The Hydropower Regulatory Efficiency Act of 2012, or HR 3680, introduced by Representatives Cathy McMorris Rodgers (R-WA) and Diana DeGette (D-CO), seeks to streamline and accelerate approval for non-controversial small hydro projects, and would allow many more projects to qualify for exemption from FERC licensing altogether.
HR 3680 passed the House Energy and Commerce Committee with bipartisan support about two weeks ago, but its ultimate fate is still unclear. Companion legislation passed the Senate Energy and Natural Resources Committee in April 2011.
If it becomes law, the bill could have a huge positive impact on exactly the kinds of projects that are Kurt Johnson’s bread and butter. Johnson is the President of the Colorado Small Hydro Association (COSHA) and principal at Telluride Energy, a small hydro development and consulting firm. Most of his clients simply seek to take advantage of existing infrastructure, including dams, pipelines and irrigation canals, to create a small steady stream of green electricity.
Johnson recently traveled to Washington DC to testify on the bill’s behalf.
As the nation embarks on an “all-of the-above” domestic energy strategy, Johnson told legislators, “We need to dramatically step up the pace of utilizing the massive, currently-untapped resource of small hydro.
“The problem is, the FERC process is particularly burdensome for very small projects, where the cost of FERC compliance can potentially exceed the cost of hydro equipment,” he testified. “Many projects do not get built once people understand the law.”
Or, they get built under the radar – in what Johnson calls “guerrilla hydro.”
Johnson touted HR 3680 as “long-overdue, common-sense reform, which will accelerate the development of small hydro, creating jobs in rural areas, [and] leading to substantial new distributed, base-load, emissions-free renewable energy generation.”
Few can argue that there is tremendous U.S. hydropower growth potential. The nation’s 54,000 existing non-powered dams, alone, contain 12,000 MW of untapped potential, according to a study released last month by the Department of Energy.
“Ridgway Dam is a classic example,” Johnson said. “That doesn’t have hydro. Therein lies the opportunity. Only 3 percent of existing dams have hydro generation.”
But currently, the licensing of a hydropower project can take up to five years, in a process that can cost the applicant hundreds of thousands of dollars.
Few know this better than self-described “hydro-junkie” Eric Jacobson, the owner of the Ouray Hydroelectric Plant and many other hydro ventures (including, until recently, the Bridal Veil Falls Power Plant above Telluride).
“FERC has made compliance costs so high it absolutely shuts down small projects,” he said. “There’s a direct correlation between size of project and size of its impact. Big ones submerge tens of thousands of acres. Little ones submerge nothing, and take nothing away in habitat. Yet some say that every project ought to have the same environmental review. Kurt’s legislation simply recognizes that adding hydro to existing features such as dams, rivers and ditch drops poses very little impact, if any, and shouldn’t have to go through the same level of review.”
Ouray Mayor Bob Risch, too, knows first-hand how FERC’s institutional unwieldiness can thwart all but the most stalwart proponents of small hydro; he spent 18 months and hundreds of hours navigating its labyrinthine regulations trying to get a micro-hydro project properly authorized in Ouray.
The simple grid-tied 20 Kw project was completed in 2010 and largely funded by a Governor’s Energy Office grant. It utilizes an abandoned 6” water line and a mix of purchased and donated equipment to generate just enough electricity to offset large power-sucking pumps at the Ouray Hot Springs Pool.
“The fact that the project was grid-tied triggered the FERC licensing requirement,” Risch said in a letter of support for HR 3680 addressed to Congressman Scott Tipton. “Had we not had a volunteer (me) agree to undertake the extensive licensing process, the cost of a consultant would have seriously endangered the economic feasibility of the project.”
Throughout his ordeal, Risch said that his interactions with FERC staffers in Washington, D.C. were generally very cooperative and supportive. “They were equally frustrated with legally required procedures that made no real sense on a very small project such as ours,” he said.
Risch suspects that HR 3680 would be a great relief not only to communities such as Ouray that wish to pursue renewable energy sources, but to FERC staffers as well, who “clearly have considerable work to do on large projects where the onerous requirements for a full license make some sense.”
As Ouray contemplates a second, somewhat larger, micro-hydro plant on its water main, Risch said the city would “certainly benefit from the availability of a small, more focused licensing process.”
“It’s hard to overestimate the importance of getting rid of regulatory barriers to small hydro projects,” Johnson agreed. “This has been a problem for decades. Hopefully the bill will succeed. Then all of a sudden, what that does is it changes the relative cost associated with building these small projects.”