Hydropower--An Energy Source Whose Time Has Come Again

EMD-80-30: Published: Jan 11, 1980. Publicly Released: Jan 11, 1980.

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There is an urgent need for the United States to develop its renewable energy resources and reduce its dependence on imported oil. One resource for which technology is available now is hydropower. The best prospects for the development of hydropower are at existing hydro sites where the dam structures are already built and the environmental impacts are few. Despite the administration's stated interest in small-hydro development, the Small-Hydro Program has moved slowly.

Although demonstrations were needed to measure constraints and show hydro viability, more than 2 years passed before demonstration grants were awarded. The program lacked clear direction and an adequate staff. Thus, potential hydro developers were not receiving needed assistance. GAO felt that an aggressive outreach program would give important impetus to the program. Efforts to clearly define how it planned to foster development have been contradictory. Although positive efforts have been made in streamlining licensing procedures for non-Federal dams, no similar actions were being taken to improve the approval process for adding power at existing Federal dams. The Federal Energy Regulatory Commission (FERC) has been indecisive about whether public or nonpublic entities had preference when competing licensing applications were submitted. GAO forsaw bottlenecks in handling the increasing volume of applications for licenses and permits. Additional factors hindering development included the inability of potential developers to find a market for their power and the limiting of the legal size of a project to 15 megawatts.

Matter for Congressional Consideration

  1. Status: Closed

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

    Matter: The Congress should amend the National Energy Act by redefining a small-hydro project as one that could have up to 100, rather than 15, megawatts of capacity, thereby including several good sites that now exceed the limitation set in the present law.

Recommendation for Executive Action

  1. Status: Closed

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

    Recommendation: The Secretary of Energy should increase efforts to provide assistance, information, and guidance to prospective hydro developers through an outreach program using regional staff as appropriate; expedite the grant program for demonstration projects; and reassess the goals for hydro development. The Chairman of the FERC should rule on who has preference for competing relicensing applications; closely monitor the number of applications for hydro licenses and assign additional staff if the volume continues to increase; and seek statutory authority in dealing with interconnections to require that the Federal power marketing agencies and Rural Electric Cooperatives purchase the hydropower output when no other markets are available. The Director of the Office of Management and Budget should assess its position on the need for incentives to encourage small hydro development. The Director of the Water Resources Council should adopt the provisions in its update draft of principles and standards as enclosed in the May 24, 1979, Federal Register. These changes would require Federal hydro benefit-cost studies be done on a life cycle costing basis, thus putting renewable resource projects such as hydro in proper economic perspective in relation to nonrenewable resources. The Secretaries of the Interior and the Army should direct the Bureau of Reclamation and the Corps of Engineers to streamline their procedures for adding power at existing dams when such additions require no major structural changes and result in minimal environmental impact.

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