip
mall and none of the--not that I have anything against strip
malls--but none of the environmental benefits are taken into
account. Every form of energy has some impact. There is no free
lunch in energy. But it seems to me that projects that have a
substantial environmental impact should get some credit, if you
will, for that gain to the environment, but often in hydropower
licensing situations that is not the case.
Mr. Corwin, do you agree?
Mr. Corwin. I agree, and in the instance you used, where
there is already an existing dam, if you have the proponent of
a license walk away because they can't get through the process,
you haven't improved the environmental conditions in that area
either. You still have the dam there.
Senator King. One final question, and I know I am at the
end of my time, Mr. Chairman. One of the problems with
developing hydropower is that it is capital intensive and fuel
free, but it is competing against natural gas, which is a very
low capital investment, probably a fourth or a fifth of what it
costs to develop a hydropower project. But it has an energy
cost--a fuel cost that goes out into the future. The market
does not really recognize that now, and that is why I think I
agree with Senator Cantwell. We need some special upfront
incentives in order to try to get these capital-intensive
projects, which will be there for 40, 50, maybe even 100 years,
but right now they cannot compete for capital because of the
high demand upfront.
Mr. Woolf, is that your experience?
Mr. Woolf. Absolutely, and it's particularly made more
challenging if every other form of zero-carbon technology is
subsidized and hydropower is not. It makes it an impossible
investment climate.
Senator King. Well, Mr. Chairman, I think this is a worthy
area for our attention. I thank you for holding this hearing.
Senator Barrasso [presiding]. Thank you very much, Senator
King.
Senator Cortez Masto.
Senator Cortez Masto. Mr. Chairman, thank you. Thank you
both, Mr. Chairman and the Ranking Member, for holding today's
hearing. As you all know, 100 percent of my State of Nevada is
experiencing some level of drought, and in many locations
across the West the ability to generate electricity is
incumbent upon the availability of water. So Commissioner
Touton, let me start with you. Nevada is a beneficiary of water
in the Colorado River Basin. In fact, over two million Nevadans
get their water from the Colorado River. But despite only
receiving 0.3 million acre-feet of annual allocation out of the
16.5 million acre-feet allocated across the Basin--and that's
the lowest of any in the Colorado River Basin--southern Nevada
has been at the forefront of implementing conservation measures
to help keep more water in Lake Mead for future water use, but
also to keep enough water in the lake to generate electricity,
which we have been talking about today.
So Commissioner, my question to you is one, what should we
be considering for those of us that utilize that water along
the Colorado River, but also important for the electricity that
is generated from the Colorado River? And could you also talk
about--I understand you were in Las Vegas when the Colorado
Water River Users Association came together and signed the
agreement. I think it is referred to as the 500+ Plan. There is
a nexus between the drought that we are seeing and the
electricity we want to try to generate through hydropower. So
can you talk a little bit about that and what we need to be
aware of and considering, and how that work that we need to do
is also important for us to bring the states into this
conversation as well?
Ms. Touton. Thank you, Senator Cortez Masto, good morning.
When you look at hydropower, there are two components to
it, the elevation at the reservoir or that head, as we talk
about, and the flow rate, or the amount of water that goes to
the turbines. What we are seeing in the Colorado River is
record low capacity, so low head, and subsequently low water
going to those turbines. So that has immediate impacts on
hydropower production. And so the plan that you mentioned, a
partnership with the Southern Nevada Water Authority and the
State of Nevada, California and Arizona--the 500+ Plan--says
that we need to find, within 2022 and 2023, 500,000 acre-feet,
so a collective million acre-feet of water and prop up Lake
Mead. So that helps on two fronts for hydropower. It helps keep
levels up so we have a higher head and certainly, it helps with
flow rates because you have more water behind the reservoir. As
we work with our partners, specifically our preference
customers in the Western Area Power Administration, investment
in new technology, like low head help, it really is looking at
the water supply because it is the fuel that helps to also
answer our challenges of hydropower.
Senator Cortez Masto. Commissioner, do you feel confident
that the users along the Colorado River, particularly the Lower
Basin states that you just talked about--that everybody is in
agreement and understands the necessity to come together to
conserve that water?
Ms. Touton. Yes. Not only are we in agreement, we have
committed to significant financial resources. The Bureau of
Reclamation has already found $50 million of the $100 million
cost share that we have with the states, and the states have
gone to their boards and have brought those monies to bear as
well. So we are ready to work.
Senator Cortez Masto. And then the work that we did in the
bipartisan infrastructure package, how does that benefit what
we are talking about today?
Ms. Touton. First, there is a significant investment and
there is part of the drought contingency plan. So thank you for
that. And certainly, the large-scale water recycling that we
are hoping to bring online soon is another tool, because if you
are developing water somewhere else, you are saving that water
in a reservoir. And so there are direct correlations to
conservation and efficiencies within the system that translate
into more water behind reservoirs, and therefore, more
generation capacity for hydropower.
Senator Cortez Masto. Thank you.
And so let me ask both Commissioner Touton and Acting
Director Garson, can you provide an update on current efforts
and coordination with other agencies to address today's unique
challenges and keep our dams and hydropower facilities safe?
There is concern around, obviously, cybersecurity and hacking.
What work is being done to address this issue to make sure we
are protecting that important piece of hydropower and
electricity to our communities?
Either Commissioner Touton or Acting Director Garson.
Ms. Touton. Sure. I can go first. One of the significant
partnerships we have is the Federal Hydropower Memorandum of
Understanding. It helps for us to coordinate both on the
technological side, but also permitting, among other things.
Reclamation has to remain vigilant as far as cybersecurity, and
so we are continually working with DOE, we are working with the
Army Corps, exchanging best practices, knowing that the bad
actors are always there, and even when you feel like you are at
the forefront of cybersecurity, you have to continually improve
because they're getting better at going after our facilities.
Senator Cortez Masto. Thank you.
Ms. Garson. Yes, in addition to the Memorandum of
Understanding we are working with FEMA on its dam safety
program and trying to leverage some of the analysis and work
that we have through HydroSource at our Oak Ridge National
Laboratory to provide the analysis needed to inform an
interagency working group that has been looking at the
interconnects between cybersecurity and safety, of which they
are obviously incredibly interrelated.
Senator Cortez Masto. Thank you.
Thank you again, Mr. Chairman.
The Chairman [presiding]. Now we have Senator Kelly.
Senator Kelly. Thank you, Mr. Chairman. Thank you for
holding this hearing. This issue of hydropower is critical to
our state, but as we all realize, and as Senator Cortez Masto
spoke about, this 22-year drought that we have been
experiencing in the West is connected with our ability to
generate electricity, especially at the Hoover Dam. So
Commissioner Touton, I wanted to follow up on the line of
questioning that my colleague from Nevada had about the 500+
Plan that was finalized last month. As you and we all realize,
this plan is going to help water users in Arizona, Nevada, and
California conserve about one million acre-feet of water in
Lake Mead through 2023, 500,000 acre-feet in 2022, and then
again the following year. That is a lot of water. It is not
enough to prevent future drought restrictions, but it does buy
some important time to deploy some more mitigation measures.
And this matters because, as the Senator from Nevada spoke
about, Lake Mead is home to the Hoover Dam, which produces
electricity for millions of people in Arizona and across the
Southwest.
Right now, as of today, if we were to check, I think the
water level in Lake Mead is about 1,066 feet above sea level,
but it is going down. If levels fall below 950 feet above sea
level, the dam will stop generating electricity, which is about
116 feet from where it is today. So Ms. Touton, how soon does
Reclamation estimate that Lake Mead could reach this dead pool?
Well, reach the dead pool elevation, which is in the
neighborhood of 800 and something feet. So the dam stops
generating electricity at 950, but at 850 or so, I think we
wind up with a dead pool, where we cannot get any more water
out of it. Do you have estimates for when those two things will
happen?
Ms. Touton. Current modeling does not project Lake Mead to
decline to dead pool, as you mentioned, Senator, within the
next five years. And we see that there is a three-percent
chance that Lake Mead will decline to minimum power pool as
early as 2026. That is certainly not to say that 1,066 is not a
scary number for us. It is certainly within the capacity of
Lake Mead, you know, that is about 34 percent of capacity. So
we are at historically low levels at Lake Mead now.
Senator Kelly. Earlier you mentioned that the Drought
Contingency Plan--there is funding from that--but there is also
funding in the bipartisan infrastructure bill for the 500+
Plan. How much money can we use out of the bipartisan
infrastructure bill at this point for the 500+ Plan?
Ms. Touton. So thank you to Congress. We were able to,
within our FY21 reprogramming and supplemental funding for
FY22, have cash on hand for $50 million of the $100 million for
the 500+ Plan. So we are ready to work on that portion of it.
We are currently finalizing our spending plan, Senator, and it
is in review with the highest levels of the Federal Government,
hopefully to get to you soon. But the $250 million there for
the Lower Basin certainly will be one of the areas that we look
at for the additional $50 million for the 500+ Plan, which then
leaves another $200 million for work within the Basin.
Senator Kelly. I want to talk a second, since my colleague
from Colorado just arrived, are Upper Basin states contributing
resources and amounts similar to the 500+ Plan?
Ms. Touton. Well, we are currently working with our
partners in the Upper Basin states that we just announced. We,
Reclamation, just announced changes in releases from Lake
Powell throughout the year to be able to continue to protect
levels at Powell and we certainly have resources in hand to
work with partners in the Upper Basin states when they are
ready.
Senator Kelly. Well, thank you, Commissioner.
This is a critical issue, not just for Lower Basin states,
for Upper Basin states, and for the entire Southwest, but for
the country, in fact. This time of year especially, a large
percentage--nearly all of the green leafy vegetables that
people eat across the country come from the State of Arizona
from the Lower Basin. That water that comes from the Colorado
River is critical for farmers to be able to grow that portion
of our food supply. So I encourage you and the Secretary to
continue to lean a little bit on the Upper Basin and all
Colorado River states to work together on this critical issue,
and apologies for going over my time, Mr. Chairman.
The Chairman. Senator Murkowski, are you ready?
Senator Murkowski. Sure.
The Chairman. Okay.
Senator Murkowski. Thank you, Mr. Chairman. I appreciate
the opportunity to be talking about hydropower and its
extraordinary benefits. It is something that I think has been
overlooked and is oftentimes just kind of the unsung, just
chugging along making things happen. Certainly, for us in
Alaska, it is an extraordinary source of renewable, clean,
environmentally safe energy. So I know that we need to be doing
more to work to facilitate the build-out around our country. In
Alaska we hear repeatedly the concerns from many of our smaller
operators who feel almost overwhelmed with the permitting
challenges, the licensing challenges, and the length of the
construction process.
So I know that the legislation that Senator Cantwell and I
have introduced has been commented on that would create the
federal tax incentives to encourage the safety, the
environmental, and the resilience upgrades for our hydropower
dams. So hopefully we will be able to work with all of you and
work with those in the Administration to try to advance that,
and I would basically put out an ask that as we are looking to
again do more when it comes to our hydropower resources that we
can count on the agencies to work to reduce these barriers to
deploy more of our hydroelectric capacity and certainly, our
smaller hydro.
It seems to me we just have not been able to talk openly
about the different ways that we create energy through our
hydropower. Not everything is a big Bonneville or Hoover Lake.
So much of it, in my state, is the small run-of-river projects,
the RivGen project that we have in Igiugig is a great little
example of how you can take smaller solutions and make a big
difference. When you take a village off of diesel, you are
making an extraordinary difference in the quality of life and
the sustainability of that community. I want to make sure that
we are doing just exactly that. I would hope that we could do
more to demonstrate to the public that projects like this are
safe, that they can be constructed without detriment to the
environment and, in many of our cases, without impact to our
fisheries, and that is exactly what we are doing in Alaska.
I want to get to my question here, and this is for Ms.
Garson. In your testimony you mentioned that in the Energy Act
of 2020 Congress expanded the definition of qualified
hydroelectric facility to include an existing dam or conduit
constructed in an area of inadequate electric service, as
determined by the Secretary. The RFI that DOE released last
July proposes to limit the definition by stating, ``or where
the cost of electricity is significantly above the typical
residential electric cost.''
So what I have heard from folks back home is that with the
inclusion of the word ``significantly'' it departs from the
law. It is really going to limit the program's reach in Alaska,
where our typical residential electric rates are generally
higher than in the Lower 48. So I would like your commitment to
work with me and my office to ensure that the final rulemaking
here is not so overly restrictive that it shuts out many of the
communities that I believe it is intended to support. So I
would like your commitment that we can work on that.
Ms. Garson. Yes, Senator, and there are actually three
different qualifications for inadequate electric service. One
is lack of access to an interconnected transmission system,
which Alaska is not connected to the Eastern or Western
Interconnection or ERCOT. So in our interpretation, Alaskan
communities and Alaskan projects--nearly all if they meet the
other qualifications, would be eligible under 242. But I would
be happy to meet with you and discuss more about our
implementation and our rulemaking process.
Senator Murkowski. Good. Well, I would welcome that. I
would look forward to that.
In the meantime, Mr. Chairman, I want to submit for the
record comments from the Alaska Independent Power Producers
Association, Renewable Juneau, and Juneau Hydropower. They were
submitted in response to the RFI from the Department of Energy.
[Comments regarding the Department of Energy RFI follow:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Murkowski. But again, everything that this
Committee can do to work on the permitting issues, the
licensing issues, the cost issues, the length of time, this is
going to be extraordinarily important. I am hopeful that we
will be able to work through this Congress to get this
provision that Senator Cantwell and I have been working on. I
think that will be a big step forward. So I am getting lots of
good positive nods from our witnesses and hope that those of
you that are appearing virtually today can note the enthusiasm
for the direction that we are taking.
And with that, Mr. Chairman, I thank you.
The Chairman. Thank you, Senator.
Senator Hickenlooper.
Senator Hickenlooper. Thank you, Mr. Chair. Thank all of
you for your work on this. Thank you, Chairman, for bringing
together this panel.
And now that my esteemed colleague, Senator Kelly, has left
and I can talk a little real truth about the Lower Basin
states, and how this is going to result--I am just kidding.
[Laughter.]
Senator Hickenlooper. We have had frequent constructive
conversations on the challenges we are going to be facing.
Commissioner Touton, given that the projections demonstrate
the very legitimate and real possibility that Lake Powell is
going to go below the minimum level required to produce power
under possible hydrologic scenarios literally, possibly, as
early as next winter, and I am happy to report that the
mountains in Colorado are about 30 or 40 percent above average,
which is a great data point, but it is only a data point. I
wanted to see if, Commissioner, you could talk a little bit
about how the Bureau of Reclamation--when you are looking at
how you avoid this sort of a situation where we have, clearly,
very serious negative outcomes, and at what point do you try to
prepare for those situations? And where is the inflection point
where you begin to focus more on preparing or dealing with,
rather than avoiding?
Ms. Touton. Thank you, Senator. Good morning. Certainly, I
think we are at the point where we are doing both. The levels
at Lake Powell--we are operating in conditions that we have
never operated in before since the construction and bringing
online of this facility. And so the first thing we did that we
announced last week was we adjusted the releases from Powell.
The volume stays the same of how much goes out, but how much--
we varied it between months to be able to protect, as you said,
critical times in the power pool. So that is step one. But that
is a lot more to do, and certainly one of the things that we
are doing to prepare--this is part of our supplemental funding.
We have allocated funds to look at the operations of the
facilities under these dry conditions to better understand them
and how we can move forward should these conditions persist. We
are very happy about the snow, but as you said, it is one data
point.
[Laughter.]
Ms. Touton. It is like, you know, not getting money to your
bank account for a year and then all of sudden getting a
paycheck for a month. So we are still at extreme deficits, but
we are not going to complain about getting more snow.
Senator Hickenlooper. Thank you, and I could not agree
more. It is about--maybe it is two paychecks, but not anything
that is going to solve our problems.
Mr. Woolf and Ms. Garson, as you know, we are poised for a
remarkable build-out of clean energy, especially in wind and
solar in the coming decade. I think hydro can play a critical
role in that build-out and be a big part of the clean resource
mix, all the more so because it does complement wind and solar
in certain key respects in terms of generation and storage. Can
you discuss a little bit about how that complementary
relationship really does help other renewable energy sources as
wind and solar begin to grow?
I don't know who--you want to go first?
Mr. Woolf. I'll jump in.
We think of hydropower as the renewable resource that
enables other renewable resources. One example of this is, just
in California, even during the recent drought, hydropower is
able to ramp up in those afternoon periods as the sun is
setting, hydropower ramps up to keep the lights on. So we
really view hydropower as providing an essential complement to
the other clean energy technologies.
Senator Hickenlooper. Yes, absolutely.
Do you want to add something to that, Ms. Garson?
Ms. Garson. Yes, I will say that one of the things that we
are actually doing with the National Renewable Energy
Laboratory in Colorado is looking at specifically the
integration factor that could be enabled by hydropower. So
specifically quantifying how much additional solar or wind
could you have either at a national or localized level by
having hydropower serve in a more flexible operating
environment to provide load balancing and other critical grid
services.
Senator Hickenlooper. Great, and I appreciate that shout
out for NREL, the National Renewable Energy Laboratory,
something we are very proud of in Colorado.
I yield back to the Chair.
The Chairman. Thank you, Senator.
Senator Lee.
Senator Lee. Thank you, Mr. Chairman.
I would like to follow up on some of these issues regarding
Lake Powell. I am very worried about what the ongoing drought
in the West has done, particularly the impact that it has had
on Lake Powell. Current water level readings at Lake Powell are
only 10 feet above the critical threshold that has been set to
protect power production capabilities at Glen Canyon Dam. And
according to the most recent 24-month analysis by the Bureau of
Reclamation that was released just a few weeks ago, those water
levels are projected to cross that critical threshold by March
of this year and then continue to decline over the next year.
And so, Mr. Corwin, I have been worried about this. What
can you tell me? What steps do you think federal agencies or
WAPA could take in order to ease transitions for customers if
our power generation capacity there continues to fluctuate?
Mr. Corwin. Well, near-term--and I defer to WAPA, the
experts, on how they would approach their planning and the
Bureau of Reclamation on the state of the projects, but
diversifying your supply and your contracts is critical in that
instance. And I think hydropower, generally, for one thing,
being able to create mechanisms to bring more into the area,
because to balance that region is critical as well. So there
are a lot of different steps. Some of it involves transmission
capability as well that I know they are looking at to try to
ameliorate that.
Senator Lee. Okay.
Mr. Corwin, you may be aware that the Bureau of Land
Management (BLM) establishes solar energy zones as areas well
suited for utility scale production of solar energy where the
BLM will prioritize solar energy and associated transmission
infrastructure development. Do you think similar steps could be
taken by federal agencies in order to address and incentivize
pumped hydro storage?
Mr. Corwin. Certainly, there is potential for that.
Anything you do to make the process easier and to create some
incentive for investors and developers to make it actually
happen to the extent the zone helps get you through some of
that permitting process easier, that could help.
Senator Lee. So that could be helpful in that way, that
hydropower generation?
Mr. Corwin. Yes, I hadn't looked at that for pumped
storage, but I think the concept has potential, certainly.
Senator Lee. Okay.
Mr. Woolf, you mentioned in your testimony that, quote,
``The time, costs, and uncertainty involved in licensing and
relicensing in existing hydropower facilities is diametrically
at odds with the urgency of addressing climate change and the
upcoming wave of hydropower relicensing proceedings.'' What
steps do you think Congress can take to lighten the licensing
burden while upholding the statutory objectives that we have
set to consider water quality, species protection, cultural
resource impacts, and recreation?
Mr. Woolf. I think there are two fundamental problems. The
first is lack of process discipline. There is no one agency
that is responsible for the process, and particularly if state
or federal and natural resource agencies don't do their jobs
under the required deadlines, there are no consequences and
there is no decisionmaker, no dispute resolution process. The
other problem is that some of these agency mandatory conditions
run amok. They are going way beyond what is related to the
facts of the facility. So if we could rein in those two
problems, I think we could have a much more rational system
that still respects environmental concerns and still involves
the resource agencies and tribes, and others. In fact, I
mentioned earlier that we have been working closely with the
environmental community and tribes, and we hope to be able to
come back to this Committee in February with a legislative
reform package to address a lot of these challenges.
Senator Lee. Wonderful. Including the regulatory-systems-
run-amok-related problems?
Mr. Woolf. Correct.
Senator Lee. Do you think these are fixable, and fixable in
a way that could take into account these interests that we
previously identified as significant?
Mr. Woolf. I think they are fixable and they need to be
fixed if the industry is going to continue.
Senator Lee. Okay. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
Now we have Senator Hoeven.
Senator Hoeven. Thank you, Mr. Chairman.
Mr. Woolf, if a significant number of the hydropower
facilities elect to decommission rather than renew their
license, what would be the reliability and affordability
impacts on consumers?
Mr. Woolf. It could be dramatic. We are facing a wave of
relicensing proceedings over the next decade, and these
facilities not only provide clean power, they are dispatchable,
so they are often the ones that keep the lights on as you have
increasing amounts of variable wind and solar. So it could be
significant.
Senator Hoeven. All right. And my next two questions are
related to Senator Lee's question, and I think you answered
that on the things that should be done to improve the process.
So I am going to go to Mr. Corwin. When it comes to renewals
for existing dams as well as permits for new projects, what
steps do you feel should be taken to address the challenges so
that the permitting process is improved? And I think Mr. Woolf
touched on this with his thoughts there, but I would like to
hear yours.
Mr. Corwin. Yes, thank you, Senator.
And I mentioned earlier some of the basics, like getting a
clear lead agency to hold the other agencies to timelines, the
clear lead agency being FERC. To not do redundant studies and
duplicating studies. One thing mentioned in the report that DOE
or NREL did, they noted too that you have a lot of staff
turnover, that mid-project, they are trying to rebuild
technical expertise in the middle of a project review and that
can hold things up. There are disagreements over scientific
data. There are waiting times on studies coming from these
resource agencies. There are just a lot of different parts and
pieces that could be addressed. It has just not been done to
date.
Senator Hoeven. Okay. Should an expansion of hydropower be
included in the discussion?
Mr. Corwin. Yes, I think that there are a lot of
opportunities for expansion, including just better, more
efficient use even at current projects, and some of the work at
the Department of Energy labs has highlighted that, as well as
our technological advances and data increase--you can expand
even just by operating more efficiently, but expansion,
certainly. At non-powered projects right now, there is a lot of
opportunity, and we mentioned earlier tens of thousands of
projects where there is potential.
Senator Hoeven. Okay. Well, then that leads me to
Commissioner Touton. Do you see an opportunity for expanded
hydropower development at Reclamation's existing facilities?
Ms. Touton. Yes, Senator. Our hydropower strategic plan
outlines some of those opportunities within our facilities.
Senator Hoeven. Okay, and are you working on that?
Ms. Touton. We absolutely are.
Senator Hoeven. All right.
Then, Director Garson, do you also believe that the current
licensing process involves too many agencies?
Ms. Garson. That is not at the discretion of the Department
of Energy, but we have been providing third-party analysis
specific to the timelines associated with the regulatory
process, and our findings have been published just this past
October, detailing the multiple steps that hydropower licensing
and relicensing requires.
Senator Hoeven. Then, to ensure hydropower remains an
important part of our energy mix, do you agree the permitting
process needs to be streamlined?
Ms. Garson. I think to address some of the challenges
articulated by Mr. Woolf and Mr. Corwin, there could be
efficiencies, but again, the U.S. Department of Energy isn't
necessarily involved in the regulatory process, but we would be
happy to meet with your staff to discuss our regulatory study.
Senator Hoeven. Do you have specific recommendations to
alleviate burdensome permitting costs and delays?
Ms. Garson. I do not. This study instead articulates where
some of the challenges might lie, but the Department of Energy
does not provide recommendations on how to streamline the
permitting process.
Senator Hoeven. Thank you, Mr. Chairman. I yield back the
rest of my time.
The Chairman. If you all have any more questions--Senator
Lee, Senator Hoeven, do you have any other questions?
I just have one follow up and then we will adjourn.
Have there been rate increases to the customers with these
water conditions we have out West? How are we able to maintain
the revenue that is needed for maintenance and repairs? If the
revenue is down because of the rate increases, or maybe rate
increases haven't happened, I don't know.
Mr. Corwin, do you know?
Mr. Corwin. Yes, there have been rate increases over time
in the wholesale power cost and some certainly associated with
not just the increased cost of licensing and the maintenance--
--
The Chairman. Right.
Mr. Corwin [continuing]. But also, the operations and lack
of ability to make use of the capability of those projects.
The Chairman. Is it going to be difficult with the
reduction of water to maintain the rates or can you continue to
raise the rates or adjust the rates that will be needed to keep
the operations up to par?
Mr. Corwin. Difficult to say with water conditions year to
year, and there are a lot of different factors impacting rates
as well. There are increased costs for cybersecurity and for
transmission maintenance and build. There are environmental
considerations. So there are a lot of impacts to those
customers, residents, and businesses in the West.
The Chairman. I have one final question. There is a
gentleman, Charlie Jones, who passed away a couple years ago.
Charlie was about 100 years of age in West Virginia. He was a
tremendous, tremendous individual, and he was as sharp and
bright as could be. Charlie had a plan, basically, to build a
very large pipeline from the water basin that we have in West
Virginia--in our pools down in Paducah, Kentucky, there are
areas of water--to build a pipeline to the West for water. Has
that ever--I mean, we have to do something to make sure you
have adequate water supply and we have an abundance of water on
the East Coast here, especially in the basin that we have that
we share with Kentucky. And he did all the calculations on it
and has all the drawings and everything. And I was just
wondering, has that ever been a consideration?
Mr. Corwin. I would say, you know, historically there--I
don't know about going that far, but even trying to move it
longer distances around the West, it has been looked at over
the years, but boy, if you think permitting that one little
project can be difficult, trying to put in that type of
infrastructure and the cost on it is----
The Chairman. I am sure the cost and all that would be up,
but I just was wondering if the environmentalists would be
opposed to a water pipeline?
Mr. Corwin. I would say the siting permitting would be
extremely challenging----
Senator King. Mr. Chairman, Mr. Chairman.
The Chairman. Yes.
Senator King. Would you agree with me that if we did
something like that, we ought to peg the water to the price of
a barrel of oil?
[Laughter.]
The Chairman. Well, at least I can tell you one thing, we
would like to get paid for our water in West Virginia.
[Laughter.]
The Chairman. So I do not think we would be quite as
expensive as oil, but we would get a pretty penny for it.
Senator King, do you have any further follow-up? Any
questions?
Senator King. No, Mr. Chairman, but thank you again for
this hearing. I think it is a very important one and I think we
have had some good ideas here and some things we can act upon.
The Chairman. I think we have taken it for granted, you
know, for far too long on hydropower and not really paying
attention to it and developing it the way it should be
developed. It is a tremendous opportunity, and we have an
opportunity now to reduce our footprint, our carbon footprint,
and it would be tremendous to have the reliable power that we
know can do the job and has done it. Technology--I do not know
if technology has been keeping up with it or if we put enough
emphasis on that, on additional technology for hydropower
production, but it is something we should do.
Senator King. Well, Mr. Chairman, one of the tremendous
resources we identified today was the dams, the thousands of
dams----
The Chairman. Right.
Senator King [continuing]. That do not have any power
generation.
The Chairman. Absolutely.
Senator King. And I think we should look into some kind of
expedited permitting process, similar to very small hydro
projects at FERC, to enable the country to move forward tapping
that resource. I think that is one of the most important things
we have learned in this hearing today, and we need to figure
out how to facilitate that development in areas where the
environmental impact has already taken place.
The Chairman. With all of your assistance, maybe we can--
our most able staffers on Renae and Richard's teams--work with
you all to get an update on where we stand on these and what
potential there is. The most logical, reasonable, and cost-
effective ones. Which dams would you target if you were going
to put hydro on? That would help us tremendously. Narrow it
down to the ones that could be done. If you could help us with
that, we would appreciate it.
I want to thank all the witnesses for joining us this
morning for the discussion. It has been quite informative, as
you can tell by the questions that have been asked.
Members will have until the close of business tomorrow to
submit additional questions for the record.
With that, the hearing will be adjourned.
[Whereupon, at 11:53 a.m., the hearing was adjourned.]
APPENDIX MATERIAL SUBMITTED
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