Non-Federal Development of Hydroelectric Resources at Federal Dams--Need To Establish a Clear Federal Policy

EMD-80-122: Published: Sep 26, 1980. Publicly Released: Sep 26, 1980.

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Studies indicate that hydroelectric power potential, particularly at existing dam sites, can save the country hundreds of thousands of barrels of oil equivalent per day. Some of the best potential sites in the United States are located at Federal water resource projects. Federal agencies may be authorized to plan, design, and build multi-purpose-dams. When hydropower is not an authorized project purpose, the non-Federal sector has as much right to propose development as the Federal agency. GAO was requested to (1) determine whether a Federal policy exists which allows non-Federal developers to develop hydroelectric resources at Federal dams, and (2) identify examples of non-Federal interests being discouraged from developing hydroelectric power at Federal sites.

There is no consistent Federal policy to foster non-Federal development of hydropower at Federal dam sites. The Corps of Engineers and the Water and Power Resources Service comment on non-Federal applications to develop hydropower at their facilities on a case-by-case basis. Both believe they should first have a chance to study the feasibility of installing hydropower at their dams and then recommend to Congress either public or non-Federal development. The Federal Energy Regulatory Commission (FERC) will grant a preliminary permit to a non-Federal developer to study the feasibility of installing power at a Federal site unless (1) hydropower is an authorized project purpose, or (2) a Federal study on a dam is nearly completed. The Department of Energy (DOE) and the Rural Electrification Administration (REA) will aso provide grants and loans to non-Federal developers when they secure an FERC permit or license. Some non-Federal developers interested in developing power at Federal sites encountered resistance from the water resources agencies, others did not. There was agreement among the public and non-Federal parties that the non-Federal sector can get hydropower on line faster than the public sector, and without major outlays by the Federal Government. Presently, there are unresolved legal questions which can potentially become serious barriers to non-Federal development of power at Federal sites. If left unresolved, power development at Federal dams could be delayed for a long time.

Matter for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: If an agreement cannot be reached by the Secretary of the Interior and the Chairman, FERC, as to who has final authority to grant a right-of-way permit to develop hydropower on public lands, approve engineering plans, and assess a water fee and a fee for the use of Federal facilities, Congress should amend the Federal Power Act and the Federal Land Policy Management Act to clarify its intent concerning which agency has the responsibility for the above items.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretaries of the Army, and the Interior should direct the Corps of Engineers and the Water and Power Resources Service, respectively, to encourage non-Federal development of hydropower at their facilities by fully cooperating with non-Federal developers and the Chairman, FERC. Preliminary permits should be issued to non-Federal developers interested in Federal dams in all cases where power is not an authorized project purpose. For those dams where power is an authorized purpose, the Secretaries of the Army and the Interior should direct the Corps and the Service, respectively, to conduct design studies within a period of time and recommend to Congress whether power should be installed. In cases where Congress decides against Federal development, the non-Federal sector should be given the opportunity to develop the sites. The Secretary of the Interior and the Chairman, FERC, should develop within 6 months a memorandum of understanding on who has final authority to (1) grant a right-of-way permit to develop hydropower on public lands, (2) approve engineering plans, and (3) assess a water fee and a fee for the use of Federal facilities.

    Agency Affected:

 

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