Licensing Hydropower Projects: Better Time and Cost Data Needed to Reach Informed Decisions About Process Reforms

Hydropower projects generate about 10 percent of all electricity produced in the United States. Federally owned and operated hydropower projects generate about half of this amount, while about 1,000 nonfederally owned and operated hydropower projects, which are licensed by the federal government, generate the rest. Some licensees and other participants in the licensing process have expressed concern that obtaining a license takes too long and costs too much. In response, the Federal Energy Regulatory Commission (FERC) established an alternative licensing process, and other federal agencies undertook reforms to streamline the licensing process. However, these reforms did not quell the concerns. In November 2000, Congress directed FERC to review the policies, procedures, and regulations on the licensing of nonfederal hydropower projects to determine how to reduce the time and costs associated with obtaining a license. This testimony discusses (1) the process used by FERC to issue licenses to build and to operate nonfederal hydroelectric power projects and (2) FERC's congressionally mandated report on hydroelectric licensing policies, procedures, and regulations.