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[House Report 112-219]
[From the U.S. Government Printing Office]


112th Congress                                            Rept. 112-219
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

======================================================================



 
             SMALL-SCALE HYDROPOWER ENHANCEMENT ACT OF 2011
                                _______
                                

               September 23, 2011.--Ordered to be printed

                                _______
                                

       Mr. Hastings of Washington, from the Committee on Natural 
                   Resources, submitted the following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 795]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Natural Resources, to whom was referred 
the bill (H.R. 795) to expand small-scale hydropower, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Small-Scale Hydropower Enhancement Act 
of 2011''.

SEC. 2. DEFINITIONS.

  In this Act:
          (1) Conduit.--The term ``conduit'' means any tunnel, canal, 
        pipeline, aqueduct, flume, ditch, or similar manmade water 
        conveyance that is operated for the distribution of water for 
        agricultural, municipal, or industrial consumption and not 
        primarily for the generation of electricity.
          (2) Secretary.--The term ``Secretary'' means the Secretary of 
        the Interior.

SEC. 3. APPLICABILITY OF LAW.

  Notwithstanding any other provision of law, a hydroelectric project 
that uses only a non-federally owned conduit to generate electric power 
that does not exceed 1.5 megawatts and that, on or before the date of 
enactment of this Act, is not licensed under, or exempted from the 
license requirements contained in, part I of the Federal Power Act (16 
U.S.C. 792 et seq.) shall not be required to be licensed under part I 
of such Act.

SEC. 4. INCLUSION OF CERTAIN FACILITIES IN REPORT AND STUDY.

  The Secretary shall--
          (1) not later than 6 months after the date of enactment of 
        this Act, revise and update the study and report required under 
        section 1834 of the Energy Policy Act of 2005 (Public Law 109-
        58) to include facilities that would result in less than 1 
        megawatt of capacity;
          (2) to the maximum extent practicable, consult with non-
        Federal and noncontracting interests in implementing this 
        section;
          (3) implement this section on a nonreimbursable basis; and
          (4) include in the report revised and updated under paragraph 
        (1), information regarding the availability and importance of 
        using materials and equipment produced and manufactured in the 
        United States in the type of facilities referred to in that 
        report.

                          PURPOSE OF THE BILL

    The purpose of H.R. 795, as ordered reported, is to expand 
small-scale hydropower.

                  BACKGROUND AND NEED FOR LEGISLATION

    Faced with aging infrastructure costs, static or declining 
federal and state budgets and mounting energy and environmental 
costs for pumping water, irrigation districts and water 
utilities seek to generate revenue from new hydropower 
production at canals, ditches, pipes, laterals and other water 
delivery devices (collectively known as ``conduits''). Although 
small in nature, this ``low-head'' hydropower has the potential 
to add significant amounts of renewable electricity on a 
cumulative scale and generate local revenue as a way to 
decrease dependence on federal appropriations. In Colorado 
alone, conduit development could lead to 1,400 megawatts of 
production (equivalent to Glen Canyon dam's hydropower 
capacity). At a time when some irrigation districts are using 
diesel fuel to pump water, emissions-free hydropower would also 
have a direct environmental benefit by replacing that fossil 
fuel source.
    While there are thousands of miles of canals and water 
pipelines in the western United States available for potential 
hydropower development, and with technological advances making 
small turbines more cost-effective, water utilities and other 
potential hydropower developers indicate that unnecessary 
federal regulations and lack of creativity and vision at the 
Department of the Interior have stifled conduit hydropower 
production.
    Under federal law, any non-federal conduit hydropower 
project must have a Federal Energy Regulatory Commission (FERC) 
license or an ``exemption'' from that license, no matter the 
size of the project and the lack of environmental impact. 
Specifically, FERC must carry out its license/exemption 
responsibilities under Section 30 of the Federal Power Act, 
which requires the agency to consult with the U.S. Fish and 
Wildlife Service as it relates to the Fish and Wildlife 
Coordination Act. This requirement has proven time-consuming 
and costly to the point where project costs have increased 100 
percent. This requirement makes little sense because conduits 
are already off-river on previously disturbed ground and have 
no impact on the environment. Some opponents of the legislation 
point out that FERC has improved this process to reduce costs 
and time, however the expensive time delays are much longer 
than FERC's review time. Most of the time and cost is spent by 
applicants before FERC review. In reality, this makes the real 
time barrier at least two to four times larger than the formal 
review period. As a result, Section 3 of H.R. 795 exempts any 
non-federal conduit hydropower project that generates 1.5 
megawatts or less from the FERC licensing/exemption process.
    This bill does nothing to harm the environment. For 
example, non-federal conduit hydropower development covered in 
this bill is already categorically excluded from the National 
Environmental Policy Act process under FERC regulations. In 
addition, the legislation does not preclude reviews resulting 
from Endangered Species Act, Clean Water Act or other 
environmental statutes. The legislation simply seeks to end 
unnecessary paperwork while keeping environmental protections 
in place.
     Section 4, which is jurisdictional to the Natural 
Resources Committee, directs the Bureau of Reclamation to re-
examine its facilities for conduit hydropower development using 
its authority in Section 1834 of the Energy Policy Act of 2005 
(Public Law 109-58). The agency failed to include these 
facilities in its initial assessment, but is now using existing 
funding to examine conduit hydropower development. There are 
concerns among water utilities and other developers that the 
agency will not pursue an aggressive study and will fail to 
solicit private input. H.R. 795 requires the Bureau of 
Reclamation to finish the report within six months of bill 
enactment and encourages non-federal participation in the 
study.

                            COMMITTEE ACTION

    H.R. 795 was introduced on February 18, 2011, by 
Congressman Adrian Smith (R-NE). The bill was referred 
primarily to the Committee on Energy and Commerce. The bill was 
referred additionally to the Committee on Natural Resources, 
and within that Committee to the Subcommittee on Water and 
Power. The bill was also referred to the Committee on 
Transportation and Infrastructure. On June 23, 2011, the 
Subcommittee on Water and Power held a hearing on the bill. On 
July 20, 2011, the Full Resources Committee met to consider the 
bill. The Subcommittee on Water and Power was discharged by 
unanimous consent. Congressman John Garamendi (D-CA) offered an 
amendment; the amendment was adopted by unanimous consent. The 
bill, as amended, was ordered favorably reported to the House 
of Representatives by unanimous consent.

            COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII of the Rules of the House of Representatives, the 
Committee on Natural Resources' oversight findings and 
recommendations are reflected in the body of this report.

                    COMPLIANCE WITH HOUSE RULE XIII

    1. Cost of Legislation. Clause 3(d)(1) of rule XIII of the 
Rules of the House of Representatives requires an estimate and 
a comparison by the Committee of the costs which would be 
incurred in carrying out this bill. However, clause 3(d)(2)(B) 
of that rule provides that this requirement does not apply when 
the Committee has included in its report a timely submitted 
cost estimate of the bill prepared by the Director of the 
Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974. Under clause 3(c)(3) of rule 
XIII of the Rules of the House of Representatives and section 
403 of the Congressional Budget Act of 1974, the Committee has 
received the following cost estimate for this bill from the 
Director of the Congressional Budget Office:

H.R. 795--Small-Scale Hydropower Enhancement Act of 2011

    Under the Federal Power Act, the Federal Energy Regulatory 
Commission (FERC) issues licenses and regulates hydroelectric 
facilities, regardless of size. H.R. 795 would exempt certain 
small hydroelectric facilities with less than 1.5 megawatts of 
generating capacity from FERC's licensing requirements. In 
addition, the bill would require the Department of the Interior 
(DOI) to report on the potential for generating more 
electricity from small hydroelectric facilities on federal 
lands.
    CBO estimates that implementing H.R. 795 would have no 
significant impact on the federal budget. Exempting small 
hydroelectric facilities from federal licensing requirements 
would reduce FERC's workload. However, because FERC recovers 
100 percent of its costs through user fees, any reduction in 
administrative costs (which are controlled through annual 
appropriation acts) would be offset by an equal change in fees 
that the commission charges, resulting in no net change in 
federal spending. Based on information from DOI, CBO also 
estimates that meeting expanded reporting requirements under 
H.R. 795 would not significantly affect the department's costs. 
Furthermore, any such costs would be subject to the 
availability of appropriated funds.
    Enacting H.R. 795 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply. 
H.R. 795 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Megan Carroll. 
The estimate was approved by Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

    2. Section 308(a) of Congressional Budget Act. As required 
by clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives and section 308(a) of the Congressional Budget 
Act of 1974, this bill does not contain any new budget 
authority, spending authority, credit authority, or an increase 
or decrease in revenues or tax expenditures. CBO estimates that 
implementing H.R. 795 would have no significant impact on the 
federal budget.
    3. General Performance Goals and Objectives. This bill does 
not authorize funding and therefore, clause 3(c)(4) of rule 
XIII of the Rules of the House of Representatives does not 
apply.

                           EARMARK STATEMENT

    This bill does not contain any Congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined 
under clause 9(e), 9(f), and 9(g) of rule XXI of the Rules of 
the House of Representatives.

                    COMPLIANCE WITH PUBLIC LAW 104-4

    This bill contains no unfunded mandates.

                PREEMPTION OF STATE, LOCAL OR TRIBAL LAW

    This bill is not intended to preempt any State, local or 
tribal law.

                        CHANGES IN EXISTING LAW

    If enacted, this bill would make no changes in existing 
law.

                            DISSENTING VIEWS

    H.R. 795 would exempt non-federally owned in-conduit 
hydropower projects with the capacity of 1.5-megawatt or less 
from any Federal Energy Regulatory Commission (FERC) oversight. 
This includes an exemption from the FERC process for conduit 
exemptions. Section 4 of H.R. 795 directs the Secretary of the 
Interior to perform a study that looks at hydropower 
capabilities of 1-megawatt or less. Because of the 
jurisdictional constraints, only section 4 of the legislation 
is referred to the Natural Resources Committee. We support the 
general intent of Section 4, but have concerns with the 
remainder of the bill.
    Since 2001, FERC has issued 50 conduit exemptions. From 
2006-2010, 13 conduit exemptions were completed in less than a 
year. Of the 11 conduit exemptions that were issued in 2011, 
orders regarding the nine conduit exemptions that presented no 
substantive issues were issued on average 40 days after the 
comment deadline established in the public notice.
    Proponents for the legislation will argue that the FERC 
conduit exemption process is tedious, costly, and time 
consuming. It is unclear, however, why an exemption from the 
FERC process for 
in-conduit hydropower is necessary when a conduit exemption is 
already in place and when it appears that the process is 
approving projects in as little as two months. Removing FERC 
oversight also removes any ability for environmental 
mitigation, if any is necessary.
                                   Edward J. Markey,
                                           Ranking Member.

                                  
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