[Senate Report 112-19]
[From the U.S. Government Publishing Office]
Calendar No. 55
112th Congress Report
SENATE
1st Session 112-19
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HYDROPOWER IMPROVEMENT ACT
_______
May 18, 2011.--Ordered to be printed
_______
Mr. Bingaman, from the Committee on Energy and Natural Resources,
submitted the following
R E P O R T
[To accompany S. 629]
The Committee on Energy and Natural Resources, to which was
referred the bill (S. 629) to improve hydropower, and for other
purposes, having considered the same, reports favorably thereon
with an amendment and recommends that the bill, as amended, do
pass.
The amendment is as follows:
On page 10, line 21, strike ``(b)(3)'' and insert
``(b)(4)''.
Purpose
The purpose of S. 629 is to improve and increase hydropower
production in the United States.
Background and Need
Hydropower represents approximately two-thirds of the
renewable electricity generation in the United States and is
currently providing almost seven percent of the country's total
energy generation. About forty-five percent of all hydropower
in the United States is generated at federally-owned
facilities. With only three percent of the nation's
approximately eighty thousand federal and non-federal dams
currently generating hydropower there is great potential to
increase hydropower production. Additional hydropower can be
sited, constructed, and operated in a responsible manner to
reduce or avoid environmental damages. S. 629 seeks to
encourage development of additional hydropower through
efficiency improvements or capacity additions at existing
facilities, including conduits, adding hydropower to non-
powered dams, small hydropower development, and pumped storage
projects.
Further research will aid in the development of more
efficient and environmentally sound hydropower technologies.
Improving the licensing process will also help ensure that
additional hydropower can be developed while maintaining
environmental protections and the opportunity for public input
into the licensing process. Through the workshops and pilot
projects called for in S. 629, it is anticipated that the
Federal Energy Regulatory Commission (FERC), the Bureau of
Reclamation and the resources agencies will develop processes
that will improve existing procedures.
Legislative History
Senator Murkowski introduced S. 629 on March 17, 2011. The
bill is co-sponsored by Senators Begich, Bingaman, Cantwell,
Crapo, Murray, Risch, Whitehouse, and Wyden. The Committee on
Energy and Natural Resources held a hearing on S. 629 on March
31, 2011 (S. Hrg. 112- ) and considered the bill and adopted an
amendment at its business meeting on April 12, 2011. The
Committee ordered S. 629 favorably reported, as amended, at its
business meeting on April 12, 2011.
Committee Recommendation
The Senate Committee on Energy and Natural Resources, in
open business session on April 12, 2011, by voice vote of a
quorum present, recommends that the Senate pass S. 629, if
amended as described herein. Senators Lee and Paul were
recorded as opposing the measure.
Committee Amendment
During its consideration of S. 629, the Committee adopted
an amendment. The amendment made a technical clarification to
the bill.
Section-by-Section Analysis
Section 1 provides the short title of the bill and table of
contents.
Section 2 contains findings relating to the potential for
development of additional hydropower in the United States.
Section 3 defines terms used in the Act.
Section 4 states the Sense of the Senate that the United
States should increase the capacity and generation of clean,
renewable hydropower to improve environmental quality and
support job creation and economic investment.
Section 5 directs the Secretary of Energy to establish a
competitive grant program to support the following efforts:
efficiency improvements or capacity additions at existing
hydropower facilities; adding power generation to non-powered
dams; addressing aging infrastructure concerns; conduit
projects, environmental studies; and environmental mitigation
measures.
Section 6 directs the Secretary of Energy to develop and
implement a plan for research, development and demonstration of
increased hydropower production. The Secretary is also directed
to provide technical assistance for applicable environmental
analyses.
Section 7 directs FERC to conduct workshops and pilot
projects to investigate whether hydropower development at
existing non-powered dams and closed-loop pumped storage
projects can be licensed within two years, and to report back
to Congress on the results.
Section 8 codifies FERC's regulatory definition of
``conduit'' and allows conduit projects located on federal land
to be eligible for FERC's existing licensing exemption process.
FERC is also directed to enter into a memorandum of
understanding with other agencies to establish a more efficient
approval process for conduit hydropower projects and to conduct
workshops and develop pilot projects to identify ways to
improve the approval process for conduit and small hydropower
projects while maintaining adequate environmental, health and
safety protections. The workshops will also investigate whether
the rated capacity for small hydroelectric power projects
should be increased from five megawatts.
Section 9 authorizes FERC to extend the term of a
hydropower preliminary permit for two years.
Section 10 directs the Commissioner of Reclamation to study
the barriers to non-federal development at Reclamation projects
and to enter into a Memorandum of Understanding with FERC to
improve coordination and timeliness of non-federal development
at Reclamation projects.
Section 11 directs the Secretary of Energy to study the
potential quantity of hydropower that may be obtained from
conduits.
Section 12 directs the Secretary of Energy, in consultation
with the United States Geological Survey, to study and identify
suitable pumped storage sites in the country.
Section 13 directs the President to report to the Senate
Energy and Natural Resources Committee and the House Energy and
Commerce Committee on the actions taken by the agencies to
implement the March 24, 2010 Memorandum of Understanding on
Hydropower.
Section 14 provides that the Act shall not limit the
authority of the Bureau of Reclamation to develop new
hydropower at existing federal projects consistent with Federal
law, power and nonpower operating requirements, and laws
governing Federal Power Marketing Administrations. The Act does
not limit the authority under existing law of a Federal Power
Marketing Administrator in the event that operations at Federal
projects with hydropower are modified.
Section 15 states that the Statutory Pay-As-You-Go Act of
2010 applies.
Cost and Budgetary Considerations
The following estimate of costs of this measure has been
provided by the Congressional Budget Office:
S. 629--Hydropower Improvement Act of 2011
Summary: S. 629 would authorize appropriations for a
variety of activities aimed at promoting the supply and energy
efficiency of hydroelectric power. Assuming appropriation of
amounts authorized by the bill and estimated to be necessary,
CBO estimates that implementing S. 629 would cost $378 million
over the 2012-2016 period. S. 629 would not affect direct
spending or receipts; therefore, pay-as-you-go procedures do
not apply.
S. 629 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would impose no costs on state, local, or tribal
governments.
Estimated cost to the Federal Government: The estimated
budgetary impact of S. 629 is shown in the following table. The
costs of this legislation fall within budget functions 270
(energy) and 300 (natural resources and environment).
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
--------------------------------------------------
2012 2013 2014 2015 2016 2012-2016
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Estimated Authorization Level................................ 113 100 100 100 100 513
Estimated Outlays............................................ 23 60 95 100 100 378
----------------------------------------------------------------------------------------------------------------
Basis of estimate: For this estimate, CBO assumes that S.
629 will be enacted by the end of fiscal year 2011 and that
appropriations will be provided near the start of each fiscal
year. Estimates of outlays are based on historical spending
patterns for similar activities carried out by the affected
agencies.
S. 629 would specifically authorize the appropriation of
$510 million over the 2012-2016 period for a variety of
activities aimed at promoting hydroelectric power. That amount
includes:
$50 million annually over the 2012-2016
period for the Department of Energy (DOE) to provide
grants to support projects to add new hydroelectric-
generating capacity, projects to increase the energy
efficiency of existing facilities that generate
hydroelectric power, and analyses and implementation of
measures to mitigate the environmental impact of such
projects;
$50 million annually over the 2012-2016
period for DOE to establish a program to research,
develop, and demonstrate innovative means of increasing
the use, generation, energy efficiency, and
environmental quality of hydropower; and
A total of $10 million for the Federal
Energy Regulatory Commission to establish pilot
projects to demonstrate the feasibility of small
hydroelectric-power facilities and projects to generate
hydroelectric power using water flowing through
agricultural, municipal, or industrial conduits.
In addition, CBO also estimates that funding various
studies, reports, and regulatory activities under the bill
would require appropriations totaling $3 million in 2012. In
total, assuming appropriation of the authorized and estimated
amounts, CBO estimates that implementing S. 629 would cost $23
million in 2012 and $378 million over the 2012-2016 period,
with additional spending occurring in later years.
Pay-as-you-go considerations: None.
Intergovernmental and private-sector impact: S. 629
contains no intergovernmental or private-sector mandates as
defined in UMRA and would impose no costs on state, local, or
tribal governments.
Estimate prepared by: Federal Costs: Megan Carroll; Impact
on State, Local, and Tribal Governments: Ryan Miller; Impact on
the Private Sector: Amy Petz.
Estimate approved by: Peter H. Fontaine, Assistant Director
for Budget Analysis.
Regulatory Impact Evaluation
In compliance with paragraph 11(b) of Rule XXVI of the
Standing Rules of the Senate, the Committee makes the following
evaluation of the regulatory impact which would be incurred in
carrying out S. 629.
The bill is not a regulatory measure in the sense of
imposing Government-established standards or significant
economic responsibilities on private individuals and
businesses.
No personal information would be collected in administering
the program. Therefore, there would be no impact on personal
privacy.
Little, if any, additional paperwork would result from the
enactment of S. 629, as ordered reported.
Congressionally Directed Spending
S. 629, as ordered reported, does not contain any
congressionally directed spending items, limited tax benefits,
or limited tariff benefits as defined in rule XLIV of the
Standing Rules of the Senate.
Executive Communications
The testimony provided by the Federal Energy Regulatory
Commission, the Bureau of Reclamation and Department of Energy,
at the March 31, 2011, Full Committee hearing on S. 629
follows:
Statement of Michael L. Connor, Commissioner, Bureau of Reclamation,
Department of the Interior
Chairman Bingaman, Ranking Member Murkowski, and members of
the Committee, I am Mike Connor, Commissioner of the Bureau of
Reclamation (Reclamation). I am pleased to be here alongside
the Department of Energy (DOE) and the Federal Energy
Regulatory Commission (FERC) to discuss activities underway at
the Department of the Interior (Department) as they relate to
S. 629, the Hydropower Improvement Act of 2011.
Hydropower is a clean and efficient way to produce energy
and is a renewable resource. Each kilowatt-hour of
hydroelectricity is produced at an efficiency of more than
twice that of any other energy source. Where hydropower does
have environmental impacts, particularly on fish species and
their habitats, we work with our partner bureaus and agencies
to evaluate and mitigate these impacts. Further, hydropower is
very flexible and reliable when compared to other forms of
generation. Reclamation has nearly 500 dams and dikes and
10,000 miles of canals and owns 58 hydropower plants, 53 of
which are operated and maintained by Reclamation. On an annual
basis, these plants produce an average of 40 million megawatt
(MW) hours of electricity, enough to meet the entire
electricity needs of over 9 million people on average.
Reclamation is the second largest producer of hydroelectric
power in the United States, and today we are actively engaged
in looking for opportunities to encourage development of
additional hydropower capacity at our facilities. This
afternoon, Reclamation will publish the Hydropower Resource
Assessment at Existing Reclamation Facilities (Assessment), a
comprehensive review of power potential at all Reclamation
facilities. The Assessment benefitted from public comment
received this past winter. The Assessment will detail our
findings on hydropower potential, providing information on
whether or not hydropower development at existing Reclamation
facilities would be economically viable and warrant further
investigation. In addition to the Assessment, Reclamation will
be publishing two Federal Register notices in the near future
regarding Lease of Power Privilege opportunities at Granby and
Pueblo dams in Colorado (two facilities that were identified to
have good hydropower development potential in the Assessment).
Reclamation and DOE are also working on a funding opportunity
announcement to conduct several pilot studies on a low-head
hydropower unit at Reclamation facilities.
I am pleased to report on these recent activities as they
relate to the directives in S. 629. Subsection 10(a) of the
bill calls for study of non-Federal hydropower development at
Bureau of Reclamation projects. Reclamation is directed to
conduct a study of barriers to non-Federal hydropower
development at Reclamation projects. This provision may
duplicate efforts already underway. For example, the
constraints analysis outlined in Chapter 3 of the Assessment,
titled Site Analysis Methods and Assumptions (specifically,
Chapter 3.5 of the Assessment), examines how land or water use
regulations and legal requirements could potentially affect
development of hydropower. These factors were taken into
account when assessing the potential for hydropower development
on existing Reclamation facilities. Further, the identified
regulatory constraints have been mapped within Reclamation's
regions using Geographic Information System (GIS) data. Local
information for fish and wildlife and fish passage constraints,
issues that could add significant development costs to a
project site but are important to address from an environmental
and natural resource standpoint, were identified by
Reclamation's regional and area offices and accounted for in
the Assessment as well.
Subsection 10(b) of S. 629 calls for Reclamation and FERC
to develop and issue a memorandum of understanding to improve
the coordination and timeliness of the non-Federal development
of hydropower resources at Reclamation projects. Reclamation
and FERC already have an MOU, signed in 1992, that addresses
the establishment of processes for early resolution of issues
related to the timely development of non-federal hydroelectric
power at Bureau of Reclamation facilities. Reclamation and FERC
recently met to discuss how to improve the timeliness of the
processes developed in that MOU and other issues.
Section 8 of the bill would allow low-head hydropower
development on Reclamation-owned conduits to be eligible for
inclusion in FERC's conduit exemption program. Currently,
Reclamation is assessing the potential for developing low-head
hydroelectric generating capacity on our Federally-owned canals
and conduits. A report, similar to the Resource Assessment, is
expected to be released for public review by the end of this
year. We expect that the provisions in Section 8 of the bill
would help address uncertainty in the approval process for new
licenses and would facilitate the development of new capacity
at existing facilities. Reclamation supports the opportunity to
enter into new agreements with private or quasi-public entities
to develop low-head hydropower potential in an environmentally-
sustainable manner.
Overall, the Department shares the Committee's view that
interagency coordination can leverage Federal and private
sector investment in additional hydropower development. This
consideration was foremost in the Department's signing a
Memorandum of Understanding with the Department of Energy and
U.S. Army Corps of Engineers on March 24, 2010, to increase
communication between federal agencies and strengthen the long-
term relationship among them to increase in a sustainable
manner hydropower production at existing Federal facilities.
In conclusion, Reclamation recognizes the importance of
hydropower. We hope that the Assessment and the new efforts
described will provide a lasting contribution to the power
supplies of our nation. We will of course continue to
coordinate with other agencies and look forward to working with
the Congress in this important area to avoid duplication, and
utilize existing authority and resources.
This concludes my written statement. I am pleased to answer
any questions the Committee may have.
Testimony of Jeff C. Wright, Director, Office of Energy Projects,
Federal Energy Regulatory Commission
Chairman Bingaman, Ranking Member Murkowski, and Members of
the Committee: My name is Jeff Wright and I am the Director of
the Office of Energy Projects at the Federal Energy Regulatory
Commission (Commission or FERC). I appreciate the opportunity
to appear before you to discuss S. 629, S. 630, and S. 1462. As
a member of the Commission's staff, the views I express in this
testimony are my own, and not those of the Commission or of any
individual Commissioner.
i. background
The Commission regulates over 1,600 hydropower projects at
over 2,500 dams pursuant to Part I of the Federal Power Act
(FPA). Together, these projects represent 54 gigawatts of
hydropower capacity, more than half of all the hydropower in
the United States. Hydropower is an essential part of the
Nation's energy mix and offers the benefits of an emission-
free, renewable, domestic energy source with public and private
capacity together totaling about nine percent of U.S. electric
generation capacity.
Under the FPA, non-federal hydropower projects must be
licensed by the Commission if they: (1) are located on a
navigable waterway; (2) occupy federal lands; (3) use surplus
water from a federal dam; or (4) are located on non-navigable
waters over which Congress has jurisdiction under the Commerce
Clause, involve post-1935 construction, and affect interstate
or foreign commerce.
The FPA authorizes the Commission to issue either licenses
or exemptions for projects within its jurisdiction. Licenses
are generally issued for terms of between 30 and 50 years, are
renewable, and carry with them the right to exercise federal
eminent domain to obtain property necessary for the
construction, operation, and maintenance of a project.
Exemptions are perpetual, and thus do not need to be renewed,
but do not permit the use of eminent domain. Congress has
established two types of exemptions. First, section 30 of the
FPA allows the Commission to issue exemptions for projects that
utilize for generation only the hydroelectric potential of
manmade conduits that are operated for the distribution of
water for agricultural, municipal, or industrial consumption,
and not primarily for the generation of electricity. Conduit
projects must be located on nonfederal lands, and have a
maximum capacity of 15 megawatts (40 megawatts if the exemptee
is a state or local government entity). Second, in section
405(d) of the Public Utility Regulatory Policies Act, Congress
authorized the Commission to grant exemptions for small
hydroelectric power projects having an installed capacity of
5,000 kilowatts or less. To qualify for this type of exemption,
a project must be located at an existing dam that does not
require construction or the enlargement of an impoundment, or
must use the hydropower potential of a natural water feature,
such as a waterfall. Both types of exemptions are subject to
mandatory fish and wildlife conditions provided by federal and
state resource agencies.
The Commission has established three licensing processes,
with the intent of allowing parties to select the process that
is best suited to individual proceedings. The integrated
licensing process (ILP) frontloads issue identification and
environmental study to the period before an application is
filed, and is thus well-suited to complex cases with
substantial issues. The alternative licensing process (ALP)
allows participants significant flexibility to tailor licensing
procedures in a manner that may work well for unique cases. The
traditional licensing process (TLP), in which environmental and
other work can occur after the application is filed appears to
work best for less controversial matters. The TLP may be the
process that is best-suited for many simple cases involving
exemptions or small, low impact licenses. Commission staff has
also developed a pilot licensing process for hydrokinetic
projects in which, with the assistance of federal and state
resource agencies, a project can be licensed in as little as
six months.
It is extremely important to note that project developers
and other stakeholders, not the Commission, in most instances
play the leading role in determining project success and
whether the regulatory process will be short or long, simple or
complex. The first key issue is site selection and proposed
project operation. For example, the processing of applications
tends to be expedited when applicants propose projects that:
(1) are located at an existing dam where hydropower facilities
do not currently exist, (2) would result in little change to
water flow and use, (3) are unlikely to affect threatened and
endangered species and are unlikely to need fish passage
facilities, and (4) involve lands and facilities that are
already owned by the applicant. To the extent that a proposed
project, even one of small size, raises concerns about water
use and other environmental issues, it may be difficult for the
Commission to quickly process an application. It is important
to remember that the small capacity of a proposed project does
not necessarily mean that the project has only minor
environmental impacts.
Another, and related, factor is the extent to which project
developers reach out to affected stakeholders. If a developer
contacts concerned citizens, local, state, and federal
agencies, Indian tribes, and environmental organizations, and
works with them to develop consensus as to what information is
needed to understand the impacts of a project and what
environmental measures may be appropriate, and to develop
support for the project, the application and review process is
likely to be simpler and quicker. Where a project comes as a
surprise to affected entities or where a developer does not
respond to expressed concerns, the Commission's job becomes
much more difficult, because the Commission must, and does,
ensure that all expressed concerns are addressed.
A final, and again related, matter is the development of
the full record that the Commission needs to act on an
application. A potential applicant needs to work with
Commission staff and with federal and state resource agencies
and other stakeholders to determine what information is needed
to support an application, and to provide the Commission with a
complete application. Where Commission staff or other
stakeholders must ask an applicant to provide information that
is missing from an application, the regulatory process slows
down.
The other entities with roles in the licensing and
exemption process regarding small hydropower projects are also
key to its success. The quickest, most efficient process can be
achieved only where federal and state agencies, as well as
other stakeholders, devote the resources early on to help
project review move ahead, and where they display the
flexibility to look at the merits of individual projects and
the willingness to shorten the process in appropriate cases.
Commission staff is dedicated to making the regulatory process
as short and cost-effective as possible. We can only do that
where applicants, resource agencies, and other stakeholders
serve as willing partners in the process.
ii. commission efforts regarding small and innovative projects
The majority of the hydropower projects regulated by the
Commission are small projects, with about 71 percent having an
installed capacity of 5 megawatts (MW) or less. In recent
years, the Commission has seen a greatly increased interest in
small hydropower projects, in innovative hydrokinetic projects,
and in pumped storage projects, particularly closed loop pumped
storage, which does not involve regular water withdrawals from
rivers or other water sources. The Commission has responded by
implementing a number of measures to facilitate efficient
review of project proposals. In 2007, in order to provide
personalized, responsive service to entities seeking to develop
small hydropower projects, Commission staff established a
dedicated phone line and email address for inquiries on small
hydropower, developed a brochure to provide guidance to
potential developers of small, low impact hydropower projects,
and put these resources and a list of frequently-asked
questions on the Commission's website.
In light of the continued growing interest in such
development, the Commission held a technical conference on
December 2, 2009, at its Washington, D.C. headquarters to
explore issues related to licensing, and exempting from
licensing, small non-federal hydropower projects in the U.S.
The December technical conference generated discussion on
recommendations that could improve the process for authorizing
small hydropower projects. In addition to insights received
from the panelists and attendees at the December conference,
written comments were solicited and over 40 comment letters
were received from industry representatives; federal, state,
and local agencies; private citizens; and non-governmental
organizations. At the Commission's April 15, 2010 meeting,
staff reported on the conference and the comments received, and
presented an action plan to assist and expedite the review of
small hydropower proposals. The action plan adopted the
following immediate changes: (1) adding new web-based resources
to the Commission's website (www.ferc.gov) to make it easier
for applicants to understand and complete the licensing
process; (2) updating or creating Memoranda of Understanding
(MOUs) with other agencies to improve coordination; (3)
continuing our small hydropower hotline and email address to
answer applicant questions; and (4) educating potential small
hydropower developers through a new education and outreach
program.
The Commission has, under its small hydro initiative, held
numerous outreach meetings with small hydropower developers and
interested stakeholders, and implemented web based tools, such
as conduit application templates and application checklists,
which potential applicants can use to prepare their
applications. The small hydro website further contains guidance
and sample letters that applicants can use to obtain waivers
from fish and wildlife agencies for part of the prefiling
consultation process. The Commission staff has also relaxed
some of the standards, under Section 4.39 of its regulations,
for exhibits and drawings for conduit applications. For those
applicants that have filed complete and adequate applications,
and for which the Commission has determined that impacts are
minimal, the Commission has reduced the public notice period
from 60 days to 30 days and the reply period from 45 days to 15
days. A number of conduit exemptions have been approved in as
short as two months from the date that an application has been
deemed complete.
Since the April 15, 2010 Commission meeting, we have signed
an MOU with the State of Colorado to expedite the small hydro
licensing process (August 2010); launched a small hydro program
website (August 2010); participated in small hydro workshops in
Oregon (September 2010), Massachusetts (October 2010), and New
Hampshire (November 2010); conducted two webinars on our small
hydro website (November/December 2010); and updated our small
hydro brochure. Upcoming outreach efforts will include:
participating in small hydro workshops in Washington, DC,
Vancouver, BC, and California as well as conducting another
webinar this summer. We have also completed an update on our
MOU with the Army Corps of Engineers.
The MOU with the State of Colorado provides an excellent
example of a Federal-State solution for developing a pilot
process to find flexible and innovative ways to reduce barriers
to small hydro and conduit project development. In order to
facilitate the Commission approval of such projects, the MOU
provides that Colorado will prescreen any proposals and ensure
that the applications are complete and meet Commission
regulations before they are filed.
With this background, I will turn to the draft legislation.
iii. s. 629
S. 629, the Hydropower Improvement Act of 2011, has the
laudable goal of increasing hydropower capacity and generation
in United States. I strongly support that goal, and offer
comments on specific sections of the bill.
a. sections 5 and 6
Sections 5 and 6 of the bill would authorize the Secretary
of Energy to issue grants to increase hydropower generation,
and to support hydropower research, development, and
demonstration projects. I support these sections, which would
assist in the development of additional renewable energy.
b. section 7
Section 7 would require the Commission to investigate the
feasibility of implementing a two-year licensing process, in
particular, with respect to hydropower development at existing,
non-powered dams, and for closed-loop pumped storage projects.
I support the goal of an expedited licensing process.
Indeed, as I have discussed, it is Commission staff's goal to
act on all license applications as quickly as possible, and the
Commission has established processes that allow for great
flexibility and efficiency. I am thus not certain whether an
additional licensing process is necessary. During the last few
years, we have been able to issue some licenses in a matter of
a few months, where the project proponent had selected a site
wisely, stakeholders had agreed on information needs, and state
and federal agencies performed their responsibilities quickly.
Moreover, the Commission operates under significant constraints
imposed by the FPA, and by other legislation affecting the
licensing process--the Clean Water Act, Coastal Zone Management
Act, Endangered Species Act, and National Historic Preservation
Act among them. In the absence of the ability to waive sections
of the FPA and other acts, or to set enforceable schedules in
licensing proceedings, it is not clear that the Commission,
under its existing authorities, can mandate a shortened
process.
c. section 8
Section 8 would establish various measures to promote
conduit and small hydropower projects. Again, this goal is
consistent with Commission policy and has been a major focus of
Commission's staff's effort in the last few years.
Section 8(a)(1) would amend section 30 of the FPA to allow
conduit projects to be located on federal lands. I support this
provision, which would remove the current bar on siting conduit
projects on federal lands. This section would also amend the
FPA to provide conditioning authority to federal land
management agencies. These agencies already have the ability to
impose conditions on proposed projects through the requirement
that developers obtain special use authorizations under the
Federal Land Management and Policy Act, so this amendment may
not alter the current regulatory regime. As a general matter,
however, I do have some concern that authorizing additional
mandatory conditioning authority may slow down the licensing
process and result in increased potential bars to hydropower
development.
Section 8(a)(3) would require the Commission and the
Commissioner of Reclamation to conduct regional public
workshops on reducing barriers to conduit hydropower projects
and thereafter report any recommendations to Congress. We have
worked successfully with the Bureau of Reclamation in the past
and are prepared to join Reclamation in this effort.
Section 8(b) would require the Commission to conduct
regional public workshops on reducing barriers to small
hydropower projects, and to report the results of this effort
to Congress. Noting the outreach efforts described above, we
are prepared to undertake this additional effort should
Congress deem it helpful.
d. section 9
Section 9 would amend the FPA to authorize the Commission
to extend the term of a preliminary permit issued under FPA
section 5 once for up to two years. Preliminary permits grant
the permittee a ``first-to-file'' preference with respect to
license applications for projects being studied under a permit.
Commission staff has heard anecdotally that developers are
concerned that the need for environmental studies in some
instances makes it difficult to complete a license application
within the current maximum three-year term of a permit, with
the result that a developer which has invested substantial time
and money studying a project may face the possibility of losing
its project based on competition from other entities--
particular those with statutorily-granted municipal
preference--if it needs to seek a subsequent permit. I
therefore support the proposed FPA amendment, which could
ameliorate this problem. It might be worth considering, as an
alternative, authorizing the Commission to issue permits for
terms of up to five years, which could avoid the need for
developers to go through the process of seeking an extension.
e. section 10
Section 10 would require the Commissioner of Reclamation,
in consultation with the Commission, to study barriers to non-
federal hydropower development at Bureau of Reclamation
projects and to develop a memorandum of understanding to
improve the coordination and timeliness of such development. We
have already begun working with the Bureau of Reclamation on
this matter, and we have no objection to Section 10.
iv. the marine and hydrokinetic renewable energy promotion act of 2011
S. 630 would authorize the Secretary of Energy to take
various steps to promote marine and hydrokinetic renewable
energy technology. As a general matter, the bill is consistent
with the Commission's initiatives to support the development of
appropriate marine and hydrokinetic projects, which I have
previously described. I have only two comments on the bill.
Section 3 of S. 630 would allow the Secretary of Energy to
issue grants to support national testing facilities for marine
and hydrokinetic technology research, development, and
demonstration. Commission staff has informally discussed this
concept with DOE staff over the last year or so, and I believe
that testing centers could be extremely helpful in the
development of new renewable technologies. Section 3 provides
that test centers may be nonprofit institutions, state or local
governments, national laboratories, or National Marine
Renewable Energy Research, Development, and Demonstration
Centers established pursuant to section 634 of the Energy
Independence and Security Act of 2007. The Federal Power Act
contains no provisions allowing the Commission to authorize the
testing of jurisdictional hydropower facilities; accordingly,
with some limited exceptions, tests centers operated by private
entities or by state and local government may be required to be
licensed by the Commission. Moreover, if a test center were to
use a variety of technologies with differing environmental
impact, the Commission might be required to issue separate
authorizations for individual tests. This would not be the case
for centers under the aegis of other federal entities, such as
DOE, which do not fall within the Commission's jurisdiction.
Therefore, to allow for the maximum flexibility and simplicity,
it may be worth considering either placing any test centers
under the authority of DOE or another federal agency or
providing an exemption from the provisions of Part I of the FPA
for such test centers.
Second, section 6 of the bill would authorize the Secretary
of Energy to issue grants to advance the development of marine
and hydrokinetic renewable energy; to help fund the costs of
environmental analysis, the collection and dissemination of
environmental data; and to support demonstration projects. The
provision of grant funding to address the environmental
information needs surrounding these new technologies directly
addresses an issue of concern to federal agencies and other
stakeholders. Environmental information is essential to the
development and regulation of energy projects, yet, because
marine and hydrokinetic technology is relatively new, and
because these projects may be sited in areas, such as coastal
zones, where the environment is not as well understood as
onshore areas, much necessary information has yet to be
developed. The cost of obtaining environmental information
falls in large part on pioneering developers, and may thus
discourage their efforts. The Commission and other federal
agencies are partnering to reduce this burden by assembling and
sharing environmental information. However, there are still
issues which will require new studies, some of which are
relevant to many developers. Federal funding to support
gathering such information will help the regulatory process and
advance the development of the technology as a whole.
v. the american clean energy leadership act of 2009
Title I, subtitle D of the American Clean Energy Leadership
Act deals with the integration of energy and water resources.
While this subtitle would not impose any direct requirements on
the Commission, I note that the Commission recognizes the link
between energy development and the use of our Nation's water
resources. In siting natural gas and hydropower projects, the
Commission conducts thorough analyses of the impact of proposed
projects on water resources, authorizes only those projects
that appropriately balance energy development and environmental
protection, and imposes mitigation measures to ensure that
approved projects are developed in an environmentally
responsible manner.
vi. conclusion
There is a great deal of potential for the development of
additional hydropower projects throughout the country,
including small projects and marine and hydrokinetic projects.
Working within the authority given it by Congress, the
Commission continues to adapt its existing, flexible procedures
to facilitate the review and, where appropriate, the approval
of such projects. Commission staff remains committed to
exploring with project developers, its sister federal agencies,
Indian tribes, the states, local government, and other
stakeholders every avenue for the responsible development of
our nation's hydropower potential. The legislation under
consideration will, as I have testified, assist in realizing
that potential.
This concludes my remarks. I would be pleased to answer any
questions you may have.
Statement of Steven G. Chalk, Chief Operating Officer & Acting Deputy
Assistant Secretary for Renewable Energy, Office of Energy Efficiency
and Renewable Energy Department of Energy
Chairman Bingaman, Ranking Member Murkowski, Members of the
Committee, thank you for the opportunity to discuss the three
pieces of legislation before us today: S. 629, the Hydropower
Improvement Act of 2011; S. 630, the Marine and Hydrokinetic
Renewable Energy Promotion Act of 2011; and Title I, subtitle D
of the American Clean Energy Leadership Act of 2009 (ACELA, S.
1462 from the 111th Congress).
In his State of the Union address in January, President
Obama referred to America's need to transition to a clean
energy economy as ``our generation's Sputnik moment,'' a goal
so important that we need to ``reach a level of research and
development we haven't seen since the height of the Space--
Race.''\1\ S. 629 and S. 630 would dramatically increase the
federal government's investment in both conventional hydropower
and marine and hydrokinetic (MHK) renewable energy
technologies.
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\1\http://www.whitehouse.gov/the-press-office/2011/01/25/remarks-
president-state-union-address.
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The provisions being considered from ACELA address the
interdependence of our energy and water consumption. Water is
an integral component of many traditional and alternative
energy technologies used for transportation, fuels production
and electricity generation. Energy-related water demands are
beginning to compete with other demands from population growth,
agriculture and sanitation. This competition could become
fiercer if climate change increases the risk of drought, making
our water supply more vulnerable. The Department of Energy
(DOE) has initiated many activities over the last few years to
address this energy-water nexus.\2\
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\2\See, for example, the activities undertaken by the National
Energy Technology Laboratory, http://www.netl.doe.gov/technologies/
coalpower/ewr/water/index.html.
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Since fiscal year 2008, when DOE restarted its Water Power
Program, it has made significant strides in advancing next-
generation water power technologies, assessing existing
resources, promoting deployment opportunities, and cooperating
with other government agencies to accelerate water power
development. About 45 percent of all hydropower in the United
States is generated at Federally-owned facilities, providing
clean, renewable power to the grid.\3\ DOE's estimates indicate
that there could be an additional 300 gigawatts of hydropower
through efficiency and capacity upgrades at existing
facilities, powering non-powered dams, new small hydro
development and pumped storage hydropower.\4\
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\3\http://eia.doe.gov/cneaf/electricity/page/eia906_920.html.
\4\FY09 DOE Interim Conventional Hydro Resource Assessment, Oak
Ridge National Lab.
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DOE works on both conventional hydropower and on marine and
hydrokinetic (MHK) technologies. The combined FY 2012 Budget
Request for conventional hydropower and MHK technologies is
$38.5 million. Conventional hydropower--energy derived from
water using dams, diversionary structures, or impoundments for
electric power--generates more electricity than any other
renewable energy source in the U.S. Conventional hydropower
represented 65 percent of U.S. renewable electricity generation
in 2010, and seven percent of total U.S. electricity generation
that year.\5\ Conventional hydropower principally serves as a
baseload electricity supply, but can also function as a
dispatchable resource to balance variable renewable energy
technologies such as wind and solar.
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\5\http://www.eia.doe.gov/cneaf/electricity/epa/epa.pdf.
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MHK technologies include energy devices that can extract
energy from moving water, including waves and currents in
oceans, rivers, and tidal areas, and from ocean thermal and
salinity gradients. These resources if also developed in an
environmentally responsible manner hold potential for helping
our nation meet its clean energy goals.
In a March 2007 report, the Electric Power Research
Institute indicated that its conservative estimate was that MHK
power (from wave and tidal sources alone) could provide an
additional 13,000 megawatts (MW) of capacity by 2025.\6\ MHK
power and ocean thermal energy are resources that typically can
have higher capacity factors than some other renewable energy
sources. In addition, they may not present the same level of
integration challenges that large-scale development of variable
renewable energy sources such as wind and solar may create for
electricity grid planners and operators.
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\6\http://www.aaas.org/spp/cstc/docs/07_06_1ERPI_report.pdf.
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Through its Power Marketing Administrations (PMAs), DOE
promotes and creates opportunities for new conventional
hydropower technologies and development. PMAs encourage the
most widespread use of hydropower possible at the lowest rates
consistent with sound business principles. Some PMAs have
established an active hydropower modernization program, adding
hundreds of megawatts of capacity at existing facilities by
updating equipment, while others have faced challenges in
arranging financing. Because some of the challenges are
statutory in nature, the PMAs and their customers may consult
with the Committee on measures that would actively encourage
expansion of hydropower capacity through updates to existing
facilities.
Last year, DOE, the Bureau of Reclamation, and the Army
Corps of Engineers signed a memorandum of understanding (MOM on
hydropower that aims to build long-term working relationships
between agencies by prioritizing similar goals and aligning
ongoing and future renewable energy development efforts.\7\ The
objectives of the MOU include deploying new, environmentally
sustainable hydropower capacity, including upgrading existing
facilities; powering non-powered dams; and research,
development and deployment (RD&D) into new hydropower
technologies, among other objectives. The pursuit and ultimate
achievement of these goals will serve to strengthen our
economy, enhance our national security, and protect our
environment.
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\7\http://www.energy.gov/news/8793.htm.
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Water is an integral aspect of energy consumption and
generation for many energy technologies other than hydropower
as well. Many types of energy production make use of water,
particularly for cooling, and increasingly, water-efficient
technologies are being developed to reduce these impacts and
help America use less water to meet its energy demands and use
less energy to meet its water demands. Still, power generation
from thermal energy sources (which include coal, natural gas
and nuclear energy) accounted for approximately 41% of U.S.
freshwater withdrawals in 2005.\8\ Although most of the water
withdrawn for cooling thermal power plants is subsequently
returned to the source, this still can have disruptive effects
on water flows and temperatures, which in turn negatively
affect aquatic organisms, namely fish populations such as
salmon. DOE estimates that there are significant opportunities
to reduce water consumption for both electricity and fuels
production. For example, in the electricity sector, development
of hybrid wet-dry cooling systems may reduce water consumption
by 70-80 percent compared to recirculating cooling systems.
Moving, pumping and treating water and wastewater is in itself
quite energy-intensive, representing roughly four percent of
U.S. electricity consumption.\9\
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\8\http://pubs.usgs.gov/circ/1344/pdf/c1344.pdf.
\9\http://www.circleofblue.org/waternews/wp-content/uploads/2010/
08/EPRI-Volume-4.pdf.
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The Department, through its National Laboratories and
collaboration with universities and the private sector, is
pursuing three major objectives to address the energy-water
challenge. First, to address the increasing limited supplies of
freshwater, DOE is considering strategies to increase use of
nontraditional water resources in the power sector. Second, DOE
is working to reduce the consumption of fresh water when
generating electricity, while considering the full life-cycle
of various energy technologies to determine how much water they
demand and what kind of water quality they need. Finally, DOE
is researching water-efficient technologies for the production
of alternative or unconventional fuels for transportation.
I am pleased to offer the Department's perspective on these
pieces of legislation. I will discuss these bills in the order
they appeared in my invitation to testify before this
Committee.
s. 629: hydropower improvement act of 2011
The Hydropower Improvement Act of 2011, S. 629, seeks to
substantially increase hydroelectric capacity and generation
and improve its environmental performance.
A recent report from the Federal Energy Regulatory
Commission (FERC) demonstrates that little additional
hydropower is in the pipelines.\10\ Concerns include
environmental issues and nontechnical barriers to reduce the
expense and uncertainty of the regulatory process is needed.
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\10\http://www.ferc.gov/legal/staff-reports/03-17-11-energy-
infrastructure.pdf.
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The most significant provision of S. 629 is a proposed
authorization to DOE of $50 million per year for competitive
grants and $50 million per year for RD&D to increase hydropower
generation. This authorization level is significantly higher
than the FY 2012 Budget Request for EERE's conventional
hydropower program of $20 million, and would also represent a
substantial increase to the FY 2010 Budget for conventional
hydropower of $13 million. These additional resources, if
appropriated would enable increases in renewable hydropower
generation, and provide for the accelerated demonstration of
innovative technologies that can improve environmental
performance.
In FY 2010, DOE funded the Hydropower Advancement Project
(HAP) for $3 million. The HAP is focused on the most cost-
effective, least-controversial types of new hydropower
development, and seeks to stimulate further hydropower
development and generation without new dams. The project has
already identified multiple opportunities for adding generation
and/or improving environmental performance without sacrificing
energy efficiency. Current funding allows for fifty initial
facility assessments and three to five detailed engineering
design studies. Additional resources would be used to support
facility improvements that could result in increased hydropower
generation at the most cost-effective sites.
DOE has invested in a three year program of research and
development (R&D) to address issues related to the
environmental performance and siting of hydropower
technologies. These efforts focus on increasing fish passage,
investigating adequate environmental flows and improving water
quality and will help ensure that increases in conventional
hydropower generation are coupled with concurrent improvements
in the environmental sustainability of the industry, issues
that DOE has been working on since the mid 1990s. If realized,
the additional funding authorized by S. 629 would help scale-up
the advanced turbines and optimize operational scenarios.
A quicker, two-year FERC licensing process, as proposed by
S. 629 would help accelerate development of conventional
hydropower resources. A streamlined licensing approach already
has been implemented by FERC for small hydropower projects;
expanding this quicker process would be welcomed by DOE and the
hydropower industry. At the same time, we must be sure that
this quicker licensing process does not sacrifice rigorous
maintenance of environmental standards and ensures adequate
opportunity to allow for public input. Providing a quicker
regulatory process when all environmental and public concerns
have been addressed is a valuable goal.
S. 629 would require FERC and the Bureau of Reclamation to
conduct workshops on small hydropower projects and conduit
hydropower.\11\ These workshops would provide opportunities for
the federal government, including natural resource agencies,
industry, environmental organizations and other stakeholders to
reach consensus on strategies to overcome barriers to greater
hydropower deployment, including conflicting definitions of
eligible projects and complicated, poorly understood permitting
and licensing processes.
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\11\Conduits are defined as tunnels, canals, pipelines, aqueducts,
flumes, ditches, or similar manmade water conveyance systems that
distribute water for agricultural, municipal, or industrial consumption
and not primarily for the generation of electricity.
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S. 629 would define a ``small hydroelectric power project''
according to the definition found in Section 4.30 of title 18
in the Code of Federal Regulations. DOE finds this definition
problematic in this context, since this definition specifies
that a small hydroelectric power project cannot be ``owned or
operated by the United States or by an instrumentality of the
Federal Government.'' A majority of the non-powered dams that
are proposed to be powered through this legislation are
federally-owned by the U.S. Army Corps of Engineers and the
Bureau of Reclamation. In fact, initial analysis by DOE for a
forthcoming report indicates that the ten largest non-powered
dams in the U.S. with potential to produce more than one
megawatt are all operated by the Army Corps of Engineers.\12\
DOE accordingly recommends that the definition of small
hydroelectric power project that appears in this legislation
delete the requirement that the dam not be federally-owned or
operated.
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\12\The National Hydropower Asset Assessment Project, to be
released in April 2011.
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The Department appreciates that S. 629 recognizes the non-
application of this legislation to the PMAs. In addition, the
PMAs believe that they should have the approval right for
efficiency power or capacity additions, improvements or
replacements at Federal projects, made in association with this
legislation, where the Army Corps of Engineers and the Bureau
of Reclamation seek appropriations.
All other provisions of S. 629 would either build on or
support current DOE activities and areas of interest.
s. 630: marine and hydrokinetic renewable energy promotion act of 2011
S. 630, the Marine and Hydrokinetic Renewable Energy
Promotion Act of 2011, seeks to accelerate the growth of the
MHK industry through additional federal aid, and expansion of
the scope and scale of DOE's MHK activities. The additional
funding authorized by this bill would represent a significant
increase in DOE's program for MHK technologies and is
significantly higher than either the FY 2012 Budget Request of
$18 million or the FY 2010 Budget of $37 million.
DOE already has several MHK systems engineering efforts
underway, but the additional systems engineering required by S.
630 would be used to accelerate these programs.
S. 630 would also require DOE to devote more R&D funding to
develop open interface standards. This would ensure consistent
design and development and allow unbiased comparison between
competing technologies to achieve optimal energy generation in
resulting systems. As the U.S. market develops, it will be
crucial to avoid the pitfalls seen in the development of MHK
technologies in Europe, where, despite tremendous strides that
have been 12 The National Hydropower Asset Assessment Project,
to be released in April 2011. made in device development and
deployment, the interface standards with devices and data are
still being developed.
The creation of a competitive grant program for MHK RD&D
test facilities would mimic similar innovative activities
already sponsored by DOE for other renewable energy
technologies. DOE is currently investing in three MHK test
facilities that focus on the demonstration of multiple MHK
technologies. Investment in these National Marine Renewable
Energy Centers (NMRECs) is critically important in order to
help MHK technologies realize their full potential and to
support their rapid commercialization if done in an
environmentally responsible way. Each Center is currently
developing plans for the development of open-water test
facilities. Further investment in NMRECs, as called for by this
legislation, would enable the open-water test berths to be
established. Third-party testing and evaluation of device
performance and reliability would enable private sector
investment in these emerging technologies.
All three of DOE's existing NMRECs are unrestricted in
terms of the device types they develop and support. Although
none are geographically located for in-stream testing, tidal
device research and development can substitute. It is
unnecessary to distinguish between ``marine'' and
``hydrokinetic'' centers as the existing NMRECs could conduct
research on any type of device.
On June 29, 2010, the Department of Energy and the
Department of the Interior (DOI) signed an MOU for the
coordinated deployment of renewable energy technologies on the
OCS. The MOU's Action Plan includes a number of MHK-related
activities, including coordination of studies and other
activities to support future BOEMRE-issued MHK research leases,
the development of environmental monitoring and mitigation
protocols and collaboration on environmental study efforts, and
development of a plan for MHK resource management and
prediction. Additionally, on August 3, 2010, DOE announced the
designation of Florida Atlantic University (FAU) as a national
center for ocean energy research and development. With this
designation, DOE awarded the new Southeast National Marine
Renewable Energy Center $250,000 to undertake research and
development of technologies capable of generating power from
ocean currents and ocean thermal energy. FAU has applied for a
five-year limited lease under BOEMRE's Interim Policy. If
issued, this lease would allow for limited testing of ocean
current devices on the OCS offshore Florida. DOE has also
provided funding to the Northwest National Marine Renewable
Energy Center to aid in the development of facilities to serve
as an integrated, standardized test center for developers of
wave and tidal energy, and the Hawaii National Marine Renewable
Energy Center for the development of a site for the testing of
wave energy conversion devices and ocean thermal energy
conversion systems. DOE may seek to obtain research leases from
DOI.
If funding is realized under S. 630, development of MHK
technologies would be accelerated, speeding their
transformation from promising but fledgling technologies to
commercially viable, clean, renewable energy sources.
title i, subtitle d of the american clean energy leadership act of 2009
Title I, Subtitle D of ACELA contains provisions that would
create an energy-water clean technology grant program in DOE
and would require several studies on the energy-water nexus.
The grant program created under ACELA could serve as a
useful way to spur industry to devote time and resources to
develop strategies to minimize water consumption in energy
processes. These provisions would also require DOE and other
agencies to collaborate on several studies on this subject. The
study that would be run by the Natural Academy of Sciences
regarding the effects of energy development and production on
U.S. water resources would be a useful, in-depth analysis.
However, in this legislation, the analysis appears limited to a
current assessment. While this in itself would be useful, DOE
recommends that any such study also consider the expected
increase in water demand from projected growth in energy
production, and the water implications of moving to a clean
energy economy. This will be especially important since certain
clean energy technologies (carbon capture and storage,
bioenergy, concentrated solar power, etc.) may result in
increased water demands. The effects of climate change on water
availability should also be analyzed in order to better
understand the potential vulnerability of the energy sector to
water constraints.
One of the other studies included in ACELA would require
the Department of the Interior (DOI) to evaluate the amount of
energy used in water storage and delivery operations. This
study would be useful, but DOE suggests that the proposed study
would benefit from consultation with other agencies with
expertise in the energy-water area, including DOE.
In general, interagency consultation must be an integral
component of our national strategy to address the energy-water
nexus. Along with energy production, agriculture uses more
water than any other sector in the U.S., so engagement with the
U.S. Department of Agriculture will be essential. The U.S. Army
Corps of Engineers must also play a vital role in developing
more efficient water usage strategies. DOE welcomes efforts to
build on existing collaborations with these and other agencies,
such as the MOU referenced above.
These provisions would also require DOE to develop an
Energy-Water R&D Roadmap to define future RD&D and
commercialization efforts necessary to address emerging water-
related challenges to future clean energy generation and
production. DOE has already produced a report examining these
issues, which it transmitted to Congress in January of 2007,
and has developed a follow-up report, ``Energy-Water Challenges
and Research and Development Issues,'' that we expect will be
finalized and transmitted to Congress shortly.
conclusion
In conclusion, I would like to again thank this Committee
for its leadership in supporting both conventional hydropower
and MHK energy technologies and in confronting the challenges
associated with the interrelation of our energy and water
consumption.
As Secretary Chu stated last year, ``While hydropower is
the largest source of renewable electricity in the nation,
hydropower capacity has not increased significantly in decades.
As the single largest owner of hydropower generation in the
United States, it is important for the federal government to
tap this valuable asset so it can continue to contribute to our
clean energy portfolio and energy security.''\13\ S. 629 and S.
630 both contain provisions that would help realize this goal;
however, both bills contain authorizations significantly in
excess of the 2012 Budget request within EERE for Water
Programs. The President's FY 2012 budget represents DOE's
priorities for applied R&D in energy efficiency and renewable
energy technologies.
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\13\http://www.energy.gov/news/8793.htm.
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Transitioning to a clean energy economy will be greatly
enhanced if we also identify ways to minimize or eliminate
water use associated with energy generation. The ACELA
provisions could be the catalyst to finding these solutions.
I would be pleased to address any questions the Committee
might have.
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
the bill, as ordered reported, are shown as follows (existing
law proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, existing law in which no change
is proposed is shown in roman):
Section 5 of the Federal Power Act (16 U.S.C. 798) is
amended as follows:
FEDERAL POWER ACT
The Act of June 10, 1920, Chapter 285, as Amended
AN ACT To
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
* * * * * * *
[Each preliminary permit issued under this Part shall be
for the sole purpose of maintaining priority of application for
a license under the terms of this Act for such period or
periods, not exceeding a total of three years, as in the
discretion of the Commission may be necessary for making
examinations and surveys, for preparing maps, plans,
specifications, and estimates, and for making financial
arrangements. Each such permit shall set forth the conditions
under which priority shall be maintained. Such permits shall
not be transferable, and may be canceled by order of the
Commission upon failure of permittees to comply with conditions
thereof or for other good cause shown after notice and
opportunity for hearing.]
(a) Each preliminary permit issued under this Part shall be
for the sole purpose of maintaining priority of application for
a license under the terms of this Act for such period or
periods, not exceeding a total of three years, as in the
discretion of the Commission may be necessary for making
examinations and surveys, for preparing maps, plans,
specifications, and estimates, and for making financial
arrangements.
(b) Extension.--The Commission may extend the term of a
preliminary permit once for not more than 2 additional years if
the Commission finds that the permittee has carried out
activities under the permit in good faith and with reasonable
diligence.
(c) Each such permit shall set forth the conditions under
which priority shall be maintained.
(d) Such permits shall not be transferable, and may be
canceled by order of the Commission upon failure of permittees
to comply with conditions thereof or for other good cause shown
after notice and opportunity for hearing.
* * * * * * *
Section 30 of the Federal Power Act (16 U.S.C. 823a) is
amended as follows:
(a) Exemption Qualifications.--Except as provided in
subsection (b) or (c), the Commission may grant an exemption in
whole or in part from the requirements of this part, including
any license requirements contained in this part to any facility
(not including any dam or other impoundment) constructed,
operated, or maintained for the generation of electric power
which the Commission determines, by rule or order--
[(1) is located on non-Federal lands, and
[(2) utilizes for such generation only the
hydroelectric potential of a manmade conduit, which is
operated for the distribution of water for
agricultural, municipal, or industrial consumption and
not primarily for the generation of electricity.]
(1) is located on non-Federal lands or Federal lands;
and
(2) uses for the generation only the hydroelectric
potential of a conduit.
(b) Maximum Installment Capacity for Exemption.--The
Commission may not grant any exemption under subsection (a) to
any facility the installed capacity of which exceeds 15
megawatts (40 megawatts in the case of a facility constructed,
operated, and maintained by an agency or instrumentality of a
State or local government solely for water supply for municipal
purposes).
(c) Consultation With Federal and State Agencies.--In
making the determination under subsection (a) the Commission
shall consult with [the United States Fish and Wildlife
Service, National Marine Fisheries Service and the State
agency] the Secretary of the department that supervises the
land on which the facility is or will be located, the United
States Fish and Wildlife Service, the National Marine Fisheries
Service and the State agency exercising administration over the
fish and wildlife resources of the State in which the facility
is or will be located, in the manner provided by the Fish and
Wildlife Coordination Act ( 16 U.S.C. 661, et seq.), and shall
include in any such exemption--
(1) such terms and conditions as the [Fish and
Wildlife Service, National Marine Fisheries Service]
the Secretary of the department that supervises the
land on which the facility is or will be located, the
United States Fish and Wildlife Service, the National
Marine Fisheries Service, and the State agency each
determine are appropriate to prevent loss of, or damage
to, such resources and to otherwise carry out the
purposes of such Act, and
(2) such terms and conditions as the Commission deems
appropriate to insure that such facility continues to
comply with the provisions of this section and terms
and conditions included in any such exemption.
* * * * * * *
(f) Savings Clause.--Nothing in the section alters or
affects the authority of the Secretary of the Interior under
the reclamation laws-
(1) to authorize private hydropower development under
a lease of power privilege; or
(2) to develop other hydropower generation at
facilities of the Bureau of Reclamation.
(g) Definition of Conduit.--In this section, the term
''conduit'' means any tunnel, canal, pipeline, aqueduct, flume,
ditch, or similar manmade water conveyance that is operated for
the distribution of water for agricultural, municipal, or
industrial consumption and not primarily for the generation of
electricity.