[House Report 116-622]
[From the U.S. Government Publishing Office]


116th Congress   }                                        {     Report
                        HOUSE OF REPRESENTATIVES
 2d Session      }                                        {    116-622

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



 
        RELIABLE INVESTMENT IN VITAL ENERGY REAUTHORIZATION ACT

                                _______
                                

December 8, 2020.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Pallone, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 3361]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 3361) to amend the Energy Policy Act of 2005 to 
reauthorize hydroelectric production incentives and 
hydroelectric efficiency improvement incentives, and for other 
purposes, having considered the same, reports favorably thereon 
without amendment and recommends that the bill do pass.

                                CONTENTS

                                                                   Page
   I. Purpose and Summary............................................. 2
  II. Background and Need for the Legislation......................... 2
 III. Committee Hearings.............................................. 2
  IV. Committee Consideration......................................... 3
   V. Committee Votes................................................. 3
  VI. Oversight Findings.............................................. 4
 VII. New Budget Authority, Entitlement Authority, and Tax Expenditure 4
VIII. Congressional Budget Office Estimate............................ 4
  IX. Federal Mandates Statement...................................... 6
   X. Statement of General Performance Goals and Objectives........... 6
  XI. Duplication of Federal Programs................................. 6
 XII. Committee Cost Estimate......................................... 6
XIII. Earmarks, Limited Tax Benefits, and Limited Tariff Benefits..... 6
 XIV. Advisory Committee Statement.................................... 6
  XV. Applicability to Legislative Branch............................. 6
 XVI. Section-by-Section Analysis of the Legislation.................. 6
XVII. Changes in Existing Law Made by the Bill, as Reported........... 7
 
                         I. Purpose and Summary

    H.R. 3361, the ``Reliable Investment in Vital Energy 
Reauthorization Act'' or the ``RIVER Act'', was introduced by 
Representatives David McKinley (R-WV) and Paul Tonko (D-NY). 
This bill reauthorizes the Hydroelectric Production Incentive 
and the Hydropower Efficiency Improvement programs at the 
Department of Energy.

              II. Background and Need for the Legislation

    Sections 242 and 243 of the Energy Policy Act of 2005, 
respectively, authorized the Hydroelectric Production 
Incentives program and the Hydroelectric Efficiency Improvement 
program.\1\ The purpose of the production incentives program is 
to provide funds to support the development of hydropower 
production at existing dams and conduits. Congress established 
the efficiency improvement program to encourage investments to 
improve the energy efficiency of existing hydropower production 
facilities.
---------------------------------------------------------------------------
    \1\Pub. L. No. 109-58 (2005).
---------------------------------------------------------------------------
    There are thousands of existing dams and conduits in the 
United States. These facilities present an opportunity for 
expanding hydropower production without the costs and 
environmental effects associated with building new dams. In 
addition to power production, hydropower provides other 
ancillary services that stabilize the electricity grid, 
including black start capability, energy storage capability, 
and grid stability.\2\ And, these grid services are often not 
sufficiently compensated in electricity markets.\3\ The 
hydropower production program is intended to incentivize 
investment in powering these structures by providing annual 
payments over a 10-year period to operators who begin 
generating power during the period between October 1, 2005, and 
September 30, 2015. The facilities eligible for the program are 
those that were constructed before August 8, 2005. Current law 
caps annual payment to a facility at $750,000. H.R. 3361 
reauthorizes the hydropower production program at $10 million 
for 17 years beginning in fiscal year 2019.
---------------------------------------------------------------------------
    \2\Department of Energy, Office of Energy Efficiency & Renewable 
Energy, 4 Reasons Why Hydropower is the Guardian of the Grid (May 1, 
2017) (www.energy.gov/eere/articles/4-reasons-why-hydropower-guardian-
grid).
    \3\House Committee on Energy and Commerce, Part II: Powering 
America: Defining Reliability in a Transforming Electricity Industry, 
114th Cong. (Oct. 3, 2017).
---------------------------------------------------------------------------
    The hydroelectric efficiency improvement program is 
intended to incentivize capital improvements to existing 
hydropower facilities. The Secretary of Energy may provide 
incentive payments for capital investments that improve the 
efficiency of a facility by at least three percent. The law 
caps the award to any single facility at $750,000 and cannot 
exceed 10 percent of the capital cost of the improvement. H.R. 
3361 reauthorizes the hydropower efficiency improvement program 
at $10 million for 17 years beginning in fiscal year 2019.

                        III. Committee Hearings

    For the purposes of section 103(i) of H. Res. 6 of the 
116th Congress, the following hearings were used to develop or 
consider H.R. 3361:
    On March 15, 2017, the Subcommittee on Energy held a 
hearing entitled, ``Modernizing Energy Infrastructure: 
Challenges and Opportunities to Expanding Hydropower 
Generation.'' The Subcommittee received testimony from the 
following witnesses:
           Chuck Hookam, P.E., Director of NBD 
        Services, CMS Energy, on behalf of the American Society 
        of Civil Engineers
           Kieran Connolly, Vice President of 
        Generation and Asset Management, Bonneville Power 
        Administration
           Ramya Swaminathan, CEO, Rye Development, on 
        behalf of the National Hydropower Association
           David Steindorf, California Stewardship 
        Director, American Whitewater on behalf of the 
        Hydropower Reform Coalition
    On October 3, 2017, the Subcommittee on Energy held a 
hearing entitled, ``Part II: Powering America: Defining 
Reliability in a Transforming Electricity Industry.'' The 
Subcommittee received testimony from the following witnesses:
           Marty Durbin, Executive Vice President and 
        Chief Strategy Officer, American Petroleum Institute
           Paul Bailey, President and CEO, American 
        Coalition for Clean Coal Electricity
           Maria G. Korsnick, President and CEO, 
        Nuclear Energy Institute
           Tom Kiernan, CEO, American Wind Energy 
        Association
           Steve Wright, General Manager, Chelan Public 
        Utility District on behalf of the National Hydropower 
        Association
           Kelly Speakes-Backman, CEO, Energy Storage 
        Association
           John Moore, Director, Sustainable FERC 
        Project, Energy & Transportation Program, Natural 
        Resources Defense Council

                      IV. Committee Consideration

    Representatives McKinley, Tonko, and Loebsack introduced 
H.R. 3361 on June 19, 2019, and the bill was referred to the 
Committee on Energy and Commerce. H.R. 3361 was then referred 
to the Subcommittee on Energy on June 20, 2019. Hearings 
related to this bill were held during the 115th Congress.
    The Subcommittee met in open markup session on January 9, 
2020, to consider H.R. 3361 and nine other bills. During 
consideration of H.R. 3361, no amendments were offered to the 
bill and the Subcommittee agreed to a motion by Mr. Rush, 
Chairman of the subcommittee, to forward H.R. 3361 favorably to 
the full Committee, without amendment, by a voice vote, a 
quorum being present.
    On July 15, 2020, the full Committee met in virtual open 
markup session, pursuant to notice, to consider the H.R. 3361 
and 29 other bills. No amendments were offered during 
consideration of the bill. Upon conclusion of consideration of 
H.R. 3361, the full Committee agreed to a motion on final 
passage offered by Mr. Pallone, Chairman of the committee, to 
order H.R. 3361 reported favorably to the House, without 
amendment, by a voice vote, a quorum being present.

                           V. Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list each record vote 
on the motion to report legislation and amendments thereto. The 
Committee advises that there were no record votes taken on H.R. 
3361, including the motion for final passage of the bill.

                         VI. Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII and clause 2(b)(1) 
of rule X of the Rules of the House of Representatives, the 
oversight findings and recommendations of the Committee are 
reflected in the descriptive portion of the report.

 VII. New Budget Authority, Entitlement Authority, and Tax Expenditures

    Pursuant to 3(c)(2) of rule XIII of the Rules of the House 
of Representatives, the Committee adopts as its own the 
estimate of new budget authority, entitlement authority, or tax 
expenditures or revenues contained in the cost estimate 
prepared by the Director of the Congressional Budget Office 
pursuant to section 402 of the Congressional Budget Act of 
1974.

               VIII. Congressional Budget Office Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, October 26, 2020.
Hon. Frank Pallone Jr.,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3361, the RIVER 
Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Aaron 
Krupkin.
            Sincerely,
                                         Phillip L. Swagel,
                                                          Director.
    Enclosure.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    

    H.R. 3361 would amend existing law regarding incentive 
payments made by the Department of Energy (DOE) to nonfederal 
owners or operators of certain hydroelectric facilities. DOE 
currently is authorized to provide two types of incentives to 
eligible projects: payments based on the amount of 
hydroelectricity generated by the facility and payments that 
defray some of the cost of measures that improve the efficiency 
of existing facilities.
    H.R. 3361 would authorize the appropriation of $10 million 
annually through 2036 for payments based on hydropower 
generation and another $10 million per year over that period 
for payments based on investments in hydropower efficiency 
measures. In addition, the bill would modify the deadlines and 
eligibility criteria for receiving such assistance.
    In 2020, DOE allocated $7 million for generation-based 
payments; no funding was provided for hydroelectricity 
efficiency payments. Because CBO estimates the budgetary 
effects under continuing resolutions on an annualized basis, in 
2021 CBO assumes that the same amounts will be available under 
the current continuing resolution (Public Law 116-159). As a 
result, CBO estimates that the bill would authorize an increase 
in spending subject to appropriation in 2021 for generation-
based payments of $3 million, the difference between the 
authorized amount and the annualized amount provided under the 
continuing resolution.
    Based on historical spending patterns for similar 
activities, and assuming appropriation of the authorized 
amounts, CBO estimates that implementing H.R. 3361 would cost 
$69 million over the 2021-2025 period and $169 million over the 
2021-2030 period. The costs of the legislation (detailed in 
Table 1) fall within budget function 270 (energy).

                                   TABLE 1.--ESTIMATED INCREASES IN SPENDING SUBJECT TO APPROPRIATION UNDER H.R. 3361
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    By fiscal year, millions of dollars--
                                                   -----------------------------------------------------------------------------------------------------
                                                     2021    2022    2023    2024    2025    2026    2027    2028    2029    2030   2021-2025  2021-2030
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hydroelectric Generation Incentivesa
    Authorization.................................       3      10      10      10      10      10      10      10      10      10        43         93
    Estimated Outlays.............................       1       3       9      10      10      10      10      10      10      10        33         83
Hydroelectric Efficiency Incentives
    Authorization.................................      10      10      10      10      10      10      10      10      10      10        50        100
    Estimated Outlays.............................       1       5      10      10      10      10      10      10      10      10        36         86
    Total Changes
        Authorization.............................      13      20      20      20      20      20      20      20      20      20        93        193
        Estimated Outlays.........................       2       8      19      20      20      20      20      20      20      20        69        169
--------------------------------------------------------------------------------------------------------------------------------------------------------
aH.R. 3361 would authorize the appropriation of $10 million annually through 2036 for the Department of Energy to provide hydroelectric generation
  incentives. In 2020, the department allocated $7 million for those purposes. Because CBO estimates the budgetary effects under continuing resolutions
  on an annualized basis, in 2021 CBO assumes that the same amount will be available under the current continuing resolution (Public Law 116-159). As a
  result, CBO estimates that the bill would authorize an increase in spending subject to appropriation in 2021 of $3 million, the difference between the
  authorized amount and the annualized amount provided under the continuing resolution.

    On August 19, 2019, CBO transmitted a cost estimate for S. 
859, the Reliable Investment in Vital Energy Reauthorization 
Act, as ordered reported by the Senate Committee on Energy and 
Natural Resources on July 16, 2019. The two pieces of 
legislation are similar, and CBO's estimate of their budgetary 
effects are the same, adjusted for differences in assumptions 
about the timing of enactment. The cost estimate for H.R. 3361 
also reflects the enactment of the continuing resolution for 
2021.
    The CBO staff contact for this estimate is Aaron Krupkin. 
The estimate was reviewed by H. Samuel Papenfuss, Deputy 
Director of Budget Analysis.

                     IX. Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

        X. Statement of General Performance Goals And Objectives

    Pursuant to clause 3(c)(4) of rule XIII, the general 
performance goal or objective of this legislation is to 
reauthorize the Hydropower Production Incentives program at the 
Department of Energy and to support power production by 
qualified hydropower facilities.

                  XI. Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of rule XIII, no provision of 
H.R. 3361 is known to be duplicative of another Federal 
program, including any program that was included in a report to 
Congress pursuant to section 21 of Public Law 111-139 or the 
most recent Catalog of Federal Domestic Assistance.

                      XII. Committee Cost Estimate

    Pursuant to clause 3(d)(1) of rule XIII, the Committee 
adopts as its own the cost estimate prepared by the Director of 
the Congressional Budget Office pursuant to section 402 of the 
Congressional Budget Act of 1974.

   XIII. Earmarks, Limited Tax Benefits, and Limited Tariff Benefits

    Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the 
Committee finds that H.R. 3361 contains no earmarks, limited 
tax benefits, or limited tariff benefits.

                   XIV. Advisory Committee Statement

    No advisory committee within the meaning of section 5(b) of 
the Federal Advisory Committee Act was created by this 
legislation.

                XV. Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

          XVI. Section-by-Section Analysis of the Legislation


Section. 1. Short title

    Section 1 designates that the short title may be cited as 
the ``Reliable Investment in Vital Energy Reauthorization Act'' 
or ``RIVER Act''.

Sec. 2. Hydropower production incentives and efficiency improvements

    Section 2(a)(1) amends section 242(c) of the Energy Policy 
Act of 2005 by extending the eligibility for receipt of 
subsidies for operating a hydropower facility from the program 
from 10 years after fiscal year 2006 to 22 years after fiscal 
year 2006, the first full year of the program following its 
authorization.
    Section 2(a)(2) amends section 242(e)(2) to update the 
existing reference to the Internal Revenue Code to reflect a 
change in the Code.
    Section 2(a)(3) amends section 242(f) of the Energy Policy 
Act of 2005 to extend the sunset of the program to 32 years 
after the fiscal year 2006.
    Section 2(a)(4) amends section 242(g) to extend the 
authorization years of the program to fiscal years 2019 through 
2036.
    Section 2(b) amends section 243 of the Energy Policy Act of 
2005 to extend the authorization of the Hydroelectric 
Efficiency Improvement program to include the period from 
fiscal year 2019 through 2036.

      XVII. Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

                       ENERGY POLICY ACT OF 2005




           *       *       *       *       *       *       *
TITLE II--RENEWABLE ENERGY

           *       *       *       *       *       *       *


Subtitle C--Hydroelectric

           *       *       *       *       *       *       *


SEC. 242. HYDROELECTRIC PRODUCTION INCENTIVES.

  (a) Incentive Payments.--For electric energy generated and 
sold by a qualified hydroelectric facility during the incentive 
period, the Secretary shall make, subject to the availability 
of appropriations, incentive payments to the owner or operator 
of such facility. The amount of such payment made to any such 
owner or operator shall be as determined under subsection (e) 
of this section. Payments under this section may only be made 
upon receipt by the Secretary of an incentive payment 
application which establishes that the applicant is eligible to 
receive such payment and which satisfies such other 
requirements as the Secretary deems necessary. Such application 
shall be in such form, and shall be submitted at such time, as 
the Secretary shall establish.
  (b) Definitions.--For purposes of this section:
          (1) Qualified hydroelectric facility.--The term 
        ``qualified hydroelectric facility'' means a turbine or 
        other generating device owned or solely operated by a 
        non-Federal entity which generates hydroelectric energy 
        for sale and which is added to an existing dam or 
        conduit.
          (2) Existing dam or conduit.--The term ``existing dam 
        or conduit'' means any dam or conduit the construction 
        of which was completed before the date of the enactment 
        of this section and which does not require any 
        construction or enlargement of impoundment or diversion 
        structures (other than repair or reconstruction) in 
        connection with the installation of a turbine or other 
        generating device.
          (3) Conduit.--The term ``conduit'' has the same 
        meaning as when used in section 30(a)(2) of the Federal 
        Power Act (16 U.S.C. 823a(a)(2)).
The terms defined in this subsection shall apply without regard 
to the hydroelectric kilowatt capacity of the facility 
concerned, without regard to whether the facility uses a dam 
owned by a governmental or nongovernmental entity, and without 
regard to whether the facility begins operation on or after the 
date of the enactment of this section.
  (c) Eligibility Window.--Payments may be made under this 
section only for electric energy generated from a qualified 
hydroelectric facility which begins operation during the period 
of [10] 22 fiscal years beginning with the first full fiscal 
year occurring after the date of enactment of this subtitle.
  (d) Incentive Period.--A qualified hydroelectric facility may 
receive payments under this section for a period of 10 fiscal 
years (referred to in this section as the ``incentive 
period''). Such period shall begin with the fiscal year in 
which electric energy generated from the facility is first 
eligible for such payments.
  (e) Amount of Payment.--
          (1) In general.--Payments made by the Secretary under 
        this section to the owner or operator of a qualified 
        hydroelectric facility shall be based on the number of 
        kilowatt hours of hydroelectric energy generated by the 
        facility during the incentive period. For any such 
        facility, the amount of such payment shall be 1.8 cents 
        per kilowatt hour (adjusted as provided in paragraph 
        (2)), subject to the availability of appropriations 
        under subsection (g), except that no facility may 
        receive more than $750,000 in 1 calendar year.
          (2) Adjustments.--The amount of the payment made to 
        any person under this section as provided in paragraph 
        (1) shall be adjusted for inflation for each fiscal 
        year beginning after calendar year 2005 in the same 
        manner as provided in the provisions of [section 
        29(d)(2)(B)] section 45K(d)(2)(B) of the Internal 
        Revenue Code of 1986, except that in applying such 
        provisions the calendar year 2005 shall be substituted 
        for calendar year 1979.
  (f) Sunset.--No payment may be made under this section to any 
qualified hydroelectric facility after the expiration of the 
period of [20] 32 fiscal years beginning with the first full 
fiscal year occurring after the date of enactment of this 
subtitle, and no payment may be made under this section to any 
such facility after a payment has been made with respect to 
such facility for a period of 10 fiscal years.
  (g) Authorization of Appropriations.--There are authorized to 
be appropriated to the Secretary to carry out the purposes of 
this section $10,000,000 for [each of the fiscal years 2006 
through 2015] each of fiscal years 2019 through 2036.

SEC. 243. HYDROELECTRIC EFFICIENCY IMPROVEMENT.

  (a) Incentive Payments.--The Secretary shall make incentive 
payments to the owners or operators of hydroelectric facilities 
at existing dams to be used to make capital improvements in the 
facilities that are directly related to improving the 
efficiency of such facilities by at least 3 percent.
  (b) Limitations.--Incentive payments under this section shall 
not exceed 10 percent of the costs of the capital improvement 
concerned and not more than 1 payment may be made with respect 
to improvements at a single facility. No payment in excess of 
$750,000 may be made with respect to improvements at a single 
facility.
  (c) Authorization of Appropriations.--There are authorized to 
be appropriated to carry out this section not more than 
$10,000,000 for [each of the fiscal years 2006 through 2015] 
each of fiscal years 2019 through 2036.

           *       *       *       *       *       *       *


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