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MODERNIZING ENERGY INFRASTRUCTURE: CHALLENGES AND OPPORTUNITIES TO EXPANDING 

HYDROPOWER GENERATION 

HEARING 

BEFORE THE

SUBCOMMITTEE ON ENERGY 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

MARCH 15, 2017 

Serial No. 115–12 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

GREG WALDEN, Oregon 

Chairman 

JOE BARTON, Texas 

Vice Chairman 

FRED UPTON, Michigan 

JOHN SHIMKUS, Illinois 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

LARRY BUCSHON, Indiana 

BILL FLORES, Texas 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

CHRIS COLLINS, New York 

KEVIN CRAMER, North Dakota 

TIM WALBERG, Michigan 

MIMI WALTERS, California 

RYAN A. COSTELLO, Pennsylvania 

EARL L. ‘‘BUDDY’’ CARTER, Georgia 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

BEN RAY LUJA ́ N, New Mexico 

PAUL TONKO, New York 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

RAUL RUIZ, California 

SCOTT H. PETERS, California 

DEBBIE DINGELL, Michigan7 

SUBCOMMITTEE ON ENERGY

FRED UPTON, Michigan 

Chairman 

PETE OLSON, Texas 

Vice Chairman 

JOE BARTON, Texas 

JOHN SHIMKUS, Illinois 

TIM MURPHY, Pennsylvania 

ROBERT E. LATTA, Ohio 

GREGG HARPER, Mississippi 

DAVID B. MCKINLEY, West Virginia 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

LARRY BUCSHON, Indiana 

BILL FLORES, Texas 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

KEVIN CRAMER, North Dakota 

TIM WALBERG, Michigan 

GREG WALDEN, Oregon (ex officio) 

BOBBY L. RUSH, Illinois 

Ranking Member 

JERRY MCNERNEY, California 

SCOTT H. PETERS, California 

GENE GREEN, Texas 

MICHAEL F. DOYLE, Pennsylvania 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

PETER WELCH, Vermont 

PAUL TONKO, New York 

DAVID LOEBSACK, Iowa 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

G.K. BUTTERFIELD, North Carolina 

FRANK PALLONE, JR., New Jersey (ex 

officio) 

(II) 

(III) 

C O N T E N T S 

Page 

Hon. Fred Upton, a Representative in Congress from the State of Michigan, 

opening statement ................................................................................................ 1 

Prepared statement .......................................................................................... 3 

Hon. Scott H. Peters, a Representative in Congress from the State of California, opening statement .................................................................................... 3 

Hon. Greg Walden, a Representative in Congress from the State of Oregon, 

opening statement ................................................................................................ 5 

Prepared statement .......................................................................................... 6 

Hon. Frank Pallone, Jr., a Representative in Congress from the State of 

New Jersey, opening statement .......................................................................... 7 

Prepared statement .......................................................................................... 9 

WITNESSES

Kieran Connolly, Vice President, Generation Asset Management, Bonneville 

Power Administration .......................................................................................... 11 

Prepared statement .......................................................................................... 13 

Answers to submitted questions ...................................................................... 121 

Chuck Hookham, Director, New Business Development and Projects, CMS 

Energy, on Behalf of the American Society of Civil Engineers ........................ 22 

Prepared statement .......................................................................................... 24 

Dave Steindorf, California Special Projects Director, American Whitewater, 

on Behalf of the California Hydropower Reform Coalition ............................... 38 

Prepared statement .......................................................................................... 40 

Answers to submitted questions ...................................................................... 126 

Ramya Swaminathan, Chief Executive Officer, Rye Development, on Behalf 

of the National Hydropower Association ............................................................ 48 

Prepared statement .......................................................................................... 50 

Answers to submitted questions ...................................................................... 140 

SUBMITTED MATERIAL

Statement of American Rivers, March 15, 2017, submitted by Mr. Upton ........ 106 

Letter of March 14, 2017, from Adam Cramer, Executive Director, Outdoor 

Alliance, to Mr. Upton and Mr. Rush, submitted by Mr. Upton ...................... 115 

Statement of Sacramento Municipal Utility District, March 15, 2017, submitted by Mr. Upton ............................................................................................ 118 

(1) 

MODERNIZING ENERGY INFRASTRUCTURE: 

CHALLENGES AND OPPORTUNITIES TO EXPANDING HYDROPOWER GENERATION 

WEDNESDAY, MARCH 15, 2017 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON ENERGY, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 1:16 p.m., in room 

2123, Rayburn House Office Building, Hon. Fred Upton (chairman 

of the subcommittee) presiding. 

Members present: Representatives Upton, Barton, Murphy, Harper, McKinley, Kinzinger, Griffith, Johnson, Long, Bucshon, Flores, 

Mullin, Hudson, Walberg, Walden (ex officio), Peters, Castor, 

Tonko, Schrader, Kennedy, and Pallone (ex officio). 

Staff present: Grace Appelbe, Staff Assistant; Elena Brennan, 

Legislative Clerk, Oversight and Investigations; Jordan Davis, Director of Policy and External Affairs; Wyatt Ellertson, Research Associate, Energy and Environment; Adam Fromm, Director of Outreach and Coalitions; Tom Hassenboehler, Chief Counsel, Energy 

and Environment; Zach Hunter, Director of Communications; A.T. 

Johnson, Senior Policy Advisor/Professional Staff, Energy and Environment; Ben Lieberman, Senior Counsel, Energy; Brandon 

Mooney, Senior Policy Advisor, Energy; Mark Ratner, Policy Coordinator; Annelise Rickert, Counsel, Energy; Dan Schneider, Press 

Secretary; Hamlin Wade, Special Advisor for External Affairs; 

Everett Winnick, Director of Information Technology; Jeff Carroll, 

Minority Staff Director; Jean Fruci, Minority Policy Advisor, Energy and Environment; Rick Kessler, Minority Senior Advisor and 

Staff Director, Energy and Environment; John Marshall, Minority 

Policy Coordinator; Dan Miller, Minority Staff Assistant; Alexander 

Ratner, Minority Policy Analyst; Tuley Wright, Minority Energy 

and Environment Policy Advisor; and C.J. Young, Minority Press 

Secretary. 

OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. UPTON. Good afternoon, everyone. 

I don’t know if all Members have heard, but our ranking subcommittee member’s wife passed away this weekend, so why don’t 

we have a brief moment of silence for her. 

[Moment of silence.] 

Thank you. 

2 

So today’s hearing, ‘‘Modernizing Energy Infrastructure: Challenges and Opportunities to Expanding Hydropower Generation,’’ 

continues this committee’s efforts to examine what we need to do 

to keep our infrastructure the very best in the world. 

I want to start certainly by thanking our witnesses for appearing 

before us today. Their testimony is going to continue to give us a 

better understanding of the current state of hydropower in the 

United States so that we can identify ways to improve the regulatory process, modernize our aging infrastructure, and ensure consumers continue to have access to reliable and affordable electricity 

produced from hydropower. 

Our hydropower fleet is aging. Yes, it is. Hydropower plants are 

among the oldest power plants in the U.S. In fact, according to the 

Energy Information Administration, the average hydropower facility has been operating for 64 years—I am 63—and the 50 oldest 

electric generating plants in the U.S. are all hydropower. Each has 

been in service since 1908. That was the last year until this year 

the Cubs won the World Series. 

As a result, more than 500 projects, representing about 50 percent of non-Federal hydro licenses, will begin the relicensing process before 2030. 

The regulatory environment for hydropower has become increasingly challenging. Licensing new hydropower facilities and relicensing existing facilities requires extensive consultation with multiple Federal, State, and local government entities. The process 

takes years and costs often tens of millions of dollars, and as a result, needed investments are too often discouraged or unnecessarily 

delayed. And in some cases the cost to modernize or meet environmental objectives outweighs the potential economic benefits of continued operation and the plants have to be shut down. 

In many ways, licensing challenges are limiting hydropower’s potential. So, with sound policy and smarter regs, hydropower could 

have a very bright future. 

Hydro is the Nation’s number one renewable, producing electricity with negligible emissions. Today, it is responsible for providing 7 percent of the Nation’s total energy needs, and with continued technological advancements and smarter regs, hydropower 

generation could expand by an additional 50 percent by the year 

2025. 

These are things that Congress could do to maximize 

hydropower’s potential. This committee advanced legislation last 

Congress that would improve the licensing process, promote efficiency improvements, and encourage pump storage and development of nonpowered dams. While we were not able to agree on the 

hydropower reform package in the context of the larger energy bill, 

significant progress was made, and I am hopeful, I am encouraged, 

and I am optimistic that we are going to be able to deliver this 

time around. 

Hydro, as we know, is clean, affordable, reliable. Updating and 

modernizing the hydro infrastructure will incentivize economic development, create jobs, and strengthen our energy security. I look 

forward to working with all of my colleagues on both sides of the 

aisle to really see this happen in this Congress. 

3 

And I yield back my time and recognize the acting ranking member of the powerful Energy and Power Subcommittee, the gentleman from California, Mr. Peters, for 5 minutes. 

[The prepared statement of Mr. Upton follows:] 

PREPARED STATEMENT OF HON. FRED UPTON

Today’s hearing—‘‘Modernizing Energy Infrastructure: Challenges and Opportunities to Expanding Hydropower Generation’’—continues this committee’s efforts to 

examine what we need to do to keep our infrastructure the best in the world. 

I want to start by thanking the witnesses for appearing before us today. Their 

testimony will give us a better understanding of the current state of hydropower in 

the U.S. so that we can identify ways to improve the regulatory process, modernize 

our aging infrastructure, and ensure consumers continue to have access to reliable 

and affordable electricity produced from hydropower. 

Our hydropower fleet is aging. Hydropower plants are among the oldest power 

plants in the United States. In fact, according to the Energy Information Administration, the average hydropower facility has been operating for 64 years, and the 

50 oldest electric generating plants in the United States are all hydropower; each 

has been in service since 1908. As a result, more than 500 projects—representing 

about 50 percent of non-Federal hydropower licenses—will begin the relicensing 

process before 2030. 

The regulatory environment for hydropower has become increasingly challenging. 

Licensing new hydropower facilities and relicensing existing facilities requires extensive consultation with multiple Federal, State, and local government entities. 

The process takes years and costs tens of millions of dollars. As a result, needed 

investments are too often discouraged or unnecessarily delayed. In some cases, the 

costs to modernize or meet environmental objectives outweighs the potential economic benefits of continued operation and the plants have to be shut-down. In many 

ways, licensing challenges are limiting hydropower’s potential. 

With sound policy and smarter regulations, hydropower could have a very bright 

future. Hydropower is the Nation’s number one renewable, producing electricity 

with negligible emissions. Today, it’s responsible for providing 7 percent of the Nation’s total energy needs. With continued technological advancements and smarter 

regulations, hydropower generation could expand by an additional 50 percent by 

2025. 

There are things Congress could do to maximize hydropower’s potential. This committee advanced legislation last Congress that would improve the licensing process, 

promote efficiency improvements, and encourage pumped-storage and development 

of non-powered dams. While we were not able to agree on the hydropower reform 

package in the context of the big energy bill, significant progress was made and I 

am hopeful that we’ll be able to deliver this time around. 

Hydro is clean, affordable, and reliable. Updating and modernizing hydropower infrastructure will incentivize economic development, create jobs, and strengthen our 

energy security. I look forward to working with all my colleagues to bring more 

hydro to the Nation. Thank you. 

OPENING STATEMENT OF HON. SCOTT H. PETERS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. PETERS. Thank you very much, Mr. Chairman. 

It is an honor to stand in today for the ranking member of the 

Energy Subcommittee, my colleague, Bobby Rush. And I too want 

to acknowledge that he couldn’t be here today because of the passing of his wife of 36 years, Carolyn. And I want him to know that 

my thoughts, and everyone in the room, are with him and his family during this difficult time. 

This hearing on modernizing energy infrastructure, and specifically expanding hydropower generation, comes at a critical juncture 

in America’s energy landscape. Our economy is undergoing a rapid 

transition, with decisive leaps in technology happening every day. 

4 

And front and center in the changing economy of this decade is the 

fundamental shift in the way we power our world. 

Transition to a clean economy is happening right now. America 

has an opportunity to diversify our energy sources and give our 

children a future with cleaner air, cleaner water, and greater economic opportunities, and hydropower plays an important role in 

that transition, because it is always on. 

Hydropower provides zero-emission base load generation that can 

help our country meet our energy goals and commitments to the 

global community made in the Paris Agreement last year. Hydropower offsets over 190 million metric tons of CO2 each year, the 

equivalent of over 40 million cars on the road. 

Yet America’s aging infrastructure and onerous licensing processes are making it harder for States, local governments, and the 

private sector to adopt and expand new forms of energy, like hydropower. 

Just 5 days ago, the American Society of Civil Engineers report 

card gave the United States infrastructure a D-plus and gave dams 

a slightly higher grade of D. That is probably still not good enough. 

And this average age of the country’s 90,000 dams—I have 56 

years old, which is a little bit closer to my age than the chairman’s, 

but still too old. And today, only about 3 percent are equipped to 

generate clean power. 

So the first step forward is to provide sufficient funding to modernize our infrastructure. I would like to hear more from our witnesses about where they see the greatest need to make those longterm investments to expand hydropower generation. 

Another critical step is regulatory reform. Hearing from industry, 

it takes on average 8 years and sometimes as long as 10 years or 

more to relicense an existing project. And if the time and cost of 

licensing these projects exceeds the point where the project can be 

profitable, we know that investment in this clean energy source 

will decrease. 

So, in these cases, our regulatory regime is incentivizing municipalities and the private sector not to invest in clean energy. That 

is not what any of us want. 

So any kind of regulatory reform, we know, must maintain protections for fish, wildlife, natural resources, and water quality, and 

I am confident we can do that, but we can still eliminate duplicative processes and enhance interagency coordination. It is a false 

choice that we can’t have both a clean, safe environment and a regulatory process in place to ensure that investment in clean energy 

remains a cost-competitive option. 

I look forward to hearing from our witnesses how Congress and 

this committee specifically can act in a bipartisan way to modernize our energy infrastructure and facilitate the expansion of hydropower energy generation in a way that is sustainable. 

And I look forward to the testimony. And I yield back, Mr. Chairman. Thank you. 

Mr. UPTON. Thank you. 

The Chair would recognize for an opening statement the chairman of the full committee, the wonderful gentleman from the good 

State of Oregon, Mr. Walden. 

5 

OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OREGON 

Mr. WALDEN. I thank the gentleman from Michigan. I want to 

stand up on his behalf. I was going to potentially move to have the 

gentleman from California’s words taken down when he was taking 

the shot at you about age, that his dams were closer to your age 

than his. 

Mr. UPTON. The good thing is that I look younger still. 

Mr. WALDEN. That is right. 

I want to welcome our witnesses, and especially Kieran Connolly, 

who is with the Bonneville Power Administration. We are glad you 

are here. You all do a great job out in Oregon and for the Northwest. 

One of the many challenges and advantages, frankly, the great 

advantage of living in Oregon is the plentiful supply of affordable, 

reliable, and clean hydropower. Hydropower is great for homeowners as well as job-creating businesses. We know that well in 

the Northwest. However, even in the Pacific Northwest, we have 

additional opportunities, as we do across the country, to take greater advantage of this valuable resource. 

This hearing is a crucial step in the Energy Subcommittee’s efforts to modernize our Nation’s electricity infrastructure, and today 

we will focus on the challenges and opportunities in expanding hydropower generation. 

For over a century, hydropower has provided electricity to millions of Americans across our Nation. The United States and Canada led the way in hydropower engineering for the first half of the 

20th century. In 1936, the Hoover Dam became the world’s largest 

hydroelectric plant, generating 1,345 megawatts. Six years later, in 

1942, the Grand Coulee Dam in Washington State surpassed the 

Hoover Dam in electricity-generation capacity. 

As a footnote, when Richard Nixon came out to The Dalles, Oregon, to dedicate The Dalles Dam, my father was the master of 

ceremonies for those day’s activities. And so this has gone on for 

generations. 

And, obviously, in my home State of Oregon, hydropower is one 

of the largest sources of electricity generation and provides over 

half of Oregon’s electricity-generation needs. In fact, Mr. Connolly, 

representing BPA, his organization is responsible for marketing the 

Northwest’s wholesale electrical hydropower. 

So I look forward to hearing more about Bonneville’s balance, 

how you balance the various objectives while carrying out your mission of producing and delivering reliable, affordable power to consumers across the Pacific Northwest. You get kind of wrapped 

around the axle by Governors and courts, and interest groups of all 

sides, so it is a challenge. 

The electricity generated from hydropower allows for a diverse 

energy mix, which in turn increases our Nation’s energy security 

and reliability. A recent DOE report found that U.S. hydropower 

production could grow by almost 50 percent by year 2050. I know 

a lot of that is up in Alaska. This potential increase in hydropower 

production would boost job growth, increase economic investment, 

facilitate the use of wind and other intermittent renewables, and 

avoid harmful emissions from the electric power sector. 

6 

In reading through the various testimonies that you all submitted, I found it very interesting on the pump storage piece and 

the limits and opportunities on hydro and what is involved there, 

and it is important to get the right balance, and how we can harness all those to really work with the renewable energy resources 

as well, because getting that grid balanced right is very important. 

And I have seen the swings in the charts of wind energy a thousand megawatts up one hour and down the next, and somehow you 

make all that work. 

Despite the numerous benefits of hydropower, the greatest impediment facing its growth is the regulatory process. Take the Bowman Dam in Crook County, Oregon, for example. For many years, 

I and some others in the delegation worked to pass legislation to 

help pave the way for future hydropower and jobs in central Oregon. Even after the bill was passed unanimously and signed into 

law in 2014, it took more than a year for that new law to be implemented. 

But it is not just the delays. The licensing of new hydropower facilities and the relicensing of existing facilities is really costly and 

takes forever. The process often requires 7 to 10 years to complete 

and costs tens of millions of dollars. We would like to find a way 

to streamline that, frankly, but recognizing the importance of 

stakeholders having an opportunity to make their case. 

As I have stated before, my objectives at the committee start 

with the consumer. If we put the consumer first in our discussion, 

we will end up with really good public policy. A diverse energy mix 

empowers consumers by giving them choices in different energy 

sources. The electricity generated by hydropower is as clean and renewable it gets. 

When it comes to improving our Nation’s laws regarding hydropower development, we in Congress have the opportunity to reach 

across the aisle, and I think we can get some good things done for 

the environment, for reduction of carbon emissions, and for the 

economy. 

And as this subcommittee continues its efforts to modernize our 

Nation’s energy infrastructure through technology, neutral improvements, and expansion, we have to bring greater transparency, 

efficiency, and accountability to the regulatory process affecting hydropower and more. 

So, again, thank you for your testimony. I am juggling between 

two subcommittees. You probably see other Members doing that. 

We do the Nation’s work here, and we really appreciate your contributing to our public policy debate and discussion. 

With that, Mr. Chairman, I yield back the balance of my time. 

[The prepared statement of Mr. Walden follows:] 

PREPARED STATEMENT OF HON. GREG WALDEN

One of the many advantages of living in Oregon is the plentiful supply of affordable, reliable, and clean hydropower. Hydropower is great for homeowners as well 

as job-creating businesses. However, even in the Pacific Northwest we have additional opportunities-as we do across the country to take greater advantage of this 

valuable resource. 

This hearing is a crucial step in the energy subcommittee’s efforts to modernize 

our Nation’s energy infrastructure, and today we will focus on the challenges and 

opportunities in expanding hydropower generation. 

7 

For over a century, hydropower has provided electricity to millions of Americans 

across our Nation. The United States and Canada led the way in hydropower engineering for the first half of the 20th century. In 1936, the Hoover Dam became the 

world’s largest hydroelectric plant generating 1,345 megawatts. Six years later in 

1942, the Grand Coulee Dam in Washington State surpassed the Hoover Dam in 

electricity generation capacity. In my home State of Oregon, hydropower is the largest source of electricity generation and provides over half of Oregon’s electricity generation needs. In fact, one of our witnesses here today, Mr. Connolly, is representing 

the Bonneville Power Administration, the nonprofit Federal organization responsible 

for marketing the Northwest’s wholesale electrical hydropower. I look forward to 

hearing how Bonneville Power balances multiple objectives while carrying out its 

mission of producing and delivering reliable power to customers across the Pacific 

Northwest. 

The electricity generated from hydropower allows for a diverse energy mix, which 

in turn increases our Nation’s energy security and reliability. A recent DOE report 

found that U.S. hydropower production could grow by almost 50 percent by year 

2050. This potential increase in hydropower production would boost job growth, increase economic investment, facilitate the use of wind and other intermittent renewables, and avoid harmful emissions from the electric power sector. 

Despite the numerous benefits of hydropower, the greatest impediment facing its 

growth is the regulatory process. Take the Bowman Dam in Crook County Oregon, 

for example. For many years, I worked to pass legislation to help pave the way for 

future hydropower and jobs in Central Oregon. Even after the bill was passed 

unanimously and signed into law in 2014, it took more than a year for that new 

law to be implemented. But it’s not just bureaucratic delays. The licensing of new 

hydropower facilities and the relicensing of existing facilities is costly and time consuming. The process often requires 7 to 10 years to complete and costs tens of millions of dollars. 

As I’ve stated before, my objectives at the committee are to put consumers first 

in all that we do. A diverse energy mix empowers consumers by giving them choices 

in different energy sources. The electricity generated by hydropower is as clean and 

renewable as its gets. When it comes to improving our Nation’s laws regarding hydropower development, we in Congress have the opportunity to reach across the 

aisle and get good things done for the environment, for reduction of carbon emissions and for the economy. As this subcommittee continues its efforts to modernize 

our Nation’s energy infrastructure through technology-neutral improvement and expansion, we must bring greater transparency, efficiency and accountability to the 

regulatory processes affecting hydropower. 

Mr. UPTON. The gentleman yields back. 

I would note that, because of the weather issues yesterday, we 

have a good number of Members that were stranded in their district and not able to get back, juggling flights to get in and out, as 

well. 

Mr. WALDEN. And, Mr. Chairman, just a point of personal privilege. I want to join in my colleagues about paying our respects to 

Bobby Rush at the loss of his wife. 

Mr. UPTON. And we had a moment of silence. She was a wonderful woman, great partner. 

Mr. WALDEN. And, you know, I know he expressed—well, he was 

afraid it was going to happen when we were having our markup. 

And that is one of the hardest things people go through, is loss of 

a spouse. So he is in all our thoughts and prayers. 

Mr. UPTON. Yes. Absolutely. 

The Chair would recognize the ranking member of the full committee, the gentleman from New Jersey, Mr. Pallone, for 5 minutes. 

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY 

Mr. PALLONE. Thank you, Mr. Chairman. And let me also express my sympathy for Bobby. I actually had the chance to talk to 

8 

him after his wife passed away, and he seemed in pretty good 

shape. But as our full committee chairman said, it has got to be 

difficult. So I want to express my sympathy as well publicly. 

Mr. Chairman, that is Chairman Upton, let me thank you for 

holding today’s hearing on the challenges and opportunities of modernizing our hydroelectric power infrastructure. As I have said before, Democrats strongly support modernizing our energy infrastructure, much of which is outdated or on the verge of disrepair 

or inadequate for today’s needs. 

Hydroelectric power is among the most mature generating technologies providing substantial, virtually carbon-free base load energy at low cost to our manufacturing sector and to residential and 

commercial consumers. It is an important asset that we need to 

maintain. 

At the same time, it also has major impacts on fish and wildlife 

populations, water quality, water supply management, and other 

important physical and cultural resources if poorly operated or 

sited. For example, there are numerous examples of hydroelectric 

dams devastating lands and waters sacred to Native American 

Tribes, and this should not happen. While hydroelectric power licenses depend on rivers for free fuel, those rivers belong to all 

Americans, not just those who sell or buy the power generated from 

it. 

The Federal Power Act requires the Federal Energy Regulatory 

Commission, or FERC, to balance those competing interests in 

issuing a license. No interest, whether it be power, drinking water, 

irrigation, commercial fishery, recreation, or other use, should 

automatically take precedence in the licensing process. 

The Power Act authorizes States and Federal natural resource 

agencies to place conditions on hydroelectric licenses to preserve 

water quality, protect public lands and Native American reservations, and ensure proper fish passage to preserve healthy ecosystems and fisheries. 

If, for instance, a license might adversely impact a protected 

area, such as a National Park, or cause the release of toxic sediment into drinking or agricultural water supplies or flood a Native 

American reservation, the State or Federal agency responsible for 

managing these resources can place conditions on the license to ensure that those resources are protected. 

And hydroelectric licenses have fixed conditions that generally 

remain unchanged during the 30 or 50 years that they are in force. 

Licenses also benefit from unlimited automatic annual extensions 

after the license has expired if a new license has not been issued. 

As a result, the impacts of these hydropower dams often go 

unaddressed for more than half a century. 

For those facilities first licensed before enactment of the National 

Environmental Policy Act or the Clean Water Act and the Endangered Species Act, the licensing process certainly can be rather rigorous. Sometimes the necessity of addressing these complex issues 

also makes the process time-consuming and expensive, as new license conditions will require significant upgrades to old facilities to 

bring them in line with modern environmental laws and regulations. 

9 

Now, ironically, climate change has increased the need to license 

new capacity of this carbon-free generating technology at the same 

time it has caused record droughts that have made it more difficult 

to site new works or provide long-term relicensing of existing facilities. Climate-induced changes in hydrology, including the record 

drought in the West that just ended, are calling into question the 

reliability of existing facilities, and these changes are also upending the economics of siting new hydropower capacity and increasing 

the challenges associated with addressing hydropower’s environmental issues. 

In addition to the unique challenges faced by the hydropower industry, the significant changes in electricity markets and relatively 

flat demand for electricity create a difficult financial environment 

for developing new base load generation in many areas of the country. Some of the unique benefits that hydropower and pump storage can offer cannot be fully compensated by current electricity 

rate structures. 

So I am glad we are holding this hearing today, and I urge the 

chairman to hold more like this before we begin to discuss legislation. We must understand more fully the challenges facing the hydropower industry and the rivers the industry relies upon before 

we update our policies. Our goal should be to maintain the fundamental principles of balance in the process so that we maximize the 

benefits of hydroelectric power and expand it where it is most appropriate to do so. 

I know we have an excellent panel here today to start this process, and I thank you for being here. I am sure you have been told 

that we are bouncing back and forth with the other subcommittees, 

so you may not see you us the whole time. But thank you. 

Thank you, Mr. Chairman. I yield back. 

[The prepared statement of Mr. Pallone follows:] 

PREPARED STATEMENT OF HON. FRANK PALLONE, JR. 

Mr. Chairman, thank you for holding today’s hearing on the challenges and opportunities of modernizing our hydroelectric power infrastructure. As I’ve said before, 

Democrats strongly support modernizing our energy infrastructure, much of which 

is outdated, on the verge of disrepair, or inadequate for today’s needs. 

Hydroelectric power is among the most mature generating technologies providing 

substantial, virtually carbon-free, baseload energy at low cost to our manufacturing 

sector and to residential and commercial consumers. It is an important asset we 

need to maintain. 

At the same time, it also has major impacts on fish and wildlife populations, 

water quality, water supply management, and other important physical and cultural 

resources if poorly operated or sited. For example, there are numerous examples of 

hydroelectric dams devastating lands and waters sacred to Native American Tribes. 

This should not happen. While hydroelectric power licensees depend on rivers for 

free fuel, those rivers belong to all Americans, not just those who sell or buy the 

power generated from it. 

The Federal Power Act requires the Federal Energy Regulatory Commission 

(FERC) to balance those competing interests in issuing a license. No interest, 

whether it be power, drinking water, irrigation, commercial fishery, recreation, or 

other use should automatically take precedence in the licensing process. The Power 

Act authorizes States and Federal natural resource agencies to place conditions on 

hydroelectric licenses to preserve water quality, protect public lands and Native 

American reservations, and ensure proper fish passage to preserve healthy ecosystems and fisheries. If, for instance, a license might adversely impact a protected 

area such as a National Park, or cause the release of toxic sediment into drinking 

or agricultural water supplies, or flood a Native American reservation, the State or 

10 

Federal agency responsible for managing those resources can place conditions on the 

license to ensure those resources are protected. 

Hydroelectric licenses have fixed conditions that generally remain unchanged during the 30 to 50 years they are in force. Licensees also benefit from unlimited, automatic, annual extensions after their license has expired if a new license has not 

been issued. As a result, the impacts of these hydropower dams often go 

unaddressed for more than half a century. For those facilities first licensed before 

enactment of the National Environmental Policy Act, the Clean Water Act, and the 

Endangered Species Act in the 1970s, the licensing process certainly can be quite 

rigorous. Sometimes, the necessity of addressing these complex issues also makes 

the process time-consuming and expensive as new license conditions will require significant upgrades to old facilities to bring them in line with modern environmental 

laws and regulations. 

Ironically, climate change has increased the need to license new capacity of this 

carbon-free generating technology at the same time it has caused record droughts 

that have made it more difficult to site new works or provide long-term relicensing 

of existing facilities. Climate-induced changes in hydrology—including the record 

drought in the west that just ended- are calling into question the reliability of existing facilities. These changes are also upending the economics of siting new hydropower capacity, and increasing the challenges associated with addressing 

hydropower’s environmental issues. 

In addition to the unique challenges faced by the hydropower industry, the significant changes in electricity markets and relatively flat demand for electricity creates 

a difficult financial environment for developing new baseload generation in many 

areas of the country. Some of the unique benefits that hydropower and pumped storage can offer cannot be fully compensated by current electricity rate structures. 

So, I’m glad we’re holding this hearing today and I urge the Chairman to hold 

more like this before we begin to discuss legislation. We must understand more fully 

the challenges facing the hydropower industry and the rivers the industry relies 

upon before we update our policies. Our goal should be to maintain the fundamental 

principles of balance in the process so that we maximize the benefits of hydroelectric 

power and expand it where it is most appropriate to do so. 

We have an excellent panel here today to start this process. I thank you all for 

being here to participate in this important effort. 

Mr. UPTON. The gentleman yields back. 

Again we want to thank our witnesses for being here. I appreciate you submitting your testimony early so we had a chance to 

look at it prior to the hearing. And we would like each of you now 

to summarize your statement, taking no more than 5 minutes. 

We are joined by Mr. Chuck Hookham, director of NBD Services 

for CMS Energies, on behalf of the American Society of Civil Engineers; Kieran Connolly, vice president of generation and asset 

management from the Bonneville Power Administration, as Chairman Walden indicated; Ramya Swaminathan, CEO of Rye Development, on behalf of the National Hydropower Association; and Dave 

Steindorf, California stewardship director of American Whitewater, 

on behalf of the Hydropower Reform Coalition. 

And we will start in the order that you are at the table. 

Mr. Connolly, welcome. Thank you for being here today. 

11 

STATEMENTS OF KIERAN CONNOLLY, VICE PRESIDENT, GENERATION ASSET MANAGEMENT, BONNEVILLE POWER ADMINISTRATION; CHUCK HOOKHAM, DIRECTOR, NEW BUSINESS DEVELOPMENT AND PROJECTS, CMS ENERGY, ON BEHALF OF THE AMERICAN SOCIETY OF CIVIL ENGINEERS; 

DAVE STEINDORF, CALIFORNIA SPECIAL PROJECTS DIRECTOR, AMERICAN WHITEWATER, ON BEHALF OF THE CALIFORNIA HYDROPOWER REFORM COALITION; AND RAMYA 

SWAMINATHAN, CHIEF EXECUTIVE OFFICER, RYE DEVELOPMENT, ON BEHALF OF THE NATIONAL HYDROPOWER ASSOCIATION 

STATEMENT OF KIERAN CONNOLLY 

Mr. CONNOLLY. Good afternoon, Mr. Chairman. My name is Kieran Connolly, and I am vice president for generation and asset 

management at Bonneville Power Administration. I appreciate the 

subcommittee’s invitation to be here today, and I ask that my written remarks be entered into the record. 

Bonneville is a Federal power marketing administration 

headquartered in Portland, Oregon, and is one of the largest providers of low-cost renewable energy in the Nation, marketing power 

generated primarily at 31 Federal hydroelectric dams. These dams 

are owned and operated by the U.S. Army Corps of Engineers and 

the Bureau of Reclamation. 

Bonneville and our partners are able to maintain these projects 

through direct funding of the power portion of the costs at the dam. 

Direct funding allows Bonneville to fund operations and maintenance as needed and appropriate. Bonneville also direct funds’ substantial investments in the rehabilitation of the hydropower system 

as its components require replacement. 

Bonneville provides this funding through power sales and borrowing from the U.S. Treasury that is fully recovered through 

power ratepayers. The interest on Bonneville’s debt is at rates comparable to those for similar bonds issued by government corporations. 

Bonneville’s partnership with the Corps and Reclamation provides for a sound program of maintenance and modernization of 

Federal hydro generation assets. In 1999, Bonneville, the Corps 

and Reclamation produced the first asset management strategy for 

the FCRPS. Today, a collaborative team from the three agencies 

builds on that legacy through the use of industry-leading asset assessment tools and portfolio optimization to efficiently care for 

these facilities. 

Bonneville and our partners rely on third-party vendors for much 

of our generation rehabilitation work. A promising initiative I 

would like to raise for the subcommittee’s awareness is recent discussions between the Corps and the Federal PMAs to improve the 

acquisition and delivery process for major hydropower equipment. 

Historically, because of its complexity, the acquisition process 

can be cumbersome, resulting in prolonged unit outages and cost 

overruns. These issues reduce generation, resulting in lost revenue 

and increased replacement power expenses for the PMAs. In turn, 

these circumstances contribute to rate increases that diminish the 

product value for power customers. 

12 

The Corps and the PMAs have established a work plan to address these challenges, and I appreciate the Corps’ commitment to 

this effort. 

The FCRPS is also unique in the extensive modifications and 

operational challenges made for the recovery of fish and wildlife. 

This is a responsibility we take seriously and are committed to. 

Since the 1980 Northwest Electric Power Planning and Conservation Act, hydro revenues have committed billions of dollars toward 

structures and revised operations of the dams, as well as offsite 

restoration efforts for watershed health that have received broad 

regional support. The trend of salmon and steelhead survival is up, 

posting returns that by some measures approached those before 

Bonneville Dam was built. 

The Northwest as a whole has engaged in examining the science 

and is committed to long-term strategies. However, some parties to 

litigation of the Federal hydro system continue to call for additional spill, when fish are migrating, as a presumptive path, foregoing nonpolluting power generation. Bonneville believes the Federal hydro system is operating with carefully calibrated conditions 

for fish, defined and guided by scientific evidence. 

In the same litigation, we are very concerned about motions to 

suspend specific maintenance and modernization projects at the 

dams. Poorly maintained equipment and the resulting risk to generating units is not a trivial matter to the reliability, safety, and 

environmental performance of the system. This issue is in litigation 

in the U.S. District Court in Oregon and was the subject of a hearing in that court last week. 

Finally, western electricity markets’ design is evolving, responding to State mandates, Federal incentives, and the declining cost 

of technology. Much of the new resource development is in intermittent generation, particularly wind and solar. Hydropower offers 

flexibility to integrate these resources reliably, and Bonneville believes the value of hydropower for these types of services needs to 

be recognized in market design. 

An additional development in the evolving electricity market is 

the impact of low natural gas prices and, to a lesser extent, renewable resource incentives on the wholesale market price for electricity. Under these conditions, Bonneville’s surplus power sales 

have not generated the levels of revenue historically experienced. 

Consequently, the appropriate valuation of hydropower in the 

evolving market is important for sustaining funding for congressionally authorized programs while retaining competitive rates for 

Bonneville’s customers. 

Bonneville is proud of the tradition of collaboration with the 

Corps and Reclamation for operation and maintenance of the 

FCRPS and with numerous other regional partners for the sustainability of the Columbia River’s Federal hydro system. 

That concludes my testimony, Mr. Chairman. I would be happy 

to answer the subcommittee’s questions. 

[The prepared statement of Mr. Connolly follows:] 

13 


TESTIMONY OF KIERAN CONNOLLY 

VICE PRESIDENT, GENERATION ASSET MANAGEMENT 

BONNEVILLE POWER ADMINISTRATION 

BEFORE THE 

SUBCOMMITTEE ON ENERGY 

COMMITTEE ON ENERGY AND COMMERCE 

U.S. HOUSE OF REPRESENTATIVES 

MARCH 15,2017 

Good morning Mr. Chairman. My name is Kieran Connolly, and I am Vice President for 

Generation Asset Management of the Bonneville Power Administration (Bonneville). 

Bonneville is a Federal power marketing administration headquartered in Portland, Oregon. I am 

pleased to be here to describe the significance of hydropower generation in the Pacific Northwest 

and the role played by Bonneville as a partner in the Federal Columbia River Power System 

(FCRPS) and a steward for the region's Federal hydroelectric assets. I will describe how 

Bonneville invests in the long-term maintenance and modernization of the hydropower assets in 
14 


an environmentally responsible and cost-effective manner. With that background, I will also 

discuss potential challenges to the long-term viability of the low-cost hydropower resource. 

Bonneville is one of the largest providers of low-cost renewable energy in the Nation. 

Bonneville markets power primarily generated at 31 Federal hydroelectric dams. These dams 

capture the power of the Columbia River and its tributaries and generate some of the most 

affordable electricity in the Nation. Owned and operated by the U.S. Army Corps of Engineers 

(Corps) and the U.S. Bureau of Reclamation (Reclamation), the dams have a capacity of over 

22,000 megawatts. Bonneville's power marketing portfolio also includes the Columbia 

Generating Station, a non federal nuclear plant, and a small amount ofnonfederal wind projects. 

Bonneville's power portfolio produces a relatively low amount of carbon emissions. 

Maintaining the hydroelectric resource as the low-cost resource of choice for Northwest 

preference utility customers contributes to Bonneville's long-term financial stability to ensure 

that Bonneville revenues continue to return repayments on Federal investment. Our ongoing 

investments in the hydropower equipment at these dams and in our transmission system will 

enable these facilities to continue to serve the region for many years. 

Bonneville was created in 1937 to market the electricity from Federal dams that were first built 

in the New Deal after President Franklin Roosevelt saw the potential for harnessing river power 

as an engine for rural economies. In successive generations, the value of the river has been 

expressed in ways that met the challenges of the times from bringing electricity to rural homes 

and farms; to powering the factories that built the ships and planes that won World War II; 

2 
15 


integrating the electric resources of the Pacific Northwest; developing the interregional power 

exchange for the Pacific Northwest, California, and the Southwest through the Pacific lntertie; 

achieving the benefits coming from the Columbia River Treaty; and restoring the fish and 

wildlife so prized by the people of the Northwest. Today, hydropower remains the workhorse 

that powers the economy of the Pacific Northwest while also supporting the reliable integration 

of other renewable technologies such as wind and solar. 

Bonneville maintains the hydroelectric projects of the Corps and Reclamation through direct 

funding ofthe power portion of operation and maintenance expenses. Bonneville also direct 

funds substantial investments in the rehabilitation of the Federal hydropower system. Bonneville 

finances the operations and investments for the hydroelectric assets and the associated Federal 

transmission system primarily through power and transmission revenues and borrowing from the 

U.S. Treasury that is recovered through rates to its power and transmission ratepayers. The 

interest on Bonneville's debt is at rates comparable to the rates prevailing in the market for 

similar bonds issued by government corporations. In FY 2016, Bonneville made its 33rd 

consecutive annual payment to the U.S. Treasury on time and in full. The total payment was 

$1.9 billion for the fiscal year. 

MAINTENANCE AND MODERNIZATION OF THE FEDERAL HYDROPOWER SYSTEM 

Bonneville's partnership with the Corps and Reclamation provides for a sound program of 

maintenance and modernization of Federal hydro generation assets. In 1999, Bonneville, the 

Corps, and Reclamation produced a 20-year Asset Management Strategy for the FCRPS. The 

3 
16 


overall goal of the strategy was to maximize the value of the FCRPS. Bonneville also stated two 

objectives for the strategy: establish the level of power and joint-use investments needed to 

restore the reliability of the FCRPS to industry standards or better; and assess the ability of the 

FCRPS to enhance revenues. 

Today, a collaborative team with representation from Bonneville, the Corps, and Reclamation 

strives to achieve and expand upon the goals of the 1999 Asset Management Strategy through 

the use of industry leading portfolio optimization tools in order to better inform the selection and 

timing of investments. These tools are integral in the development of the long-term System 

Asset Plan, which was first developed in 2016 and is refreshed on an annual cycle. 

The team identified five key indicators of FCRPS performance: cost of power; material 

condition; reliability; environmental stewardship; and safety. These indicators provide ways to 

establish how the FCRPS has performed relative to other hydropower systems and to track 

progress toward meeting the objectives of the strategy. Bonneville reviews priorities for 

investments in public processes involving its customers and other interested regional 

constituencies prior to filing its power rate proposals every two years. 

These investments are financed through direct funding, authorized by Congress in 1992, which 

allows Bonneville to provide funds to the Corps and Reclamation for maintenance and 

modernization of the power assets at the dams, without their having to receive annual 

appropriations. Bonneville recovers the cost of direct funding through its power rate revenues. 

4 
17 


For operation and maintenance, these cost are recovered annually; for capital expenses, 

Bonneville in effect borrows the funds from the Treasury and recovers these costs over time. 

A promising initiative I would like to raise for the Subcommittee's awareness is recent 

discussions between the Corps and the Federal Power Marketing Administrations (PMAs) for 

improved collaboration between the agencies. One area of focus in these discussions is 

streamlining the acquisition and delivery process for major hydropower equipment. The 

acquisition of major hydropower equipment such as turbines, generators, transformers, circuit 

breakers, etc., is a complicated process that typically requires the development of multi-million 

dollar contracts with very technical specifications. Where the acquisition process (planning 

through installation) is delayed, it can sometimes result in a unit being out of service for a period. 

This would reduce generation and lead to a loss of revenue (due to increased replacement power 

expenses for the PMAs); in turn, these circumstances would contribute to rate increases for 

power customers. To address this concern, the Corps and the PMAs have a work plan 

established for a collaborative review of acquisition and delivery processes with the objective of 

identifying where there are opportunities to increase efficiencies and improve collaboration in 

order to reduce lead time and costs. I appreciate the Corps' commitment on this effort. 

HYDROPOWER IN A CHANGING ENERGY MARKET ENVIRONMENT 

Western electricity market design is evolving to respond to attributes of a changing electricity 

resource mix. Responding to state mandates, Federal incentives, and the declining cost of 

technology, much of the West is meeting electricity demand increasingly through other 

5 
18 


renewable resources, particularly wind and solar. In this evolution, hydro offers adaptable 

operational capability to integrate these resources, particularly intermittent resources, reliably 

and at low cost. Though hydro has been historically operated in the Paeific Northwest to meet 

base loads, it now can offer value from operating to meet the just-in-time needs of intermittent 

renewable generation. The value of hydropower for these types of services needs to be 

recognized. 

Our first obligation is to provide reliable supply power to our wholesale preference utility 

customers in the Northwest. But with surplus power available in most years and the ability to 

provide multiple services from these resources, we're eager to find enhanced value from the 

flexibility of hydro generation that provides services that could defer the need to construct new 

baseload or flexible generation. 

Connecting the Columbia River hydro generation with the rest of the West is the Pacific 

Northwest-Pacific Southwest Intertie electric transmission system. This system links our region 

and British Columbia with electricity generation and loads in California and the Southwest. 

This combination of high-voltage transmission totals more than 7,000 megawatts of electric 

transfer capacity between the two regions. 

This transfer capacity allows the flexibility of Pacific Northwest hydro generation to respond to 

the hour-to-hour shape of electric generation from variable wind and solar resources in 

California and elsewhere. Market design to incent the optimal use of hydro should increase the 

value of Northwest hydropower assets. 

6 
19 


One additional challenge in the evolving electricity market is the impact of low natural gas 

prices, and to a lesser extent renewable resource incentives, on the wholesale market price for 

electricity. Historically, the price of natural gas has set the benchmark for the wholesale 

electricity price. In this era of historically low gas prices, Bonneville's surplus power sales have 

not generated the levels of secondary sales revenue that Bonneville experienced before the shale 

boom. Consequently, the appropriate valuation of hydropower in the evolving electricity market 

is important to the bottom line of Bonneville's ratepayers. 

FISH AND WILDLIFE RESTORATION 

The FCRPS is also unique in the extensive modifications and operational changes made for the 

recovery offish and wildlife. Since the 1980 Northwest Electric Power Planning and 

Conservation Act, hydro revenues have financed billions of dollars towards improved design and 

operation of the dams as well as offsite restoration efforts for watershed health sponsored by 

tribes, states, and rural communities. The trend of salmon and steelhead return of hatchery and 

wild fish is up. 1 

1 ACOE et al. 2017. US. Army Corps of Engineers Northwestern Division, Bureau of 

Reclamation Pacific Northwest Region, and Bonneville Power Administration. 2017. 

Endangered Species Act. Federal Columbia River Power System, 2016 Comprehensive 

Evaluation, Page 5 https://www .salmonrecovery.gov /doc/default-source/default-documentlibrary/fcrps20 16comprehensiveevaluationsection l.pdf?sfvrsn=O 

7 
20 


It is a challenge to balance investments in fish restoration while maintaining the hydropower 

generation for the region. The Northwest as a whole has engaged in examining the science and 

committing to long-term strategies with demonstrated promise. Notwithstanding this sciencebased approach, some parties in the region continue to call for more spill, as a presumptive 

operation, to be provided when fish are migrating as a presumptive path, which would reduce 

power generation. Bonneville believes the Federal hydrosystem is operating with carefully 

calibrated conditions for fish survival as demonstrated by continuous scientific monitoring and 

that adjustments to operations should be made through the applicable statutory processes and in 

coordination with the responsible Federal agencies and regional States, Tribes, and other 

stakeholders. This issue is in litigation in U.S. District Court in Oregon and was the subjeet of a 

hearing in that Court on March 9. 

We are very concerned by proposals to suspend specific scheduled investments in projects at the 

dams. Additionally, Bonneville is often the first resort for regional utilities facing their own 

generation challenges. Even though the region is in a period of relatively robust energy supply, 

forced outages can interrupt customer loads. As recently as December 2016 a large regional 

utility was forced to seek emergency assistance from Bonneville due to the unexpected loss of a 

generating resource during cold weather conditions. Poorly maintained equipment and the 

resulting risks of loss of generating units is not a trivial matter to the reliability, safety and 

environmental performance of the Federal hydropower system. 

8 
21 


A MODEL OF FEDERAL AGENCY COLLABOA TION 

Finally, I would like to add that the collaboration of Bonneville, the Corps and Reclamation for 

operation and maintenance of the FCRPS is but one example of the collaboration among Federal 

agencies in the Pacific Northwest in support of the hydrosystem's mission. For many years, the 

Federal agencies with responsibilities for fish and wildlife have participated in the Federal 

Caucus for developing collaborative strategies for their roles in recovering salmon and steelhead 

listed for protection under the Endangered Species Act. Just recently, Bonneville completed a 

Memorandum of Understanding with the U.S. Forest Service for consultations on management 

and maintenance of transmission lines on public lands managed by the Forest Service. These 

represent the culture of cooperation among the Federal agencies in our region in pursuit of our 

respective missions. 

That concludes my prepared remarks, Mr. Chairman, and I would be happy to respond to 

questions from the Subcommittee. 

9 
22 

Mr. UPTON. Thank you very much. 

Mr. Hookham. 

STATEMENT OF CHUCK HOOKHAM 

Mr. HOOKHAM. Chairman Upton, Congressman Peters, members 

of the subcommittee, thanks for having me. I am a 36-year-veteran 

professional engineer, worked on quite a few hydro projects, so I 

think I am pretty well qualified to talk about this. I am from 

Michigan. I apologize for the weather. I think I can talk on behalf 

of Congressman—— 

Mr. UPTON. You should be happy, if you are from Michigan. 

Mr. HOOKHAM. I feel comfortable. 

Mr. UPTON. We will give you an extra 10 minutes. 

Mr. HOOKHAM. So I am speaking on behalf of the American Society of Civil Engineers. Last week we came out with the Infrastructure Report Card, which I hope you have all seen. It talks a lot 

about the infrastructure problems across 16 different categories, 

one of which is energy, and talks to the troubles we are having getting funding and doing the right things. 

ASC is very active finding solutions. Believe me, we are not just 

reporting bad grades; we are trying to come up with strategies. 

And so I would implore on the committee, subcommittee to talk to 

us about strategies, priorities, and how to make sure we can correct these things. 

Right now we are reporting about a $4.59 trillion infrastructure 

demand, about $2 trillion of which has been targeted, earmarked, 

some of which has not been appropriated. We still have a $2 trillion deficit over the next 10 years. This is really critical, that we 

start getting this right. We are hopeful. We hear of what President 

Trump has laid out. We need to make those statements turn into 

real action. 

As far as hydropower goes, we have quite a few recommendations 

we would like to offer up. I represent a utility that has got 13 

hydro plants as well as a pump storage facility, so we take advantage of that technology. 

To talk about age, our dams are 99 years old. So we are talking 

about some pretty old infrastructure here that we care and maintain and have done so successfully. We do that under licensure 

with FERC that requires us to do inspections, so our power dams 

are fairly well taken care of. We need to continue that process and 

take advantage of technology. 

Importantly, we need to fund, fully fund, dam safety programs. 

These are really critical to the operations of our facilities both at 

Federal and State levels. We need to continue that funding. We 

have got some activity going on to get that funding appropriated, 

both on hydropower and nonhydropower dams. That needs to continue forward. Our safety is really critical. Most of these dams now 

support or protect people downstream. 

Whereas dams supporting hydropower are regularly inspected, 

like I mentioned, we still have this challenge of operating licensure, 

and we have challenges with respect to relicensure that are, in our 

case, many times duplicate or sequential as opposed to being collaborative, and that is really causing trouble because of the 

timelines it takes for us to get projects approved. 

23 

In reality, since 1950, there have only really been four significant 

dam hydropower project issues that have taken place, most of 

which are dam-related and not hydropower-related. We need to 

continue our investment in economical, reliable, acceptable hydropower. It is critical to the Nation’s infrastructure, as has been 

pointed out by others, and we need to continue looking at it from 

a visionary point of view. 

There are technologies out there now that are enhancing fish/ 

habitat survival, that maximize water use efficiency, and improve 

discharge water quality. We need to tap those and continue to protect our environment. We are really supportive of the sustainability 

concept here. 

We also have technology, like lidar and drones and things like 

that, that can really be used to avoid problems going down in the 

future, and we think that successfully implemented will add to the 

base of the case to build more hydroelectric. 

Research that directly supports reducing capital costs, improves 

efficiency and impact indication are important. Michigan State 

University is actually doing some work in our State to help in that 

regard, and HydroNEXT by the Department of Energy also defines 

some great things going on there. 

We should look at prioritizing some federally owned dams. We 

think there are areas where that could be a benefit, where privatepublic relationships can be used to maximize the benefits and minimize the costs, and then also reduce the impacts on environment. 

Newer technologies like hydrokinetic are great as well. We need to 

keep focusing on that. 

Legislation that purely focuses on improving hydropower licensing, it certainly is troublesome. And when we talk about the Hydropower Regulatory Efficiency Act of 2013, streamlining that, working on Order 2002, we need to look at that. We need to avoid having duplicative FERC and Army Corps of Engineer Section 408 permitting. It doesn’t make sense. It just takes tremendous time. 

Our best opportunities for hydropower are where you have existing nonpower dams, we have talked a lot about that, or closed loop 

pump storage, where it makes sense, where we can align with population mode centers, market pricing. 

We are really driven as a utility to focus on what makes sense 

for our customers as well as being regulated by the State. It is a 

tough box to fit into, so it is a challenge. 

We, as consumers of energy, support hydropower. We are also a 

very sustainable organization. We are trying to do our best for our 

ratepayers, and that is a real primary focus for us going forward, 

competing against other forms of renewables and fossil fuels. 

Lastly, we need a national energy policy that works. We are really struggling making decisions that make sense from a corporate 

point of view. 

Thank you. 

[The prepared statement of Mr. Hookham follows:] 

24 


Testimony Of 

ASCE 

AMERICAN SOCIETY OF CIVIL ENGINEERS 

101 ConstiMionAvenue, NW, Suite375 Eost 

Woshinglon,OC20001·2179 

(800) 548.ASCE(27231 toll free 12021 789.7850 

12021 789.7859 fax • www.ASCE.org 

The American Society of Civil Engineers 

to the 

U.S. House of Representatives 

Committee on Energy and Commerce 

Subcommittee on Energy 

on 

"Modernizing Energy 

Infrastructure: Challenges and Opportunities to 

Expanding Hydropower Generation" 

March 15, 2017 
25 


1.0 CURRENT CONDITIONS 

Hydroelectric generation in the United States is uniquely owned by a diverse group of investorowned utilities, municipalities, cooperatives, government agencies, and private developers (see 

Figure I and Table 1 also). Privately owned infrastructure (over 1,500 installations) is regulated 

primarily by the Federal Energy Regulatory Commission (FER C) and other state-, local-, and 

tribal-based agencies. Federally owned hydroelectric generation is authorized/regulated by U.S. 

Congress, but must meet laws and evolving environmental regulations similar to those imposed 

by FERC and other federal agencies including the U.S. Army Corp of Engineers and U.S. Fish 

and Wildlife Service. Involvement of many agencies has greatly increased licensing/re!icensing 

complexity. 

Figure 1: Largest Domestic Hydropower Generators 

idaho Power co. 

VIrginia !Siectrlc & Power co. 

Pac!llc Gas and Ef\>Ctrlc co. 

State of New York 

Tennessee Valley Authority 

u.s. Bureau of Rec!amatfon 

10000 15000 20000 25000 

M<>gawatts 

Source: Hydroelectric Design Center, U.S. Army Corps of Engineers (USACE), 2013 

In recent years, hydroelectric generation has produced roughly 7% of the total U.S. power 

generated, and the U.S. Energy Administration (EIA) anticipates this contribution will remain 

flat for coming years. Bolstered by tax credits and investment, the American Wind Energy 

Association disclosed on February 9, 2017 that wind energy has surpassed hydropower as the 

leading renewable energy source in the U.S. energy mix. The EIA in March, 2017 predicted 

continued growth in both wind and solar generation in 2017/2018 and beyond versus flat 

hydropower growth. 

The average age of the almost 87,000 publicly and privately owned dams in the National 

Inventory of Dams is 52 years and, by 2020, over 85% will be over 50 years old (a common 

design life). Approximately 3% of these dams were fitted with hydroelectric generating 

capability (the 97% balance represents an opportunity for hydropower, as dams create needed 

hydraulic head for desired generation). As of the end of2015, the U.S. Department of Energy 

Page 2 of 14 ASCE, March 15,2017 
26 


(DOE) reported there are 2,198 active conventional hydroelectric plants (representing 79.6 

gigawatts, GW) and 42 pumped storage plants (representing 21.6 GW) for a total generating 

capacity of 101 GW with median age of over 55 years old. Table 1 illustrates approximate 

ownership class of2,198 plants and 101 GW, based on PERC and Idaho National Laboratory 

reporting: 

Table l: Private vs. Public H dropower Ownership 

Ownership Class Plant MW Commentary 

Ownership, Generation, 

Percent Percent 

Utilities (privately owned) 31% 24% Conventional and pumped 

storage hydro (PSH) 

Non-utility Private Sector 38% 4% Smaller, river-based units 

Public Sector (Federal and Non- 31% 72% Larger units on major rivers 

federal Public) (e.g., Columbia) and PSH 

Information about individual PERC-licensed hydropower facilities is available at the PERC 

website; data on all domestic facilities is available from the Virtual Hydropower Prospector 

(http://en.openei.org/wiki/Virtual Hydropower Prospector), a Geographical Information System 

(GIS) based tool maintained by Idaho National Laboratory and shown in Figure 2. 

Figure 2: U.S. Hydropower Fleet (Lower 48 States) 

Page 3 of 14 ASCE, March 15,2017 
27 


ASCE recognizes that economical, reliable, safe and environmentally acceptable energy 

production and development are critical to industrial and commercial expansion, economic 

growth, stability and national security. While hydropower typically has the ability to supply 

continuous (base load) power source on demand with minimal air pollution, the high initial 

capital costs, potential ecosystem disturbance, and reduced uncertainly during low water 

seasons/years does create uncertainty. For this reason, ASCE strongly encourages development 

of a national energy policy which balances investment in hydropower with other sources. As 

Congress continues to examine various fuel/resource contributions to the electricity market and 

private/public investment, we encourage extending the life of existing facilities and expanded 

use of new hydropower as further discussed herein. 

2.0 HYDROPOWER EXPANSION- CHALLENGES AND OPPORTUNITIES 

ASCE supports the expansion, and development of hydropower opportunities, from large-scale 

pumped storage (PSH) plants through low-head micro/hydrokinetic facilities, where found 

feasible. Clearly, such must be done in a manner that minimizes potential environmental 

impacts, maximizes safety, and balances the use of resources. Hydropower is among the most 

cost effective of all electricity sources given that it does not require a fuel source. Because its 

fuel is flowing water, and less frequently waves or pumped water discharged by gravity, it is 

viewed to be local, stable, and safe with no carbon emissions. To keep such safe and its 

environmental impacts reasonable, such facilities must be maintained and their design bases 

checked against changing climatic conditions. New projects must take advantage of biological 

technologies to avoid impacts to fish and other aquatic species. 

Last year, the DOE released a new report looking at the future of hydropower through 2050. The 

report, Hydropower Vision: A New Chapter for America's First Renewable Electricity Source, 

found "that with continued technology advancements, innovative market mechanisms, and a 

focus on environmental sustainability, hydropower in the United States (U.S.) could grow from 

101 gigawatts (GW) to nearly !50 GW of combined electricity generation and storage capacity 

by 2050." This would be comprised of 13 GW of conventional (upgrades of existing, adding 

hydro to unpowered dams/canals, limited new stream-based units) and 36 GW of pumped 

storage. 

While there clearly is great potential and opportunity, there are also challenges. Two key DOE 

recommendations avoid many of these challenges: (I) upgrade performance of existing 

hydroelectric generation, and (2) utilize current non-power dams, canals, and conduits (e.g., 

irrigation) for new generation. In both eases, challenges such as land/impoundment 

procurement, complex environmental permits, and significant costs associated with dam and 

civil works construction are avoided. Both alternatives also enable investments which overcome 

aging of dam/civil works and improve overall safety; where possible, ASCE recommends these 

opportunities be prioritized particularly where reduced impacts to fish/aquatic life (for example, 

see low impact criteria proposed by Low Impact Hydropower Institute 

(http://lowimpacthydro.org/low-impact-criteri!l[)) and close proximity to existing 

transmission/distribution exist. Other goals including continued safe operations, keeping cost of 

generation low, and meeting licensing requirements are achievable (see Regulatory Challenges 

herein). Table 2 summarizes ill challenges/opportunities for the existing hydroelectric fleet. 

Page 4 of 14 ASCE, March 15,2017 
28 


In 2016, American Municipal Power (AMP) successfully completed four run-of-river 

hydroelectric projects at four existing non-power USACE dams along the Ohio river adding over 

300 MW of renewable energy to its diversify its portfolio. While admittedly not the least-cost 

generation to construct, the intrinsic benefits of requiring no fuel, emitting no airborne emissions 

and offering flexible base load generation were more compelling. Rye Development is also 

seeking to invest in nominally 265 MW of similar projects east of the Mississippi River at the 

present time. The AMP projects also were located close to existing distribution circuits, and 

clearly demonstrate the benefits of adding hydropower at existing dams. 

Table 2 : Existing Conventional and Pumpe d Storage Hydroelectric GeneratiOn 

Challenges Opportunities 

Aging infrastructure (investments needed are Expanded generation through new technologies 

competing with investment in other new sources (power uprate); unique flexibility to meet changing 

or demand-side alternatives) demands and backstop intermittent renewables 

FERC-related relicensing (plan to reduce cycle to Continued reduction in environmental impacts (e.g., 

2-year duration needs further improvements improved fish ladders, barriers) 

workshop this month) 

Pressure to keep electricity rates low reduces Low-cost renewable generation (original investment 

maintenance spending capitalized) with no harmful air emissions 

i Impoundments have been found to emit methane USACE, Bureau of Reclamation leadership on 

I from microbes consuming organic matter in leasing existing dams for expanded hydroelectric 

collected sediments use 

I 

PSH storage offers invaluable grid support, as well 

as on-demand capacity/energy 

The pace of developing and licensing rum: conventional hydroelectric projects in the USA has 

slowed in recent years, with one common citation being that all viable sites have already been 

developed. DOE statistics indicate that less than 1/3 of proposed new hydropower projects are 

new stream development (NSD) and over 50% of these reside in Alaska. However, opportunities 

do still exist beyond using existing non-power dams and a majority fit into one of the following 

categories: 

• Hydrokinetic, micro, or small conventional configurations using new technology 

(commercial proofing, often led by the equipment manufacturer); typically less than I 

MW project size and limited in number 

• Municipalities or commercial/industrial businesses with access to flowing water and with 

sustainability aspirations (e.g., renewable power goals or portfolio standard compliance); 

typically less than 30 MW in scale 

• Utilities which have determined that a defined conventional hydroelectric project 

represents the best supply-side alternative via IRP (as a result of larger MW capacity 

projects with lower capital cost/kW generated and low life cycle cost). 

Notably in all three categories, these projects are competing with other renewables and gas-fired 

generation for advancement. Without tax credits, streamlining of permitting/approval, carbon 

tax, or other differentiator, investment in new hydroelectric projects is challenged as it is not the 

least cost of generation. An audit of 2015 to 2017 integrated resource plans of multiple utilities 

found little consideration of hydropower projects (except select utilities evaluated PSH, where a 

defined project is already in planning). 

Page 5 of 14 ASCE, March 15,2017 
29 


The following "concerns" inhibit investments: 

• Long-term projection of relatively low natural gas prices and suitable volume available; 

• Uncertainty in permitting/licensing, and long-lead time to develop projects, each of 

which challenges securing financing; 

• Declining solar and wind equipment and overall project costs; 

• Uncertainty over the impacts of climate change (e.g., floods, droughts, other) on future 

performance; 

• Costs, lead time, and environmental impacts associated with construction of rum: dams 

with hydropower facilities (only select locations avoid these concerns) 

• Market conditions; low prices currently paid for power by independent system operators 

and regional transmission owners favors other forms of generation to be constructed or 

demand-side management. An example is the Independent System Operator of New 

England (ISO-NE) and Commonwealth of Massachusetts procurement oflow-cost 

hydropower from Canada along with new domestic wind construction. 

A number of these concerns can be "stacked" together, which further challenges investment and 

moves focus to alternatives. Table 3 summarizes challenges/opportunities for new hydropower. 

Table 3: New Dam-Based or Run-of-River (NSD) Hydroelectric Generation 

Challen~res Opportunities 

Limited sites with sufficient hydraulic head or Improved equipment increases output with lower 

headrace/tailrace properties remaining; concerns aquatic impacts, including that for low head and 

for future climate changes (e.g., floods) variable flow rates (micro hydro) 

Environmental impacts (to be balanced with Hydrokinetic (wave and tidal) systems gaining 

generation opportunity) commercial acceptance 

Licensing lead time and uncertain outcome, Focus on less-impactful hydropower addition at 

jeopardizes project financing existing dam sites 

! Cost of generation higher than other sources (e.g., 

other renewables, gas-fired generation) 

Pumped storage (PSH) represents approximately 22,000 MW of capacity at present, and the 

DOE concluded that 36,000 more MW can be built by 2050. With current time lines running at 

least 8 years just to obtain all necessary approvals, permits, and licenses, improvements are 

clearly needed to make this happen. An important feature of PSH-based storage involves its 

ability to generate when intermittent renewables (wind, solar) are not available while also 

offering spinning reserve and reactive power support which increase the reliability and 

performance of the electrical transmission grid. Development of pumped storage capacity is a 

capital intensive infrastructure activity, requiring significant upfront investment and uncertain 

regulatory and licensing issues have limited use. The DOE Hydropower Vision report 

summarizes the enormous potential that properly sited PSH projects can offer. 

While PSH benefits are significant, investment of private capital are challenged by uncertainty in 

project development (including licensing) and revenues from the electricity market. Elevated 

capital costs and constraints also affect potential federal PSH investments, although the U.S. 

Bureau of Reclamation (USBR) has actively engaged PSH enhancements at its existing 

hydropower facilities (reference USBR "Renewable Energy Update, Fiscal Year (FY) 2017, 

Ql ",TVA's "2015 Integrated Resource Plan", and Bonneville Power Authority (BPA) "20 17-

Page 6 of 14 ASCE, March 15,2017 
30 


2030 Hydro Asset Strategy" for the Federal Columbia River Power System). Public/private PSH 

development at federal hydropower facilities is encouraged by ASCE. 

Table 4: New Pumped Hydroelectric (PHEV Generation 

Challenges Onnortunities 

Few opportune sites exist near population centers Significant capacity, energy, and ancillary benefits 

or industry (NIMBY); consider abandoned mine to electric grid (e.g., Ludington) support continued 

sites, federal hydropower sites, similar development 

Open loop PSH (connected to continuously flowing If successful, FERC's streamlined permitting of 

water) have elevated environmental impacts versus closed loop PSH could stimulate greater interest 

closed loop particularly in western US 

Markets (ISOs/RTOs) don't compensate owners for NHA reports that over 78% of the general public 

ancillary (storage) benefits supports new hydroelectric and PSH projects 

Significant lead time to plan, permit, obtain FERC Pumping operation can be aligned with other 

license, finance, and build (risks to owner) renewables; generation can overcome intermittency 

Elevated cost of generation due to elevated initial 

capital investment hurts inclusion in IRP 

2.1 Cost of Generation (COG) Challenges 

Basic tenants in production and delivery of electric power include safety to the general public, 

low environmental impacts, high efficiency and waste avoidance, and low cost of service. 

Sustaining a balance of these tenants is difficult and best managed through flexible policies. The 

market-based system currently employed in much of the U.S. places a premium on low cost of 

service, perhaps without considering long-term sustainability. Minimizing the COG of 

hydropower requires controls over initial capital cost and ensuring that annual operating and 

maintenance (O&M) costs are similarly kept in check. An advantage many hydropower projects 

have over others is actual service lives are typically 50 years or greater), which generally yields a 

greater energy return on investment (ROI). 

Figure 3 depicts estimated 20 I 8 levelized COG for various supply-side generation systems. 

Hydropower COG is more expensive than gas-fired and wind-based generation under current 

market conditions where the long-term cost of natural gas is low/stable and tax credits exist for 

other renewable generation. Hydropower's advantage is that it is not exposed to fuel-related 

inflation. 

Page 7 of 14 ASCE, March 15,2017 
31 


Figure 3: Future Levelized COG 

Estimated Levelized Cost of New Electric Generating 

Technologies in 2018 (2011 $/megawatthour) 

"Natural Gas Technologies lEER 

Source: The Institute for Energy Research (IER) 

Integrated resource planning (IRP) is often focused on necessary near-term supply- and demandside actions of a utility, developer, or public agency. Where shortfalls in capacity are found in 

IRP modeling, projects with certain costs/time lines are selected and this often disfavors 

hydropower alternatives. Policies such as avoidance of greenhouse gases impact selection and 

favor renewables but COG and transmission and distribution factors also come into play. In 

summary, short-term pressures to keep COG low often favor other forms of generation. 

2.2 Regulatory Challenges 

ASCE also supports continued streamlining of the permitting/review process associated with 

new hydropower licenses. As a minimum, better definition of the process itself(parties with 

stature, decision-making authority) and the overall time line needed to secure financing and 

enable integrated planning. The current licensing process is extremely complex, costly and timeconsuming. Requirements tend to discourage hydro owners/developers from developing new 

hydropower at existing dams, and even those at low-impact small and low-head hydropower 

using open stream or conduit-based applications. The amendment process for increasing the 

capacity, efficiency and output of existing plants and relicensing projects at the end of their 

FERC operating license are similarly prohibitive. 

On a positive front, memoranda of understanding (MOA) between the USACE, other Federal 

agencies, and marketers including the Southeastern Power Administration (SEPA) have yielded 

sustainable bases for rehabilitating and extending the life of federally owned hydropower and 

have opened the proverbial door for more public/private investments. In addition, integrated 

Page 8 of !4 ASCE, March 15,2017 
32 


licensing (ILP) depicted in Figure 4 and conduit/small hydro exemptions have shown some 

promise in terms trying to establish more certainty, but additional effort is required. 

An effort to make legislative improvements to new/existing hydropower regulation took place in 

calendar year 2016 (114'h Congress) but the House and Senate were unable to agree on how to 

proceed. The Senate-passed Energy Policy Modernization Act (S. 2012) and the House 

amendment to that legislation (which included H.R. 8, the North American Energy Security and 

Infrastructure Act) contained said licensing reform provisions. Although understood that the 

hydropower provisions enjoyed broad bipartisan support, other provisions lumped into the same 

proposals addressing energy conservation, liquefied natural gas exports, and wildfire mitigation, 

met resistance. It is recommended that legislation solely addressing hydropower licensing 

improvements/regulations be pursued to increase hydropower deployment. 

2.3 Aging Concerns 

As existing hydropower facilities age beyond their design life, more frequent inspections, review 

of key design parameters (e.g., embankment pore pressures) and emergency action plans, and 

expanded use of technology can be used to preserve function/safety and avoid failures. As 

examples, drones and other remotely operated vehicles (ROVs) can be used to increase visual 

inspection frequency in areas where human access is challenged and remote sensing can monitor 

key parameters and sense changes (e.g., structural deflection/movement, water level/flow). 

Many licensees are already managing aging effectively but new technology can economically 

· such. concern in non-power dams inspected less frequently. 

Photo courtesy of the Electric Power Research Institute (EPRI) 

Page 9 of 14 ASCE, March 15,2017 
33 


3.0 RECOMMENDATIONS 

As Congress considers issues to help ensure existing hydropower dams are safe and that 

expanded use is contemplated, ASCE offers the following recommendations: 

l. Fully fund dam safety programs and utilize alternative financing and "customer" 

investments. Our nation's dams provide power generation, flood control, water supply, 

irrigation, recreation, navigation, and environmental protection. Thousands of our 

nation's dams are in need of rehabilitation to meet current design and safety standards. 

Increased downstream development, aging, and climate changes all need to be considered 

to avoid future flooding, earthquakes, dam failures, or safety concerns. Whereas dams 

supporting hydroelectric facilities are regularly inspected as part of FERC licensing and 

safe performance has ensued, many other dams are less rigorously maintained. 

2. Continued investment in economical, reliable, safe and environmentally acceptable 

hydropower is critical to industrial/commercial operations, economic growth, stability 

and national security. U.S. Department of Energy Hydropower Vision offers cohesive 

implementation guidance for industry expansion. 

3. Technologies which enhance fish/habitat survival, maximize water use efficiency, and 

improve discharge water quality should be tapped to minimize environmental impact at 

existing dams and hydroelectric facilities. In addition, drones, GIS, and remote sensing 

should be used as low-cost supplements to license-mandated facility inspections. 

4. Research such as select efforts to reduce capital cost, improve efficiency, and lower 

aquatic impacts (DOE's HydroNEXT initiative) are recommended, but must lead to 

industry improvements (examples include use of modularity to reduce initial cost). 

5. Privatization of select federally owned dams should be studied, particularly in locales 

where local private owners or municipalities are in the best position to maintain them or 

where non-power dams can be enhanced with hydropower/hydrokinetic addition. 

6. Legislation that purely focuses on improving hydropower licensing/regulation and adds 

certainty to permit/approval time lines is needed building upon the Hydropower 

Regulatory Efficiency Act of20l3 and streamline the previous FERC Hydropower Final 

Rule (Order No. 2002). Current permit/licensing challenges inhibit inclusion of potential 

hydroelectric projects in integrated resource planning. 

7. A national energy policy that anticipates future energy needs, promotes development of 

clean/renewable energy supply such as hydropower, increases energy efficiency, and 

reduces dependency on foreign sources will enable prudent investment. 

4.0 CITED REFERENCES 

American Society of Civil Engineers (ASCE), 2017 Infrastructure Report Card (released on 

March 9, 2017), www.infrastructurereportcard.org 

ASCE Public Policy Statements, www.asce.org/public_policy_statements/ 

U.S. Department of Energy, "Hydropower Vision", July 26, 2016 

National Hydropower Association, Pumped Storage Development Council, "Challenges and 

Opportunities for New Pumped Storage Development", 2012 

Page 10 of 14 ASCE, March 15,2017 
34 


APPENDIX A - DEFINITIONS 

The following terms were used herein: 

Ancillary Service: services necessary to support the reliable transmission of electric power from 

seller (e.g., generator) to purchaser (e.g., consumer) in specific control areas of the 

interconnected transmission system. Examples include frequency regulation. 

Capacity: the nameplate generation possible at a hydropower facility when design water flow 

and equipment are fully available, expressed in kilowatts (kW), megawatts (MW, or l,OOOkW), 

or gigawatts (GW, or 1,000 MW). 

Conventional hydropower: a combination of dam-based, canal/conduit, and run-of-river 

generating plant designs. These are typically divided into capacity classes: large (> 30 MW), 

small (between I and 30 MW), low power (between 100 kilowatts and 1 MW), and micro(< 100 

kilowatts) generation. 

Dam-based hydropower: a generating plant derives power from passage of water stored behind 

a dam placed in flowing water (impoundment or head race) which creates hydraulic head, that 

can be focused through turbine generation with discharge into a flowing body of water or pond 

(tail race) downstream. 

Energy: actual generation produced by a hydropower facility over time (kW produced in one 

hour or kWh, typically aggregated over one year. 

Page II ofl4 ASCE, March 15,2017 
35 


Hydrokinetic power: a generating plant that harnesses the kinetic energy stored in the form of 

wave action, tidal motion, or water body flow typically using technologies that differ from 

conventional hydroelectric turbine generator sets. Hydrokinetic resources tend to be of the small 

or micro scale at present. 

Photos courtesy of Ocean 

Pumped storage hydropower (PSH): a generating plant that employs either combination 

pump/turbine generators or separate equipment to capture water during periods oflow demand 

and cost from one water body and elevate such to a dedicated upper water body (storage) where, 

upon need for electricity it flows via gravity down through the turbine generator to the original 

body of water. An open loop involves a continuously flowing water body whereas a closed loop 

involves discrete water bodies (such as a lake and dedicated storage pond). The closed loop 

Ludington Plant in Michigan will soon possess over 2,000 MW of generating capacity. 

Page 12of14 ASCE, March 15, 2017 
36 


Run-of-River hydropower: a generating plant that derives its power directly from the flow of 

water passing through or over a turbine generator. 

Graphic courtesy of Basic Mechanical Concepts 

Page 13 of14 ASCE, March 15,2017 
37 


U.S. House of Representatives 

Energy and Commerce Committee, Subcommittee on Energy 

"Modernizing Energy Infrastructure: Challenges and Opportunities to Expanding 

Hydropower Generation" 

EXECUTIVE SUMMARY- Testimony of the American Society of Civil 

Engineers (ASCE) 

• ASCE's 2017 Report Card for Infrastructure graded the nation's dams a "D" and energy 

infrastructure a "D+" in terms of capacity, condition, resilience, and funding. 

Public/private investment needed in all energy systems, including hydropower and 

associated transmission and distribution (T &D). 

• Dam safety programs need full funding; our nation's dams provide power generation, 

flood control, water supply, irrigation, recreation, navigation, and environmental 

protection; over 85% will be 50 years old by 2020. Rehabilitation to meet safety, 

changing demands, and to protect downstream development should not be deferred. 

• Prudent investment in hydropower reduces dependency on other sources, offers flexible 

and renewable generation with low air emissions, and supports economic growth and 

national security. U.S. DOE's Energy Hydropower Vision details opportunities for 

hydropower expansion. 

• Technologies which enhance fish/habitat survival, maximize water use efficiency, and 

improve discharge water quality should be tapped to minimize environmental impact. 

• Research to reduce capital cost, improve efficiency, and lower aquatic impacts (DOE's 

Hydro NEXT initiative) recommended, but must lead to industry improvements. 

• Few hydropower facilities have failed in the U.S., but age and climate change increase 

stresses. Continued updating of emergency action plans (EAPs) by licensees, coupled 

with inspections, updating design bases, and use of remote monitoring (e.g., drones, GIS, 

performance-based sensors) technology are encouraged. 

• Privatization of select federally owned dams should be studied, particularly in locales 

where local private owners or municipalities are in the best position to maintain them or 

where non-power dams can be enhanced with hydropower or hydrokinetic addition. 

• Legislation that purely focuses on improving hydropower licensing/regulation and adds 

certainty to permit/approval time lines is needed; current permit/licensing challenges 

inhibit inclusion of hydroelectric projects in integrated resource planning. 

• A national energy policy that anticipates future energy needs, promotes development of 

clean/renewable energy supply such as hydropower, increases energy efficiency, and 

reduces dependency on foreign sources will enable prudent investment. 

Page 14 of 14 ASCE, March 15,2017 
38 

Mr. UPTON. Thank you. 

Mr. Steindorf. 

STATEMENT OF DAVE STEINDORF 

Mr. STEINDORF. Chairman Upton, Ranking Member Peters, and 

members of the committee, my name is Dave Steindorf, and I am 

the special projects director for American Whitewater. And I am 

testifying on behalf of the Hydropower Reform Coalition. The HRC 

is made up of more than 160 regional and local organizations with 

a combined membership of over 1 million people who work to restore rivers impacted by hydropower dams. 

I have over 20 years of experience working on hydropower relicensing. During this time, I have been directly involved in the license implementation and relicensing of over 20 hydropower 

projects in California. My first relicensing was on PGE’s Rock 

Creek and Cresta Project on the North Fork Feather River. At that 

time, I was teaching high school economics, had long been an avid 

fly fisherman, and had recently taken up whitewater paddling. I 

didn’t know anything about the process, but I knew that I wanted 

to help restore the river. 

Before this project was built, the Feather was amongst the best 

cold water fisheries on the West Coast and a tourist destination for 

anglers around the country. Afterward, the river became a collection of stagnant ponds connected by a small trickle of water. The 

project’s operations reduced the river’s flows to just between 5 and 

10 percent of what they had been, devastating the fishery and the 

local economy. 

Through the relicensing process, we restored flows to 30 percent 

of their historical average. The result is that we are on our way 

to restoring this section of the North Fork Feather River as a robust recreational and economic resource. 

The reduction in power production to make this happen was just 

6 percent. From my perspective as a ratepayer and as a river enthusiast, the benefits gained are well worth the cost. 

To be clear, getting to these types of positive outcomes is not 

easy. FERC relicensing requires collaboration and engagement 

from all stakeholders. Given that hydropower licenses last for 30 

to 50 years, it makes sense to take the time to get it right. 

There are two key elements that lead to positive outcomes in relicensing. First, start with a process by collaboratively developing 

studies about the river and the project. That is what the intent was 

behind FERC’s integrated licensing process. The information collected informs stakeholders as they make challenging trade-offs between resource protection and power generation. Federal, State, 

and tribal agencies request these studies in order to fulfill their 

statutory obligations, but often these are denied by FERC or the 

licensee. Often, studies are standard elements of successful 

relicensings. States in particular are then forced to wait until 

FERC has completed its process to request information they need 

to comply with State law, leading to delays that last years. 

The HRC recommends two solutions for this problem. First, we 

recommend that at the beginning of the process, FERC include resource agency studies requested in its study plan. Second, we recVerDate Mar 15 2010 11:10 May 15, 2017 Jkt 037690 PO 00000 Frm 00042 Fmt 6633 Sfmt 6633 I:\115THCONGRESS\115X12HYDROPOWERSCANS051217\115X12HYDROPOWERPEND
39 

ommend that FERC and other agencies develop a memorandum of 

understanding to improve coordination throughout the process. 

Second point. It is critical that resource agencies be engaged during the relicensing process and implementation. In my experience, 

when Federal agencies are involved with the design and construction of recreational infrastructure, these projects come in on budget 

and on time. When they aren’t, the opposite is the case. Efficiencies 

are gained by having local land managing agencies that are fully 

engaged rather than projects being managed from DC. 

Additionally, FERC’s mandate is in energy production and has 

limited expertise in fisheries, recreation needs, tribal concerns, or 

State water law. 

Additionally, we request that Congress evaluate allowing licensees to pay a portion of their relicensing fees that they now pay to 

FERC to the land managing agencies for the direct cost of implementing their license conditions. 

Finally, I want to make a quick point about the future of hydropower in the context of shifting energy markets. As renewable energy technologies continue to increase, it no longer makes sense 

just to focus on generating more electrons. As highlighted in DOE’s 

Hydro Vision report from last year, hydropower’s primary value is 

in its ability to regulate the grid. Often this can be done by maintaining or improving environmental or recreational values. 

To this end, FERC can improve their analysis of license application to better quantify grid regulation capabilities. It is this type 

of smart operation, combined with environmental protection, that 

are the future of hydropower. 

Thank you to the committee for this opportunity, and I will be 

happy to answer any questions. 

[The prepared statement of Mr. Steindorf follows:] 

40 


WRITTEN TESTIMONY OF DAVID STEINDORF ON BEHALF OF 

THE HYDROPOWER REFORM COALITION 

UNITED STATES HOUSE OF REPRESENTATIVES 

THE ENERGY AND COMMERCE COMMITIEE 

ENERGY SUBCOMMITIEE 

HEARING ON "MODERNIZING ENERGY INFRASTRUCTURE: CHALLENGES AND OPPORTUNITIES TO 

EXPANDING HYDROPOWER GENERATION" 

CONGRESSMAN FRED UPTON, CHAIRMAN 

HEARING ON MARCH 15, 2017 

TESTIMONY SUBMITIED BY DAVID STEINDORF 

CALIFORNIA SPECIAL PROJECTS DIRECTOR, AMERICAN WHITEWATER 

CHAIR, CALIFORNIA HYDROPOWER REFORM COALITION 

Chairman Upton, Ranking Member Rush, and Members of the Subcommittee: 

Thank you for this opportunity to testify and share the perspective of the Hydropower Reform 

Coalition on the topic of Challenges and Opportunities to Expanding Hydropower Generation. 

The Hydropower Reform Coalition is a diverse consortium of more than 160 national, regional 

and local organizations with a combined membership of more than one million people. We 

represent stakeholders, from canoeists to conservationists to lake homeowners, with an interest 

in restoring rivers that are impacted by hydropower dams. Together, our efforts have protected 

or restored thousands of river miles and countless opportunities for boating, fishing and other 

forms of recreation across the country that provide direct economic benefits to communities 

impacted by hydropower development. 

I come before the Subcommittee today as an individual with more than 20 years of direct 

experience in hydropower licensing, working as a consultant for hydropower companies and 

non-governmental organizations. During this time I have been directly involved in study 

development, study implementation, hydropower license negotiations, and license 

implementation on more than 20 hydropower projects in California. I currently serve as the 

Special Projects Director for American Whitewater, a 501 (c)(3) organization with a mission to 

conserve and restore America's whitewater resources and enhance opportunities to enjoy them 

safely. Since the 1990's, American Whitewater has actively participated in hundreds of Federal 

Energy Regulatory Commission hydropower licensing and relicensing processes across the 

country. We were a founding member of the Hydropower Reform Coalition and the California 

Hydropower Reform Coalition. I serve as the Chair of the California Hydropower Reform 

Coalition and am on the steering committee of both coalitions. 
41 


Hydropower Licensing 

Hydropower provides approximately 7% of the overall energy production in the country, and 

comprises 50% of all non-fossil fuel energy consumed in the U.S. In my home state of 

California, we have 287 hydropower plants that produced 6% of total in-state electricity in 2014. 1 

The Federal Energy Regulatory Commission (FERC) oversees licensing hydroelectric dams, 

with the critical involvement of the federal Departments of Agriculture, Commerce, and the 

Interior, as well as state and tribal water quality agencies. Public interest organizations and 

individuals likewise participate and add significant value to the process. FERC may grant a 

license for a term of 30 to 50 years, with the average life of a license being 45 years. Licenses 

dictate river flows, reservoir levels, public access, and power generation, and thus profoundly 

affect fish, wildlife, communities, and recreation-based economies for several decades. 

The Federal Power Act grants FERC the authority to license non-federal hydropower dams, and 

FERC is thus the convenor and decision maker on many components of the license. The 

Federal Power Act ensures that power companies have rights and protections as recognized by 

FERC in the relicensing process. The Clean Water Act grants states, and some tribes, the right 

to prescribe instream flows for fish, water quality, and water-based recreation in order to protect 

the interests of their citizens. Federal agencies that are responsible for the management of 

public land and water and imperiled and/or migratory fish species also have the ability to protect 

those public interests in relicensing through issuing mandatory conditions in the license. The 

National Environmental Policy Act ensures that the relicensing process is science-based, 

transparent, and open to local citizens, municipalities and counties, and organizations that are 

most directly affected by the hydropower projects. 

These regulatory authorities are designed to ensure that hydropower development balances 

power and non-power interests and that adverse impacts to underlying resources-such as fish, 

wildlife, and recreation values-are avoided or mitigated. Without these dovetailed legal 

authorities, local communities, fish and wildlife, and recreation-based economies would be left, 

as they historically have been, at risk of irresponsible hydropower development. 

Relicensing the Rock Creek and Cresta Hydroelectric Project-Feather River 

I became directly engaged in hydropower licensing over two decades ago when I first attended 

a meeting for the relicensing of Pacific Gas and Electric's Rock Creek and Cresta Project on the 

North Fork Feather River. At the time, I was teaching high school economics, had long been an 

avid fly fisherman, and had recently started whitewater paddling. I wanted to help restore the 

ecological and recreational integrity of the river. Before the project was built, the Feather was 

considered to be among the best coldwater fisheries on the West Coast. The river was a 

popular tourist destination that supported a robust local economy that was built around the river 

and anglers who came from around the country to experience the spectacular fishing. Once a 

1 http://www.energy.ca.gov/hydroelectric/ (last visited March 12th, 2017). 

2 
42 


series of dams and associated hydropower projects were built, the river became a collection of 

stagnant ponds connected by a small trickle of water. The project's operations had reduced the 

river's flows to between just 5% and 10% of what they had historically been, and the impacts to 

the fishery and the local economy were devastating. 

Over the course of a series of meetings with Pacific Gas and Electric, resource agencies, and 

non-governmental organizations, we reached a consensus on the future operations of the Rock 

Creek and Cresta Project that we presented as a comprehensive settlement to FERC. This 

settlement restored flows in the river to 30% of their historic average, and as a result, we are 

now well on our way to restoring this section of the North Fork Feather as a robust recreational 

and economic resource for the entire region. We have achieved specific fishery objectives, 

including restoring multiple age classes of trout to the river. The average length of a trout caught 

is more than 10 inches long, with a good sprinkling of some longer than 17 inches. The same is 

true for whitewater recreation. Where paddlers once drove by a dry riverbed, today they flock to 

the Feather River from all across the country to enjoy a series of recreational releases. The 

reduction in power production to make this happen was just 6%, which is typical for projects like 

this one. From my perspective as a ratepayer and a river enthusiast, the economic and societal 

benefits gained are well worth this cost. 

To be clear, getting to these types of positive outcomes requires a collaborative spirit and 

active, ongoing engagement from local stakeholders, but in my view it is well worth the effort. 

These locally based solutions to natural resource issues have a meaningful and lasting impact. 

Some contend that the federal hydropower licensing process takes too long, but when local 

stakeholders come together to develop a plan for managing the river for several decades into 

the future, it makes sense to take some time and get it right. 

Opportunities to Encourage Collaboration and Local Solutions 

The current legal and regulatory framework that guides hydropower licensing recognizes the 

importance of collaboration. Congress attempted to improve licensing when, in the Energy 

Policy Act of 2005, it created an alternative to the Traditional Licensing Process. This new 

process, the Integrated Licensing Process (ILP), encourages the type of collaboration we 

experienced in developing the license proposal for the Feather River. It brings all the resource 

agency staff with local knowledge and expertise into the room with the licensee to facilitate 

information sharing and encourage collaboration as early as possible. The ILP process was 

developed by FERC through consultation with licensees and other stakeholders. However, 

despite the process improvements it offers, opportunity remains to further improve coordination 

and efficiency among the agencies, applicants and stakeholders. For example, FERC could 

take actions to further expedite licensing by initiating Memorandums of Understanding (MOU) 

between itself, tribes, and states. As Chair of the CHRC, I assisted in crafting an MOU between 

the FERC and the California State Water Resources Control Board to allow the ILP process and 

the §401 process to happen in parallel, rather than sequentially. 

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43 


When collaboration does not happen disagreements and intransigence lead to litigation, which 

is expensive and time consuming. The costs of licensing, monetary and otherwise, are 

ultimately borne by the people of the United States, and all parties should be interested in 

minimizing cost whenever possible and appropriate. For these reasons, we believe FERC 

should promote the adoption of memoranda of understanding (MOUs) between itself, tribes, and 

states to incentivize collaboration rather than litigation. 

Another potential avenue to increase collaboration and reduce time consuming consultations is 

for the Committee to consider delegating to Native American tribes the authority to protect their 

lands. Currently, §4(e) of the Federal Power Act grants the Secretary of the Interior, working 

through the Bureau of Indian Affairs, the authority to condition a license to protect tribal 

resources. If tribes were granted that authority directly, it would expedite the licensing process 

by eliminating the middleman. There is precedent for such delegated authority: many tribes 

have been delegated Clean Water Act authority to set and enforce water quality standards, 

including in hydropower license proceedings. The HRC urges the Committee to consider, in full 

consultation with the appropriate tribal representatives, whether it would be advisable to devolve 

the authority to protect tribal resources from the Department of the Interior to the tribes 

themselves. 

Ensure Critical Information is Available at the Beginning of the Process 

It is imperative to start the licensing process by collaboratively developing and carrying out 

studies about the river, how the project operates, and the impact that it has had on the 

ecosystem and surrounding communities. This information informs the entire licensing process, 

and is important to get right because licenses last for 30-50 years. Additionally, many of the 

projects that are due for relicensing were originally licensed before bedrock environmental laws 

and health statutes were implemented, and before impacts to water quality, fish, wildlife, 

recreation and federal lands and waters were adequately considered. 

FERC, federal resource agencies, and state and tribal water quality agencies submit requests 

that studies be done in order to evaluate the impact that a hydropower project has had on their 

respective jurisdictions. These studies are necessary in order for agencies to fulfill their statutory 

obligations in relationship to hydropower relicensing. The standard length of a study is only two 

years, although if the licensee presents insufficient information, the studies may go on longer. 

Once agencies, tribes, and other stakeholders submit their study requests, FERC issues a 

decision (i.e. a "study plan determination") on what studies they determine are necessary. 

FERC may reject some study requests, including those that are designed to provide critical 

information for resource agencies to exercise their authority. When this happens, most federal 

resource agencies undergo a dispute process to ensure that they will have access to the 

information they need. Agencies with §401 authority under the Clean Water Act have the 

authority to require their studies later. In both instances, it unnecessarily delays the process. In 

some cases, decade-long delays have ensued in part because the §401 agency has been 

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44 


denied, by FERC and/or the licensee, access to the information necessary for it to complete the 

process in a legally defensible manner. 

The HRC recommends that at the beginning of the licensing process, FERC either grant these 

study requests or allow other agencies to require them under their own regulatory authority. We 

also recommend that FERC and other agencies develop a memorandum of understanding to 

improve coordination throughout the process, as discussed above. While these 

recommendations do not necessarily require a change to the Federal Power Act, a statement by 

Congress would have the salutary effect of encouraging FERC to adopt them. 

Some stakeholders are doing a poor job of learning from decades of relicensing proceedings 

and integrating that knowledge into future study plan development. In my experience, some 

licensees argue that studies they did not propose are unnecessary, when in actuality, they have 

become standard practice in other relicensing proceedings. The relicensing process could go 

much more efficiently if FERC works with experienced relicensing stakeholders to develop and 

implement a Best Practices Guide to relicensing studies. 

Meeting the Challenge of Adequately Funding Resource Agencies 

Federal resource agencies play a vital role in the hydropower licensing and relicensing process, 

ensuring that fish, wildlife, recreation and public lands and waterways are granted equal 

consideration to power generation as stakeholders develop hydropower license conditions. 

Federal agency staff provide invaluable first-hand, on-the-ground expertise and experiences 

with the project because they live and work in the region where the project is located. While 

FERC staff often live in Washington, D.C., and are only able to visit a project once or twice in 

the course of a relicensing proceeding, federal resource agency staff attend relicensing 

meetings regularly and have experience from other projects that informs the process. They also 

have the ability to sit down with the licensee, can get out on the river to observe real-time 

conditions, and understand the river and its hydrology because they have monitored it. The 

information that they gather is pivotal to the licensing process, allowing stakeholders to make 

challenging decisions in the public interest about trade-offs between resource protection and 

power generation. 

Where FERC's mandate relates to energy regulation, Congress directed federal resource 

agencies (the U.S. Forest Service, U.S. Bureau of Land Management, U.S. Fish and Wildlife 

Service, U.S. Bureau of Indian Affairs, and the National Marine Fisheries Service) to fulfill 

certain obligations and make scientifically informed and legally defensible conditions on 

hydropower licenses. Their ability to carry out their regulatory obligations in a timely fashion has 

become increasingly constrained in the face of funding restrictions. 

In order to carry out their duties in an efficient and effective manner federal resource agencies 

must be adequately funded in order to support their employees and their work. The HRC 

recommends that Congress increase appropriations to the federal resource management 

agencies in order to fund the staff positions that allow them to efficiently and thoroughly 

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45 


evaluate applications for hydroelectric licenses. Additionally, we request that Congress evaluate 

allowing licensees to pay to the land managing agencies a portion of the fees that they now pay 

to FERC for the direct cost of implementing their license conditions. 

Improving the Process of Adding Hydropower to Existing Army Corps Dams 

We have heard concerns from some in the hydropower industry that the FERC licensing 

process is duplicative of the process required by the U.S. Army Corps of Engineers (Corps) 

when installing hydropower at existing non-powered dams. However, given that Corps dams are 

taxpayer owned, authorized by Congress for specific purposes, and are generally considered 

critical infrastructure, it is essential that the Corps retain its authority to carefully consider the 

implications of alterations to their facilities when adding hydropower to their structures. 

Therefore, we agree with then-Director of the Office of Energy Projects at FERC, Ann Miles, 

when she testified before the Subcommittee in May 2015 that it might be advisable for the 

Committee to give the Corps the exclusive authority to regulate non-federal hydropower 

development at Corps infrastructure2 To simplify the process of adding hydropower to nonpowered federal dams, the Committee should consider amending the Federal Power Act to 

remove these dams from FERC's jurisdiction. 

Opportunities to Expand the Value of Hydropower 

The subtitle of this hearing is "Challenges and Opportunities to Expanding Hydropower 

Generation." It is important to understand the reality of this quest in the context of other new 

energy development. In 2016 alone, more than 14 GWof new solar power and 8 GWofwind 

power were brought online in the United States-' Solar installations were led by California, North 

Carolina, Nevada, Massachusetts and New York, while the biggest increase in wind production 

occurred in Texas, Oklahoma, Iowa, North Dakota, Kansas and Nebraska.• These states span 

the entire geographic and political spectrum of the United States. For context, the July, 2016, 

U.S. Department of Energy Hydropower Vision Report evaluated the potential for increasing 

hydropower production in the U.S-" The Report stated that there is potential to add 1.7 GW of 

new hydropower capacity by 20506 through constructing new dams.7 This is just 7% of the wind 

2 United States. Cong. House. Committee on Energy and Commerce, Subcommittee on Energy and 

Power. Hearing on Discussion Drafts Addressing Hydropower Regulatory Modernization and FERC 

Process Coordination under the Natural Gas Act. May 13, 2015. 114th Cong. 1st sess. (Testimony of Ann 

Miles, Director, Office of Energy Projects, Federal Energy Regulatory Commission at p. 15). Available at: 

http://docs.house.govlmeetings/IFIIF0312015051311 034431HHRG-114-IF03-Wstate-MilesA-20150513.pdf 

(last visited March 12, 2017). 3 Solar Energy Industries Association. (n.d.) Solar Market Insight Report 2016 Year in Review. 

http://www.seia.orglresearch-resourceslsolar-market-insiqht-report-2016-year-review (last visited March 

12, 2017); and American Wind Energy Association. (n.d.) U.S. Wind Industry Fourth Quarter 2016 Market 

Update. Available at: http://awea.files.cms-plus.comiFileDownloadslpdfsi4Q2016%20Fact%20Sheet.pdf 

(last visited March 12, 2017). 4 /d. 

5 U.S. Department of Energy, Wind and Water Power Technologies Office. Hydropower Vision Report. 

July 2016. Available at: http://energy.gov/eere/water/articles/hydropower-vision-new-chapter-america-s1st-renewable-electricity-source (last visited March 12, 2017). 6 Hydropower Vision Report at p. 4. 

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46 


and solar installed last year alone. In addition, the report stated that the United States could add 

11.1 GW of new hydropower capacity by upgrading existing projects and retrofitting nonpowered dams with hydropower capabilities by 2050.6 While there is certainly potential to retrofit 

existing dams, it is doubtful that these facilities will be able to compete in the emerging energy 

marketplace, unless they have grid-regulating capabilities. 

In the past, many have focused on total energy production as the metric to consider when 

quantifying opportunities for expanding hydropower. However, simply calculating the gross 

number of electrons that a project can produce is no longer adequate. Instead, the future of 

hydropower should focus on the value it provides in the context of rapidly changing energy 

markets. As solar generation increases in California and other energy markets, there is an 

increasing risk of over-generating power in the middle of the day. 9 This phenomenon, formally 

known as the "duck curve," highlights the fact that bringing on more baseload generation in 

today's marketplace is akin to bringing sand to the beach. Simply put, the projects that will have 

the most value in the immediate and foreseeable future are those that can provide 

complimentary grid regulation as renewables like wind and solar continue to rapidly come 

online. To this end, FERC can improve their analysis of license applications by including an 

assessment of whether projects are capable of regulating the grid while maintaining or 

improving the integrity of the aquatic environment and recreational values of the waterway. This 

is something that is already happening. In a relicensing in which I'm currently involved, we have 

found that we can actually increase the grid regulating capabilities of the project while providing 

additional flows to the river. It is this type of smart operation combined with efficient 

environmental protection that is the future of hydropower. 

Lastly, a critically important finding of the Department of Energy's 2016 Hydropower Vision 

Report is that building new dams will cost more in both investment dollars and negative impacts 

to clean water, wildlife, and rural economies than it is worth. The Report concluded that efforts 

to expand hydropower production should instead focus on promoting efficiency, retrofitting 

suitable non-powered dams, and upgrading the century-old technology that is present in far too 

many currently operating hydroelectric projects. We agree. As recent events associated with 

Oroville Dam on the Feather River demonstrate, the hydropower industry needs to be focused 

on maintaining their existing projects before considering any expansion. We oppose and 

strongly discourage any incentives or initiatives aimed at building new hydropower dams. The 

future of hydropower is in the smart and responsible operation of the existing system to better 

meet the needs of the grid, with modest additions to capacity at existing dams. The Committee 

should focus its attention there. 

7 See generally, Hydropower Vision Report. 6 1dat 18. 9 Scottmadden Management Consultants, Revisiting the California Duck Curve: An Exploration of Its 

Existence, Impact, and Migration Potential, October 2016. Available at: http://www.scottmadden.comlwpcontent/uploads/2016/10/Revisiting-the-Duck-Curve Article.pdf (last visited March 12, 2017). 

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Conclusion 

In my work with hydropower licensing, I have had several successful experiences negotiating 

license agreements that provide for continued profitable generation of hydropower in a manner 

that recognizes the non-power values our rivers provide for fishery resources, recreational 

experiences, cultural values, and general public use and enjoyment. We all want our lights to 

come on and we all value healthy rivers. In hydropower licensing, as in all things, we must seek 

consensus and compromise when possible. 

There are many opportunities to improve the hydropower licensing process, the value of 

hydropower, and the health of our rivers. This includes ensuring that resource agencies have 

the funding and information they need to fulfill their statutory obligations and incentivizing 

collaboration through adopting MOUs. It also involves recognizing the role that hydropower 

plays in a rapidly changing energy market and ensuring it meets the needs of the grid while 

maintaining or improving the integrity of the aquatic environment and recreational values of the 

waterway. Finally, as we consider modernizing hydropower we need to focus on maintaining 

and upgrading existing infrastructure and in some cases, consider project removal. 

Thank you for providing the opportunity to provide this testimony. I am happy to answer 

questions and provide further information as necessary. 

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Mr. UPTON. Thank you very much. 

Ms. Swaminathan. 

STATEMENT OF RAMYA SWAMINATHAN 

Ms. SWAMINATHAN. Thank you, Chairman Upton, Congressman 

Peters, members of the subcommittee. Thank you for the opportunity to testify before you today on this important topic. My name 

is Ramya Swaminathan, and I am the CEO of Rye Development, 

a member of the National Hydropower Association. 

NHA is a nonprofit national organization dedicated to promoting 

clean, affordable, renewable U.S. hydropower. NHA represents 

more than 220 companies, from Fortune 500 corporations to small 

family-owned businesses, and I plan to supplement this testimony 

with additional materials provided by NHA. 

Rye Development is a member of NHA, and we are the developer 

of the largest portfolio of new hydro development projects on existing dams in the United States. We are also developing a 393-megawatt pumped hydro storage project in the State of Oregon with an 

affiliate of National Grid. Our conventional hydro projects are located in seven States: Pennsylvania, Ohio, West Virginia, Indiana, 

Kentucky, Mississippi, and Louisiana. All of these projects are on 

existing dams, and the environmental impacts are broadly acknowledged to be mitigable. 

As this committee has recognized, hydroelectric generation is the 

oldest and most reliable form of renewable generation. The headline number for the potential for new hydropower capacity on existing dams is compelling. There are more than 80,000 dams in the 

United States, and only 3 percent of them currently have hydropower. 

The benefits of this form of hydropower development include 

meaningful job creation and all the associated economic activity, 

and importantly, private investment into our aging dam infrastructure, which provides structural and ongoing operational benefits to 

the dam owner. 

The timeline for a new hydropower development project to reach 

commercial operation is between 10 and 13 years, which is almost 

unmatched in the power generation space. Federal permitting can 

account for 8 to 10 years of that time. And most other energy 

projects can be built in less than half that time, which means that 

investors in the energy space are effectively discouraged from investing in new hydropower generation. 

The Federal permitting regime for new hydropower on Army 

Corps dams—and the Army Corps owns several of the best-suited 

dams for this kind of development—has two major parts: the FERC 

process and the Army Corps process. In our substantial licensing 

experience, the FERC process takes 5 to 6 years, and FERC recently piloted a 2-year licensing process. One of our projects on the 

Kentucky River, at Lock and Dam 11, was the only project selected 

for this pilot, and in May of last year received its license, marking 

the successful completion of this pilot process. 

We believe that it is possible to shorten the FERC licensing process to 2 years for a precisely defined yet nationally significant set 

of projects, making this pilot process more broadly applicable. 

49 

Next, to the Army Corps process. The duplicative application of 

NEPA, first by the FERC during the licensing phase and then subsequently by the Army Corps triggered by the Section 404 permit, 

is a particular problem for a hydropower development, because it 

affects the water quality standard, which for a hydro developer determines the amount of water that is available for generation and, 

therefore, revenue, uncertain until the 7th or 8th year of a combined Federal permitting process. 

Some ideas we have to address this duplication include requiring 

any Federal agency to adopt the NEPA analysis of another Federal 

agency if it has analyzed the same project within a certain number 

of years. Alternatively, we could require that the Army Corps adopt 

the prevailing State standards for water quality parameters applicable to that particular project. 

The last substantive point I want to leave you with is the idea 

of public-private partnerships. These projects, new hydro on existing dams, are an avenue for the Federal Government to attract private capital to invest in its dam infrastructure, offering measurable 

benefit to the Federal Government. The benefits of the private investment are that it actually reinforces the portion of the dam 

structure with new construction, which is the part that the hydro 

developer builds, and takes over the maintenance obligations for 

that portion of the dam and typically that side of the abutment. 

The Federal Government could recognize the value that private 

capital brings in one of a few different ways. Some ideas we have 

are providing a 20-year standard offer for the purchase of power 

pursuant to published rates for these projects, or making them eligible for low-cost financing from programs such as the Rural Utility 

Service. Both of these actions would effectively lower the cost of 

electricity produced by the relevant hydroelectric project. 

In conclusion, Rye Development thanks you for inviting our testimony on this vitally important subject, and we are ready to work 

with you further to resolve challenges and create opportunities. 

Thank you. 

[The prepared statement of Ms. Swaminathan follows:] 

50 


WRITIEN TESTIMONY OF RAMYA SWAMINATHAN 

CEO, Rye Development 

before the 

U.S. HOUSE OF REPRESENTATIVES SUBCOMMITIEE ON ENERGY 

regarding 

"MODERNIZING ENERGY INFRASTRUCTURE: CHALLENGES AND OPPORTUNITIES TO EXPANDING 

HYDROPOWER GENERATION" 

MARCH 15, 2017 

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EXECUTIVE SUMMARY 

1. Hydroelectric power has proven grid reliability and stability characteristics, in addition to being a 

clean, emission-free, renewable form of electricity generation. 

2. An increase in hydropower generating and storage capacity would be in the nation's best 

interest due to these characteristics. 

3. There is significant potential for increases in hydroelectric generating capacity in a variety of 

forms, including capacity increases at existing hydro plants, new conventional hydropower, 

pumped hydro storage, marine and hydrokinetic generation and applications in conduits. 

4. One of those forms, adding hydropower generating capability to existing non-powered dams has 

the potential to add as much as 12,000 MW of generating capacity. 

5. The length, redundancy and opacity of the federal permitting processes that govern the timeline 

for new hydropower on existing dams is a significant barrier to additional capital being invested 

into this sector. 

6. New hydropower development has faced challenges far beyond other energy technologiesboth renewable and not- for this reason and others. Reducing the challenges and creating 

opportunities would speed the development of new hydropower throughout America. 

7. Based on the success of the 2-year pilot licensing process, which this Subcommittee approved 

and was signed into law in 2013, as well as other licensing processes Rye Development has been 

through, we believe it is possible to adopt a 2-year licensing process for a significant number of 

projects that meet the criteria for low-impact, low-controversy projects. 

8. Duplication and opacity in the overall federal process, both at FERC and USACE, must be 

minimized with regulatory risks throughout the overall federal permitting process being 

sequentially taken "off the table." 

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9. Non-federal hydropower development on federal dams brings quantifiable benefits to the 

federal government that should be valued through the extension of low cost financing to those 

projects and/or a federal standard offer power purchase agreement. 

10. In conclusion, we see many opportunities, both legislative and regulatory, for the federal 

government to play an important role in overcoming impediments to increasing hydropower 

generating capacity, including permitting reforms, recognition for the value of Public-Private 

Partnerships, definitional changes that allow hydropower market access, and other economic 

incentives. 

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INTRODUCTION 

Chairman Upton, Ranking Member Rush, Members of the Subcommittee, thank you for the opportunity 

to testify before you today on this important topic. My name is Ramya Swaminathan, and I am the CEO 

of Rye Development, a member of the National Hydropower Association (NHA). 

I am pleased to discuss the importance of hydroelectric power, its benefits to the national electricity 

generation mix, and the potential for and impediments to the growth of hydropower. 

NHA is a nonprofit national association dedicated to promoting clean, affordable, renewable, U.S. 

hydropower- including conventional hydropower, pumped hydro storage, marine and hydrokinetics, 

and conduit power projects. NHA represents more than 220 companies, from Fortune 500 corporations 

to family-owned small businesses. NHA's members include both public and investor-owned utilities, 

independent power producers, project developers, equipment manufacturers, other service providers 

and academic professionals. 

Rye Development is a member of NHA and is the developer of the largest portfolio of new hydropower 

development projects in the United States. Our projects are located in eight states (Oregon, 

Pennsylvania, Ohio, West Virginia, Indiana, Kentucky, Mississippi, and Louisiana). All but one project are 

proposed to be located on existing dams owned by the state or the US Army Corps of Engineers. These 

make beneficial use of existing infrastructure by adding hydroelectric generating equipment to the 

existing dam. No new dams or impoundments will be constructed and the impacts of these projects on 

environmental and other resources are broadly agreed to be minimal and mitigable. 

In addition to this portfolio of projects that will add hydropower generating capacity to existing dams, 

we have recently entered into a partnership with Grid America Holdings, an affiliate of the multinational utility company, National Grid, to jointly acquire, develop, construct and operate a 393 MW 

pumped hydro storage project in the State of Oregon, near the California border. 

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THE BENEFITS OF HYDROPOWER 

Hydroelectric generation is the oldest and most reliable form of renewable generation. The technology 

behind conventional hydroelectric generation has not changed significantly since the world's first 

hydroelectric power plant began operating in Appleton, Wisconsin in 1882. As our chief engineer likes 

to say, there's nothing very innovative about hydropower, and that's the beauty of it. 

Hydropower accounts for approximately 7 percent of the nation's total electricity generation, generates 

power in every region of the country, and is, by far, the largest form of energy storage available and 

used in the United States and around the world. As this Committee stated in the report on H.R. 8, the 

inherent benefits of hydropower include: energy security, stability, and reliability, environmental 

protection and enhancement, and recreation. 

The benefits that hydroelectric generation provides to the electric grid are unique and numerous. In 

addition to pure generating capacity, hydropower and pumped storage provide essential grid reliability 

and stability services, such as load following, firming for other more intermittent sources of power 

through energy storage, voltage and frequency support, and blackstart capability in times of outage. 

The addition of significant amounts of new hydropower generating capacity to our nation's energy mix 

will provide all of these mentioned grid benefits as well as a meaningful amount of economic activity in 

the regions of development, additional emissions-free clean energy, and in the case of new hydro 

development on existing dams, much-needed private investment into our aging dam infrastructure and 

its ongoing maintenance. 

POTENTIAL FOR NEW HYDROPOWER 

There is significant potential for increasing hydropower generating capacity. The Department of 

Energy's "Hydropower Vision" report suggests that hydropower capacity can be increased by close to 

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50% by 2050, which would represent a cumulative economic investment of $148 billion and more than 

195,000 related jobs. Increases in capacity could come from efficiency improvements and responsible 

expansion of existing hydropower projects, pumped hydro storage, marine and hydrokinetic generation, 

applications in conduits and new hydropower added to existing non-powered dams. 

The headline number for the potential for new hydropower on existing dams is compelling: there are 

over 80,000 dams in the United States and only three percent (3%) of them have hydropower 

generating capacity. The supply of non-powered dams that can provide incremental generating capacity 

is essentially unbounded even if a significant fraction of the remaining of 77,600 are excluded from 

consideration. 

The Department of Energy estimates that adding generating capacity to existing dams in this type of 

low-impact development could add as much as 12,000 MW to the nation's electricity stack. 

The benefits of this form of hydropower development include: 

1. Direct employment. The construction of hydropower projects on existing dams has the 

potential to create approximately 150-300 jobs per project during an average construction 

period of between lY, and 3 years. 

2. Direct purchase of goods and services. Many goods and services used in construction must be 

procured locally (e.g. concrete, fuel, riprap, gravel, etc.), which is a benefit to local and regional 

businesses. 

3. Indirect Economic Impact. Additional benefits to local communities include the "multiplier 

effect" from the economic activity generated by direct employment and purchase of goods and 

services locally. 

4. Private investment into aging dam infrastructure. The addition of newly constructed 

hydropower facilities on an existing dam provides a number of enhancements, both structural 

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56 


and operational, to the dam itself. These inure to the benefit of the dam owner and, by 

enhancing the stability of the dam, contribute to the public benefit. 

REGULATORY IMPEDIMENTS TO NEW HYDROPOWER DEVELOPMENT 

The time line for a new hydropower development project to reach commercial operation is between 10 

and 13 years, which is almost unmatched in the power generation space. Most ofthis time is taken by 

permitting. Federal permitting can account for 8 to 10 years (FERC licensing for 5-6 years and USACE 

permitting for 2-4 years) of that time, with the average construction period being between 1.5 and 3 

years. Other renewable energy resources, and indeed fossil fuel generation, can effectively progress 

from inception to operation in less than half that time. It is possible to advance solar, wind, and even 

combined cycle plants from concept to being operational within 2 or 3 years. 

This disparity of timelines to commercial operation presents a formidable challenge to new hydropower 

development. Private investors in the power generation space find the length and complexity of 

hydropower's timeline difficult to manage. As a result, hydropower development becomes expensive 

due to the compounding of interest costs over long periods coupled with the unclear risk profile. When 

faced with these factors, many investors to choose to invest in other forms of generation with far 

shorter timelines and clearer risk assessments. 

Only nuclear and geothermal generation have regulatory processes that are comparable in length and 

complexity to what new hydropower on existing USACE dams must undergo. However, the impacts of 

building new hydropower on existing dams are not comparable to the risks of building a new nuclear or 

geothermal plant. These dams already exist, and the projects are proposed on already disturbed 

ground. Hydraulic impacts are typically limited to the stretch of the river a few thousand feet upstream 

and downstream of the existing dam; terrestrial impacts are typically limited to the area of ground 

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57 


disturbance, which is usually small as there is no dam being built, only a relatively small powerhouse and 

appurtenances, including transmission lines, and construction access. 

The federal permitting regime for new hydropower on existing USACE dams has two major parts: the 

FERC license and the USACE processes. 

FERC licensing 

In our experience, the FERC licensing process takes 5-6 years from preliminary permit to license order. 

The Hydropower Regulatory Efficiency Act of 2013 (HREA, H.R. 267, 113'h Congress; P.L. 113-23} made 

multiple references to increasing the efficiency of the FERC licensing process and directed the FERC to 

investigate the feasibility of a two-year licensing process for hydropower development and nonpowered dams. 

In May of 2014, FFP Project 92, LLC, a project company for which Rye Development is the agent, 

requested approval to use the two-year licensing process for a proposed project on Kentucky River Lock 

& Dam 11. In August of 2014, FERC granted that request, and our project became the only project 

nationwide selected to advance through the two-year licensing process. In May of 2016, the FERC 

granted a license order to FFP Project 92, LLC for its proposed project, marking the successful 

completion of the two-year licensing process. 

Based on our successful experience with the two-year licensing process and our experience filing 22 

other final license applications with the FERC and receiving lllicense orders, we believe that it is 

possible to shorten the FERC licensing process to two years for a narrowly defined yet nationally 

significant set of projects. All would be low-controversy projects that have impacts that are widely 

understood to be minimal and mitigable. This does not mean they would all be small projects; with 

hydropower, size and impact are not directly correlated. 

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In our view, there are two critical requirements for the successful adoption of the two-year process: 

1. limiting projects that qualify for that expedited treatment to those that meet an objective, 

predetermined set of criteria that is applicable to a larger number of projects than the pilot 

project solicitation. 

2. Imposing strict and published time lines for all parties involved, including the applicant and FERC 

staff. This was very successfully implemented by FERC during the two-year pilot process. 

USACE Regulatory Process 

The USACE is the owner of many of the non-powered dams best suited for hydropower development in 

the country. Developers who propose projects on USACE dams must go through more federal 

permitting at the USACE, typically after FERC license, which can add another 2 to 4 years to the 5-6 

years spent in FERC licensing. Before infrastructure construction can begin, Section 404 permits 

(required by Section 404 of the Clean Water Act) for "dredge and fill" activities must be granted (usually 

at all projects, not just at those on USACE dams) and Section 408 permissions to modify the USACE dam 

itself must also be granted. 

There have been a number of recent legislative and administrative developments that are positive steps 

toward the rationalizing the USACE permitting regime and its interaction with FERC licensing. The Water 

Resources Reform and Development Act of 2014 (P.L 113-121) mandated that the USACE prioritize the 

development of non-federal hydropower at federal dams. The USACE has also entered into an MOU 

with the FERC to prioritize coordination between these agencies. 

However, from a developer's perspective, these steps have not yet resulted in a "right-sized" federal 

permitting process: the overall time line is still too long and the combined permitting process does not 

sequentially take risks "off the table" for the investor. Important project parameters are left unresolved 

until very late (i.e. the 7'" or even 8'" year of a combined federal permitting cycle). 

9 
59 


There are still redundancies between the FERC licensing process and the USACE permitting regime, for 

example, the duplicative application of NEPA, first by the FERC at the licensing phase and then 

subsequently by the USACE, triggered by the Section 404 permit. In particular, the parameter that is 

most at stake for a hydropower developer is the water quality standard, which determines the amount 

of water ultimately that will be available for passage through the turbines and therefore, determine the 

amount of generation (revenue) at any given project. From a planning perspective, understanding the 

volume of water allowed to be used is necessary for designing the project. From a commercial 

perspective, this is an absolutely critical parameter that would· best be known as early as possible and is 

a risk that needs to be taken "offthe table" at the earliest point in the process regulators have the 

ability to do so. 

Pursuant to the Clean Water Act, the state in which the project discharges water must either grant or 

waive a Section 401 permit, without which the FERC license order cannot be granted. For our project 

that borders Mr. McKinley's district and Mr. Johnson's, we require permits from both West Virginia and 

Ohio. The FERC license order incorporates the terms and conditions of the State-issued Section 401 

permit as mandatory conditions. 

Subsequent to all the work, studies, and analysis performed by the applicant, FERC staff and contractors, 

and the State, and subsequent to the issuance of the FERC license at the 10- 20% design point, the 

UASCE may undertake separate analysis, for which the developer may be required to perform new and 

different studies (beginning in the 6'" or 7'" year of a federal permitting process), and may prescribe 

different water quality standards from the FERC and the State after the 60% design point. At that point, 

the developer will have likely spent several million dollars on the development of a license and studies 

supporting it as well as final design engineering to the 60% point based on a set of economic criteria that 

may or may not be achieved under new design parameters to support the changed water quality criteria 

In addition to the sunk costs at that point, the developer will likely have to spend hundreds of thousands 

10 
60 


of dollars more to determine whether the changed design parameters will lead to an economically 

feasible project. 

There are a number of different potential solutions to the opacity and the redundancy of this combined 

federal process, including: 

Requiring any federal agency to adopt the NEPA analysis of another federal agency if it has 

analyzed the same project within a certain period oftime, or 

Requiring that USACE adopt the prevailing State standards for water quality parameters 

applicable to the project. 

FACILITATING THE DEVELOPMENT OF HYDROPOWER PUBLIC-PRIVATE PARTNERSHIPS 

Non-federal hydropower development at federal dams is an avenue for the federal government to 

attract private capital to invest in its dam infrastructure and an example of a Public-Private Partnership. 

The privately-funded construction of hydropower on an existing dam provides a number of benefits to 

the federal owner: 

a. New construction of a powerhouse and other appurtenances at an existing dam 

reinforces the dam at the powerhouse and at the tie-in to the dam structure. 

b. Erosion and sedimentation control on the side of the dam with the new construction 

will typically become the responsibility of the private developer. 

c. The private developer will typically take maintenance obligations of at least the portion 

of the dam occupied by the powerhouse and other project elements. 

d. In some projects, hydropower project elements benefit the dam, the dam owner and 

the ongoing operations in support of the original purpose of the dam. For example, 

lining of existing conduits enhances the strength and long-term serviceability of the 

conduits. 

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e. New hydropower projects typically provide recreational enhancements to existing 

facilities, including fishing platforms and portages. 

f. Federal facilities typically require that the private developer provide electricity or pay 

the electric bill for the dam on which the project is located. 

Taken in this context, non-federal hydropower development offers a quantifiable benefit to the federal 

government. The federal government could recognize the value that private capital brings in one of a 

few different ways: 

Providing a 20- or 30-year standard offer for the purchase of power, pursuant to published 

rates, for hydroelectric power sold by non-federal projects located on federal dams, or 

Making non-federal hydropower projects on federal dams eligible for low-cost financing from 

programs such as the Rural Utility Service (RUS) Electric Programs. Since this would take the 

form of a loan, the project entity would be required to pay interest to the RUS, benefiting the 

United States taxpayer. 

Both of these actions would effectively lower the cost of the electricity produced by the relevant 

hydroelectric projects, providing further benefit to the local communities in which the projects are 

located. 

ADDITIONAL OPPORTUNITIES TO EXPAND HYDROPOWER GENERATION 

In addition to the regulatory impediments we face and the potential Public-Private Partnerships that we 

propose, there are other opportunities for the federal government to expand hydropower generation: 

Definition of "renewable energy": The current definition of "renewable energy" for Federal 

purchase requirements (42 US Code§ 15852) includes electric energy generated from 

hydroelectric generation capacity achieved from increased efficiency or additions of new 

capacity at an existing hydroelectric project. Allowing hydropower added to non-powered dams 

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and pumped-storage projects would allow these types of projects to support the federal 

government's goals and benefit project developers. 

Section 242: The Hydropower Production Incentives Act was added to the Energy Policy Act of 

2005 by this Committee. It creates an incentive for private developers to add hydropower to 

existing dams and conduits. We thank Congressmen McKinley and Johnson for their leadership 

to reauthorize the program and for their and Congressman Doyle's annual efforts to fund it. 

• Tax Incentives: While not within this Committee's jurisdiction, changes to the tax code, 

including reestablishing parity among generation sources, would greatly improve the ability of 

hydropower developers to access capital. 

CONCLUSION 

Rye Development, as a member of NHA, thanks you for inviting our testimony on this vitally important 

subject and are ready to work further with you to resolve the challenges and create opportunities to 

expand hydropower generation. This Subcommittee worked last Congress to produce legislation that 

addressed the challenges hydropower developers face. We are grateful for all your efforts. We 

encourage you to continue working to help expand the development of low-impact, low-cost, zeroemission power. Hydropower helps to promote our national energy security by diversifying local energy 

portfolios, provides a tried-and-true mechanism for integrating all renewables into the grid, and with 

pumped storage, like our Swan Lake North project, is essential for energy storage and grid reliability. 

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SUPPLEMENTAL WRITTEN TESTIMONY OF RAMYA SW AMINATHAN 

CEO, Rye Development (on behalf of NHA) 

before the 

U.S. HOUSE OF REPRESENTATIVES SUBCOMMITTEE ON ENERGY 

regarding 

"MODERNIZING ENERGY INFRASTRUCTURE: CHALLENGES AND 

OPPORTUNITIES TO EXPANDING HYDROPOWER GENERATION" 

MARCH 15, 2017 
64 


Supplemental Written Testimony of Ramya Swaminathan, CEO, Rye Development on behalf ofNHA 

Executive Summary 

1. In the last several years, hydropower has provided approximately 6 percent of all U.S. 

electricity generation and nearly half of renewable generation. By 2030, approximately 400 

projects representing 18,000 MW of capacity of the existing system will be up for 

relicensing. 

2. Hydropower has significant untapped growth potential, particularly at existing infrastructure 

and with low impact projects, such as capacity additions at current hydropower facilities, 

adding generation to non-powered dams, and closed-loop pumped storage, among others. 

The Department of Energy's recent Hydropower Vision Report estimates that close to 50 

GW of new capacity is available by 2050, with the right conditions and policy support in 

place. 

3. New hydropower project development, as well as the relicensing of existing projects, faces a 

variety of obstacles. These include: a regulatory process that can be modernized to increase 

coordination and reduce unnecessary duplication, delays and costs; a lack of valuation of grid 

security and reliability services; and inequitable treatment and recognition under renewable 

energy tax incentives and other renewable/clean energy programs, including federal R&D 

funding to support new technologies. Combined, these issues are impacting hydropower 

competitiveness and creating unnecessary challenges that hold back growth. 

4. NHA supports policies to address regulatory inefficiencies and to improve coordination in 

the overall hydropower project approval process and calls on Congress and the 

Administration to address this and other energy and market policy issues that limit 

investment in hydropower infrastructure. And, we believe this can all be done in ways that 

promote the hydropower resource while protecting environmental values. 

5. Hydropower has a critical role to play in meeting our nation's energy, environment, and 

economic objectives. The benefits from this resource are many -low-cost, reliable, base load 

renewable electricity, along with additional ancillary grid services (load following, frequency 

response, energy storage, etc.)- services that will allow our country to add significantly to 

our national portfolio of renewable, clean energy resources. 

6. Finally, as the Congress works to address our energy and infrastructure needs, whether that 

be on a new national infrastructure program or further work on an energy bill, policies that 

support the preservation of the existing hydropower system and promote the deployment of 

new projects (for all categories of water power technologies) must be included. A greater 

recognition that our hydropower infrastructure is incredibly valuable is needed, and 

continued investment and re-investment in the system is critical to our energy future and 

national security. 

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65 


Introduction 

The following information supplements the written testimony ofRamya Swaminathan on behalf 

of the National Hydropower Association (NHA) and provides additional information and details 

on the state of the U.S. hydropower industry today, the importance of hydropower to the U.S. 

electric system, the untapped growth potential across the various sectors of the industry, and the 

policy issues that need to be addressed to fully realize that growth. 

NHA is a nonprofit national association dedicated to promoting clean, affordable, renewable 

U.S. hydropower- from conventional hydropower to pumped storage to marine energy to 

conduit power projects. NHA represents more than 220 companies, from Fortune 500 

corporations to family-owned small businesses. Our members include both public and investorowned utilities, independent power producers, developers, equipment manufacturers and other 

service providers, and academic professionals. 

U.S. Hydropower Statistics 

Currently, the U.S. conventional hydropower fleet is made up of almost 2200 individual plants 

with a total capacity around 80 GW. In the last two years, these plants provided approximately 6 

percent of all U.S. electricity generation and almost half of all renewable electricity generation 

-making hydropower the single largest provider of renewable electric power in our country. 

Looking over the long term, hydropower has supplied a cumulative 10 percent of U.S. electricity 

generation over the past 65 years ( 1950-20 15), and 85 percent of cumulative renewable power 

generation over the same time period. 

In addition to the conventional hydropower system there are an additional 42 hydropower 

pumped storage plants with approximately 22 GW of capacity- projects that make-up almost 

all, 97 percent, of energy storage in the U.S. today.1 

2015 Sources of Renewable Electricity 

Generation 

2016 Sources of Renewable Electricity 

Generation 

1 20!6 Hydropower Vision Report, Department of Energy, Office of Energy Efficiency and Renewable Energy, 

Wind and Water Power Technologies Office, Executive Summary P. 9. 

https://energy .gov /sites/prodltl les/20 !6/l O/G3/Hydropower-Vision-Executive-Summary-! 02120 16.pdf 

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66 


Hydropower generation is a clean air resource and avoids millions of metric tons of carbon 

emissions each year. In fact, regions that rely on hydropower as a primary energy source (like the 

Northwest) reap the benefits of significantly cleaner air with some of the lowest carbon intensity 

rates in the country. 

In addition to this clean and renewable energy, hydropower infrastructure provides other 

important benefits, including managing river flow for aquatic species and habitat protection, 

flood control and drought management, water supply, irrigation and more, as the chart below 

illustrates.2 

Figure 2·11. Total capacity and number of plants for six "'parate uses (illustrated by tho blue bars) olexi>tlng hydropower 

clams and mservoirs. 

The next map below was developed by the Department of Energy (DOE) through Oak Ridge 

National Laboratory (ORNL) and provides a visual representation of the size and location of 

projects for both the federal and non-federal hydropower systems. Existing hydropower assets 

are located in all but two states (Delaware and Mississippi), though every state receives the 

benefit of the clean renewable generation that these projects provide. 

2 Hydropower Vision Report, Chapter 2, Page 83. 

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The contributions of the existing hydropower fleet to the electric grid are many (base load power, 

peaking generation, load-following, energy storage, reliability and more). With the need for more 

of these benefits and services, as the nation strives to become more energy independent, NHA 

has seen the hydropower industry grow and expand in recent years. 

In fact, the United States experienced a net capacity increase of~ from 2005 to 2013, 

enough to power over half a million homes4. FERC has reported an additional260 MW of 

capacity being placed in service since then, with even more projects in licensing or in the 

construction phase today. And this number could significantly increase with a modernized 

regulatory approval process that currently takes years longer than that of other renewable 

resources- in some cases licensing can take I 0 years or longer. 

In addition, hydropower projects bring multiple economic benefits to the communities in which 

they are located and those that they serve. To start, the industry itself currently employs a sizable 

workforce. 143,000 jobs are created just from the continued operation and maintenance, as well 

' 2014 Hydropower Market Report, Executive Summary P. VI. 

4 An Assessment of Energy Potential at Non-Powered Dams in the United States, Department of Energy, Office of 

Energy Efficiency and Renewable Energy, Wind and Water Power Technologies Office and Oak Ridge National 

Laboratory, April2012, Executive Summary P.Vll, Footnote I. 

http://nhaap.ornl.gov/sites/default/files/NHAAP NPD FYI! Final Report.pdf 

5 
68 


as upgrades, of the existing system, with additional employment opportunities gained in the 

pursuit of new project development and deployment.s 

On top of this, the access to low-cost, reliable clean power is attracting many companies to 

regions with hydropower. For example, major high-tech companies like Google, Facebook, and 

Yahoo require large, energy-intensive data centers to drive their businesses. Specifically, in 

September 2010, Yahoo opened a new facility in Lockport, New York to utilize hydropower 

provided by the New York Power Authority. And again, in 2013, New York officials cited the 

importance oflow-cost hydropower in Yahoo's decision to expand the Lockport facility.6 

Growth Potential 

One of the largest misconceptions of the hydropower industry is that any growth potential is 

"tapped out". In its new report issued in 2016 titled, Hydropower Vision: A New Chapter for 

America's I" Renewable Electricity Resource, the Department of Energy smashes that myth. 

The Vision analysis finds that U.S. hydropower could grow to nearly 150 GW by 2050. This 

would represent close to a 50 percent increase in capacity. 

The report identifies opportunities for 13 GW of new hydropower capacity by adding generating 

facilities to existing non-powered dams and canals, upgrades to existing hydropower facilities, 

and limited development of new stream reaches. It also finds the potential to add up to 36 GW of 

new pumped storage capacity. 

Looking to the benefits of this potential, the report finds $148 billion in cumulative economic 

investment. $58 billion in savings in avoided mortality, morbidity and economic damages from 

air pollution. Cumulative 30 trillion gallons of water withdrawals avoided for the electric power 

sector. 5,600,000,000 metric tons of C02 emissions reductions with $209 billion in avoided 

global damages. And over 195,000 hydropower-related gross jobs spread across the nation in 

2050.7 Those are quite substantial benefits for our country. 

Adding Generation to Non-powered Dams 

One ofthe prime areas of growth in the hydropower industry is on existing infrastructure, such 

as non-powered dams and conduits. Of the approximately 80,000 dams in the U.S. today only J. 

percent have electric generating facilities. Put another way, 97 percent of our dams do not 

produce power and were built for other purposes such as water supply, irrigation, navigation and 

recreation. 

NHA recognizes that not every existing dam may be a suitable candidate to add power 

generating equipment, as many factors come into play in development decisions: project 

development costs and revenue opportunities; energy generation potential; natural resource 

s Vision Chapter 2, Page 203-204. https://energv.gov/sites/prod/files/2016/l0/f33/Hydropower-Vision-Chapter-2-

10212016.pdf 

6 http://www.nypa.gov/Press/20 13/130322.pdf 

1 Hydropower Vision, Executive Summary P. 7 and 23. 

6 
69 


considerations; transmission needs; dam safety; etc. However, what this statistic shows is the 

large untapped universe of potential opportunities that exist- and that are not being developed in 

significant part because of the concerns about the uncertain, duplicative and lengthy regulatory 

process. 

Those dams that are candidates for hydropower development are infrastructure that will continue 

to exist, operate and release flows to meet water supply, irrigation, flood control, and other 

purposes for which they were originally constructed- regardless of whether hydropower 

facilities are installed. It is good public policy to take advantage of these existing releases to 

capture the energy currently untapped at these sites to add to our portfolio of renewable, carbonfree resources. 

The U.S. Department of Energy recognized this opportunity and in 2012, through the Oak Ridge 

National Laboratory, released an assessment of potential capacity at non-powered dams for 

projects greater than I MW. The map below on the following page depicts the size and location 

of the top projects of that survey with capacity greater than I MW.s 

Legend 

Potential Capacity (MW) 

o 1·30MW 

• 30·100MVV 

~~ 100-250MW 

41) 250-4S6MW 

s http://www.energy.gov/eere/water/hydropower-resource-assessment-and-characterization 

7 

N 

A 
70 


The results of the study show that over 12 GW of potential exist across the existing system with 

8 GW of potential available at the top 100 sites.9 Also of interest, 81 of the top 100 sites were 

located on federal facilities, in particular, Army Corps of Engineers dams.Jo 

These types of projects are some of the lowest impact new developments in the energy sector. 

No new dams need to be built and the projects aim to utilize existing flows through the projects. 

This water is already moving through the system, what better way to maximize the benefits of 

this infrastructure by also generating clean, renewable power with them. 

Capacity Additions/Efficiency Improvements at Existing Hydropower Infrastructure 

The potential for new conventional hydropower generation is not only about adding new 

capacity at non-powered dams. Existing hydropower facilities are also expanding through 

upgrades and efficiency improvements. 

In fact, since EPAct of2005 and the inclusion ofhydropower as an eligible technology in the 

production tax credit (PTC), over 150 projects have received certification. These projects have 

seen, on average, about a 9 percent gain in generation. 11 These projects represent a small 

fraction of the hydropower fleet, so there are even further gains to be had if more projects 

undertake these kinds of upgrades. And in many instances, the project realizes not only an 

increase in capacity or generation, but also an increase in environmental performance. 

NHA also notes from an infrastructure perspective that there is tremendous opportunity for reinvestment in the federal hydropower system. Almost half of the U.S. hydropower generation 

comes from the federal system, with the bulk owned and operated by the U.S. Army Corps of 

Engineers, the Bureau of Reclamation and the Tennessee Valley Authority. The median age for 

federal hydropower projects is 50 years.12 Turbine and other equipment refurbishments 

(including repairs, replacements and upgrades) are available and can improve the performance of 

these projects both from an energy and environmental perspective. 

Hydropower Pumped Storage 

Pumped storage is a modified use of conventional hydropower technology to store and manage 

electricity. As shown below, pumped storage projects store potential electricity by circulating 

water between an upper and lower reservoir.I3 

Electric energy is converted to potential energy and stored in the form of water at an upper 

elevation. Pumping the water uphill for temporary storage "recharges the water battery" and, 

92012 Non-Powered Dams Report, Executive Summary P.Vll and Vlll. 

10 2012 Non-Powered Dams Report, Executive Summary P.VIII. 

11 Federal Energy Regulatory Commission data. 

12 Hydropower Vision, Chapter 2, Page 147. 

13 Illustration provided by GE Renewable Energy. 

8 
71 


during periods of high electricity demand, the stored water is released back through the turbines 

and converted back to electricity like a conventional hydropower station. See illustration below. 

Pumped storage projects able to rapidly shift, store, and reuse energy generated until there is the 

corresponding system demand and for variable energy integration. This energy shifting can 

alleviate transmission congestion, which helps more efficiently manage the electric grid, and can 

reduce the need for costly new transmission projects, as well as to avoid potential interruptions to 

energy supply. 

As more intermittent generation is added to the grid, particularly in the West, the need for the 

services that pumped storage provides is increasing. As a result, we are seeing a significant 

renewed interest in these projects, including closed-loop project proposals.J4 As the map below 

shows, there are currently close to 15,000 MW of proposed new pumped storage projects before 

FERC with preliminary permits right now. 

"Closed loop pumped storage projects arc physically separated from existing river systems. They present minimal 

to no impact to existing river systems because after the initial filling of the reservoirs, the only additional water 

requirement is minimal operational make-up water required to offset evaporation or seepage losses. 

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Source FERCStaff,January 12,2017 

Again, NHA recognizes that not all of these projects may be developed, however, they clearly 

rebut the proposition that hydropower is a "tapped out" resource. 

Marine Energy and Hydrokinetics 

With more than 50 percent of the U.S. population living within 50 miles of coastlines, there is 

vast potential to provide clean, renewable electricity to communities and cities across the United 

States using marine and hydrokinetic (MHK) technologies. MHK technologies extract energy 

from waves, tides, ocean currents, rivers, streams, and ocean thermal gradients. Though still in 

its early stages of development as a whole, the MHK industry continues to move forward with 

new technological innovations, test site developments, and demonstration projects. Is DOE 

assessments have estimated that the total marine resource potential represents up to 25 percent of 

projected U.S. electricity generation requirements by 2050.16 

15 Photo below of technology demonstration of Columbia Power Technologies of Charlottesville, Virginia 

'' https://energy.gov/eere/water/marine-and-hvdrokinetic-resource-assessment-and-characterization 

10 
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Conduits 

Conduit projects utilize existing tunnels, canals, pipelines, aqueducts and other manmade 

structures that move water. These are fitted with electric generating equipment and are often 

small projects that are able to extract power from the water without the need for additional 

infrastructure or a reservoir. 

One of the prime opportunities in this sector is at Bureau of Reclamation infrastructure. In a 

recent study, Reclamation identified 373 potential sites with a capacity of 103 MW, enough to 

power 33,000 homes.I7 

In addition, as a result of the expedited review of non-federal conduit projects under the 

Hydropower Regulatory Efficiency Act of 2013, the Federal Energy Regulatory Commission 

(FERC) has approved dozens of small conduit projects across the country.IsJ9 
74 


Also, in 2013, legislation was passed focused on similar small conduit development at Bureau of 

Reclamation infrastructure and Reclamation has made changes to its lease of power privilege 

(LOPP) program. Reclamation continues to see increased interest in these project opportunities 

as well.2o 

New Stream-Reach Development 

Lastly, the DOE has also recently conducted a study of potential new greenfield projects. 

The assessment concluded that the technical resource potential is 85 GW of capacity. When 

federally protected lands-national parks, national wild and scenic rivers, and wilderness 

areas-are excluded, the potential is about 65 GW of capacity.21 Not all of these new 

hydropower opportunities are likely to move forward once site-specific considerations are taken 

into account. Site selection will be an important factor. Additionally, the industry and the DOE 

are investigating innovative new technologies and operational regimes to see where some of this 

potential can be realized, while also minimizing potential impact. 

Challenges for Hydropower and Policy Needs 

To begin, hydropower has the longest, most complex development time line (for project 

relicensing or new project approvals) of any of the renewable energy technologies, with some 

projects taking 10 years or longer from the start of the licensing process through construction to 

being placed-in-service. 

This process requires a considerable up-front financial commitment from the developer or asset 

owner to undertake the engineering and environmental studies required for various federal and 

state approvals. The chart below outlines the integrated licensing process or ILP, the default 

process, of several, for authorizing hydropower projects. 

20 https://www.usbr.gov/power/LOPP/index.html 

21 http://www.energy.gov/eere/water/downloads/new-stream-reach-hydropower-development-fact-sheet 

12 
75 


'Section 2.:11 of the Energy Policy Actcl2005 m pmk_ 

Integrated Licensing Process 

(Section 241 of the Energy Polley Act of 2005) 

A multitude of federal and state agencies, as well as the public and other stakeholders, play a 

major and important role in the process. And in the chart above, additional authorizations such as 

those required by federal dam owners if building on their infrastructure, are not included. These 

decisions and authorizations have tended to come at the end of the time line after the FERC 

issuance of the license. 

Water is a public resource and NHA and the industry recognize the necessity for and value of 

thorough review of project applications. However, redundancies and sequential reviews 

contained in the overall process are key reasons for delays. For example, for projects adding 

generating facilities to non-powered federal dams, FERC may issue a license, yet that project 

cannot commence construction until it has received additional approvals from the federal owner 

ofthe dam (Corps of Engineers or Bureau of Reclamation). Ifthere are unanticipated delays for 

those additional needed approvals, no work can commence. It is a similar case for state issuances 

of Clean Water Act Section 40 l water quality certifications. A license cannot be issued, nor 

work commenced, until the certificate is approved. 

NHA believes the time, cost and risks associated with licensing hydropower projects are not 

commensurate with the impacts, particularly when compared with other forms of generationconventional or renewable. As former NHA President John Suloway testified before Congress in 

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20 lS22, because of this, when faced with the choice ofwhattype of generation to install, there is 

less risk in choosing a simple cycle turbine or a combined cycle plant that burns natural gas or 

low-sulfur oil, than building a hydropower plant. 

While there is some variability with regard to size and location, the regulatory approval 

processes for simple cycle turbine or combined cycle plants are generally 1-2 years- even in 

urban areas like New York City. The FERC licensing process for hydro plants is generally 8 

years or more, including both licensing and pre-filing activities. With regard to licensing costs, a 

combined cycle plant is approximately $1 to $2 million; whereas, some studies alone can cost 

multiples of that figure for a hydropower project. It is not uncommon for a hydropower license 

applicant to spend $10 million or more on just the licensing process. 

And this is not just an issue for new project deployment, but also for existing projects that are 

undergoing relicensing. In fact, by 2030, approximately 400 projects, representing 18,000 MW 

of capacity, will be in or have gone through relicensing. NHA has already begun to hear from 

owners of smaller projects, particularly in the Northeast, but across the country, that the process 

costs for licensing may render projects uneconomic and result in the surrender oflicenses. As 

states continue to press for more clean and renewable energy resources, it would be unfortunate 

to lose the many benefits these existing hydropower projects provide. 

NHA believes that Congress and the Administration should seek to reduce uncertainties in the 

hydropower licensing and relicensing processes, eliminate unnecessary and/or duplicative studies 

or other requirements, create discipline in the schedule, and reduce the time for obtaining federal 

and state approvals. In doing so, policymakers would be recognizing the value of hydropower as 

a critical component in the nation's energy supply portfolio. In addition, NHA believes process 

improvements can maintain the substantive ability of federal and state regulators to appropriately 

protect, mitigate and enhance natural resources. 

Another issue that holds back hydropower is its limited recognition, or the complete lack thereof, 

as a renewable and/or clean energy resource under federal or state programs/environmental 

markets. State renewable portfolio standards provide one good example, and often contain 

restrictions on the amount of hydropower that is eligible. These include: project capacity 

limitations (30 MWs or less); placed-in-service restrictions (no eligibility for existing 

generation); resource and technology limitations (i.e. existing infrastructure; no new dams; 

capacity uprates or efficiency improvements only); explicit operational or impact criteria (run-ofriver; low-impact certified), among others. 

On the federal side, there are many recent examples of initiatives related to renewable energy 

development on public lands, federal renewable energy procurement policies, and governmentwide sustainability goals that either excluded hydropower as an eligible renewable technology, 

or qualified hydropower in a way that significantly reduces (or effectively eliminates) its ability 

to participate. 

22 https://energycommerce.house.gov/hearings-and-votes/hearings/discussion-drafts-addressing-hydropowerregulatory-modernization-and 

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For example, in 2015, Executive Order No. 13,693 utilized a definition of"renewable electric 

energy" that includes only new hydroelectric generation capacity achieved from increased 

efficiency or additions of new capacity at an existing hydroelectric project and yet excludes 

generation added to non-powered dams and others.2J Another example is the 2012 U.S. Army 

Corps of Engineers proposal for "Large Scale Renewable Energy Production for Federal 

Installations", which completely excluded hydropower as an eligible resource. And also, the 

EPA's Green Power Partnership Program significantly limits the definition of qualifying 

hydropower. When hydropower is not included and recognized as a renewable resource on par 

with other resources like wind and solar, it creates a distinct economic and market disadvantage 

for the industry participants (existing asset owners and developers alike). 

This disadvantage is no more clearly illustrated than in the context of the extension of the 

renewable energy tax incentives (Section 45 production tax credit (PTC) and Section 48 

investment tax credit (lTC)). The PATH Act of2015 created a competitive imbalance between 

incentives for wind and solar and other renewables, including hydropower. While the PTC and 

lTC for hydropower, MHK, and other technologies was extended through the end of2016 (now 

lapsed), the credits for electricity produced from wind and solar facilities was extended for years 

longer. This on top of the fact that the hydropower industry, only receives, and has only ever 

received, half-credit under the PTC since becoming eligible years after the program was created 

for the wind industry. 

As hydropower projects continue to compete for investment dollars, the policies adopted at the 

end of 2015 tipped the scales against investment in hydropower, putting the industry at a distinct 

disadvantage- a disadvantage that is magnified when you include the RPS policy treatment 

other renewable resources have as described above. NHA is working to fix this inequity to allow 

hydropower resources to better compete in the marketplace without the thumb on the scale tipped 

in favor of other renewable resources in the tax arena. 

Lastly, on the federal policy front, NHA highlights investment in R&D for technology 

innovation. The DOE Water Power program, which represents the single largest source of 

renewable electricity in the United States today, still remains one of the smallest of the Office of 

Energy Efficiency and Renewable Energy (EERE), particularly when compared to the funding 

levels for other EERE programs. 

The graph that follows charts the funding levels for the EERE programs from FY 2008 through 

the Administration's FY 2017 funding request, including American Recovery and Reinvestment 

Act of2009 (ARRA). 

''Fixing America's Surface Transportation Act (Pub. L. No. 114-94) Executive Order No. 13,693, Planning for 

Federal Sustainability in the Next Decade (2015) 

15 
78 


Hydropower I Marine Energy Compared to Other REPrograms 

Funding FY 2008 - FY 2017 

Jill Si~nergy 11 Geothermal tw Hydrogen 11- Hydropower l@ Marine Energy ill Solar 11 Wind 

The next graph below presents the same information, but more shows the trend lines 

through time for each individual renewable energy technology program. 

250 

""' 

lSil 

!00 

50 

Hydropower I Marine Energy Compared to Other RE Programs 

Funding FY 2008 • FY 2017 

FY10~4 FY201S f¥2CH6 

-Bioenergy -Geothermal %"""Hydrogen -Hydropower -~Marine Energy """'"'Solar -wind 

NHA appreciates and is encouraged by the growing investments by Congress in the DOE's 

Water Power program activities in recent years. However, as these charts clearly indicate, the 

16 
79 


level is still substantially below that afforded other EERE programs, with the hydropower 

program receiving the least funding, followed by the MHK program receiving the next lowest 

level of funding. One of the factors for the tremendous growth in other renewables over the last 

several years is the sustained investment shown by the federal government in technology R&D 

and market acceleration initiatives in these sectors. 

One final policy area that NHA would like to raise is that of regional electricity/power markets. 

Similar to what was discussed above on the state and federal energy policy front, oftentimes the 

various grid benefits both hydropower and pumped storage projects provide are not valued or 

compensated in our existing electricity markets. NHA, in 2015, filed comments with FERC on 

this issue that we believe are useful in this discussion and highlight the need to re-examine 

policies in order to promote hydropower deployment.24 

In its filing, NHA notes: 

"While energy storage projects are eligible to participate in some markets, there are 

several attributes of energy storage and specifically pumped storage units that are not 

currently addressed by these tariffs. Pumped-storage plants can offer significantly more 

benefits to the electric system than those commonly recognized by ISOs and included in 

the comments previously received by the ISO commenters. Specifically pumped storage 

plants can offer real time system inertia [see FERC 755 reference to flywheel effect], 

generator droop setting that can respond to system conditions instantaneously, and 

Automatic Voltage Regulation Control (AVR) that can adjust rotor field strength in real 

time. All three of these services can be provided by traditional hydropower generators as 

well and pumped storage plants. These three services are critical services that allow 

instantaneous response to grid conditions that keep the voltage and frequency stable as 

other services like AGC respond in the ultrafast 1-4 second time frame. Markets are not 

currently available to compensate for these services. 

Additionally, energy storage devices are able to provide grid services that offset the need 

for new transmission and or distribution infrastructure. Under the current regulatory 

environment, energy storage plants are classified as a generation resource and are not 

currently eligible for to get a transmission rate of return for these services." 

Conclusion 

Both the existing system and new hydropower projects have a critical role to play in meeting our 

nation's energy, environment, and economic development objectives and much is at stake for 

hydropower and the families, businesses and communities that rely on its low-cost, reliable, 

renewable generation. 

24 See: Electric Storage Participation in Regions with Organized Wholesale Electric Markets, FERC Docket No. 

AD16-20-000 

17 
80 


NHA and the hydropower industry stand ready to help meet our common clean energy goals and 

we look forward to working further with Congress and the Administration to find pathways to 

address the important policy issues federal, regional and state- to fully maximize and unlock 

the potential of the hydropower resource. 

As the Congress works to address our energy and infrastructure needs, whether that be on a new 

national infrastructure program or further work on an energy bill, policies that support the 

preservation of the existing hydropower system and promote the deployment of new projects (for 

all categories of water power technologies) must be included. A greater recognition that our 

hydropower infrastructure is incredibly valuable is needed, and continued investment and reinvestment in the system is critical to our energy future and national security. 

18 
81 

Mr. UPTON. Well, thank you all. Thank you all for your testimony. 

I want to start off my 5 minutes. We are each going to do 5 minutes of questions, and bounce back and forth. 

Ms. Swaminathan—I don’t quite have that right, but I am trying—you referenced the 2-year process, the 2-year pilot program. 

And, of course, that was actually legislation that one of our colleagues, Mrs. McMorris Rodgers, on this committee introduced. It 

has worked, I think. Would you like to see it made permanent? 

Maybe have each of you comment on that. 

Ms. SWAMINATHAN. Absolutely. And, yes, I think it is our belief 

that the process worked very successfully, and we would like to see 

it adopted to a more broadly applicable set of projects, still with 

certain criteria that would separate them for projects that legitimately should be analyzed over a longer period of time. 

Mr. UPTON. Right. And when you talk about the average is 10 

to 13 years to get a project from start to finish, that includes the 

2-year pilot project, right? 

Ms. SWAMINATHAN. No. So our experience has been that FERC 

licensing typically takes 5 to 6 years. So when I say 10 to 13 years, 

I am including our average, not our exceptional 2-year licensing experience. 

Mr. UPTON. You also talked about the NEPA changes that would 

be helpful. Have you found in your seven States that you are working on that the Corps of Engineers is sort of interested—I have a 

meeting with my Corps of Engineers later this afternoon in Michigan—have you found that the Corps of Engineers has been particularly helpful in working with FERC as relates to relicensing dam 

applications? 

Ms. SWAMINATHAN. Right. So our experience is in licensing new 

projects. And the Corps and the FERC have recently entered into 

an MOU, which is a step in the direction of constructive engagement. We welcome that. 

However, from our perspective, the combined Federal permitting 

process is still not right-sized, even accounting for legislative and 

administrative changes such as the MOU, and the water quality 

standard in particular is a particular point of pressure for hydro 

developers on new dams. 

Mr. UPTON. Mr. Steindorf, do you have a comment? 

Mr. STEINDORF. Yes. So one thing that is interesting about this, 

if they are reviewing the 2-year process, it also seems to me that, 

what I have heard from a number of developers, is the big challenge here is actually hooking their projects up to the grid. There 

is a pump storage project in California from Sacramento Municipal 

Utility District, they had an approved pump storage project that 

they were ready to build, but our understanding in talking to 

SMUD was that it was the $100 million price tag of hooking that 

project up to existing transmission. 

So some type of process whereby those hookup charges are consistent across utilities would be a great place to start, because in 

our discussions with developers, that is probably the biggest impediment to bringing those projects online. 

Mr. UPTON. Wow. 

Mr. Hookham. 

82 

Mr. HOOKHAM. To counter that concept, we develop a lot of 

projects nationally, and infrastructure like transmission is important. We factor it in every decision we make. 

To reiterate some comments that were made earlier as well, we 

are doing duplicative permitting. And simply, we can’t afford to be 

out there 8, 10 years permitting projects. That just can’t happen. 

I can build a gas plant probably in 3, 4 years tops. 

Mr. UPTON. Two. 

Mr. HOOKHAM. So I am competing with this. 

And from a rate point of view, we have to keep our rates low, 

this is really critical, or it is just not going to fly. Then I have to 

marry that up against regulatory pressures that are involved with 

all of our decisionmaking these days. 

So it is really a tough process that we really want to look at permitting to make sure it is in the right light and we are protecting 

the human life, we are protecting our aquatic life, but we are also 

moving forward in doing renewable technologies that make sense. 

Mr. UPTON. And the renewable issue is something that is important to both sides of the aisle. 

Mr. Connolly, you cited in your testimony the competitive rates 

that you have got to have, particularly with natural gas. So in your 

view, I would imagine making this 2-year pilot project permanent 

would be a good thing. 

Mr. CONNOLLY. Well, for Bonneville, we are not subject to the 

same licensing process that my comrades here are. 

I would say on the transmission piece, we do interconnect and 

provide transmission service to folks in our service territory, and 

there are well-established processes for folks to get in queue and 

line up for that and understand what their costs and impacts will 

be. 

Mr. UPTON. Thank you. 

I will yield to the acting ranking member of the subcommittee, 

Mr. Peters. 

Mr. PETERS. Thank you, Mr. Chairman. 

Ms. Swaminathan, I wanted to follow up on this 2-year process. 

First of all, you described limiting projects that qualify for the expedited treatment to objective predetermined set of criteria applicable to a large number of projects in the pilot solicitation. So what 

kind of projects didn’t meet the criteria that you think we should 

expand to have this 2-year process cover? 

Ms. SWAMINATHAN. In particular, the pilot project solicitation included a requirement that there be a letter from the dam owner 

saying that the project was feasible, and there were a number of 

dam owners, including Federal dam owners, who did not want to 

provide such a letter so early in the process. 

So our view is that the kind of criteria, objective criteria that 

could be applied that would be useful in limiting the projects to appropriate ones and yet opening them to a nationally significant 

number would be criteria such as projects on existing dams, no 

change in storage, no material change in hydraulic regimes, that 

all studies should be able to be performed in one season, and that 

it be accompanied by some off-ramps, because sometimes it does 

happen that you start a project and something unexpected is either 

found or experienced in the process of studying the project. 

83 

Mr. PETERS. Is feasibility generally an objective determination? 

Ms. SWAMINATHAN. I think there was some uncertainty about the 

intent behind the word ‘‘feasibility.’’ 

Mr. PETERS. You mentioned also that NEPA is triggered by a 

water quality issue. Can you explain that to me, a second NEPA 

process? 

Ms. SWAMINATHAN. Yes, absolutely. 

So the developer, when you are developing a new hydro project, 

first goes through the FERC licensing process, by which FERC 

staff applies NEPA, and there is a water quality element to that 

analysis. In addition to the FERC’s analysis, the developer is also 

simultaneously going through a State 401 water quality certification, without which the license cannot be granted. 

Subsequent to that, the developer will have to apply for a 404 

permit, which is for dredge and fill activities, and that triggers 

NEPA again, this time by the Army Corps. 

Mr. PETERS. But we could require that the previous document 

cover—or studies cover the 404 permit. 

Ms. SWAMINATHAN. I think there are a number of ways to get at 

the same result. From a developer’s perspective, the issue is the 

duplication and the potentially different result you get from a second process. 

Mr. PETERS. Different participants, different commenters, yes. 

Ms. SWAMINATHAN. Potentially different studies being required, 

and therefore more money, more time, and more uncertainty. 

From a developer’s perspective, when you are leveraging private 

capital, a short, certain process is best; a long and certain process 

is financeable; a long and uncertain process is really not attractive. 

Mr. PETERS. I have a sense that Mr. Steindorf is on to something 

when he says get everyone in at the same time and conduct an upfront assessment of what the issues are. You are suggesting that 

the FERC process could be condensed to 2 years. Is there any way 

you could see that the entire process for the Army Corps could also 

be concurrent to that, or does that have to follow? 

Ms. SWAMINATHAN. I think the primary barrier to concurrent 

processes at the FERC and the Army Corps is a commercial barrier, which is that typically the Army Corps analysis happens at 

a higher level of engineering design, at 60 percent and 90 percent, 

which in the case of a hydro project is extremely expensive. Licensing is expensive, but final design, which includes the ordering of 

equipment, major equipment, and final engineering design, is even 

more expensive. 

So, typically, an investor will want to have the certainty of knowing that a FERC license is either attainable or has been attained 

before committing to invest to get to the 60 percent design or 90 

percent design mark. 

Mr. PETERS. So you have given us some important testimony, all 

of you, with respect to the obstacles to developing new hydro, and 

those of us who would like to see more clean power should take 

this as a challenge. And it is bad news for us if a gas plant can 

be comparably permitted in a 2-year period and we are looking at 

this being 10 years, the power that we want is at a disadvantage. 

So I would like to—I am not going to be able to do it in my 5 

minutes—but I would like to work with you all to see what we can 

84 

do to achieve high standards in regulation to make sure that we 

cover the issues like the ones that Mr. Steindorf raised with respect to resources, but that we get these decisions made quickly. 

And that will also help attract more private capital to these 

projects as well. So consider me on that team, and I will look forward to working with you. Thank you very much for you being here 

today. 

And, Mr. Chairman, I will yield back. 

Mr. UPTON. Thank you. 

The Chair will recognize Mr. Long for 5 minutes. 

Mr. LONG. Thank you, Mr. Chairman. 

And, Ms. Swaminathan, you mentioned earlier that there are 

87,000 dams in the United States, but only—or I think your number was 80,000—but only 3 percent of the dams are fitted to generate hydroelectric power. I have a couple in my district. 

On the 2016 report from the Department of Energy, they recommended that we look at utilizing these nonpower dams for hydropower generation, which sounds like what you do. What are 

some of the challenges to this approach? Is it technology driven, is 

it cost, is it licensing process? What are your challenges? 

Ms. SWAMINATHAN. Thank you for asking that question. It is very 

important. 

I think we approach it from the perspective of how do we attract 

capital to the field of developing new hydropower in existing dams. 

And from an investor’s perspective, as a number of participants 

have said today, the choices effectively disfavor hydropower, and it 

is because of a variety of things when you look at the entire playing field. It is partly because of the FERC licensing process, it is 

partly because of the Army Corps and the duplicative action of 

NEPA, which lends itself to a combined Federal permitting cycle 

that is difficult and uncertain in terms of its financial challenges. 

And then the last part of what I wanted to leave you with was 

the substantive point I made at the end, which is the recognition 

of the public-private partnership, where there is a benefit being 

added to Federal infrastructure that could be recognized and supported by the Federal Government. 

Mr. LONG. OK. Thank you. 

And Mr. Hookham, could you discuss the complexity of the licensing and relicensing process for hydropower dams, and how long 

does the process take? 

Mr. HOOKHAM. Yes. It is really dependent on lots of factors. If 

it is a high hazard dam and it is in an area that needs to be revisited in a more detailed fashion, it may take longer. And if there 

is more interest in a particular habitat, like if we find something 

that is living in the reservoir upstream that is a protected species, 

it may take a different strategy. 

Effectively, we have repermitted our hydros as a group, and it 

was more effective for us to do this in a singular step, but it still 

took a long time, and it is a difficult process. 

I don’t have a definitive timeline for you. I will say that since we 

have a built asset that is existing, generating electricity, it only 

makes sense for us to try to preserve it if we can. It is an economical decision, it makes sense to us. It is an existing resource that 

85 

is renewable. So we look at that very strongly against other alternatives. 

At the same time, we are very market driven, and so if that cost 

to relicense that dam is just not effective, or if there is a sustainability issue, if there is an environmental impact that we don’t like, 

we are going to turn our heads and go a different direction. 

It is a simple investment decision. If it is more certain and more 

schedule certain to build something different, we will build it. And 

if it is better for our ratepayers and better for our citizens in Michigan or wherever we are building, that makes a lot of sense. 

Mr. LONG. This question I can ask of either of you, Ms. 

Swaminathan or Mr. Hookham. The American Society of Civil Engineers’ 2017 Infrastructure Report Card notes that many dam 

owners, especially private dam owners, find it difficult to finance 

rehabilitation projects, as you were talking a minute ago. Could 

you discuss how the Federal grant program can be utilized to address dam deficiencies? And that is d-a-m on dam deficiencies. 

Mr. HOOKHAM. So, probably the simple answer is, because we are 

a private investor looking at investing in building hydropower at 

that dam, we can come in and revisit all the maintenance needs, 

its age, its risks, its perspectives, and invest. When we build the 

hydropower, typically we will work with that private owner. 

Whether it is a Corps dam or Bureau of Reclamation, whatever it 

is, if we are building infrastructure at that dam, we can reconstitute it effectively back up to today’s standards. 

It is a strong benefit for everybody. Everybody wins in that scenario, the risks are reduced, the people that live downstream will 

have higher confidence that that infrastructure will last longer, 

and everybody, theoretically, even the ratepayers win, because it is 

a cost-effective addition. 

Ms. SWAMINATHAN. I agree with that. 

Mr. LONG. You are OK with that? 

The report also states that innovative approaches to risk management have the potential for seeing the cost of rehabilitation go 

down. Could either of you expand on what these approaches are 

and the extent to which they could lower rehabilitation costs? 

Tag. You are it. 

Ms. SWAMINATHAN. I am not a dam safety expert. 

Mr. HOOKHAM. Yes. So dam safety, emergency action planning, 

all those things are benefited by that process. And so investments 

through grants and things of that nature—— 

Mr. LONG. OK. And, Ms. Swaminathan, how many of these have 

you done where you convert them to hydropower? 

Ms. SWAMINATHAN. We are pursuing 23 projects. 

Mr. LONG. Twenty-three. And, again, 80,000 to 87,000, depending 

on who is counting, dams, only 3 percent now are fitted to generate 

hydropower power. 

Ms. SWAMINATHAN. Yes. 

Mr. LONG. And you are doing how many again? 

Ms. SWAMINATHAN. Twenty-three. 

Mr. LONG. What is the world out there? How many do you think 

could be converted? 

Ms. SWAMINATHAN. Even discounting half of the 80,000 to 

87,000, that is essentially an unbounded supply set. 

86 

Mr. LONG. Isn’t it extremely difficult to go in and take a dam 

that is not—wasn’t hydropower in the first place? Is that what we 

are talking about? 

Ms. SWAMINATHAN. Yes. So, a nonpower dam that was built for 

another essential purpose, navigation, drinking water. 

Mr. LONG. Right, yes, but you think half of them could. 

Ms. SWAMINATHAN. We haven’t looked in the detail to support 

that, but, you know, I think there—— 

Mr. LONG. I know, but—— 

Ms. SWAMINATHAN [continuing]. Is a significant universe of—— 

Mr. LONG. This is Washington. We are doing ballpark guesses 

here. 

Ms. SWAMINATHAN. Yes. 

Mr. LONG. OK. OK. If I had any time, I would yield it back, but 

I don’t. 

Mr. MURPHY [presiding]. Thank you. I recognize Mr. Pallone for 

5 minutes. 

Mr. PALLONE. Thank you, Mr. Chairman. 

Based on what I have heard from our witnesses today, it seems 

that many of us can agree that there is room for improvement in 

the hydropower relicensing process. The licensing landscape has 

drastically changed in the time since many of our Nation’s hydropower dams were first constructed, and landmark environmental 

laws have since been passed altering the framework by which these 

projects are licensed. 

I don’t want to see this process drag out unnecessarily, but I do 

feel that there are important natural resource considerations that 

must be reviewed and adequately satisfied before a dam is given 

the stamp of approval to operate for another several decades. And 

one of my main concerns during the licensing and relicensing process is ensuring appropriate consultation with Native American 

Tribes. Hydropower dams have a legacy of great impact on tribal 

communities, and it is critical that Tribes have a voice in the licensing and relicensing process. 

So, Mr. Steindorf, I wanted to issue a couple questions. You discussed a proposal to grant Tribes conditioning authority whereby 

Tribes themselves would protect their resources rather than the 

Department of Interior. I understand this model is used under the 

Clean Water Act. Can you give us more detail about how it would 

work and why it would speed up the relicensing process? 

Mr. STEINDORF. Well, in our opinion, we think that Tribes having 

direct knowledge about the lands that they have out there, they 

can provide an important voice within the relicensing process. And 

it really only makes sense to give them the same statutory authority that other agencies have, given their particular knowledge and 

interest in those lands. 

Mr. PALLONE. Right. And then you—well, let me mention this. 

The integrated licensing process, or ILP, was created by FERC as 

a reform to address problems resulting from lack of communication 

and coordination amongst various State, Federal, and Tribal organizations involved in the licensing and relicensing process. However, my understanding is that most licenses, as many as 90 percent, according to FERC, continue to choose the traditional license 

process. 

87 

So, in your opinion, why hasn’t the creation of this process, the 

ILP, been more successful? Why have licensees continued to prefer 

the traditional process? What can be done to improve the ILP? 

Mr. STEINDORF. I can’t really speak to the reasons why licensees 

are choosing to use the traditional licensing process. That would be 

a question for them. I do think that the ILP has offered significant 

improvements in the licensing process by setting a set schedule 

that all the stakeholders know when their homework is due and 

how they have to get it done. 

But let’s be clear about licensing and why it takes a while. A 

project that I recently completed covered an area 30 percent larger 

than the State of Rhode Island. These are huge projects covering 

multiple stream reaches, multiple dams. Getting the information 

that you need necessary to evaluate what should happen in each 

of those individual stream reaches takes a significant amount of 

time. It is important to get it right. And the idea that we are somehow not using our time effectively is simply not accurate. 

I also think that I would like to reiterate some things that were 

said up here about other projects, particularly Corps projects. 

We support, as our other witnesses did, having the Corps deal 

with their own process and really getting FERC out of that jurisdiction. Ann Miles also said that from FERC last year in her testimony, and that is certainly something that we support. 

And the last thing is I think we do need to look at power production, particularly renewable power production as a whole and how 

hydro fits into that. Last year alone—or, I just read a report yesterday—wind power this last year surpassed hydropower in terms of 

its total installed capacity. In the last 6 months of last year, more 

wind and solar was brought online than what the DOE Hydro Vision report said is potentially capable of coming online by 2050. 

So let’s put the additional hydropower development perspective 

in line with what is actually coming online and being permitted. 

And that is happening largely because those projects can be done 

with lower impacts than what we are looking at with most hydro 

operations. 

Mr. PALLONE. All right. Ms. Swaminathan, did you want to comment on any of this with regard to Native Americans or this ILP 

process? 

Ms. SWAMINATHAN. Well, what I can say is that for our projects 

we have chosen the traditional licensing process. All our projects 

are original licenses, meaning they are not relicensings, they are 

for new projects on existing dams. And our choice of the traditional 

licensing process reflects the fact that they were generally and 

broadly acknowledged to have mitigable impacts and generally low 

controversy, which is one of the criteria for choosing the TLP. 

Mr. PALLONE. I see. All right. Well thank you. It certainly 

sounds, Mr. Chairman, like there are ways we can increase collaboration. And I would like to talk to the Republicans more about 

that. So thank you all. 

I yield back. 

Mr. MURPHY. Thank you. I now recognize the gentleman from 

Ohio, Mr. Johnson, for 5 minutes. 

Mr. JOHNSON. Thank you, Mr. Chairman. And thanks for this 

hearing, a really important hearing. 

88 

And let me start with Mr. Hookham and Ms. Swaminathan. You 

know, the Federal Power Act allows FERC to issue a preliminary 

permit to maintain priority of an application for a license. The preliminary permit does not allow construction, but it allows the applicant to study the site as they prepare to apply for their license. 

While FERC has some discretion to grant extensions for applicants 

acting in good faith to obtain the necessary permits and commence 

construction of a hydropower project, Congress often has to step in 

and waive the strict Federal Power Act time limits. In fact, there 

were nine separate hydropower extension bills that were included 

in the energy conference last Congress. Unfortunately, these bills 

were never signed into law. 

So my question to both of you, and you can choose who goes in 

what order, should Congress amend the Federal Power Act to give 

FERC more discretion to extend the period of preliminary permits 

and time limits for construction of a project so they don’t have to 

come back for congressional approval? 

Ms. SWAMINATHAN. I think the incidence of projects and developers needing additional extensions is actually supportive of the 

overall point that we are making, which is that looking at any particular point in this process as being the problem is probably not 

going to solely result in more investment in hydropower. It is because there are multiple pain points for a developer along the way. 

So somebody gets through the rather extensive FERC process, 

but then there are still challenges to face through the Army Corps 

process, and then ultimately in the commercialization of the 

project. And without knowing the circumstances of the specific 

projects that are asking for extension, I would surmise that one of 

the reasons, one of the common reasons that further extensions are 

needed is because the subsequent parts of the process are not falling into place with ease. Because when you look at the overall process, we are not caught in a virtuous cycle. 

As to the specifics of modification of the Federal Power Act, we 

would have to study that. I don’t have a position on it at the moment. But I think it supports the underlying problem which ripples 

through the entire process of developing hydropower. 

Mr. JOHNSON. Well, let me rephrase it then. I mean disregard 

the modifying the Federal Power Act. If Congress didn’t have to 

come back and approve the extensions, things would move a lot 

faster, wouldn’t they? Especially if you reach a time limit and you 

wind up in a partisan situation like we so often see here in the 

Capitol where you can’t get the legislation through and signed into 

law. Then it might be a problem. 

Mr. Hookham, do you have an opinion? 

Mr. HOOKHAM. Yes. I think maybe just to add to that, I have 

heard other people mention this too, having precise understanding 

going into a project, which the preliminary permitting lets us do, 

lets us screen out projects that don’t make sense. And it will help 

us make a decision that will help shorten the timeline. 

We really need to focus on the timeline from the time we think 

a project is real to the time it can get permitted to have clarity, 

because that uncertainty is impossible to finance, it is impossible 

to really put the resources together to make a project like that 

work. 

89 

Mr. JOHNSON. OK. Along the same lines, FERC is generally OK 

with congressional approval to relicense a hydro project that did 

not begin construction within FERC’s specified construction time, 

assuming that the congressional relicensing occurs within 10 years 

of the original license issued by FERC. So a follow-on question. In 

your opinion, should FERC or Congress allow that 10-year window 

to be extended? And why or why not? 

Ms. SWAMINATHAN. I would answer it by saying anything that allows private capital to not perceive a cliff coming, and that essentially is the problem, which is that you might have a project which 

gets through its licensing, still has some fairly sticky permitting to 

go through with the Army Corps or other processes, and as the 

begin-construction-window end comes closer and closer, that project 

becomes more and more difficult to finance even though there may 

be nothing particularly wrong with it. But from a capital perspective, that itself becomes a constraint. 

Mr. JOHNSON. I get it. And my time is about to expire. So let me 

just say this and see if you agree, and it is a short answer. Really 

what we need is efficiency in the entire front end of the project. 

The 10-year window would be less of an issue if we had efficiency 

in the permitting and the development up front. 

Ms. SWAMINATHAN. Yes. 

Mr. JOHNSON. Thank you. I yield back. 

Mr. MURPHY. The gentleman’s time has expired. 

Now Mr. Tonko, you are recognized for 5 minutes. 

Mr. TONKO. Thank you, Mr. Chair. And welcome to our panelists. 

I believe we all want to see more emission-free base load energy 

generation added to our mix, especially if it complements intermittent resources. But it must be done in a way that is also respectful 

of other resources, ecological and recreational. 

So Mr. Hookham, your testimony states active hydroelectric 

plants have a median age over 55 years old. It seems that there 

is a great opportunity to upgrade performance of existing hydro 

generation. Since the construction of many of these sites decades 

ago, what types of advancements in technology have been developed to most improve efficiency? 

Mr. HOOKHAM. So Consumers Energy is in the process of relicensing and repermitting and investing in Ludington, which is a 

huge asset to this country. It is a 1,900-megawatt plant that is 

going to over 2,000 megawatts of pumped storage, which gives us 

that energy and storage capacity. 

The efficiencies we are getting are basically to push the limits of 

how much water we can fit through the turbine section to generate 

electricity. There are thermal limits and mechanical limits that we 

are up against. But we have worked with the OEMs, and we are 

working with OEMS virtually every time we relicense a dam to see 

if we can get more out of that hydro engine. 

Mr. TONKO. And what is the process for putting the newest technologies on these old sites? 

Mr. HOOKHAM. It really varies. And we try to work with the 

original OEM, if they are still in business, to see what technologies 

they brought to the table, using different materials like permanent 

magnets or different seal materials that can allow more efficient 

generation. But we will work with whoever. 

90 

Mr. TONKO. And is there anyone estimating how much capacity 

could be added by upgrading and retrofitting these older sites? 

Mr. HOOKHAM. So there is always a transmission limit that we 

have to worry about. But generally speaking, if we can generate 

more electricity efficiently out of a specific site, we will do that. 

Mr. TONKO. And what are the regulatory challenges to doing 

these upgrades? 

Mr. HOOKHAM. So I mentioned it earlier. It is an economic challenge for the most part, where if we invested a dollar today in a 

new hydro addition or a retrofitted hydropower plant, is that worth 

spending that dollar for our ratepayers and our shareholders 

versus spending that dollar on something else? We have to weigh 

that every time. 

Mr. TONKO. Are there sufficient incentives in place to make these 

investments economically worthwhile? 

Mr. HOOKHAM. It is a long answer, unfortunately, but yes. 

Mr. TONKO. OK. 

And Mr. Steindorf, generally speaking, do retrofits have a smaller environmental impact than new constructions? 

Mr. STEINDORF. We typically support retrofits on existing 

projects, certainly as opposed to building new ones. 

I personally have been involved in a number of retrofits on some 

existing licenses that I have worked on. And we have worked with 

various utilities, including Pacific Gas and Electric Company and 

others, to not only see that those projects get retrofitted, but also 

to see that they are eligible for a renewable energy credit. 

Mr. TONKO. Thank you. 

And Ms. Swaminathan, when you put power generation on an 

Army Corps dam, what responsibilities do you inherit? In other 

words, do you pay, for instance, for dam inspections or maintenance? What are some of those responsibilities? 

Ms. SWAMINATHAN. So the Army Corps maintains responsibility 

for dam safety, and they have a fairly developed program. We of 

course participate in that program and are subject to all its conditions. 

The developer typically will take maintenance responsibility for 

the portion of the dam that is the new construction up to the point 

of tie-in. Maintenance responsibility including for erosion, sedimentation control on the abutment side that adjoins the new construction. A lot of debris and trash handling is handled through the 

hydro project and its trash racks and debris handling mechanisms. 

And, of course, there are upgrades to existing facilities or potentially new facilities, typically recreation, that are associated with 

projects. 

The last point I will make is the applicant or the developer also 

typically will provide electricity to the dam facility itself. 

Mr. TONKO. OK. And I take it that partnership works rather 

well? 

Ms. SWAMINATHAN. Yes. 

Mr. TONKO. Great. 

And for the 2-year licensing process to work as intended, how important was it to provide all the necessary info and study requests 

at the beginning of the process? 

91 

Ms. SWAMINATHAN. It is important for all sides to have a clear 

understanding of what both is needed, the characteristics of the existing condition, the characteristics of the proposed condition, and 

to adhere to timelines that are clear to all involved. So we would 

be supportive of a process that included all that. 

Mr. TONKO. OK. 

Mr. Chair, I will yield back. 

Mr. MURPHY. Thank you. The gentleman yields back. 

And I will recognize myself for 5 minutes. 

So I wanted to ask you about your project because you have one 

near my district. In Charleroi, Pennsylvania, a lock and dam is 

being rebuilt. These dams are over a century old. As I watch it 

being rebuilt early on, we would note that the lock was so old that 

when water went in and out the concrete shifted a little bit. So it 

is much more stable. 

And so Rye Development is developing this conventional hydropower plant in Monongahela Lock & Dam number four in North 

Charleroi, Washington County. I was just reading over some of the 

list of permitting. It is pretty massive, as it should be. This is a 

big project. 

But I am curious here, the timeline for hydropower licensing, 

how does that compare to acquiring permits for example for other 

renewable energy projects like wind and solar? And what benefits 

does hydropower have to offer that may be complementary to other 

renewable energy resources? 

Ms. SWAMINATHAN. That is an important question. 

So, relative to other renewable resources, and even relative to 

other fossil resources, hydropower generation’s permitting cycle is 

almost unmatched. So you can put up a solar project in 9 to 12 

months, a wind project in maybe 2 to 3 years, a gas plant in probably a similar timeline, 2 to 3 years. And a combined permitting 

process for non-Federal hydropower on Federal facilities is close to 

10 years. It is between 8 and 10 years. So that disparity in 

timelines effectively discourages investment into non-Federal hydropower development. 

And to answer the second part of your question, the importance 

of hydropower, certainly it is a clean, renewable form of generation, 

it has associated job creation and associated economic impact. And 

we talked about public-private partnerships and the potential for 

these projects to bring benefits to the dam owner. 

But in addition to that, and I believe a number of parties here 

have spoken about it today, hydropower adds a significant amount 

of reliability and stability to the grid, which actually also benefits 

intermittent sources of power such as wind and solar. And that 

needs to be recognized. 

Mr. MURPHY. Let me read over some of these things with this 

permitting process. I am reading here from the Pennsylvania bulletin alone, is that we are dealing with ‘‘discharge permits, erosion 

and sediment control permits, water obstruction encroachment permits, submerged land license agreements, water resources planning 

and registration, limited power permits, water quality monitoring, 

preparedness prevention and contingency plans, operations inspections, transfer projects, correspondence’’—they even tell you who 

you have to write to. Quite a few things there with that. And you 

92 

said in your testimony that there are redundancies—that was just 

some of the State ones, too—between the processes that happen 

with FERC, Army Corps of Engineers permitting. And you suggested NEPA should only be applied once during the construction. 

So can you get at some details of this as to how, on an Army 

Corps of Engineers-owned dam, how would that Federal permitting 

process benefit with less duplication? 

Ms. SWAMINATHAN. I think it could be streamlined and increase 

coordination among all the participants. It would certainly benefit 

the overall timeline and bring investors to the table to invest in 

this sector. But I think it also would benefit some of the stakeholders who are going through some of the these duplicative processes and going through multiple permitting processes for the same 

project in having to review, comment, and provide studies and 

study requests multiple times along the process. 

Mr. MURPHY. It is fascinating to me because through that lock 

and dam passes millions of tons of coal. There is a barge manufacturing company just upriver that sends barges downriver. We have 

natural gas. And so the supplies for fracking go through there, so 

it is really quite an energy hub. 

Do any of the panelists—perhaps I will let you speak on this— 

but, given that many American dams have exceeded their design 

life, where do you see modernization fitting in with regard to the 

President’s plan and discussing infrastructure development and the 

private sector? Anybody want to comment on that? 

Mr. Steindorf, go ahead. 

Mr. STEINDORF. Again, I think it is really important to recognize 

the importance that we have seen with hydropower, which is its 

grid-regulating capability. So, increasingly, we are in a situation 

where, believe it or not, we are awash in electrons out there. Curtailment of wind and solar projects in California is becoming a reality. And those developments, again, are happening across the 

United States, with Texas and Oklahoma leading the way in wind, 

and places like California leading the way in solar. 

It is not a question of enough energy out there, it is how do we 

regulate the grid. So really specifying and using hydro to its highest potential, rather than really specifying that we want to have 

more base load generation, I don’t think that is what we actually 

need at this point. 

Mr. MURPHY. I know many in that area who think the EPA’s regulations, they shut down two power plants within a few miles of 

this one being proposed down there. Put a lot of people out of work. 

But you are right, we need to find out how we modernize the grid 

and be more efficient with that. 

But I see my time is up. And next is Mr. Schrader. You are recognized for 5 minutes. 

Mr. SCHRADER. Thank you very much, Mr. Chairman. I appreciate the panelists for being here. A great group to get some insight 

from. 

Mr. Connolly, I want to thank you and BPA for doing such a 

great job of providing low cost power to the entire Pacific Northwest, and a great regional compact that I think other areas of our 

great country would like to emulate. We are very, very fortunate. 

And I want to thank you for the great work that you do. 

93 

We spend a lot of money making sure that we meet our requirement to make sure there is equal consideration to fish, wildlife 

habitat preservation on our dams. You guys spend a lot of money. 

How much money do you spend for fish protection and restoration 

right now in the Bonneville footprint? 

Mr. CONNOLLY. Thank you, Mr. Schrader. About 30 percent of 

our rates go into our fish and wildlife mitigation program. And 

then there is also another fraction of the Corps’ and Bureau’s O 

and M costs that is tougher to break out. You could say probably 

over a third of our costs are related to fish and wildlife. 

Mr. SCHRADER. Wow that seems like a pretty high number. Is 

that common through most utilities and power generating facilities, 

they spend that much on mitigation of habitat and wildlife? 

Mr. CONNOLLY. I would have to defer to the other folks here 

about fish and wildlife costs that they face. We do believe that we 

have one of the largest programs in the country, if not the world. 

Mr. SCHRADER. Is the ratepayer aware of how much of their 

rates go toward—30 percent of the rates they pay go towards that? 

Mr. CONNOLLY. I know certainly our power customers are aware, 

and I believe they talk to their ratepayers about it. 

Mr. SCHRADER. I don’t see it on my bill. I guess I would like to 

see it on my bill. Some would like that. Maybe that is a huge success that you are spending that much money. And we are getting 

some success, aren’t we, as I recollect. Fish passages, especially 

downriver, what is it now? 

Mr. CONNOLLY. Certainly, we feel like we have made significant 

progress under the programs we have in place to have survival of 

juvenile fish moving past the dams and returning. Just last week, 

the Federal agencies released a comprehensive evaluation on our 

progress for salmon and steelhead that we think shows significant 

progress that we are making in the area. 

Mr. SCHRADER. I heard some figures, at least the fry going 

downriver are some 90-plus percent survival rate. Is that accurate? 

Mr. CONNOLLY. That is right. It depends on the species, but yes. 

Mr. SCHRADER. Sure. I would call that a success. I am surprised 

that we are having problems getting our biological opinion through 

a certain judicial group here in the great Pacific Northwest. That 

would seem like an unqualified success. Wouldn’t you agree, Mr. 

Steindorf, having that sort of passage downriver is pretty good for 

an anadromous stream of that caliber. 

Mr. STEINDORF. Anadromous fish passage is good. I believe we 

support that. But let me give an example from my testimony. The 

Rock Creek-Cresta Project that I first started working on, back in 

1947 the U.S. Fish and Wildlife Service recommended a minimum 

instream flow of about 400 CFS on that project. Because there 

wasn’t the equal protection clause in the Federal Power Act, the ultimate flow that they ended up deciding on was 50 CFS for one 

project, 100 CFS for the other. As I said in my testimony, it completely devastated that river and that recreation economy. 

Mr. SCHRADER. I have short time. I am sorry. You also said you 

were able to restore a lot of that. It adds to your credit and the 

work you did. And I think Bonneville and many others are working 

along that line. 

94 

Can I switch to Ms. Swaminathan? I am sorry. I had to step out. 

You talked, I am sure, about your pilot project and the success you 

had. What agencies objected to the shorter timeline? What outside 

groups were upset with what you did? 

Ms. SWAMINATHAN. It is good to see you again, Congressman. Actually, we had no objections. So I think one of the successes of the 

2-year process was that the stakeholder agencies bought in. And it 

was an extremely collaborative process. 

Mr. SCHRADER. So for certain projects that are very contained, 

that don’t have the fish passage issues maybe that we were maybe 

just talking about, there certainly seems like there is an opportunity, if no one objects, to a shorter, clearer, nonduplicative 

timeline. 

Ms. SWAMINATHAN. That has been our experience. 

Mr. SCHRADER. Very good. Very good. 

Back to Mr. Connolly. In your testimony, you talk about concerns 

with regard to scheduled investments and not being able to recoup 

opportunities in those areas. Could you elaborate a little bit on 

that? 

Mr. CONNOLLY. Well, certainly with the litigation that we face 

currently, there are motions for injunctive relief to stop investments in a number of the dams. And we are concerned about those 

from a reliability, safety, and in fact environmental performance of 

the facilities. Loss of generating equipment in an uncontrolled 

manner presents all kinds of—— 

Mr. SCHRADER. What would that do to the ratepayers potentially? 

Mr. CONNOLLY. Well, certainly stopping that work would have— 

needing to cease capital projects would force us more than likely 

to have to expense those costs. So that would be an immediate hit 

to ratepayers, in addition to the lost generation that would occur 

from having units out of service. 

Mr. SCHRADER. Great. Thank you all very much. 

And I yield back. 

Mr. UPTON [presiding]. Thank you. Mr. McKinley. 

Mr. MCKINLEY. Thank you very much, Mr. Chairman. I am 

sorry, I missed a lot of the testimony because I was upstairs in another one, another meeting on this. I heard some of the comments. 

And when I read Ms. Swaminathan—am I close? 

Ms. SWAMINATHAN. Yes. 

Mr. MCKINLEY. And since I arrived here, there have been several 

other questions along this idea of this timeline of approvals. And 

I thought I was just confused because of the last response you 

made that perhaps some hydro can be shorter. 

Ms. SWAMINATHAN. Right. So I think the last question that Congressman Schrader was asking me was about a pilot process that 

FERC set up pursuant to the HREA passed in 2013, where they 

were directed to have a 2-year licensing process as a model, as a 

pilot to see if it was possible. There was a solicitation, and our 

project on Kentucky Lock and Dam 11 was the only project chosen 

nationwide to be in that pilot process. 

Mr. MCKINLEY. So have the projects that you have in mind in 

Morgantown, Cumberland, and—— 

Ms. SWAMINATHAN. Opekiska. 

95 

Mr. MCKINLEY. Opekiska. How long have they been in the pipeline? 

Ms. SWAMINATHAN. So we are awaiting licensure on Opekiska 

and Morgantown, and we have been working on those projects 

since 2010 to 2011. 

Mr. MCKINLEY. So it has been 5 to 6 years. 

Ms. SWAMINATHAN. Yes. 

Mr. MCKINLEY. It just begs the question. Everyone in Washington is interested in renewables. Why something like hydro 

would go 7 to 10 years or longer, as compared to solar and wind? 

I don’t think you kill any birds, do you? OK. And I don’t think you 

create any sound problems that people have with wind. Personally, 

I love wind. And I am fascinated with the solar panels. But I don’t 

know why the hydro facility would take so long. 

So can you give me some perspective on why you think government drags out the permitting for hydro facilities? Because surely 

they understand the impact they have on—eventually they are 

going to approve them, and they have an impact on people’s economy in those communities. Look at what is happening to 

Martinsville. They were able to build a new courthouse and school 

building down there. Why is this? 

Ms. SWAMINATHAN. Absolutely. We couldn’t agree with your 

question more. I think it points to the need to modernize a process 

that is potentially antiquated and does not distinguish between 

projects that have potentially legitimate issues or need analysis 

that spans many years. 

But the kinds of projects that we work on, including Morgantown 

and Opekiska, by and large have relatively limited impacts, both 

hydraulic and terrestrial. The physical footprint is very small, and 

the hydraulic impacts are very limited. And I think that is fairly 

broadly acknowledged, as evidenced by the fact that typically 

stakeholders in our licensing process don’t generate a lot of controversy. I think there is a fair amount of collaborativeness in the 

process. However, it does stretch out for a very long time. 

Mr. MCKINLEY. Joe Barton and I are the only two licensed engineers in Congress. So this is something that I have been fretting 

with for 40-some years in my practice in engineering. And that was 

why our dams, our low head dams, why we are not using low head 

turbines on every one of them. 

So is it bureaucracy that is holding it up? Why don’t we have 

more? 

Ms. SWAMINATHAN. Well, we don’t have more of these across the 

board because when you look at the entire playing field for new 

hydro development on existing dams relative to other generation 

sources, investors look at this playing field and the timeline and 

the fact that the risks are not sequentially taken off the table effectively discourage investors from investing in hydropower. 

Mr. MCKINLEY. So in the 50-some seconds, what would be the 

first step you would take to shorten the timeframe? 

Ms. SWAMINATHAN. So I think in terms of the FERC licensing 

process it is possible to adopt that pilot 2-year process, with some 

cleanups and tweaks, to be more applicable to a precisely defined 

but nationally significant group of projects and make that more applicable. 

96 

All of these projects, including Morgantown and Opekiska, on 

Federal facilities, on Army Corps facilities go through additional 

permitting by the Federal Government at the Army Corps. And 

some part of that is absolutely essential. But there are parts of 

that process that are duplicative, and importantly, from private 

capital’s point of view, leave unresolved very important parameters 

until very late in a combined permitting cycle. 

And finally, I think there is space for the Federal Government 

to recognize the value of public-private partnerships, because these 

projects are ways to bring private capital to invest in our aging 

dam infrastructure. 

Mr. MCKINLEY. Thank you very much. I yield back. 

Mr. UPTON. The gentleman’s time has expired. The Chair will 

recognize the gentlelady from Florida, Ms. Castor. 

Ms. CASTOR. Well thank you, Mr. Chairman. Thank you for calling this hearing. And thank you to our hydropower experts for 

being here and being willing to share your expertise with us. 

Very interesting, because hydropower continues to be an important component of how we generate electricity in America. And I 

think you have heard from a number of our colleagues here that 

we have got to do more to incentivize clean energy. And it is not 

so simple sometimes as saying, boy, let’s put all of our eggs in one 

basket or not. We can’t do that. We have got to continue to be as 

diversified as possible. 

Coming from the State of Florida, where we really don’t have 

hydro, we don’t have a lot of dams, I am still very interested in 

how we incentivize clean energy, including hydro. Because my 

State, as most communities in the country, we are facing significant rising costs due to the changing climate. And we know we 

have got to do more in the clean energy sector, including hydro. 

So I have heard you all mention a number of challenges here 

today, how we modernize the grid across the country and get these 

clean power sources connected to the grid. I have heard you talk 

about incentives and some regulatory relief as well. Mr. Steindorf, 

California is often the national leader when it comes to clean energy. You have a very bold renewable portfolio standard. You have 

a wide mix of energy sources. Can you help us prioritize a few of 

these from the—knowing that at the Federal level we can put certain incentives, whether it is tax incentives or regulatory relief or 

funds into modernizing the grid from the Federal perspective, help 

us prioritize how we bring more clean energy projects, including 

hydro, to the benefit of consumers. 

Mr. STEINDORF. Well, believe it or not, you know, some of the 

things that need to be done aren’t actually at the Federal level. 

You know, again in the hydro vision report that was put out by 

DOE last year said that one of the issues is that utilities are not 

properly compensated for their grid-regulating services that they 

provide. Might surprise my colleagues that I am actually advocating for the fact that they get paid more for the services that 

they do provide out there. But I think that is significant. 

So, if you want to incentivize those types of projects that actually 

provide those important services that allow you to bring wind and 

solar onboard, which is coming onboard at, again, ever-increasing 

97 

rates, that is important, with the caveat that we are able to do that 

in ways that are environmentally protective. 

I am working on a project right now in Northern California 

where we have actually done that. We have done the analysis, 

which again isn’t an analysis that FERC typically does, where we 

have shown that we can actually increase the grid-regulating services that the project provides while increasing stream flows. Now, 

that is a win-win that we should all be pursuing out there. And 

there are a number of different ways we can do that by looking at 

existing facilities and find ways to give them more flexibility. 

Also in my backyard is another project that PG & E, after spend- ing $30 million during relicensing, has just said that they would 

like to hand over that project to anybody who wants to take it. 

Now, part of the problem there is that that project just doesn’t 

have that grid-regulating capabilities. 

And the other part is that, because of community preference aggregation, utilities can no longer pass along the cost of noneconomic projects to the ratepayer. So part of this discussion really 

needs to be about what are we going to do with those projects that 

are no longer economic, some of these projects that are a hundred 

years old and they just don’t fit in today’s energy mix? That is 

going to be a big situation that we need to grapple with, because 

the last thing we want is to have a bunch of outdated unused energy infrastructure sitting the on the landscape. 

Ms. CASTOR. So Mr. Hookham, how would you answer my question on priorities from the Federal level on grid modernization, incentives, tax incentives included in regulatory relief? 

Mr. HOOKHAM. We have talked a lot about wind and solar. They 

are great attributes, clean energy sources, but they are intermittent. They don’t operate all the time. And a lot of times, as was 

pointed out earlier, they fluctuate quickly. We need to have storage 

capability. That is a huge component. PGM has proven that that 

has worked for them in their ISO grid section that they have introduced fast frequency regulation. That is great, because we can then 

ramp up quickly resources that exist so we can bring in more renewables. 

And if you look at countries like Germany, the research they 

have done in other countries where they ramped up their clean energy, they really have some stability issues going on. And part of 

that is just that, there is no storage. There is no ability to offset 

those penetrating intermittent renewables that exist. 

So, you know, I hesitate against saying an RPS from a national 

point of view because one size fits all doesn’t work with me personally. And I think we need to look at what incents us as a utility 

to build more clean energy, as opposed to market conditions which 

may incent me to build more gas. 

Ms. CASTOR. Thank you. I yield back. 

Mr. UPTON. The Chair would recognize the senior Mr. Barton 

versus the good-looking Barton junior. 

Mr. BARTON. Well, I have to admit, Mr. Chairman, that he is a 

lot better looking than I am, and he is a lot smarter than I am, 

and he is also a lot more attentive than I am. Although as soon 

as he got here, he asked how long it was going to last. 

Mr. UPTON. The gentleman is recognized for 5 minutes. 

98 

Mr. BARTON. I appreciate that. I do want to point out, Mr. 

McKinley indicated that he and I are both registered professional 

engineers. I was at one time a registered professional engineer, but 

I am not currently licensed. I don’t want to get the Texas State 

Board of Professional Engineers all upset. 

Mr. UPTON. Your $125 would be good, though. 

Mr. BARTON. I should get on the stick and get relicensed, I admit 

to that. 

I appreciate Mr. Chairman holding this hearing on our hydropower sector of the energy sector of our economy. 

I have got two basic questions. My first question: Do we have the 

capability still in this country to build brand-new hydropower 

projects, given all the complexity of the environmental regulations 

that are now in place? Anybody. Ms. Swaminathan? 

Ms. SWAMINATHAN. Thank you. 

Mr. BARTON. How close was I? Not at all? 

Ms. SWAMINATHAN. Very close. 

Mr. BARTON. She is going to go far. 

Ms. SWAMINATHAN. I think we certainly have the technical capability. I think what holds us back from having more hydropower 

development on existing dams, the kind of development that Rye 

Development does, is really when investors look at the entire landscape, what they see is a pretty forbidding chain of an extremely 

long process that leaves risks open until relatively late in the process. 

And then combined with a number of things that my fellow witnesses have talked about, the prevailing price of electricity, the 

lack of recognition for the qualities that hydropower brings in 

terms of grid reliability and stability. Those all make for a challenging business environment. But I think when you put both of 

those together, if you are an investor you have choices. And I think 

the collective challenge here is to make this as an investment proposition more attractive relative to what investors could otherwise 

invest in. 

Mr. BARTON. I guess I will ask a more general question, and everybody just give a brief yes or no answer. Will we ever build another major hydropower project in the United States? Mr. Connolly? 

Mr. CONNOLLY. That would be tough. Perhaps. Storage has 

value, but it is going to be a long climb. 

Mr. HOOKHAM. There are opportunities, but it is a long proposition, and I can build a battery storage project that can inject faster than I can build some hydro projects, so probably not. As an investment point of view, I don’t have that incentive. 

Mr. STEINDORF. And I would say with the exception of there is 

some potential with pumped hydro, and as I said earlier with the 

increase in wind power, which this year exceeded the entire installed capacity for hydro, with your State leading the way, the 

short answer is no. 

Ms. SWAMINATHAN. Our average project size in our portfolio is 12 

megawatts. And there are 23 projects. But obviously from an energy perspective, those are small projects. So in terms of major 

projects, the way we get to scale is to accumulate projects in clusters. 

99 

Mr. BARTON. These big wind turbines, aren’t they about 12 

megawatts? 

Ms. SWAMINATHAN. One turbine. 

Mr. BARTON. Yes. In the 2005 Energy Policy Act that passed this 

committee, we, at some point in the process, tried to make the 

FERC the lead agency for hydropower. We weren’t able to make 

that happen. But this is a new Congress. 

We have a new subcommittee chairman who is very experienced, 

a new full committee chairman who is a proponent of hydropower, 

and a few old goats like me that are still around. Is that something 

we ought to make another run at? 

And again, we will just start with Mr. Connolly. 

Mr. CONNOLLY. As a Federal PMA, we are not as exposed to 

FERC, so I am going to defer to the rest of the panel. 

Ms. SWAMINATHAN. So, you know, the majority of our projects are 

on Army Corps dams, so we are subject to FERC licensing and 

then the Army Corps processes. I think each part of the process 

has some virtues and essentiality, and each part of the process has 

some real challenges. 

So the virtues of the FERC process, setting aside for a moment 

that it is very long, are that it is clear, it is set up as a process 

with clearly defined steps. FERC has some open dockets, so you 

can look at other dockets and refine your game as a developer or 

potentially as a stakeholder. The Army Corps process’ virtues are, 

for one, for projects on Army Corps dams it is absolutely essential, 

to make sure that the hydropower project doesn’t interfere with the 

dam structure. 

However, I think the Army Corps process comes with its own 

challenges. It is duplicative when it comes to NEPA, it can become 

opaque. It is variable across different regions of the country and 

districts. And so what we would like to see is a solution that addresses all parts of that chain with respect to regulatory modernization. 

Mr. BARTON. My time has expired, Mr. Chairman. Thank you. 

Mr. UPTON. Thank you, Mr. Barton and Mr. Barton. The Chair 

will recognize the gentleman from the great State of Michigan, Mr. 

Walberg. 

Mr. WALBERG. Thank you, Mr. Chairman, from the great State 

of Michigan. 

And Mr. Hookham, good to see you here. We are proud of CMS 

Energy in Jackson, Michigan, and appreciate what you provide. In 

fact, I stepped out to meet with the mayor of Jackson for a little 

bit here and one of his city council members. 

I spent a lot of wonderful time below hydro project dams fly fishing myself. Either Tippy dam in Michigan or the Bull Shoals dam 

and hydro project in Arkansas on the White River. And some of the 

greatest fish stories of my life have developed from those spots at 

the end of my fly rod. But I also know that there is a significant 

power potential. 

And so Mr. Hookham, I would like to ask you what reforms could 

the Congress undertake to help ensure that this clean source of energy remains cost competitive in today’s markets? 

Mr. HOOKHAM. I think the short answer is we need less governance. We need maybe a more concise approach. So, if you could find 

100 

out a way to reduce or collaborate between State and Federal and 

reduce the number of parties that are involved in the process and 

focus it so that the parties to a license are clearer, and they have 

clear objectives, and we understand where they are headed, it will 

add a lot of clarity to us to invest. Because right now the uncertainty is really a problem. 

Mr. WALBERG. That is the key. Anything else? 

Mr. HOOKHAM. No. 

Mr. WALBERG. Give me hope. Talk about getting government at 

all levels to work together, that is a challenge. But I am delighted 

you said that. At least it tells us where the bottleneck is. 

Mr. HOOKHAM. The other part is the market side of it, because 

we are in a situation as a regulated utility where we buy and sell 

power through an ISO that was set up through FERC. So we have 

an opportunity to make revenues through cost efficient generation, 

but also to have to buy that power back for our constituents. So 

it is a very tight market in terms of making profits as an investorowned utility, and at the same time keeping our rates down, because that is really what we are all about. 

And also managing the sustainable piece of being an environmentally friendly company. So we live in a really difficult world. 

So the less wires or nooses around our neck, the better off we are 

going to have a path forward. 

Mr. WALBERG. Good admonition. Any of the rest of you want to 

add to that? 

Ms. SWAMINATHAN. I would just like to chime in on the commercial aspects of this. We are in a different position because we are 

funded by private capital, which is a different source of capital and 

a different pool with different constraints and different return 

thresholds than a regulated utility. 

So, certainly, we support regulatory modernization across the 

whole range of regulation that we face. But low cost financing 

through some of the Federal instruments that can do that, as well 

as potentially a Federal standard offer that would provide certainty 

pursuant to published rates would be measures that the Federal 

Government could adopt that would significantly galvanize private 

investment because they would provide certainty on the market 

side. 

Mr. WALBERG. Yes. 

Mr. STEINDORF. One thing I was going to recommend that we put 

in our testimony and that our coalition has been actively supporting is the developing of MOUs between FERC and State water 

agencies, particularly those with section 401 authority. 

What we worked on and what I personally worked on in California was an MOU that made that process happen in conjunction 

with the ILP process rather than happen in series. And this is 

something that we really learned after going through a round of 

relicensings, where after the ROP would finish, then the State 

board would take up their process. 

Having those both happen concurrently is a great idea, and really it is the way to ensure that these happen in a timely manner. 

And it is a far better answer than having FERC taking over State 

water law, which is something that is not supported by the National Governors Association. 

101 

Mr. WALBERG. Right. Or many of us in Congress as well. Mr. 

Connolly, did you have—I saw your hand reaching out. 

Mr. CONNOLLY. I guess the only thing I was going to say is the 

investment projects that we look at on behalf of our customers tend 

to be very economic in the long haul. But I would echo the comments about the current market conditions and the ability for 

hydro to be compensated for the services it does provide to the grid. 

For Bonneville being a not-for-profit entity, those benefits where 

they compensated, those would go back into driving down the rates 

of our customers and to enable us to continue to provide the services that Congress has asked us to provide to the region. And so, 

both of those are of course very important to us. 

Mr. WALBERG. Thank you. 

Mr. UPTON. Thank you. The Chair will recognize Mr. Griffith for 

5 minutes. 

Mr. GRIFFITH. Thank you very much, Mr. Chairman. Thank you 

all for being here today. 

Mr. Hookham, in your testimony you discuss the great potential 

for additional development of pumped storage hydroelectric generation on pages six and seven. In particular, you note opportunities 

for these facilities at abandoned mine sites. Representing a district 

in coal country in southwest Virginia, this is welcome news. 

And so we are looking for ways that we can promote economic 

development in our communities and help out, particularly when 

we can reuse some of our abandoned mine locations. In fact, the 

Virginia Department of Mines, Minerals, and Energy had put forward such a proposal for the Department of Energy’s HydroNEXT 

grant, which funds innovative projects such as this. In particular, 

the sites that are being considered in southwest Virginia are especially attractive since they use clean, nonacidic water for use in the 

system. While they were not chosen for this round of grants, I am 

hopeful that DOE and other agencies will see the importance of 

supporting these types of projects. 

So here is my question to you, and others may want to jump in: 

Can you expand on what you see as the potential for pumped storage hydro, particularly for abandoned mine sites, and discuss what 

regulatory barriers you think we need to address to streamline 

these sorts of projects? 

Mr. HOOKHAM. So we are always looking to take advantage of 

what we call brownfield sites, sites that were used for something 

else that we can reuse for a better use. So like landfills with solar 

caps makes perfect since to us, so we can cap over and protect the 

environment and at the same time generate electricity. 

A mine site is a classic example where we can create vertical 

head, where we have got an opportunity to use a pool that potentially is underground, contained, not contaminating groundwater, 

with a good clean source of water, and then be able to pump that 

back up and reuse that power on both sides. It makes a total 

amount of sense, particularly where we can align that with demand 

and where the grid infrastructure supports it. 

So, in an opportunity where there is a mine site where we have 

power lines and everything else aligned, I think we need to really 

take a close look at this. 

102 

Mr. GRIFFITH. Regulatory burdens or barriers that we may need 

to move aside? 

Mr. HOOKHAM. I would say it is the old first of a kind mind-set. 

We have to be careful what we are doing. So, environmentally, we 

have to look and see if there is any impacts, because we don’t have 

a lot of those investments right now. 

So I think we have to do a little homework. We have to do that 

prescreen to make sure it is a viable approach, but I think it 

should be done right away as part of this research mind-set we 

need to take on. 

Mr. GRIFFITH. OK. Anybody else want to touch on that subject? 

Mr. STEINDORF. One thing that I think, again looking at the perspective of the energy landscape, a lot has been said today about 

if an investor looks at a project like this, they have to look at what 

are the other alternatives. To be honest, we have been somewhat 

surprised that there hasn’t been more interest in pumped storage 

given the need for good regulation, et cetera. 

However, it needs to be said that if you are an investor looking 

at other storage technologies that are being developed right now, 

do you want to spend a billion dollars on a pumped storage project 

that could easily be leapfrogged by some new battery storage technology that is in the near future? I think that is the question. 

And in terms of pumped storage, we think it is possible to site 

them correctly. But I think you need to acknowledge the reality 

that that are other technologies that are being developed that may 

be better answers. 

Mr. GRIFFITH. And then you—yes Ms. Swaminathan. 

Ms. SWAMINATHAN. If I can chime in on that, we are developing 

a project in the State of Oregon, which is a sizable pumped storage 

project. The challenge on pumped storage has been on the market 

side, on the commercial side, which is that, you know, the conventional wisdom is that you can arbitrage on-peak and off-peak 

power. 

In an environment of very depressed prices, that is very difficult. 

And the capital costs of pumped storage are very high, because 

they tend to be sizable projects. And so, what we would like to see 

is movement on the market side. How do you pay for pumped storage in recognition of all the grid benefits that it gets? Not just the 

generation. 

Mr. GRIFFITH. I appreciate that. And then we had some conversation earlier about the length of time in getting these projects approved, and we do note need to cut that. 

I have two dams proposed already in my district for some—small 

dams, small projects, but it is taking a long time to get everything 

done. And we need more time to do it. I also should bring up that 

I have got a little bill coming in, because a lot of these larger 

projects were sold to the public as you also have recreational facilities. And yet FERC has been very aggressive in some of our lakes 

in our areas in telling the property owners on the size of the lakes 

what they can and cannot do. 

I do not know the laws of other States, but as a trained Virginia 

lawyer, although like my friend Mr. Barton, I am no longer practicing, but I think there are also some taking issues. But one of the 

things I think we need to work on is making sure that FERC conVerDate Mar 15 2010 11:10 May 15, 2017 Jkt 037690 PO 00000 Frm 00106 Fmt 6633 Sfmt 6633 I:\115THCONGRESS\115X12HYDROPOWERSCANS051217\115X12HYDROPOWERPEND
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siders that usage and considers the property owners on the size of 

the lakes as well. 

My time is up, so I am going to have to yield back. But we will 

keep that in mind. Thank you so much for your time today. And 

I yield back, Mr. Chairman. 

Mr. UPTON. The gentleman yields back. The Chair would recognize the senior Mr. Mullin for 5 minutes. 

Mr. MULLIN. Thank you. And thank you for allowing me to have 

my oldest son sit up here with me. It is his spring break. I don’t 

know why he would rather come here than Disney World, because 

his other siblings went to Disney World. You didn’t know that, did 

you? No, I am kidding. 

As we are wrapping up this hearing, and I appreciate the chairman for bringing it to our attention, hydropower is extremely important to our State. In the eastern part of the State where I represent, we have a tremendous amount of water and hydropower. 

And forgive me, ma’am, if I mess your name up, but is it Ms. 

Swaminathan? 

Ms. SWAMINATHAN. That is right. 

Mr. MULLIN. I said that right? Wow. That is a first. Anyway, I 

appreciate you being here. I have a couple questions. One, your 

company has the largest portfolio of hydropower, right? 

Ms. SWAMINATHAN. Of development projects. 

Mr. MULLIN. Of development projects. Right. So why aren’t there 

more companies like yours? 

Ms. SWAMINATHAN. That is a question we ask ourselves all the 

time. I think that when you are looking at companies like ours who 

leverage private capital, investors in the energy space have lots of 

choices. They can invest in hydropower, they can invest in wind, 

solar, fossil fuels, potentially geothermal, et cetera. 

So, what is important to look at from an investors’ point of view 

is the totality of the attractiveness of that investment proposition. 

And what they see in general terms when they look at hydropower 

is a very long process that not only is long, but leaves unresolved 

many important parameters until very late in the process, which 

is difficult. 

Mr. MULLIN. What is a long process? 

Ms. SWAMINATHAN. So the combined Federal permitting process 

for non-Federal hydropower development on Army Corps dams can 

extend as far as 10 years. 

Mr. MULLIN. For just the permitting process. That is before you 

even start the project? 

Ms. SWAMINATHAN. Yes. 

Mr. MULLIN. And then the project length is? 

Ms. SWAMINATHAN. The construction cycle, our average construction time for a project on an existing dam is anywhere from 12 

months to 2, 21⁄2 years, depending on the size and the complexity 

of the project. 

Mr. MULLIN. So you are talking about 11, 12 years before an investor would even be able to start seeing a return? 

Ms. SWAMINATHAN. Yes. 

Mr. MULLIN. How do you even raise capital? I am serious. I 

mean, I used to invest quite a bit. We kind of have restraints now 

104 

that we are in office. There is no way. That is a long way. So how 

do you do that? 

Do you have a certain group that you go after? Because hydropower is something that is sustainable for us. It is clean. It is one 

thing that you can see both sides. Republicans and Democrats both 

agree on when it generates—when we are talking about generating 

power. And it is reliable to the point that it can help bring the grid 

back up, too, in certain circumstances. 

I mean we have GRDA in my district that we are constantly 

working close with them. So if we are not developing, then we are 

behind. 

Ms. SWAMINATHAN. Right. Absolutely. And you are right, access 

to capital is a real challenge in hydropower development. And hydropower construction and projects being what they are, capital 

cost is everything. 

Mr. MULLIN. What does it cost just to go through the permitting 

process, the regulatory process before you start your project? What 

is the cost on that? 

Ms. SWAMINATHAN. It can cost about a million dollars a project 

to get through the FERC licensing process. 

Mr. MULLIN. Is that from the research you have to do, or is that 

just the cost of the permits? 

Ms. SWAMINATHAN. It is not the cost of the permit itself or the 

license itself. It is the cost of the studies, the cost of maintaining 

a technical staff to develop the application, the cost of the engineering work, the environmental studies, the field work, assembling all 

of that into a license application, as well as the ancillary permits 

that need to be put together, again supported by study work such 

as the 401 water quality. 

Mr. MULLIN. When you are just beginning a project, before you 

even can get clear to start building it, you have to have a milliondollar investment? 

Ms. SWAMINATHAN. Right. That is not even to start building it. 

That is just to get the FERC license. 

Mr. MULLIN. That is what I am talking about. 

Ms. SWAMINATHAN. And then, if the project is located on an 

Army Corps dam, there is more process, more Federal permitting 

to go through, which is actually significantly more expensive than 

the environmental studies because it includes the final engineering—— 

Mr. MULLIN. So what does that cost? 

Ms. SWAMINATHAN. That is on the order of several million dollars 

more. It depends on the size and complexity of the project. And 

every project is a little different. It can be up to $8 million. 

Mr. MULLIN. Eight million dollars just to go through the process 

to begin the project. 

Ms. SWAMINATHAN. It can be, yes. 

Mr. MULLIN. And see, that is where I think we can do a better 

job here in Congress. Because we in Congress should be creating 

an environment for entrepreneurs like yourself and your company 

to be able to thrive and be able to get through that process. And 

when we create hurdles like that, it can be as expensive as $8 million just to go through the regulations we put in place, and we can 

do better than that. 

105 

So thank you so much. I appreciate it. 

Ms. SWAMINATHAN. I appreciate it. 

Mr. UPTON. The gentleman’s time has expired. 

Seeing that there are no further Members wishing to ask questions, I want to thank you all very much for appearing with us 

today, sharing your testimony. 

I am going to ask unanimous consent to submit the following 

documents for the record: testimony of the American Rivers, testimony of Outdoor Alliance, testimony of Sacramento Municipal Utility District. 

[The information appears at the conclusion of the hearing.] 

Mr. UPTON. Pursuant to committee rules, I remind Members that 

they have 10 business days to submit additional questions for the 

record, and would ask the witnesses submit their response within 

10 business days upon receipt of the questions. 

And without objection, the subcommittee is adjourned. 

[Whereupon, at 3:10 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

106 


Hearing before the U.S. House of Representatives, Committee on Energy and Commerce, 

Subcommittee on Energy: Modernizing Energy Infrastructure: Challenges and Opportunities to 

Expanding Hydropower Generation 

Testimony of American Rivers 

March 15,2017 

Thank you for the opportunity to submit testimony regarding hydropower generation and 

operation in the United States. American Rivers is one of the leading national conservation 

organizations involved in hydropower. Our staff has been involved in hundreds oflicensings 

since our founding, and we have seen the best and worst that the federal licensing process has to 

offer. Since 1973, American Rivers has protected and restored more than 150,000 miles of rivers 

through advocacy efforts, on-the-ground projects, and an annual America's Most Endangered 

Rivers® campaign. Headquartered in Washington, DC, American Rivers has offices across the 

country and more than 250,000 members, supporters, and volunteers. 

Before delving into a discussion on how hydropower works in America today, we would like to 

identify for you five things that could improve the highly collaborative licensing process laid out 

in the Federal Power Act and attendant statutes: 

• The Federal Energy Regulatory Commission (FERC) should presumptively grant study 

requests submitted by federal, state, and tribal agencies; 

FERC should promote the adoption of memoranda of understanding (MOUs) between the 

Commission, tribes, and states to improve coordination and prevent unnecessary delay; 

• Congress should increase appropriations to the federal resource management agencies to 

fund the staff positions that allow them to efficiently and thoroughly evaluate 

applications for hydroelectric licenses; and 

• Congress should extend its recognition of the right of Native American tribes and Alaska 

Native Corporations and Villages to manage water quality standards on tribal lands to 

include their rights to manage land use and fish and wildlife populations as well. 

• Congress should consider whether FERC should relinquish jurisdiction over permitting 

projects on non-powered dams owned by the U.S. Army Corps of Engineers (Corps). 

American Rivers is heartened that the Committee is examining the challenges and opportunities 

of hydropower in the United States. In the twelve years since the Energy Policy Act of2005 was 

passed, there have been no hearings on how that act altered the licensing process. This includes 

the most recent Congress, when several changes to the Federal Power Act and the licensing 
107 


process were voted upon without the benefit of an oversight hearing into the current process, and 

without the benefit of informed stakeholders (industry, states, tribes, NGOs, and federal 

agencies) discussing what in their respective opinions works and what needs improvement. We 

are grateful that the Committee is taking the time to conduct an oversight hearing, although we 

are disappointed that no states, tribes, or federal agency witnesses were invited to testify, and we 

hope that the Committee will avail itself of their expertise before drafting legislation. Ideally, 

any legislation would be drafted pursuant to a stakeholder process that takes into account the 

perspectives, needs, and rights and responsibilities of all relevant parties to a hydropower license 

proceeding. 

Hydropower provides approximately 7 percent of the overall energy production in the country, 

and comprises 50 percent of all non-fossil fuel energy consumed in the U.S. Over the course of 

what we expect will be a thorough and informed evaluation of how hydropower functions in the 

United States, we are confident that the Committee will arrive at the same conclusion that the 

U.S. Department of Energy did in the Hydropower Vision Report released last year: building 

new dams will cost more in both investment dollars and negative impacts to clean water, 

wildlife, and rural economies than it is worth. Efforts to expand hydropower production should 

instead focus on promoting efficiency, retrofitting suitable non-powered dams, and upgrading 

century-old technology present in far too many currently operating hydroelectric projects. 

The licensing of hydroelectric dams is overseen by the Federal Energy Regulatory Commission 

(FERC), with the critical involvement of the federal Departments of Agriculture, Commerce, and 

the Interior, as well as state and tribal water quality agencies. FERC may grant a license for a 

term.of30 to 50 years, with the average life of a license being 45 years. For perspective, a dam 

coming up for relicensing in 2017 could have been last licensed during the Summer of Love in 

the administration of President Lyndon B. Johnson. That would be before the Apollo 11 moon 

landing, before Watergate, before Chernobyl, and before the fall ofthe Soviet Union. There is 

only one member of this 440-seat chamber who served in Congress at that time. He is the only 

person who could have voted on the National Environmental Policy Act of 1969 (NEPA), the 

Federal Water Pollution Control Act Amendments of 1972 (the Clean Water Act or CWA), and 

the Energy Consumers' Protection Act of 1986 (ECPA). None of the dams licensed in 1967 

considered any of those federal laws--because they did not yet exist. The depth of scientific 

knowledge gained in the past 50 years cannot be addressed in this testimony, but must be 

considered by this Committee prior to altering hydroelectric licensing. 

The Federal Power Act (FPA), passed by Congress and signed by President Woodrow Wilson in 

1920, delineates the responsibilities for licensing at the federal level. FERC is responsible for 

regulating the wholesale energy market, including by granting licenses to individuals seeking to 

place a hydroelectric dam in a navigable waterway. PERC's expertise was and has remained in 

energy markets and the safety of non-nuclear energy facilities. FERC is not, and has never been, 

responsible for maintaining fish, wildlife, or federal lands. 

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The oversight requirements relevant to this testimony are laid out largely in FPA §§4( e) and 18. 

Section 4( e) requires those Cabinet Secretaries with authority over a "federal reservation" ensure 

that the proposed project doesn't negatively impact the reservation or interfere with its 

Congressionally designated use. Federal reservations are all lands and marine reserves in the 

federal estate, from Indian reservations to National Forests and wildlife refuges. Section 18 of 

the FPA regards fish passage, or the ability of fish species to get from one side of a dam to the 

other, and charges the Cabinet Secretaries with authority over fisheries to provide it. As most 

fish species do not naturally inhabit only the section of a river between dams, for a population to 

survive the construction of a project, it must be afforded a way to either traverse it (e.g. a ladder 

or trap and haul) or an artificial means of completing its lifecycle (e.g. hatcheries). The third 

statutory oversight mechanism is via the §401 of the CWA, which recognizes the right of states 

and tribes to manage the water quality found within their borders. 

Since the passage of the FPA, the Secretaries of Commerce (through the National Marine 

Fisheries Service) and the Interior (through the U.S Fish and Wildlife Service) have been 

responsible for fish and wildlife and the Secretaries of Agriculture (through the U.S. Forest 

Service) and the Interior (through the Bureau oflndian Affairs, the Bureau of Land Management, 

the U.S. Fish and Wildlife Service, and the National Park Service) have been responsible for 

managing lands held by the federal government ("federal reservations"). The expertise and 

experience these public servants, and their staffs, have accrued in the almost-! 00 years since the 

enactment of the Federal Power Act cannot be matched at FERC, and FERC has acknowledged 

before this Subcommittee that it does not seek to absorb their responsibilities. 

The Federal Water Pollution Control Act Amendments of 1972, commonly known as the Clean 

Water Act (CWA), made an essential update to the hydroelectric licensing process by 

recognizing the right of states and tribes to regulate water quality within their boundaries. While 

the FPA itself only dictated evaluation of impacts to federal reservations and the ability offish 

species to move through the river system, §401 of the CWA empowers states and tribes to 

preserve healthy waters and requires dam owners to assist in the repair of diminished water 

quality in systems impacted by projects. FERC also lacks the staff resources and expertise to 

enforce water quality standards, or to administer state water rights, which have been confirmed 

as a matter of state law with the passage of the McCarran Amendment of 1952. 

Provided all participants in a licensing are committed to work together and provide necessary 

information in a timely manner, the hydroelectric licensing process provides a range of 

stakeholders the opportunity to shape the shared use of our nation's rivers. The rivers do not 

belong to environmentalists or to electricity producers; they belong to all Americans, and they 

must be maintained to promote multiple uses. American Rivers supports the collaborative 

process currently in place, as well as the hard work done by all parties to produce electricity that 

does not destroy critical environment or clean water for humans and wildlife. It is true, however, 

that improvements could be made to the process. We highlight five of those improvements here. 

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Study Requests 

It is essential that the impact of a given hydropower project be thoroughly examined for its 

impacts to water quality, federal reservations, and the health of the ecosystem. Because of the 

decades-long duration of federal licenses, many in effect today have only been updated once in 

the past fifty years. Many dams in operation today not only precede the bedrock environmental 

and health statutes previously mentioned, they were constructed between the Harding and 

Franklin Roosevelt Administrations. Although impacts to the river were considered in the 

decades when these projects were built, the federal government was more concerned with power 

generation, flood control, and irrigation than water quality, river connectivity, and fish and 

wildlife. The devastation of the Atlantic salmon population due to damming New England rivers 

from 1620 unfortunately did not inform consideration on how Pacific salmon and steelhead 

would fare once the rivers of the West were dammed. The impact to federal reservations too 

often focused on where the project was sited, and not how the project's construction and 

operation impacted the reservation. 

As a result of insufficient care and sometimes knowledge in the middle part of the 20'h Century, 

many licensees submitted applications to FERC that were not thoroughly vetted for their impacts 

to fish, wildlife, and federal lands. Failure to recognize the prolonged harm possible to the 

environment, rural communities, and the federal estate only began to be corrected in the 1970's 

and 1980's. While there had long been cries from tribal communities, conservationists, and rural 

advocates, it took a long time-too long in many cases-for the federal resource management 

agencies to fulfill the responsibilities Congress charged them with in 1920. While in some cases, 

insufficient information was to blame, in many, especially as regarded Indian reservations and 

maintaining fisheries, it was not a sufficiently high priority to the federal government to prevent 

the damage it has now committed to repairing. 

In order to evaluate the impact a project has had within their respective jurisdictions, FERC, the 

Secretaries of Agriculture, Commerce, and the Interior, as well as water quality agencies of the 

states and tribes where the project is sited, submit requests for information (studies). The 

standard length of a study is two years, although if the licensee presents insufficient information, 

the studies may go on longer. Under the traditional licensing process (TLP), study requests from 

the states, tribes, and federal agencies are only rendered to the applicant once FERC has 

evaluated its portion of the application. It is then that the application is referred from FERC to 

the agencies and they submit their study requests to the applicant. 

The sequential nature of these study requests has proven frustrating to both applicants and to the 

resource agencies. Applicants sometimes accuse the agencies of springing unexpected requests 

for information on them, and argue that since FERC didn't request the information, it should not 

be relevant in considering the license. Recall, however, that FERC's mission is one of energy, 

and not one of environment. FERC often does not request information on the impact on fish, 

wildlife, federal reservations, and water quality because Congress specifically vested the 

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responsibility to manage those resources in the federal and state and tribal agencies, respectively. 

FERC, unproductively, has on occasion refused to exercise its statutory authority to request 

information sought by other regulators. FERC's refusal is based in its belief that, when the U.S. 

Code provides the state, tribal, and federal agencies their own authority to obtain information, it 

should not request information--even if it speeds up the process. The result is more backlog and 

more bureaucracy. It was these issues related to the implementation of the TLP that led 

Congress to enact the Integrated Licensing Process as part of the Energy Policy Act of2005, 

which we discuss in more detail below. 

Because FERC's mandate is one of energy and not one of environment, and because the role that 

the resource agencies play in the licensing process must not be removed or reassigned, , 

American Rivers believes the most efficient way to obtain the information the agencies require is 

to have FERC presumptively include their study requests at the front-end of the review process. 

By FERC passing along the requests for information from the cabinet Secretaries, states, and 

tribes as soon as possible, it will eliminate the aspects of surprise and uncertainty that bedevil the 

process now. This change would not necessarily require action by Congress or the resource 

agencies; it could be enacted by FERC directly, although Congressional directive would clear up 

any confusion about the matter. American Rivers notes that this type of action is anticipated by 

the Integrated Licensing Process (ILP), discussed below. 

Memoranda of Understanding 

Congress understood when it passed the FPA that collaboration is essential, so the law wisely 

charges the relevant federal entities with responsibilities matched to their expertise. In the 

hydroelectric licensing process, the interplay between environmental stewardship, water quality 

and state water law, trust and treaty obligations, and preserving the use of public lands and 

waters is essential. While it is unfortunate that many projects were not evaluated appropriately in 

the past, or that there are often challenges in improving projects so they conform to the bedrock 

environmental statutes enacted almost half a century ago, it is imperative that the licensing 

process not simply be collaborative, but cooperative. 

Stakeholders on all sides agree that disagreements and intransigence lead to litigation. Litigation 

is expensive and time-consuming. The extensive costs of time and money to the government, 

conservationists, tribes, outdoor economies, utilities, and ratepayers should be avoided whenever 

possible. The costs oflicensing, monetary and otherwise, are ultimately borne by the people of 

the United States, and all parties should be interested in minimizing cost whenever possible and 

appropriate. That is why we believe FERC should promote the adoption of memoranda of 

understanding (MOUs) between itself, tribes, and states to incentivize collaboration rather than 

litigation. FERC and the California State Water Resources Control Board have recently signed 

just such an MOU to allow the ILP process and the §40 I process to happen in parallel, rather 

than sequentially, which should substantially reduce the time to license California projects that 

are pending §40 I certification. 

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Congress attempted to improve licensing when, in the Energy Policy Act of2005, it created an 

alternative to the aforementioned TLP. This new process, the Integrated Licensing Process (ILP), 

brings all the resource agencies into the room with the licensee to facilitate information sharing 

and to encourage collaboration as early as possible. Projects whereby an applicant has chosen the 

ILP, and whereby the applicant has chosen to engage in a cooperative manner with relevant 

stakeholders and conditioning agencies, tend to be completed in a much shorter timeframe than 

projects following the TLP. As the ILP is not always selected by the licensee and because even 

in an ILP, cooperating across the state and federal divide can occasionally be difficult, FERC 

should initiate MOUs between itself, tribes, and states to expedite licensing and fulfill the 

promise of the ILP. 

Increase Appropriations to Resonrce Agencies 

As stated, it is a chief frustration of all participants in licensings that the process can drag on for 

far too long. While each stakeholder can provide a bevy of reasons why licensings may be 

unnecessarily prolonged, none can deny that when it comes to the federal resource agencies, the 

tightening of the monetary spigot has forced them to do much more with much less. While it is 

possible for these agencies to process applications and fulfill their statutory duties at their current 

level offunding, it takes more time. This is delay that injures water quality, wildlife, and 

prevents licensees and their ratepayers from receiving the certainty they deserve. 

The experience housed within the resource agencies cannot survive in a funding vacuum. These 

employees are individuals whose expertise is borne of years of education and working on 

licensings. The value of sitting down with an applicant, of getting on the river and examining the 

wildlife, of cataloguing flows and releases over years and watersheds is immeasurable in the 

licensing process. In order for any of the Secretaries to fulfill their statutory obligations and place 

a scientifically informed and legally defensible condition on a license, there must be funding 

available to pay for the personnel necessary for the agencies to fulfill their responsibilities under 

the Federal Power Act, Endangered Species Act, Magnuson-Stevens Act, Coastal Zone 

Management Act, and other attendant and relevant federal statutes. 

Failure to appropriate sufficient funds starves not only the managers of our public resources, but 

denies the agencies the information they need to make decisions in the public interest. A key 

function of the resource management agencies-and one of the reasons that the independent 

Commission, located in Washington, D.C. is not responsible for evaluating the potential or actual 

environmental impacts of a hydroelectric project-is to collect information from the project site. 

The Fish and Wildlife Service, the National Marine Fisheries Service, and the Forest Service, 

among others, arc literally down in the reeds (or aboard scows) in every state of the nation. 

Failure to support them and their work only results in missed opportunities, wasted time, and 

money lost on the back end. 

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The United States is in the final stretch of reviewing licenses issued for projects before the Ford 

Administration. This is not the time to forego carrying the lessons learned over difficult 

relicensings and decades of tremendous strides made by committed and unwavering public 

servants, licensees, and citizen participants. Congress should increase appropriations to the 

federal resource management agencies to fund the staff positions that allow them to efficiently 

and thoroughly evaluate applications for hydroelectric licenses. It may be beneficial for Congress 

to consider statutorily required mandatory cost recovery for these agencies. If there is no one at 

the agency who knows how licensings work and what Congress has charged the Cabinet 

Secretaries to do, no one, including the applicants, can be served. 

Recognize the Rights of Tribes and Native CorporationsNillages 

Among those communities that have been most injured by the insufficient evaluation and ill 

considered operation of hydroelectric projects have been the Native American tribes of the 

United States. When the federal government failed to fulfill its statutory obligations under the 

FPA to ensure fish passage and preserve federal reservations, nowhere were the injuries more 

serious than on Indian reservations. While largely federally owned and partially federally 

maintained, these reservations are not public lands. Injuries to them are borne wholly by the 

tribes and their members. The Department of the Interior, through litigation, Presidential and 

Congressional direction, and the too-long realization that the fulfillment of trust and treaty 

obligations of the United States require dedicated action, has significantly improved in its 

evaluation of hydroelectric projects' impacts on Indian lands. The time has come to recognize 

tribes' right to determine the impact of actual and proposed projects on their lands and their 

reserved rights to fish and wildlife. 

The trend since the end of the Termination Era (1970), when Congress sought to extinguish its 

recognition of tribes and its responsibilities under treaties and federal law, has been to assist 

tribes, when possible, in reclaiming their capacity to develop and execute policy at the local 

level. This is the foundation of what in Indian Country is described as "sovereignty." The current 

legal epoch, the Self-Determination Era, has seen Congress devolve unto tribes greater authority 

in health care, education, and public safety. The tribes have shown remarkable resilience as they 

recover from decades of government-sponsored devastation. Many federal and state natural 

resource managers who have partnered with tribes have discovered that many tribes 

(unsurprisingly) possess the academic and technical talent required. Furthermore, generational 

knowledge and the cultural connection to the land, water, and wildlife (commonly referred to as 

"traditional ecological knowledge" or "TEK") provide an edge to tribal resource managers. 

Federal and state managers are coming to learn what they previously dismissed as folklore or 

superstition is a highly nuanced understanding of how humans interact with the natural 

environment. 

The Clean Water Act identifies tribes that are judged to possess sufficient technical capability the 

designation of "treatment as state" (T AS), meaning that they have the same rights and 

7 
113 


responsibilities as states do in evaluating water quality and the impact of hydroelectric projects 

thereon. Just as there is a crucial benefit to having state and federal regulators within proximity 

of the project site, there is a tremendous benefit to having regulators who live on or adjacent to 

the project site involved in the process. While in 2017 a Bureau of Indian Affairs (BIA) 

Superintendent may have close communication with the tribal department of environmental 

quality, it would serve both efficiency and self-determination to recognize the tribe's right to 

have its own representatives be at the licensing table .. 

American Rivers urges the Committee to consider, in full consultation with the appropriate tribal 

representatives, whether it would be advisable to devolve the authority to protect tribal resources 

from the Departments of Commerce and the Interior to the tribes themselves. Amending the FPA 

to recognize tribes' rights to manage their lands and fisheries-just as federal law recognizes 

their rights to manage their waters--could eliminate needless bureaucracy and ensure the proper 

stewardship of those resources. Doing so would be a continuation of prevailing policy trends, not 

a departure therefrom. 

Corps vs. FERC Permitting Process at Non-Powered Dams 

Section 408 of the Rivers and Harbors Act authorizes the Corps to permit modifications and 

alterations to existing Army Corps constructed public works projects. The Corps requires the 

permit applicant to meet their standards and to ensure there no injury to the public interest or any 

effect on the Corp's projects' ability to meet its intended purpose. The Corps will evaluate the 

projects impact on any alteration to flood conveyance, structural integrity, operation and 

maintenance, NEPA requirements, and flood absorption or blocking capabilities. The Corps 

oversight in allowing an outside party to use their infrastructure is necessary to ensure the 

integrity of the Corps' infrastructure as well as to ensure the outside party does not adversely 

impact the waterway or wetland where the project is located. 

Recently there has been discussion about the Corps' 408 process being duplicative of FERC's 

ILP in the permitting and licensing of hydropower projects to be added to currently non-powered 

Corps infrastructure. American Rivers agrees with the statement of then-Director ofFERC's 

Office of Energy Policy Ann Miles, who testified before this Subcommittee that it might be 

preferable for FERC to relinquish jurisdiction over hydropower projects to be added at Corps 

facilities, but it is inappropriate to transfer such authority from the Corps to FERC. American 

Rivers believes that the Committee should seriously consider simplifying the process of adding 

power to non-powered dams by exempting them from the FERC licensing process. 

While some utilities may prefer the ILP to the 408 process, American Rivers agrees with FERC 

and the Corps that alterations to structures owned by the United States and operated and 

maintained by the Corps for purposes authorized by Congress should remain within the 

jurisdiction of the Corps of Engineers in order to best protect the interests of the taxpayers and 

the multiple users of the waterway. 

8 
114 


Conclusion 

It can be too easy to fall into the "us vs. them" trap, and to believe that the only way to achieve 

our objectives is by preventing another party from achieving theirs. That is not the position of 

American Rivers. We believe affordable energy can exist alongside robust fisheries, that 

flourishing outdoor economies can benefit from longstanding dams and impoundments, and that 

the lands held in trust pursuant to treaties between sovereign nations must not be compromised 

for the sake of convenience. It's not a matter of the environmentalists versus industry. Everyone 

wants electricity, everyone wants clean water. In hydroelectric licensing, as in all things, we 

must seek consensus and compromise when possible. 

As currently organized, the hydroelectric licensing process requires the involvement of federal, 

state, and tribal officials. It is collaborative, with shared responsibilities, and should remain that 

way. There are minor changes that should be made by FERC (including study requests from the 

federal, state, and tribal resource managers and pursuing MOUs when able) and by Congress 

(providing sustainable funding, recognizing tribal rights to manage land and wildlife, and 

possibly exempting non-powered Corps dams from the FERC licensing process). We urge the 

Committee to thoroughly examine the impacts of the Energy Policy Act of2005 and to solicit the 

input of all relevant stakeholders before altering the licensing process. 

On behalf of our members and supporters, we again thank the Committee for its attention to this 

important topic. We are happy to answer questions and provide further information as necessary. 

Please direct inquiries to Brendan Mysliwiec at bmysliwiec@americanrivers.org or at 202-243-

7077. 

9 
115 


OUTDOOR ALLIANCE 

March 14, 2017 

Rep. Fred Upton 

Chair, Energy and Commerce Subcommittee on Energy 

2183 Rayburn House Office Building 

Washington, DC 20515 

Rep. Bobby Rush 

Ranking Member, Energy and Commerce Subcommittee on Energy 

2188 Rayburn House Office Building 

Washington, DC 20515 

Re: Hearing, Modernizing Energy Infrastructure: Challenges and Opportunities to 

Expanding Hydropower Generation 

Dear Chair Upton and Ranking Member Rush: 

Thank you for the opportunity to submit testimony regarding hydropower generation and 

operation in the United States. As the Committee considers opportunities and 

challenges to expanding hydropower, we request that you consider the impact of 

hydropower on public waterways and adjoining lands. Hydropower development affects 

opportunities for outdoor recreation and local communities adjacent to existing or 

potential projects that have an outdoor recreation economy. 

Outdoor Alliance is a coalition of eight member-based organizations representing the 

human powered outdoor recreation community. The coalition includes Access Fund, 

American Canoe Association, American Whitewater, International Mountain Bicycling 

Association, Winter Wildlands Alliance, The Mountaineers, American Alpine Club, and 

Mazamas and represents the interests of the millions of Americans who hike, climb, 

paddle, mountain bike, and backcountry ski and snowshoe on our nation's public lands, 

waters, and snowscapes. 

Interest of our Organization in Hydropower Licensing 

Our members directly participate in license proceedings for hydropower projects in 

partnership with federal land managers, including in particular the Forest Service and 

Bureau of Land Management. The authorities granted to federal agencies by section 

4(e) of the Federal Power Act that require equal consideration of the "protection of 

recreational opportunities"' have helped ensure that hydropower operations balance our 

1 16 U.S. Code§ 797(e). 
116 


OUTDOOR ALLIANCE 

society's need for power with the benefits of flowing rivers, including important economic 

benefits generated through the outdoor recreation economy. Outdoor recreation can be 

a benefit of hydropower under certain circumstances. On the section of their website 

promoting the benefits of hydropower, the National Hydropower Association states that 

"swimming, boating, fishing, camping, skiing and hiking are just some of the recreational 

activities that take place year-round and across the country at sites developed and 

supported by the hydropower industry."2 Hydropower can also negatively impact outdoor 

recreation by reducing river flows and limiting access to public waterways. 

Outdoor recreation generates $646 billion in annual consumer spending and directly 

employs more than 6.1 million Americans, with more than 142 million Americans 

recreating outside last year. Much of this activity happens around water given that ''the 

presence of water is essential to or enhances the satisfaction of recreationists engaged 

in most outdoor recreation activities.''3 lnstream flow, which is directly affected by 

hydropower development, is a fundamental aspect of recreational quality, and 

quantifying flow-recreation relationships has become common in most Federal Energy 

Regulatory Commission (FERC) licensing proceedings.4 The outdoor recreation 

economy is dispersed, contributing to the economic well-being of rural communities that 

are most often directly affected by hydropower development, and outdoor recreation 

offsets the often cyclical nature of resource development activities. Outdoor recreation is 

a part of our heritage, uniting families and communities in support of common passions. 

Comments 

Efforts to expand hydropower cannot come at the expense of FERC's existing 

responsibility to protect, mitigate, and enhance recreational opportunities. Past 

legislative proposals (i.e., H.R. 8, Subtitle on Hydropower Regulatory Modernization5

) 

considered by this Committee would severely limit the ability of local communities to 

advocate for recreational benefits in hydropower licensing by shifting responsibilities 

away from states, federal land managers with locally-based recreation staff, and 

affected communities. Instead, it would place that responsibility exclusively in the hands 

of FERC, a regulatory agency whose limited local field staff do not participate in 

licensing and are unlikely to understand local community needs. FERC staff only have 

the ability to participate in one or two site visits in all over a multi-year licensing process, 

and typically have minimal experience and familiarity with local resources and values. In 

2 http://www.hydro.org/why-hydro/other-benefits/, last accessed March 12,2017. 3 Kakoyannis, C. and G.H. Stankey. 2002. Assessing and evaluating recreational uses of water 

resources: implications for an integrated management framework. USDA Forest Service, PNW-GTR-536. 4 Whittaker, D., B. Shelby, and J. Gangemi. 2005. Flows and recreation: a guide to studies for river 

~rofessionals. Hydropower Reform Coalition and National Park Service. 

https://www.congress.gov/bill/114th-congress/house-bill/8, last accessed March 12, 2017. 
117 


OUTDOOR ALLIANCE 

considering future legislative changes to the Federal Power Act, our interest is in 

outcomes that are protective of and beneficial to outdoor recreation and local 

communities. 

While there are opportunities to improve hydropower licensing, we oppose any effort to 

diminish the ability of local citizens and public resource agencies to ensure that 

hydropower licenses include provisions to protect the public river resources that are 

important to them. We urge you to focus on efforts that uphold the important 

responsibility and authority that resource agencies have in the hydropower licensing 

process, including providing adequate funding for these agencies to meet their statutory 

obligations in a timely fashion. The primary focus of expanding hydropower should be 

on promoting efficiency, retrofitting suitable non-powered dams, and upgrading centuryold technology that affects rivers across the country. In some cases modernizing 

infrastructure means removing projects that are not cost effective and restoring rivers for 

the benefit of communities, the environment, and the outdoor recreation economy. 

Best regards, 

Adam Cramer 

Executive Director 

Outdoor Alliance 

cc: Brady Robinson, Executive Director, Access Fund 

Wade Blackwood, Executive Director, American Canoe Association 

Mark Singleton, Executive Director, American Whitewater 

Dave Wiens, Executive Director, International Mountain Bicycling Association 

Mark Menlove, Executive Director, Winter Wildlands Alliance 

Tom Vogl, Chief Executive Officer, The Mountaineers 

Phil Powers, Executive Director, American Alpine Club 

Lee Davis, Executive Director, the Mazamas 
118 


TESTIMONY OF SACRAMENTO MUNICIPAL UTILITY DISTRICT 

SUBMITTED FOR THE RECORD 

AT THE HOUSE ENERGY AND COMMERCE SUBCOMMITTEE ON ENERGY 

HEARING ON 

"MODERNIZING ENERGY INFRASTRUCTURE: CHALLENGES AND OPPORTUNITIES 

TO EXPANDING HYDROPOWER GENERATION" 

MARCH 15,2017 

1 
119 


Chairman Upton and Ranking Member Rush, thank you for holding an important hearing on 

expanding hydropower generation. The Sacramento Municipal Utility District (SMUD) 

appreciates the opportunity to submit this testimony for the record and welcomes the opportunity 

to serve as a resource for members of the Subcommittee who may wish to learn more about our 

experience with hydropower generation and the relicensing process. 

SMUD is the nation's sixth-largest municipally-owned utility, operating on a not-for-profit basis 

to supply electricity to California's capital region since 1946. Today SMUD serves a population 

of 1.4 million over a service territory of 900 square miles. 

A cornerstone ofSMUD's energy supply, the Upper American River Project (UARP) is a 688-

megawatt hydroelectric project that consists of 11 reservoirs and 8 powerhouses, spanning an 

area from the crest of the Sierra Nevada mountains to the foothill communities of the 

Sacramento Valley. The UARP is SMUD's most economical energy source and, due to its 

operating flexibility, a critical resource for meeting peak demand and stabilizing the grid once 

recreational and fishery resource demands are met. It can supply about 20 percent of customers' 

demand during peak load hours, and in years of normal water supplies, it can provide about 15 

percent of customers' total annual energy use. SMUD started building the UARP in the late 

1950s, and the original 50-year operating license expired in 2007. 

During the relicensing process, the Federal Energy Regulatory Commission (FERC) must 

balance the benefits of relicensing with the views of resource agencies that have mandatory 

conditioning authority. These agencies often insist that the licensee perform myriad studies and 

agree with numerous conditions. Those conditions can only be challenged through costly and 

time-consuming trial-type hearings, which licensees can win only if the defending agency lacks a 

reasonable basis for its condition, no matter how significant the impact is on the licensee's 

generation facilities. This adversarial system severely impacts projects through delays and 

increased costs. SMUD began planning for the FERC review process ofUARP in the mid1990s, established a relicensing team in 2000, and finished more than 70 technical and 

environmental studies in 2004. SMUD filed an initial application for the new license with FERC 

in 2005. 

SMUD chose to engage the people of El Dorado County and all groups with an interest in the 

project by following an alternative method of relicensing based on collaboration and negotiation. 

In 2007, SMUD asked FERC to incorporate in the new license all terms of a comprehensive 

agreement we reached with stakeholders. However, it took another 6 years for the State Water 

Resources Control Board to issue a water quality certification, which was a prerequisite for the 

FERC license. The state issued the certification in October of2013. In 2014, FERC granted 

SMUDa new 50-year license with conditions for SMUD's operation of the UARP through 2064. 

The UARP was once an effective resource for meeting fluctuations in peak energy demand. But 

in the years since relicensing, the majority of water releases are for recreational purposes, leaving 

little water available to release into turbines during the late afternoon and early evening when 

summer air-conditioning needs are highest. 

SMUD's experience relicensing the UARP exemplified problems with the current hydropower 

relicensing process. Relicensing the UARP took 13 years and cost approximately $24 million. 

2 
120 


The delays were largely due to a lack of coordination between and among federal and state 

agencies, duplicative reviews and studies, conflicting priorities, and deferred decision-making. 

These factors ultimately delayed both relicensing and the environmental improvements 

associated with the renewed license. SMUD spent roughly $7.5 million on outside contractors to 

perform 73 technical studies required throughout the relicensing process. These studies were 

made more expensive by resource agencies requiring three years of data to understand seasonal 

and yearly variability in resource areas, such as water quality and insect life. 

Based on SMUD's experience with the relicensing process, we supported the Energy and 

Commerce Committee's efforts in the 114'h Congress to streamline the process. As the 

Committee works to spur new hydropower development, SMUD hopes you will also continue to 

work toward passage of the hydropower relicensing provisions included in H.R. 8 and S. 2012. 

Reforming the relicensing process is a critical corollary to efforts to develop new hydropower 

resources, as investments in new resources may not be fully borne out if the useful life of a 

project is cut short as a result of bureaucratic red tape. SMUD was successful in its relicensing 

effort, but many more hydroelectric projects- particularly small projects are abandoned in the 

face of insurmountable regulatory costs and uncertain timelines. 

Finally, SMUD wishes to associate itself with the comments of the National Hydropower 

Association (NHA), of which it is a member, at the Senate Energy and Natural Resources 

hearing on hydropower development that took place on March 14. SMUD also supports many of 

the comments made at today's hearing by Rye Development, another NHA member, but reminds 

the Committee that public-private partnerships- while useful for leveraging the capital needed to 

build new assets- are not a silver bullet for energy infrastructure. 

Again, thank you for your consideration of this important topic and please do not hesitate to call 

on SMUD as a resource as this Committee develops energy infrastructure legislation. 

3 
121 


GREG WALDEN, OHEGON 

CHAIRMAN 

ONE HUNOREO FIFTEENTH CONGRESS 

FRANK PALLONE, JR, NEW JERSEY 

RANKING MEMBER 

<!Congress of tbe ilttiteb ~Mates 

}!)OWl£ of i>\eprcscntatibt£1 

COMMITTEE ON ENERGY AND COMMERCE 

2125 RAYBURN House OFFICE BuiLDING 

WASHINGTON, DC 20515-6115 

Mr. Kieran Connolly 

Vice President for Generation 

and Asset Management 

Bonneville Power Administration 

M<!jorny {20:?)225-2927 

Minonty (20:?)21!><JB41 

April4, 2017 

1000 Independence Avenue, S.W., 80-061 

Washington, DC 20585 

Dear Mr. Connolly, 

Thank you for appearing before the Subcommittee on Energy on Wednesday, March l 5, 2017, to 

testifY at the hearing entitled "Modernizing Energy Infrastructure: Challenges and Opportunities to 

Expanding Hydropower Generation." 

Pursuant to the Rules of the Committee on Energy and Commerce, the hearing record remains 

open for ten business days to permit Members to submit additional questions for the record, which are 

attached. The format of your responses to these questions should be as follows: (1) the name of the 

Member whose question you are addressing, (2) the complete text of the question you are addressing in 

bold, and (3) your answer to that question in plain text. 

To facilitate the printing of the hearing record, please respond to these questions with a transmittal 

letter by the close of business on Wednesday, April 19,2017. Your responses should be mailed to Grace 

Appelbe, Legislative Clerk, Committee on Energy and Commerce, 2125 Rayburn House Office Building, 

Washington, DC 20515 and e~mailed in Word fonnat to Grace.Appelbe@mail.house.gov. 

Thank you again for your time and effort preparing and delivering testimony before the 

Subcommittee. 

t:r~ Subcommittee on Energy 

cc: The Honorable Bobby L. Rush, Ranking Member, Subcommittee on Energy 

Attachment 
122 


Department of Energy 

WashinDton, DC 20585 

The !lonorablc Fred Upton 

Chairman 

Subcommittee on Energy 

May 12.2017 

Committee on Energy and Commerce 

U.S. Jlousc of Representatives 

Washington, DC 205!5 

Dear Mr. Chainnan: 

On i\·farch 15, 2017. Kieran Connolly, Vice President, Generation Asset Management, 

13onnevilk Power Administration, tcstilkd regarding "'1vlodcmizing Energy 

Infrastructure: Challenges and Opportunities to Expanding I lydropowcr Generation." 

Enclosed arc answers to three questions that you submitted l(lr the hearing record. 

If you need any additional information or further assistance. please contact me or Lillian 

Owen, Oftice of Congressional and Intergovernmental Affairs at (202) 5X6-5450. 

Enclosures 

cc: The Honorable Bobby L. Rush 

Ranking Member 

Shari Davenport 

Principal Deputy Assistant Secretary 

Congressional and Intergovernmental Affairs 
123 


QUESTIONS FROM CHAIRMAN FRED UPTON 

Q I: Your testimony raised an important issue relating to the ongoing litigation in the U.S. District 

Court in Oregon. 

Q I a: How could the safety and reliability of the power generation and transmission system be affected 

by proposals to add significant spill and stop investment in the four Lower Snake River dams? 

A I a: The requested change in operations would increase the frequency with which the. Lower 

Columbia and Lower Snake projects operate at minimum generation levels during the spring 

season, especially during low water conditions, and this would decrease the operating flexibility 

of the interconnected transmission system. Furthermore, limits on capital spending at these 

projects can have impacts to both safety and reliability. The generation and reserve capacity 

available at these projects contributes to maintaining the reliability of the interconnected 

transmission system, including stability, preventing blackouts, and assuring adequate reserves 

and system balancing needs. Without the 11exibility to adjust hydroelectric power generation 

up and down as conditions of the system require, Bonneville may need to declare transmission 

system emergencies more frequently. 

Q I b: How would removal of the Lower Snake River Dams affect Bon nevi lie's ability to provide 

adequate power during peak periods? 

Alb: Without the energy and capacity these projects supply, the region's "loss of load probability" 

increases. Loss of load probability is an important metric that Bonneville and the Northwest 

Power and Conservation Council use to assess whether generation resources are adequate to meet 

load. Without power generation from the four lower Snake River dams, loss of load probability 

increases from 5 percent to 7 percent. To maintain the probability at the regional standard of 5 

percent likely would require new gas-fired generating resources that can be called upon at any 

time of day or season of the year. 

Q2: Your testimony indicated that about 30% of Bonneville's rates go toward fish and wildlife 

mitigation. 

Q2a: How much does Bonneville spend on its fish and wildlife program on an annual basis? 

A2a: Over the last ten years, the cost of Bonneville's fish and wildlife actions has averaged $727 

million per year. This includes Bonneville's spending on its direct fish and wildlife program, the 

power share of Corps of Engineers and Bureau of Reclamation fish and wildlife spending, the 

Lower Snake Compensation Plan hatcheries of the U.S. Fish and Wildlife Service, 50 percent of 

the Northwest Power and Conservation Council budget, interest and depreciation of related 

1 
124 


capital investments, as well as foregone revenues and replacement power purchases. 

Q2b: How does Bonneville budget for fish and wildlife costs? Are ratepayers included in the process? 

A2b: Bonneville's spending on its direct fish and wildlife program covers Federal Endangered Species 

Act obligations, Fish Accords with various Tribal and state governments, and implemention of 

fish and wildlife actions consistent with the Northwest Power and Conservation Council's Fish 

and Wildlife Program as recommended by the Council through a public process. Bonneville 

works closely with the Corps of Engineers and Bureau of Reclamation to develop their spending 

forecasts. Bonneville engages its customers and other interested parties every two years in the 

Integrated Program Review (IPR) and Capital Investment Review (CIR), which are 

comprehensive reviews of Bonneville's forecast of spending that will be used in rate setting. The 

IPR and CIR processes include detailed publications, public workshops, and a comment period. 

Q3. Bonneville's contracts come up for renewal in 2028. What is Bonneville's strategy for 

addressing rate pressures? 

A3: Our central strategic objective is to be the provider of choice for our preference customers when 

long-term contracts are up for renegotiation. Our first step is to demonstrate our capacity to be 

competitive by starting on a more sustainable rate trajectory in Fiscal Years 2018 and 2019. 

Bonneville's customers will judge our power rates in the context of and comparison against 

alternative power supply options. With that competition in mind, as well as our congressional 

mandate for low rates consistent with sound business principles, Bonneville will strive to manage 

all of its costs, maximize the value of its surplus power marketing, and secure a rate trajectory 

that positions Bonneville to be an attractively-priced power supply option for the value it delivers. 

While Bonneville's strategic plan is under development and slated for publication at the end of 

2017, we have a variety of efforts contributing to the plan and addressing rate pressures. These 

efforts include: 

a cost management initiative to improve decision making and controls on Bonneville's 

costs; 

an assessment of available rate tools Bonneville may consider in future rate periods to 

enhance stability and predictability of rates; 

improving asset management practices to optimize and prioritize implementation of capital 

investments and return on investment; 

2 
125 


refreshing Bonneville's financial plan, including assessment of financial policies that could 

assist in stabilizing rates; 

continuous optimization of Bonneville's surplus power marketing operations to maximize 

revenues available to address rate pressures. 

Q3a: Are all costs on the table for review? 

A3a: Yes, subject to statutory mandates and other established legal requirements. Bonneville's 

statutory mandates include obligations for a variety of programs but do not establish specific 

funding requirements. Bonneville intends to examine all of its cost drivers, in consultation with 

the region, for levels appropriate to meet its obligations while ensuring an adequate, economic, 

and reliable power supply. 

3 
126 


GREG WALDEN, OREGON 

CHAIRMAN 

ONE HUNDRED FIFTEENTH CONGRESS 

FRANK PALLONE, JH., NEW JERSEY 

RANKING MEMBER 

<!Congrc%% of tbt ijlnittb $tatt£i 

J!)omic of ~eprc£\cntatibc!l 

COMMITTEE ON ENERGY AND COMMERCE 

2125 RAYBURN HousE 0FflCE BuiLDING 

WASHINGTON, DC 20515-6115 Majonty {202)225 2927 

Mmonty (202)225 3ll41 

April4, 2017 

Mr. Dave Steindorf 

California Stewardship Director 

American Whitewater 

4 Baroni Drive 

Chico, CA 95928 

Dear Mr. Steindorf, 

Thank you for appearing before the Subcommittee on Energy on Wednesday, March 15,2017, to 

testify at the hearing entitled ~'Modernizing Energy Infrastructure: Challenges and Opportunities to 

Expanding Hydropower Generation." 

Pursuant to the Rules of the Committee on Energy and Commerce, the hearing record remains 

open for ten business days to permit Members to submit additional questions for the record, which are 

attached. The format of your responses to these questions should be as follows: (1) the name of the 

Member whose question you are addressing, (2) the complete text of the question you are addressing in 

bold, and (3) your answer to that question in plain text. 

To facilitate the printing of the hearing record, please respond to these questions with a transmittal 

letter by the close of business on Wednesday, April 19, 2017. Your responses should be mailed to Grace 

Appelhe, Legislative Clerk, Committee on Energy and Commerce, 2125 Rayburn House Office Building, 

Washington, DC 20515 and e-mailed in Word fonnatto Grace.Appelbe@mail.house.gov, 

Thank you again for your time and effort preparing and delivering testimony befOre the 

Subcommittee, 

Sincerely, 

~:(~ Subcommittee on Energy 

cc: The Honorable Bobby L. Rush, Ranking Member, Subcommittee on Energy 

Attachment 
127 


110114'h Street N.W. • Suite 1400 ~ T: 202.347.7550 

':f:!WW. W··~a~s~h~in~g~to~n~,~D~C~2~0~0~05~----------- hyd roreform .org . -----~~~~~~F~:~20~2~·~34~7~·~92~4~0 coordinator@ hyd roreform .org 

HYDROPOWER 

REFORM 

COALITION 

Putting watttr, wUdli{(', 

and people bod. in rivt'rs, 

Questions for the Record 

Submitted by Rep. Frank Pallone 

Hearing on: Modernizing Energy Infrastructure: Challenges and 

Opportunities to Expanding Hydropower Generation 

Questions for Mr. David Steindorf: 

l. Hydropower reform proposals in the last Congress designated FERC as lead agency 

in the hydropower licensing process and provided FERC with greater authority to 

set the time table for the licensing process and to grant a license or a renewal within 

a specific time period. The assumption underlying these proposals is that federal 

resource agencies, state agencies, or tribal organizations are taking too much time to 

make decisions on one or more necessary permits to be issued under their 

conditioning authorities. 

What arc the implications for state, tribal, and private water rights within the 

watershed that hosts the hydropower project if FERC is given authority to control 

the schedule for the licensing process and has the authority to grant a license or 

license renewal without state, tribal and/or federal agencies providing formal 

approvals? 

Allowing FERC to control the schedule for the licensing process and grant a license or 

license renewal without state, tribal and/or federal agencies providing formal approval 

will place substantive limitations on these agencies· ability to carry out their mandates to 

address important environmental, water quality and quantity, and recreational issues. In 

effect, it will change natural resource policy and law on the ground without explicitly 

changing those laws. 

Ann Miles. former Director of the Office of Energy Projects at FERC, addressed the issue 

of this "enforceable schedule"language well in her testimony before the Committee on 

Energy and Commerce. Subcommittee on Energy and Power in the House committee on 

May 13,2015. She stated 

It is important to note that in many instances, it is applicants, federal and state 

agencies. and other stakeholders that determine project success, and control 

whether the regulatory process will be short or long. simple or complex. For 

example, where a developer picks a site that raises few environmental issues or 
128 


works early to build a rapport with stakeholders, and where agencies and other 

stakeholders commit to fully and timely engage in the regulatory process, project 

review can move quickly. In these instances, licenses can be issued in two years 

or less. (Ann Miles' testimony before the Subcommittee on Energy and Power. 

committee on Energy and Commerce, U.S. House, May I 5, 2015, p. 6) 

Regarding prospective changes to law diminishing stale and local controls over the areas 

surrounding projects, Ms. Miles continued 

[i]t is important to understand that, in enacting the FPA, Congress established a 

regime in which licensees and exemptees, in exchange for the use of waters 

belonging to the people of the United States, are required to satisfy the public 

interest in matters such as hydroelectric generation, recreation, irrigation, water 

supply, flood control, and environmental protection. Thus, the Commission must 

consider such issues as whether upstream or downstream residents may be 

flooded as a result of project operations or whether visitors to a lake have 

sufficient public access to boat, fish, hike, or swim. Congress determined that 

these matters sometimes are more than a local concern, and thus should be 

resolved by an entity that is required to consider the overall public interest. (Ann 

Miles' testimony before the Subcommittee on Energy and Power, committee on 

Energy and Commerce, U.S. House, May !5, 2015, p. 12-13.) 

We agree strenuously with this characterization of the process and the importance 

balance between interests. 

While some perceive the occasionally prolonged review of a license as being an issue of 

natural resource agencies taking too much time to make a decision, in our experience, 

there's a separate, underlying issue that needs to be addressed. FERC views its 

geographic and substantive scope narrowly when conducting a NEPA analysis or in 

making determinations about which studies are needed for a project, and this view 

influences their perspective of how long it takes to complete a study. Agencies that have 

directives different from FERC under the Federal Power Act, or derive their authorities 

from other statutes, such as the Clean Water Act and the Endangered Species Act, have 

different mandates that require analyses broader than what FERC considers necessary to 

fulfill its statutorily defined mission. Granting FERC the authority to control the schedule 

would allow it to make water management decisions under state and federal law, 

adjudicate water rights, and dictate the level of federal responsibility of treaty rights and 

trust obligations to American Indian nations. This will be done without the decades of 

experience or statutory charge the coordinate oversight agencies have Federalizing and 

centralizing such power in FERC will do little to solve the problem. A more effective 

solution to this issue is to improve communication and cooperation between all 

stakeholders earlier in the licensing process. We discuss solutions to this issue in more 

depth in our answers to Questions 2 and 4. 

Allowing FERC to limit state or tribal review of projects would effectively federalize the 

application of state water law. From the McCarran Amendment to the Clean Water Act, 

Congress has insisted that the states' right to manage water should not be unduly limited 

by the federal government. Where the Clean Water Act could have directed the 

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Environmental Protection Agency (EPA) to centrally manage water usage and quality, it 

instead placed that responsibility with state and tribal water quality agencies. Federalizing 

water quality management would take an enduringly strong example of cooperative 

federalism and vest that local authority in a federal commission, running counter to what 

Chief Justice Rehnquist described as a "consistent thread of purposeful and continued 

deference to state water law by Congress" (California v. U.S., 428 U.S. 645, ( 1978)). 

States and tribes (including national tribal organizations) widely opposed the 

"enforceable schedule language" included in II.R. 8 last Congress because it would have 

limited their ability to manage their water quality and in-stream flows. In the words of the 

State of Oregon, it would have 

compromise[ d) Oregon's ability to ensure that hydropower is compatible with 

environmental, recreational. and other public benefits by moving away from a 

balancing approach for development, to an approach where FERC is given 

exclusive authority to determine which measures are reasonable, economically 

feasible, and essential for fish and wildlife. (Letter from Gabriela Goldfarb, 

Natural Resource Policy Advisor to the Governor, May 28, 2015, submitted to the 

record of the May 15, 2015 hearing before the Subcommittee on Energy Power, 

Committee on Energy and Commerce, U.S. House.) 

The State of Maryland opposed the enforceable schedule language because 

[i]n removing or impairing the states' primary role and responsibility under 

Section 401 to fashion conditions in FERC licenses, 1-l.R. 8 relegate [sic] the 

states--the entities with the greatest interest and expertise in protecting state water 

quality--to bystander or second-class status. Maryland strenuously objects to the 

provisions in H.R. 8 that would strip states of their authority under Section 40 I of 

the Clean Water Act. (Letter from Ben Grumbles, Secretary, Maryland 

Department of the Environment, and Mark Belton, Secretary, Maryland 

Department of Natural Resources, June 2, 2015, submitted to the record of the 

May 15, 2015 hearing before the Subcommittee on Energy and Power, Committee 

on Energy and Commerce, U.S. House.) 

Centralizing state water management in FERC would also prevent state water boards 

from adjudicating and managing state and private water rights. This is one of the reasons 

the Western Governors' Association objected strenuously to the enforceable deadline 

language in 1-l.R. 8, stating 

[i]t is crucial... that state water quality certifications and other necessary state 

procedures be undertaken in a careful, deliberate manner. Hydropower licenses 

may have a term in excess of 50 years, and those rights granted in a hydropower 

license directly affect the quality and quantity of state water, state wildlife and 

other resources." (Letter from Governor Steve Bullock of Montana, and Governor 

Dennis Daugaard of South Dakota, Vice Chair, Western Governor's Association, 

to Chairman Upton and Ranking Member Pallone of the Committee on Energy 

and Commerce, U.S. House of Representatives, July !8, 20 16.) 

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The enforceable schedule language would grant FERC the ability to, in effect, waive 

federal, state and local laws pertaining to hydropower. This would directly impact water 

users of all kinds, from municipal drinking water authorities, agricultural producers, and 

irrigation districts to commercial and industrial users, recreational users, and tlood 

control agencies. It would not only change the regulatory authority of the state to work 

with these users, but also upend their knowledge and invalidate the decades of experience 

they have garnered by working with the state water quality agency. 

Federalizing water management would also implicate federal rights, such as those 

enshrined in treaties with American Indian nations. Many tribes have Congressionally 

ratified settlement agreements, the result of years-long, painstaking negotiation between 

tribes, states, local water users, and the federal government. These settlements dictate 

how much water tribes are entitled to for irrigation, fisheries, and other purposes, and 

how much water must be kept in the waterway for non-tribal use. These federally ratified 

rights arc for the most part managed by the states. Preventing state and tribal 

governments from completing the evaluation of a hydropower project would prevent 

them from offering legally defensible requirements in a CW A certification, and would 

enable FERC to approve water usage and management that violated the terms of tribal 

water settlement agreements. Furthermore, Tribes tend to be awarded greater water 

allocations than they use as of the settlement date. As a result of this reservation surplus, 

tribes have the ability to lease their water rights within water markets. This is a new and 

emerging economic niche, yet to be fully explored by tribes, so fiscal returns are not yet 

determinable. However, changing climate conditions and decreased levels in groundwater 

aquifers may allow tribes to capitalize on the revenue-generating opportunity by leasing 

their water rights to non-tribal members (such as municipalities), creating a welcome 

source of revenue for some communities in Indian Country. 

A number of Native American Tribes depend on waterways with hydropower facilities 

for not only sustenance, but for their religious and cultural practices. Centralizing in 

FERC water use and management decisions has the potential to negatively impact the 

free practice of these tribe's important ceremonies. For example, many waterfalls in the 

Pacific Northwest are considered sacred sites to tribes and a strong Oow of water and 

mists from waterfalls are needed for a number of their cultural and religious practices 

(e.g. Pugct Sound Energy, Inc. l 07 FERC ,i 61 ,33! 2004). Giving FERC the ability to 

deny requests from the federal trustees who work the closest with Tribes-the Bureau of 

Indian Affairs and its sister agencies in the Department of the Interior--could be 

disastrous. Such a power could very well impinge on the ability of these American 

citizens to freely engage in their religious practices. 

Many tribes entered into treaties with the United States that preserved off-reservation 

hunting and fishing rights (usufructuary rights). Those rights, though federal in nature, 

are by and large upheld by the states, which coordinate with tribal wildlife management 

agencies to ensure that tribes retain access to their historical fisheries and hunting 

grounds. Protecting these rights has afforded a benefit to non-tribal members as well, as 

robust fish and wildlife populations are required to uphold them. In a letter opposing 

decreased flexibility under sections 4(e) and 18 of the FPA, the National Congress of 

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131 


American Indians (NCAI) and the Native American Rights Fund (NARF), wrote to 

Senators Murkowski and Cantwell that, "[Such language J provides a substantial burden 

on tribes and agencies to protect fish resources at a critical time when many fish 

populations are shrinking to dangerously low numbers. This in turns (sic] puts tribal trust 

resources and tribal treaty rights at risk." (Letter from Jacqueline Pata, Executive 

Director, NCAI, and John E. Echohawk, Executive Director, NARF, to the Committee on 

Energy and Commerce, U.S. Senate, July 27, 201 5). 

In summary, the impact of a FERC "enforceable schedule" language divesting states, 

tribes and federal resource agencies of their current authority to appropriately condition 

the use of public waters, such as was found in the provisions of H.R. 8 authored by 

Representatives McMorris-Rodgers and McNerney in the I 14'11 Congress, is the creation 

of a de facto federal reserved water right for FERC to exercise on behalf of a license 

applicant. If enacted, a change in law allowing FERC to limit state, tribal, and federal 

resource mangers' authority would overturn more than half a century of federal water law 

and undcrm ine legal concepts that, in the West, extend back at least to the Reclamation 

Act, and, in the East, to doctrines that find their genesis in colonial law. It would rob 

states and tribes of Congressionally recognized sovereign rights, federal agencies of their 

power to uphold their statutory authorities and trust responsibilites, and would allow dam 

owners to avoid compliance with bedrock environmental law. An enforceable schedule 

would place power generation ahead of all other uses of a river. 

2. In a hydropower licensing or re-licensing process, states must issue a water quality 

certification for the project and state and federal resource agencies must issue a 

variety of permits under existing laws and/or define a set of conditions to mitigate 

negative impacts of the hydropower project. 

The agencies require information that is generated in studies performed by license 

applicants to support and defend their permitting decisions. It appears one source 

of delay in the licensing or relicensing process occurs during the process of defining 

the list of studies that arc required to facilitate decision-making by state, tribal, and 

federal resource agencies. 

In your experience does FERC defer to the agencies' study requests? 

No. In evaluating study requests, FERC orders studies to fulfill its own responsibilities 

under the Federal Power Act. It is not only practice, but stated policy that FERC does not 

defer to what other agencies state they need to carry out their own authorities that are 

related to relicensing but arc separate from FERC's responsibilities. See, for instance. a 

June 18,2015 order in which FERC denied an agency's study request on the grounds that 

"[l]t is up to the Commission to determine whether a particular study is necessary for the 

Commission to fully understand the effects of licensing or relicensing a project, and we 

are not obligated to require a study to support another agency's decision making." (FERC 

Order Denying Rehearing. 151 FERC 'lf61 ,240, p. 9.) 

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We believe that there should be the presumption that FERC will order studies needed by 

other resource agencies, with a review process to address exceptional cases where such 

study is not warranted. The U.S. Forest Service, Bureau of Land Management and U.S. 

Fish and Wildlife Service have a better understanding of the information that they require 

in order to make decisions regarding the rivers they manage on federally reserved lands. 

It is important that the rivers that reside within public lands are available for public uses, 

including hunting, fishing, hiking, boating and other recreational activities, and not solely 

for the development of hydropower. 

In your view, is it possible based on the experience with project licensing and relicensing that has occurred over the years to develop a list of studies that would 

define a core set of information that is necessary to evaluate every license or relieense? 

[Please see answer below] 

I recognize there may be individual circumstances or conditions that are unique to a 

specific project that might require additional studies or information that goes 

beyond the core set of information that would be included in the core study list I 

described above. However, it seems a set of defined core requirements and/or best 

practices developed based on the experience with license application evaluations 

over the years would provide more certainty to the license applicant as well as all 

other parties to the licensing process. 

Based on your experience with the licensing process, do you believe the states, tribes, 

and federal resource agencies have sufficient experience to develop, in cooperation 

with FERC, a set of standard best practices that would assist hydropower license 

applicants in preparing the necessary studies to reduce delays in the licensing 

process? 

Yes, it is possible to develop a core list of studies. Wide experience to do so exists within 

the oversight agencies and many licensees, We recommend that FERC develop a core list 

of study plans in collaboration with experienced stakeholders, starting with studies that 

such stakeholders have already collaboratively developed in reliccnsing. We suggest that 

FERC also establish a list of core operations models and water temperature models that 

arc key tools in relicensing.Licensees have carried out many well-designed studies since 

the initiation ofFERC's Integrated Licensing Process in 2003 and a commitment between 

all stakeholders to cooperate and communicate will continue to result in productive and 

efficient (re)licensings. 

We are concerned, however, about the potential rigidity of any core list, based on the use 

that the concept of"nexus·· has assumed in the existing Integrated Licensing Process 

(ILP). ILP Study Criterion 5 (18 CFR § 5.9(b)(5)) requires anyone proposing a study to 

"'[ejxplain any nexus between project operations and effects (direct, indirect, and/or 

cumulative) on the resource to be studied .... "When the ILP was enacted, this 

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requirement appeared to be a simple requirement for reasonableness. However, licensees, 

lawyers, and consultants have literally spent millions of dollars parsing the meaning of 

the concept of·'nexus" to argue against multiple study requests. By claiming that a study 

has no "nexus" to a hydropower project, licensees keep legitimate study from going 

forward. Developing a core list of studies must not become this type of"gatekeeper." 

There must be clear and reasonable exceptions to any presumption that a core study is the 

only acceptable approach. A new tool to promote efficiency must not become an obstacle 

to best evidence. 

Also, because science evolves and re!icensing practitioners gain experience, we believe 

any core list of studies should undergo a prescribed review process by appropriate 

practitioners on a specified schedule. 

What role can Memoranda of Understanding between FERC and the states or 

between FERC and the federal resource agencies play in developing a mutually 

agreed upon core set of required studies and/or best practices? 

How could advocates and license applicants contribute to the development of such 

tools? 

Memoranda of Understanding (MOU) are a positive, proactive means of coordinating 

related proceedings with other federal agencies, tribes, and states. They establish a 

framework of cooperation and collaboration from the beginning, and ensure that 

states/tribes in particular and FERC are sharing the information they need to in order to 

complete their reviews on a mutually agreed upon time! inc. This is a concept that the 

National Hydropower Association (NHA) also supports. In comments on a draft MOU 

between FERC and the California State Water Resources Control Board (SWRCB) in 

2013, NHA stated: 

Better coordination and communication up front in the hydropower licensing 

process is always encouraged and benefits all parties and stakeholders. The Draft 

MOU provides an excellent opportunity to more efficiently license projects while 

creating a template for other states. The successful implementation of the Draft 

MOU has the potential to accelerate not only the approvals of hydropower 

projects (existing and new), but also the environmental benellts resulting from the 

mitigation packages associated with the project proposals. (NHA Comments on 

FERC and SWRCB draft MOU, July 8, 2013.) 

The purpose of the MOU between FERC and the SWRCB is to coordinate the procedures 

and schedules prior to the Commission's review of hydropower license applications and 

the State Water Board's review of water quality certification applications as each pertains 

to the Commission's authorization of non-federal hydropower projects in California. 

There is no need for an applicant to wait until FERC has completed its evaluation before 

it begins collecting information for one of the resource agencies. It is also possible, 

particularly in an ILP review, to use some data for more than one regulator. 

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FERC's MOU with the State of Colorado is another example that illustrates how MOU 

can be used to streamline the regulatory process for a class of hydropower projects. This 

MOU allows the state of Colorado to ·'prescreen'' for small-scale hydropower projects to 

allow for expedited processing by FERC when the applicant seeks a FERC license 

(Memorandum of Understanding, FERC and the State of Colorado, through the 

Governor's Energy Office to streamline and simplify the authorization of small scale 

hydropower projects. August 20 I 0). Additionally, FERC and the U.S. Army Corps of 

Engineers (USACE) executed an MOU in 2016, after the passage of the Hydropower 

Regulatory Efficiency Act of20 13, that facilitated the development of hydropower at the 

USACE's federal facilities by synchronizing each agency's permitting process. We 

believe that this MOU will go a long way in bringing new hydropower projects at 

existing non-powered dams online at a faster rate. 

We recommend that MOUs address coordinated preparation of the NEPA document as 

the record basis for the decisions by the several agencies. As we have commented in 

other proceedings, such an arrangement may and should be structured to preserve each 

agency's independence of judgment on disputed factual and legal issues, while promoting 

efficiency in the analysis of environmental impacts and alternatives. Amending FERC's 

ex parte rule to allow agency participation in the FERC NEPA process will speed up 

consideration as well as provide greater communication between regulators, FERC, and 

applicants; however, for the integrity of the process to be maintained, agency findings 

must not be subject to alteration by FERC. 

In developing the list of best practices by jurisdiction and watershed, and the 'core 

studies' to be presumptively included in FERC study plans, a review and comment period 

would allow contributions by advocates and applicants. Alternatively, front-end 

consultation could be beneficial. FERC, as the clearinghouse for coordination, would 

manage this process and must ensure sufficient input from state, tribal, and federal 

resource managers, as well as applicants and interested members of the public. 

3. Please elaborate further on the benefits of delegating conditioning authority under 

Sections 4(e) and 18 of the Federal Power Act directly to tribes. 

In the approximately I 00 years since the Federal Power Act was enacted, the United 

States government has had varying degrees of success in fulfilling its obligations as 

trustee to tribal nations via sections 4(c) and !8. While the dedication of the federal 

government to upholding treaty rights and trust responsibilities has improved markedly in 

the past thirty years, so has the ability of tribal governments and inter-governmental 

organizations to manage their own resources. Devolving to quali11ed, technically capable 

tribes the responsibilities to maintain federal Indian reservations and ensure fish passage 

serves a two-fold purpose: it would ensure proper attention and expediency in reviewing 

the applications for hydropower development and it would promote self-determination 

and resource management in tribal governance. Reducing the intermediate layer of 

bureaucracy would empower local managers, free up agency staff to focus on other 

hydropower license applications, and further protect critical (and often sacred) resources. 

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One of the most persistent criticisms of the hydropower licensing process is that there is 

insufficient communication between parties in a licensing. Often, the communication 

gaps are representative of the number of tasks a given regulator is responsible for at a 

given time. In the case of potential or actual impacts of a hydropower project to an 

American Indian reservation, the process of determining the 4(e) condition moves from 

FERC to the Secretary of the Interior to the Bureau oflndian Affairs (BIA) to the 

impacted tribe, back to BIA, back to the Secretary, back to FERC. By devolving the 

authority directly to the tribe, two layers of red tape arc removed. Much the same middle 

management and review is removed by delegated section 18 authority; allowing the tribe 

to propose fish passage conditions would eliminate reviews by the U.S. Fish and Wildlife 

Service and/or the National Marine Fisheries Service and the Secretaries of the Interior 

and Commerce, respectively. 

Submitting applications directly to the tribes has the added benefit of quickly putting 

them into the hands of the resource managers who are going to devote the most 

significant amount of attention to them from the beginning. While federal resource 

managers safeguarding Indian reservations and fisheries under 4( e) and 18 have devotion 

to the agency mission and their responsibilities under treaties and statutes, they are not 

making decisions that will directly affect their lives and the lives of their community. The 

added real-life implications for the conditioning reviews will ensure that applications arc 

addressed in the most expedient manner. 

Most tribal governments spend most of their time managing the community existing 

within the boundaries of the reservation. Unlike most federal regulators, who are often 

located long distances from the Indian reservation that has been or could be impacted by 

a hydropower project, tribal resource managers know the lay of the land, local 

stakeholders, and how more or less water in the river could impact the economy. The 

local knowledge of the project and the players is invaluable and should have greater 

prominence in hydropower licensing, not less. 

While many tribes have always had a knowledge and familiarity with their resources, 

they either lacked the technical, scientific capacity to have their knowledge respected or 

sufficient funding to retain such experts. This is no longer the case. Tribal governments 

oversee police forces, medical clinics, K-undergraduate education, energy regulatory 

offices, and museums. Many tribes have environmental offices and wildlife offices with a 

technical sophistication on par with that of the state(s) in which their reservations are 

located. They are no less capable of overseeing the day-to-day needs of their 

communities than any non-Native government. Tribes provide these services pursuant to 

federal law, contracts with the federal government, and their own tribal laws. Particularly 

as regards maintaining fisheries in the Northwest, dedicated stewardship of the fishing 

stock serves the dual purposes of protecting their physical and spiritual sustenance as fish 

are "not much less necessary to the existence of the Indians than the atmosphere they 

breathed." United States v. Winans, 198 U.S. 371 (! 905). 

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Devolving the 4(e) and 18 authorities to technically capable tribes will recognize their 

sovereignty, the skill and dedication of tribal resource managers, and hasten the review 

process. 

4. Based upon your experience with multiple license and re-license processes, what 

factors result in the greatest delays and costs to complete the process? 

We believe Ann Miles, former Director of the Office of Energy Prqjects at FERC, 

described one of the greatest sources of delay very well: 

"Staffs experience has shown that agencies can have different timing 

requirements for the information needed for their decisions, which results in 

differing review periods. Information that an agency considers vital to its 

determination may not be available until after the FERC environmental review is 

complete and the Commission has issued an order. Providing agencies with timely 

and complete information necessary to perform Congressionally-mandated [sic] 

project reviews is the single most crucial step in ensuring process accountability 

and efficiency. This is the responsibility of the project sponsor and is often 

outside of the control of permitting agencies." (Testimony of Ann Miles to the 

Committee on Energy and Commerce Subcommittee on Energy and Power 

United States House of Representatives, May 13, 2015, p. 27.) 

Another source of delay occurs when licensees resist using standard practices in 

developing and implementing studies. For example, on the Don Pedro Hydroelectric 

Project (FERC No. P-2299) on the Tuolumne River in California, the study process was 

delayed by at least one year because the Licensees deviated from the Commission's study 

plan. 

In the Don Pedro Project, the study was designed to determine the quality of the 

recreational boating experience by having paddlers evaluate a set range of flows using 

different boat types. Although the study plan outlined a standard, best practice 

methodology, the licensees departed from the study plan and implemented one that 

involved little background research, reduced the geographic scope, garnered inadequate 

participation and deployed an oversimplified survey. The Commission determined that 

the first analysis was inadequate and required the licensees to do another study in the 

summer of20 13. (FERC Determinalion on Requests for Study Modification and New 

StudiesjiJr the Don Pedro Hydroeleclric Projecl, available on the Commission's website 

from the eLibrary feature at https://www.ferc.gov/docs-filing/eLibrary.asp. Accession 

number 20130521-3001, Appendix B7 RR-03-Lower Tuolumne River Lowest Boatable 

Flow.) 

A major source of delay tor applicants who seek to construct new hydroelectric projects 

is often their lack of experience with affected stakeholders, site-specific resource issues, 

standard studies and the licensing process. New project applicants often introduce 

themselves and their proposed project in filings with FERC, without having talked with 

other licensees, resource agencies, environmental organizations, and officials of local 

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governments. Many applicants have looked at the power potential of a new site, but have 

not considered such interests as water right holders who already divert from a dam 

proposed for retrofitting for hydropower, or well-known fishery and recreational issues. 

For example, on the Daguerre Point Dam Hydropower Project on the Yuba River in 

California, an applicant proposed to reconfigure an existing diversion dam without 

considering pre-existing problems with upstream and downstream passage offish, some 

of which are ESA-Iisted. By failing to reach out in advance to the water agency that uses 

the diversion dam for water delivery or to the relevant resource agencies, the applicant 

increased the cost of the licensing process and eventually walked away from the site. (See 

Comments of Foothills Water Network on Pre-Application Document for Daguerre Point 

Dam f~vdropower Project, available on the Commission's website from the eLibrary 

feature at https:l/www.ferc.gov/docs-filing/eLibrary.asp. accession number 20130219-

5040.) MOU between FERC and agencies, as well as FERC sharing best practices and 

preliminarily granting study requests, would help avoid situations like this. 

5. There is apparently interest in development of small hydroelectric projects and an 

assumption that these projects might move through the licensing process more 

quickly. Is the size of the hydroelectric project directly related to its environmental 

impacts'? 

The short answer is no. A paper by Abbasi and Abbasi (Abbasi, T. and S.A.Abbasi. 

Small hydro and the environmental implications of its extensive utilization. Renewable 

and Sustainable Energy Reviews 15:2134-2143, 20 II.) demonstrates that environmental 

problems caused by small hydropower are "no less numerous, and no less serious, per 

kilowatt generated" than those from larger centralized hydropower facilities. 

All dams, regardless of size, degrade water quality, alter important riparian processes 

(such as flow regimes and sediment transport), and harm river-dependent species. This is 

especially true when a dam is located on a small, sensitive headwater stream, or where 

the watershed is already degraded by other dams. Additionally, dams require major 

construction, leading to deforestation, and construction of new roads, buildings, and other 

infrastructure. All of these activities have negative impacts on rivers and streams. 

Dam impacts on fisheries do not necessarily scale up with size. An old 500 kilowatt 

hydro plant with no fishway near the head of tide on a coastal river can have much larger 

impacts on recreationally and commercially important fish than a modern 50 MW plant 

that can afford good fish passage or appropriate mitigation. 

The hydropower industry uses the terms "small," •·incremental" and "micro" hydropower 

to describe some projects. For some, this evokes images of covered bridges, water 

wheels, and mill dams, but the reality is quite different. These terms usually refer to the 

dam's nameplate generating capacity rather than the size or environmental footprint of 

the dam or reservoir. A more accurate description of most of these projects would be 

''low-power," as the dams themselves are often quite large in size. 

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Several dams that could have been described as "small" have made headlines when they 

were removed because they had significant negative impacts to the aquatic and riparian 

ecosystem relative to their value for power generation. Examples include but are not 

limited to: 

• The 14.7 MW Condit Dam on Washington's White Salmon River, which was 125 

feet high and 4 71 feet wide. 

The 13.3 MW Glines Canyon Dam on Washington's Elwha River was 210 feet high. 

The 3.5 MW Edwards Dam on Maine's Kennebec River was 917 feet wide and 25 

feet high. 

Removing these dams has restored fish passage, healthy flow regimes and other 

important aquatic and riparian ecosystem functionality to the rivers they once blocked. 

Projects described as "run-of-river" are also often incorrectly perceived as having less 

impact. In the United States, "run-of-river" typically means ''inflow generally equals 

outflow." While large, high-capacity storage dams do typically alter a river's hydrology 

more than a run-of-river project run-of-river projects are by no means impact-free. Many 

hydropower projects described as ''run-of-river" involve ''bypassed reaches," which are 

sections of river that have no flow due to hydropower operations, or have unnatural daily 

flow fluctuations, which is incredibly harmful to the river. "Run-of-river" projects can 

also block fish passage. Washington's I:lwha, Glines Canyon, and Condit dams were all 

run-of-river projects and all three were removed because the owners of the dams 

determined that the value of the power they produced did notjusti(y the costs associated 

with the environmental impacts. 

In addition to having a large environmental impact, small dams often produce 

substantially less power than advertised: hydropower dams are typically capable of an 

output that is only 40-50% of their stated nameplate capacity. The output of low-power 

hydropower dams is even further constrained by seasonal water availability. On many 

streams, the flows needed to sustain full generating capacity are rarely available, 

following storms or during periods of high spring snow melt. On other streams located in 

colder climates, or at higher elevations where below freezing temperatures reduce water 

flow during much ofthc winter, hydropower dams cannot produce power consistently 

throughout the year. The timing of these flows is not in sync with the demand for power. 

Rivers tlow their highest in the winter and spring when the demand tor power is at its 

lowest, and at their lowest in the summer, when demand for power is at its highest. 

A good example of seasonal flow impacting the feasibility of hydropower development 

comes from the 2005 Clearwater Creek project. In 2005 the Federal Energy Regulatory 

Commission (FERC) dismissed a new license for a proposed hydropower dam on 

Clearwater Creek in Washington's Nooksack watershed due to the applicant's failure to 

provide a timely response to FERC's request for additional information about the project 

(Dismissal of license application tor the Clearwater Creek Project No. 11495, February 

12th, 2003. FERC eLibrary Issuance 20030212-30 12.) It was estimated that the high 

water season on the Nooksack ran for only six weeks per year; as a result, the dam's 

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139 


proposed 6.0 MW of nameplate capacity was a highly inflated representation of the 

energy it would have actually been able to produce resulting in negative net annual 

benefits (Final Environmental Impact Statement, Warm Creek and Clearwater Creek 

Hydroelectric Projects, Washington, June 2002. FERC eLibrary Issuance 20020705-

0 121.) 

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GRFG WALDEN, OREGON 

CHAIRMAN 

ONE HUNDRED FIFTEENTH CONGRESS 

rRANK PALLONt, JH., NEW JEHSEY 

RANKING MEMBER 

~ongress of tbe Wniteb !etates 

~)ou!lc of l\cprr!lcntntii.Jc% 

COMMITTEE ON ENERGY AND COMMERCE 

2125 RAYnunN House OFFICE BuiLDING 

WASHINGTON, DC 20515-6115 M~jonty (202}225·2927 

Mlt'fliF!V {202)22~<!641 

April4, 2017 

Ms. Ramya Swamioathan 

CEO 

Rye Development 

745 Atlantic Avenue, 8th Floor 

Boston, MA 02111 

Dear Ms. Swaminathan, 

Thank you for appearing before the Subcommittee on Energy on Wednesday, March 15, 2017, to 

testifY at the hearing entitled "Modernizing Energy Infrastructure: Challenges and Opportunities to 

Expanding Hydropower Generation." 

Pursuant to the Rules of the Committee on Energy and Commerce, the hearing record remains 

open for ten business days to penn it Members to submit additional questions for the record, which are 

attached. The format of your responses to these questions should be as follows:(!) the name of the 

Member whose question you are addressing, (2) the complete text of the question you are addressing in 

bold, and (3) your answer to that question in plain text. 

To facilitate the printing of the hearing record, please respond to these questions with a transmittal 

letter by the close of business on Wednesday, April19, 2017. Your responses should be mailed to Grace 

Appelbe, Legislative Clerk, Committee on Energy and Commerce, 2125 Rayburn House Office Building, 

Washington, DC 20515 and C·mailcd in Word format to Grace.Appelbe@mail.house.gov, 

Thank you again for your time and effort preparing and delivering testimony before the 

Subcommittee. 

Sincerely, 

'%1!/~ Subcommittee on Energy 

cc: The Honorable Bobby L. Rush, Ranking Member, Subcommittee on Energy 

Attachment 
141 


Rye 

Development 

The Honorable Fred Upton 

Chairman 

Subcommittee on Energy 

2125 Rayburn House Office Building 

Washington, DC 20515 

April12,2017 

Dear Chairman Upton: 

Ramya Swaminathan 

Chief Executive Officer 

Rye Development, LLC 

745 Atlantic Avenue, 

8'" Floor 

Boston, MA 02111 

Please find attached responses to the Questions for the Record after the Subcommittee on 

Energy's March 15, 2017 hearing entitled "Modernizing Energy Infrastructure: 

Challenges and Opportunities to Expanding Hydropower Generation." 

As each of the listed questions asked about positions of the National Hydropower 

Association (the NHA), the responses attached have been developed by staff of the NHA. 

Thank you again for the opportunity to testify before the Subcommittee. We look 

forward to working with the members of the Subcommittee to expand the opportunities 

for hydropower generation. 

Sincerely, 

Ramya Swaminathan 
142 


Additional Questions for the Record 

Responses Submitted by Rye Development on behalfofNHA 

The Honorable Fred Upton 

1. In your testimony, you discussed some of the challenges that can occur post 

licensing that delay the start of construction of projects. Does the National 

Hydropower Association, as an organization, support an amendment to the Federal 

Power Act to allow FERC to extend the construction deadlines beyond the time 

period currently allowed? 

Answer: Yes. The National Hydropower Association supports an amendment to the 

Federal Power Act, which would allow FERC to make a decision on extensions. 

Hydropower projects can face a variety of obstacles that push back construction 

timelines. These include: delays in necessary post-licensing construction approvals; 

additional environmental permits; refinements in 11nal project design; continuing 

negotiations on power purchase agreements; securing 11nancing; and others. 

Today, the only way license holders can extend the construction deadline if they 

encounter any of these obstacles is to seek congressional approval for an individual 

project extension. The legislative process to enact such a bill into law can be a long, 

costly and uncertain one. This is borne out by the fact that there are several projects 

needing such a congressional approval and who have been working Jor several years, 

unsuccessfully, to pass such legislation. In fact, NHA testilled in favor of several of these 

projects in an Energy and Power Subcommittee hearing last year. 

An amendment as discussed above was under consideration by the conference committee 

on last year's energy bill. It would have allowed FERC to grant a licensee to receive an 

extension of the commence construction deadline tor up to an additional 8 years. NHA 

also supported that provision. 

Addressing this issue would be a significant improvement for projects in the 

circumstances described above- one that would allow the developers to complete the 

process and protect the significant investment of time and financial resources they have 

spent on the project. 

2. Does the National Hydropower Association support establishing FRRC as the 

lead agency for the purposes of coordinating all Federal authorizations and for the 

purposes of complying with the National Environmental Policy Act? 

Answer: Yes, NHA supports this provision. Similar language, which NHA also 

supported, was included in H.R. 8, the North American Energy Security and 

Infrastructure Act of 2015. 

As the issuer of the license governing the terms and conditions under which a 

hydropower project operates, it is only sensible that FERC be given the authority to 
143 

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coordinate all the federal authorizations that are required to construct, operate, and 

maintain the project. 

The many interrelated approvals required for non-federal has created a long and complex 

procedural process. Currently, no single agency has control over the sequencing and 

schedules required for the many different authorizations required for non-federal 

hydropower under Federal law-e.g., licensing before FERC under the FPA, ESA section 

7 consultation, CW A section 40 l certification, CWA 404 permitting, Coastal Zone 

Management Act (CZMA) consistency determination, authorization under section 14 of 

the Rivers and Harbors Act, and permitting under the Federal Land Policy and 

Management Act. 

This lack of centralized coordination has led to duplicative environmental reviews, 

inconsistent and conflicting requirements, and excessive delays. Such a provision would 

clearly empower FERC with a coordinating role for the purpose of improving the other 

processes that will continue to occur before various Federal and State authorities in 

fulfillment of their statutory obligations. 

3. What does the National Hydropower Association believe should be the role for 

Federal and State agencies considering an aspect of an application for Federal 

authorization? 

Answer: NHA believes the multitude of Federal and State agencies, as well as the public 

and other stakeholders, play a major and important role in the hydropower licensing 

process. 

However, as discussed above, the general permitting and licensing process is one of 

decentralized independent decision making by each of these individual regulatory 

entities. NHA believes improvements to the overall process, guiding all of the various 

authorizations required under federal law, can be made without sacrificing environmental 

values or rescinding statutory obligations. However in implementing their statutory 

responsibilities, and in exercising decisions on any federal authorization, agencies should 

act in a timely and coordinated manner, with transparency and accountability. 

N HA is aware of close to 3 dozen projects currently in the approvals process where 

FERC has completed its NEPA analysis, but for which another agency approval is 

delayed (e.g. Clean Water Act Section 401 certification by the state; Endangered Species 

Act biological opinion by F&WS or NMFS). In some ofthesc cases, the delay on the 

needed approval is years overdue- a handful still waiting for a decision after l 0 years. 

Such delays do not represent good government. Not only docs this negatively impact the 

license applicant through increased costs and uncertainty, but it also postpones the 

implementation of mitigation and improvement measures that are included as part of the 

final license, which is a no-win scenario for the industry and the environment.