```

[Senate Report 112-35]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 102
112th Congress                                                   Report
                                 SENATE
 1st Session                                                     112-35

======================================================================

 
                    ENERGY AND WATER INTEGRATION ACT

                                _______
                                

                 July 11, 2011.--Ordered to be printed

                                _______
                                

   Mr. Bingaman, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 1343]

    The Committee on Energy and Natural Resources, having 
considered the same, reports favorable thereon, an original 
bill (S. 1343) to provide for the conduct of an analysis of the 
impact of energy development and production on the water 
resources of the United States, and for other purposes, having 
considered the same, reports favorably thereon without 
amendment and recommends that the bill do pass.

                                Purpose

    The purpose of S. 1343 is to provide for the conduct of an 
analysis of the impact of energy development and production on 
the water resources of the United States.

                          Background and Need

    Water supplies and energy supplies are interrelated. Water 
is used for energy production, either as a coolant for 
thermoelectric power plants or certain solar installations, or 
as a critical input for the production of energy. Thermal power 
generation accounts for approximately 40 percent of freshwater 
withdrawals in the country, second only to agriculture-related 
withdrawals. In many instances the water returned to the system 
after it has been used in connection with energy production is 
not the same temperature or quality as before it was used for 
energy generation. An insufficient or uncertain supply of water 
due to heat waves, droughts, or over-allocation can strain the 
energy-water relationship and be a constraint on both 
conventional and renewable energy production. For example, 
during the drought in the southeastern United States in early 
2008, nuclear power plants threatened shutting down because of 
limited water supplies. In addition, in time of drought, lower 
water levels behind dams reduce output from their hydroelectric 
turbines.
    In addition, just as energy production uses large amounts 
of water, the procurement, treatment, and delivery of water 
supplies consumes large amounts of energy. For many water 
suppliers, energy costs are the highest operation and 
maintenance expense. Evaluation of energy uses associated with 
water delivery and the collection and generation of better data 
will lead to improved decision-making by state, local, and 
federal water managers.

                          Legislative History

    During the 111th Congress, S. 531, the Energy-Water 
Integration Act of 2009 was introduced by Senator Bingaman for 
himself and Senator Murkowski on March 5, 2009. S. 531 was 
incorporated in S. 1462 as title I, subtitle D, as reported by 
the Committee on July 16, 2009.
    During the 112th Congress the Committee on Energy and 
Natural Resources held a hearing on the text of title I, 
subtitle D, of S.1462 from the 111th Congress on March 31, 
2011. The Committee considered and amended the text from the 
111th Congress at its business meetings on April 12, 2011 and 
May 26, 2011, and ordered the legislation, as amended, 
favorably reported, as an original bill, at its business 
meeting on May 26, 2011.

                        Committee Recommendation

    The Senate Committee on Energy and Natural Resources, in 
open business session on May 26, 2011, by voice vote of a 
quorum present, recommends that the Senate pass an original 
bill, as described herein. Senators Lee and Coats were recorded 
as opposing the measure.

                      Section-by-Section Analysis

    Section 1 provides the short title of the bill and table of 
contents.
    Section 2 defines the term ``Secretary'' to mean the 
Secretary of Energy.
    Section 3 requires the Secretary, in consultation with 
others, to enter into an arrangement with the National Academy 
of Sciences to conduct a study to assess the impact of energy 
development and production on the water resources of the United 
States and to assess the amount of water used to produce 
transportation fuels, the amount of water used to produce 
electricity using various types of generation, and additional 
impacts on water from mining and transporting fuel sources. The 
National Academy of Sciences is directed to report the results 
of its study to the Secretary within 18 months of enactment of 
the Act and to make the results of its study available to the 
public.
    Section 4 requires the Secretary, in consultation with 
others, to conduct a study to identify best available 
technologies and other strategies to maximize water and energy 
efficiency in generating electricity and to submit a report to 
Congress of the results of the study.
    Section 5 requires the Secretary of the Interior, acting 
through the Commissioner of Reclamation, to conduct a study 
evaluating the energy used in storing and delivering water from 
Bureau of Reclamation projects, and to identify ways to reduce 
such use through conservation, improved operations, and 
renewable energy integration, and to submit a report to 
Congress a report containing the results of the study.
    Section 6 directs the Secretary of the Interior to operate, 
manage, and maintain facilities to carry out research, 
development, and demonstration activities to develop 
technologies and methods that promote brackish groundwater 
desalination as a viable method to increase water supply in a 
cost-effective manner. Section 6 also reauthorizes the Bureau 
of Reclamation's desalination research programs.
    Section 7 amends the Department of Energy Organization Act 
to require the Secretary of Energy, acting through the 
Administrator of the Energy Information Administration, to 
continually report on the energy used in procuring, treating, 
and delivering water.
    Section 8 directs the Secretary of Energy to develop an 
Energy-Water Research and Development Roadmap within 90 days of 
enactment and to submit a report to Congress.
    Section 9 directs the Secretary of Energy to carry out a 
competitive grant program to demonstrate technologies that 
conserve significant amounts of water and energy commercial, 
residential, and mixed-use development projects, and requires a 
report from grant recipients on the energy and water savings 
achieved through the project.
    Section 10 directs the Secretary of Energy to establish and 
carry out an energy and water efficiency technical assistance 
program for rural drinking water and wastewater utilities.
    Section 11 requires the Secretary of Energy, in 
consultation with other Federal agencies and appropriate 
entities, to conduct an in-depth study of the inter-related 
nature of water and energy and to report to Congress regarding 
the results of the study.

                   Cost and Budgetary Considerations

    The following estimate of costs of this measure has been 
provided by the Congressional Budget Office:

Energy and Water Integration Act of 2011

    Summary: This legislation would authorize federal agencies 
to undertake a variety of activities aimed at analyzing the 
impacts of developing and producing energy on the nation's 
water resources. CBO estimates that fully funding the 
legislation would cost $136 million over the 2012-2016 period, 
assuming appropriation of necessary amounts. The legislation 
would not affect direct spending or revenues; therefore, pay-
as-you-go procedures do not apply.
    The legislation would impose an intergovernmental and 
private-sector mandate, as defined in the Unfunded Mandates 
Reform Act (UMRA), because it would require public and private 
entities to submit information to the Energy Information 
Administration (EIA) about the amount of energy used to 
procure, treat, or deliver water. Based on information from the 
EIA, CBO estimates that the cost of complying with the mandate 
would fall well below the annual thresholds established in UMRA 
($71 million for intergovernmental mandates and $142 million 
for private-sector mandates, in 2011, adjusted annually for 
inflation).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of this legislation is shown in the following 
table. The costs of this legislation fall within budget 
functions 270 (energy) and 300 (natural resources and 
environment).

----------------------------------------------------------------------------------------------------------------
                                                                 By fiscal year, in millions of dollars--
                                                         -------------------------------------------------------
                                                            2012     2013     2014     2015     2016   2012-2016
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level...........................       37       34       33       33       33       170
Estimated Outlays.......................................       16       26       28       33       33       136
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: The legislation would authorize federal 
agencies to undertake a variety of activities aimed at 
analyzing and mitigating the impact of energy development and 
production on water resources as well as promoting water 
conservation. Under the legislation, those activities would be 
carried out primarily by the Department of Energy (DOE) and the 
Department of the Interior (DOI). Based on information from 
those departments about levels of spending for existing and 
similar activities, CBO estimates that fully funding the 
legislation would require appropriations totaling $170 million 
over the 2012-2016 period. That amount includes:
         $100 million for DOE to provide competitive 
        grants to state, local, and tribal governments to 
        support commercial, residential, and mixed-use 
        development projects involving technologies to reduce 
        consumption and conserve energy and water resources;
         $45 million for DOI to evaluate energy-saving 
        opportunities at federal reclamation projects and 
        perform a variety of activities related to water 
        desalination;
         $15 million for DOE to provide grants and 
        technical assistance to utilities that treat rural 
        drinking water and wastewater to help them improve 
        energy efficiency, conserve water, and develop 
        alternative and renewable energy supplies; and
         $10 million for various other studies, 
        reports, and analyses.
    Assuming appropriation of amounts estimated to be 
necessary, CBO estimates that spending would total $16 million 
in 2012 and $136 million over the 2012-2016 period. For this 
estimate, CBO assumes that the legislation will be enacted by 
the end of fiscal year 2011 and that spending will occur at 
historical rates for similar activities.
    Pay-As-You-Go considerations: None.
    Intergovernmental and private-sector impact: The 
legislation would impose an intergovernmental and private-
sector mandate, as defined in UMRA, because it would require 
public and private entities to submit information to the EIA 
about the amount of energy used to procure, treat, or deliver 
water. Based on information from the EIA, CBO estimates that 
the cost of complying with the mandate would fall well below 
the annual thresholds established in UMRA ($71 million for 
intergovernmental mandates and $142 million for private-sector 
mandates, in 2011, adjusted annually for inflation.)
    Estimate prepared by: Federal Costs: Megan Carroll, Aurora 
Swanson, and Martin von Gnechten; Impact on State, Local, and 
Tribal Governments: Ryan Miller; Impact on the Private Sector: 
Amy Petz.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                      Regulatory Impact Evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out the bill.
    The bill is not a regulatory measure in the sense of 
imposing Government-established standards or significant 
economic responsibilities on private individuals and 
businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    The bill requires grant recipients to report to the 
Secretary the results achieved by projects receiving grants, 
but little, if any, additional paperwork would result from the 
enactment of the bill.

                   Congressionally Directed Spending

    The bill, as reported, does not contain any congressionally 
directed spending items, limited tax benefits, or limited 
tariff benefits as defined in rule XLIV of the Standing Rules 
of the Senate.

                        Executive Communications

    The testimony provided by the Bureau of Reclamation and 
Department of Energy at the March 31, 2011, Full Committee 
hearing on S. 1343 follows:

 Statement of Michael L. Connor, Commissioner, Bureau of Reclamation, 
                       Department of the Interior

    Chairman Bingaman, Ranking Member Murkowski and Members of 
the Committee, I am Mike Connor, Commissioner of the Bureau of 
Reclamation (Reclamation). I am pleased to be here alongside 
the Department of Energy (DOE) and the Federal Energy 
Regulatory Commission (FERC) to provide the views of the 
Department of the Interior (Department) on the Reclamation-
specific provisions in Subtitle D of the American Clean Energy 
Leadership Act of 2009, S. 1462 from the 111th Congress. This 
subtitle promotes the integration of energy and water policies 
to address the challenges that exist in making sustainable use 
of finite natural resources. Two sections of this bill call for 
specific deliverables from Reclamation: Section 143 and Section 
144. Reclamation is continuing to explore ways to improve 
energy efficiencies within the scope of its projects.

                    SECTION 143: ENERGY USAGE STUDY

    Section 143 directs Reclamation to conduct a study on the 
quantities of energy used in water storage and delivery 
operations in major Reclamation projects, with an emphasis on 
identifying opportunities to reduce water and energy 
consumption and costs. The energy usage study required by 
Section 143 may provide a helpful data point for project 
managers and water customers. Facilitating sustainability of 
the Nation's natural resources is one of the Department's 
highest priorities. Through our WaterSMART program, the 
Department is committed to integrating energy and water 
policies to promote the sustainable use of all resources, 
including incorporating water conservation criteria and the 
water/energy nexus into the Department's planning efforts, 
including recommendations to reduce conflict in water 
management. Within existing operations and budget authority, 
Reclamation strives to operate its projects with the maximum 
amount of energy efficiency, and Reclamation is working to meet 
a Departmental Priority Goal for Water Conservation through 
implementation of the WaterSMART Program. This program was 
created by Secretarial Order 3297, issued on February 22, 2010 
(available at http://elips.doi.gov/app_SO/act_getfiles. 
cfm?order_number=3297). WaterSMART specifically recognizes that 
water and energy are inextricably linked and that water 
conservation can yield significant energy conservation benefits 
too.
    WaterSMART Grants and Title XVI Water Reclamation and Reuse 
projects funded in FY 2010 are expected to enable the 
conservation of an estimated 149,000 acre-feet of water each 
year once complete. Fiscal Year 2011 grants are awaiting 
completion of the appropriations process. With funds requested 
in FY 2012, we will seek to increase the 2010 total by an 
additional 140,000 acre-feet. The energy savings associated 
with this conservation will vary greatly from project to 
project, but a study focused across the Reclamation program is 
likely to provide valuable context for Reclamation's water 
conservation efforts generally and identify new opportunities 
for increasing efficiency.
    Overall, Reclamation has already been actively integrating 
energy and water policies under its existing activities. Under 
the WaterSMART Program's Water and Energy Efficiency Grants, 
which fund projects that help to meet the Priority Goal for 
Water Conservation, Reclamation incentivizes the conservation 
of energy in the delivery of water. Proposals that not only 
address water conservation but also explore the use of 
renewable energy and other energy efficiency improvements 
receive additional consideration during the selection process. 
In Fiscal Year 2010, through its WaterSMART program, 
Reclamation awarded 37 water and energy efficiency grants for 
amounts as high as $1 million, including a number of funded 
proposals that explored the relationship between water 
efficiency improvements and energy savings. We aim to continue 
these WaterSMART projects in FY 2011. If the legislation before 
the Committee today were enacted, the study authorized by 
Section 143 would need to compete for resources within the 
existing Reclamation program.

  SECTION 144: USES OF THE BRACKISH GROUNDWATER NATIONAL DESALINATION 
                           RESEARCH FACILITY

    Section 144 calls for specific research objectives and 
authorizes operation, management, maintenance, and cost 
recovery at the Brackish Groundwater National Desalination 
Research Facility (Facility) in Otero County, New Mexico. The 
directives in Section 144 relative to the Facility in New 
Mexico would be consistent with ongoing activities at the 
Facility. Reclamation is partnered with New Mexico State 
University in a four-year research program with projects at or 
associated with the Facility focused on research, education, 
and outreach in water desalination. The bill language calls on 
Reclamation to operate and manage the Facility as a state-of-
the-art desalination research center to develop new water and 
energy technologies with widespread applicability, and create 
new supplies of usable water for municipal, agricultural, 
industrial, or environmental purposes. The bill also authorizes 
Reclamation to collect charges to offset the costs of operating 
and maintaining the Facility.
    As members of the Committee may know, one of the 
authorities to operate and maintain the Facility stems from 
Public Law 104-298, as amended, commonly known as the Water 
Desalination Act of 1996. The Desalination Act has been funding 
research at the lab scale leading to pilot and demonstration 
testing at the Facility. The Facility, as well as Reclamation's 
desalination program generally, provides a venue for the award 
of competitive, cost-shared cooperative agreements with 
universities and public and private sector organizations for 
the purpose of research on converting unusable waters into 
usable water supplies. The Facility represents an avenue to 
advance the real-world potential of water desalination. The 
Desalination Act's current authority expires at the end of the 
2011 fiscal year, and its extension by the Congress for a term 
of five years could enable this important research to continue. 
Providing these authorities could help Reclamation develop 
water-related technologies and other water management practices 
and may also potentially enhance U.S. competitiveness in 
providing solutions to world-wide water issues in the 21st 
century. We look forward to working with the Congress on S. 
1462 to avoid duplication of activities that are already being 
performed by the Bureau of Reclamation.
    This concludes my written statement. I am pleased to answer 
any questions the Committee may have.

 Statement of Steven G. Chalk, Chief Operating Officer & Acting Deputy 
 Assistant Secretary for Renewable Energy, Office of Energy Efficiency 
               and Renewable Energy, Department of Energy

    Chairman Bingaman, Ranking Member Murkowski, Members of the 
Committee, thank you for the opportunity to discuss the three 
pieces of legislation before us today: S. 629, the Hydropower 
Improvement Act of 2011; S. 630, the Marine and Hydrokinetic 
Renewable Energy Promotion Act of 2011; and Title I, subtitle D 
of the American Clean Energy Leadership Act of 2009 (ACELA, S. 
1462 from the 111th Congress).
    In his State of the Union address in January, President 
Obama referred to America's need to transition to a clean 
energy economy as ``our generation's Sputnik moment,'' a goal 
so important that we need to ``reach a level of research and 
development we haven't seen since the height of the Space 
Race.''\1\ S. 629 and S. 630 would dramatically increase the 
federal government's investment in both conventional hydropower 
and marine and hydrokinetic (MHK) renewable energy 
technologies.
---------------------------------------------------------------------------
    \1\http://www.whitehouse.gov/the-press-office/2011/01/25/remarks-
president-state-union-address 
---------------------------------------------------------------------------
    The provisions being considered from ACELA address the 
interdependence of our energy and water consumption. Water is 
an integral component of many traditional and alternative 
energy technologies used for transportation, fuels production 
and electricity generation. Energy-related water demands are 
beginning to compete with other demands from population growth, 
agriculture and sanitation. This competition could become 
fiercer if climate change increases the risk of drought, making 
our water supply more vulnerable. The Department of Energy 
(DOE) has initiated many activities over the last few years to 
address this energy-water nexus.\2\
---------------------------------------------------------------------------
    \2\See, for example, the activities undertaken by the National 
Energy Technology Laboratory, http://www.neldoe.gov/technologies/
coalpower/ewr/water/index.html.
---------------------------------------------------------------------------
    Since fiscal year 2008, when DOE restarted its Water Power 
Program, it has made significant strides in advancing next-
generation water power technologies, assessing existing 
resources, promoting deployment opportunities, and cooperating 
with other government agencies to accelerate water power 
development. About 45 percent of all hydropower in the United 
States is generated at Federally-owned facilities, providing 
clean, renewable power to the grid.\3\ DOE's estimates indicate 
that there could be an additional 300 gigawatts of hydropower 
through efficiency and capacity upgrades at existing 
facilities, powering non-powered dams, new small hydro 
development and pumped storage hydropower.\4\
---------------------------------------------------------------------------
    \3\http://eia.doe.gov/cneaf/electricity/page/eia906_920.html
    \4\FY09 DOE Interim Conventional Hydro Resource Assessment, Oak 
Ridge National Lab
---------------------------------------------------------------------------
    DOE works on both conventional hydropower and on marine and 
hydrokinetic (MHK) technologies. The combined FY 2012 Budget 
Request for conventional hydropower and MHK technologies is 
$38.5 million. Conventional hydropower--energy derived from 
water using dams, diversionary structures, or impoundments for 
electric power--generates more electricity than any other 
renewable energy source in the U.S. Conventional hydropower 
represented 65 percent of U.S. renewable electricity generation 
in 2010, and seven percent of total U.S. electricity generation 
that year.\5\ Conventional hydropower principally serves as a 
baseload electricity supply, but can also function as a 
dispatchable resource to balance variable renewable energy 
technologies such as wind and solar.
---------------------------------------------------------------------------
    \5\http://www.eia.doe.gov/cneaf/electricity/epa/epa.pdf
---------------------------------------------------------------------------
    MHK technologies include energy devices that can extract 
energy from moving water, including waves and currents in 
oceans, rivers, and tidal areas, and from ocean thermal and 
salinity gradients. These resources if also developed in an 
environmentally responsible manner hold potential for helping 
our nation meet its clean energy goals.
    In a March 2007 report, the Electric Power Research 
Institute indicated that its conservative estimate was that MHK 
power (from wave and tidal sources alone) could provide an 
additional 13,000 megawatts (MW) of capacity by 2025.\6\ MHK 
power and ocean thermal energy are resources that typically can 
have higher capacity factors than some other renewable energy 
sources. In addition, they may not present the same level of 
integration challenges that large-scale development of variable 
renewable energy sources such as wind and solar may create for 
electricity grid planners and operators.
---------------------------------------------------------------------------
    \6\http://www.aaas.org/spp/cstc/docs/07 06 1ERPI report.pdf
---------------------------------------------------------------------------
    Through its Power Marketing Administrations (PMAs), DOE 
promotes and creates opportunities for new conventional 
hydropower technologies and development. PMAs encourage the 
most widespread use of hydropower possible at the lowest rates 
consistent with sound business principles. Some PMAs have 
established an active hydropower modernization program, adding 
hundreds of megawatts of capacity at existing facilities by 
updating equipment, while others have faced challenges in 
arranging financing. Because some of the challenges are 
statutory in nature, the PMAs and their customers may consult 
with the Committee on measures that would actively encourage 
expansion of hydropower capacity through updates to existing 
facilities.
    Last year, DOE, the Bureau of Reclamation, and the Army 
Corps of Engineers signed a memorandum of understanding (MOU) 
on hydropower that aims to build long-term working 
relationships between agencies by prioritizing similar goals 
and aligning ongoing and future renewable energy development 
efforts.\7\ The objectives of the MOU include deploying new, 
environmentally sustainable hydropower capacity, including 
upgrading existing facilities; powering non-powered dams; and 
research, development and deployment (RD&D) into new hydropower 
technologies, among other objectives. The pursuit and ultimate 
achievement of these goals will serve to strengthen our 
economy, enhance our national security, and protect our 
environment.
---------------------------------------------------------------------------
    \7\http://www.energy.gov/news/8793.htm
---------------------------------------------------------------------------
    Water is an integral aspect of energy consumption and 
generation for many energy technologies other than hydropower 
as well. Many types of energy production make use of water, 
particularly for cooling, and increasingly, water-efficient 
technologies are being developed to reduce these impacts and 
help America use less water to meet its energy demands and use 
less energy to meet its water demands. Still, power generation 
from thermal energy sources (which include coal, natural gas 
and nuclear energy) accounted for approximately 41% of U.S. 
freshwater withdrawals in 2005.\8\ Although most of the water 
withdrawn for cooling thermal power plants is subsequently 
returned to the source, this still can have disruptive effects 
on water flows and temperatures, which in turn negatively 
affect aquatic organisms, namely fish populations such as 
salmon. DOE estimates that there are significant opportunities 
to reduce water consumption for both electricity and fuels 
production. For example, in the electricity sector, development 
of hybrid wet-dry cooling systems may reduce water consumption 
by 70-80 percent compared to recirculating cooling systems. 
Moving, pumping and treating water and wastewater is in itself 
quite energy-intensive, representing roughly four percent of 
U.S. electricity consumption.\9\
---------------------------------------------------------------------------
    \8\http://pubs.usgs.gov/circ/1344/pdf/c1344.pdf
    \9\http://www.circleofblue.org/waternews/wp-content/uploads/2010/
08/EPRI-Volume-4.pdf
---------------------------------------------------------------------------
    The Department, through its National Laboratories and 
collaboration with universities and the private sector, is 
pursuing three major objectives to address the energy-water 
challenge. First, to address the increasing limited supplies of 
freshwater, DOE is considering strategies to increase use of 
nontraditional water resources in the power sector. Second, DOE 
is working to reduce the consumption of fresh water when 
generating electricity, while considering the full life-cycle 
of various energy technologies to determine how much water they 
demand and what kind of water quality they need. Finally, DOE 
is researching water-efficient technologies for the production 
of alternative or unconventional fuels for transportation.
    I am pleased to offer the Department's perspective on these 
pieces of legislation. I will discuss these bills in the order 
they appeared in my invitation to testify before this 
Committee.

               S. 629: HYDROPOWER IMPROVEMENT ACT OF 2011

    The Hydropower Improvement Act of 2011, S. 629, seeks to 
substantially increase hydroelectric capacity and generation 
and improve its environmental performance.
    A recent report from the Federal Energy Regulatory 
Commission (FERC) demonstrates that little additional 
hydropower is in the pipelines.\10\ Concerns include 
environmental issues and nontechnical barriers to reduce the 
expense and uncertainty of the regulatory process is needed.
---------------------------------------------------------------------------
    \10\http://www.ferc.gov/legal/staff-reports/03-17-11-energy-
infrastructure.pdf
---------------------------------------------------------------------------
    The most significant provision of S. 629 is a proposed 
authorization to DOE of $50 million per year for competitive 
grants and $50 million per year for RD&D to increase hydropower 
generation. This authorization level is significantly higher 
than the FY 2012 Budget Request for EERE's conventional 
hydropower program of $20 million, and would also represent a 
substantial increase to the FY 2010 Budget for conventional 
hydropower of $13 million. These additional resources, if 
appropriated would enable increases in renewable hydropower 
generation, and provide for the accelerated demonstration of 
innovative technologies that can improve environmental 
performance.
    In FY 2010, DOE funded the Hydropower Advancement Project 
(HAP) for $3 million. The HAP is focused on the most cost-
effective, least-controversial types of new hydropower 
development, and seeks to stimulate further hydropower 
development and generation without new dams. The project has 
already identified multiple opportunities for adding generation 
and/or improving environmental performance without sacrificing 
energy efficiency. Current funding allows for fifty initial 
facility assessments and three to five detailed engineering 
design studies. Additional resources would be used to support 
facility improvements that could result in increased hydropower 
generation at the most cost-effective sites.
    DOE has invested in a three year program of research and 
development (R&D) to address issues related to the 
environmental performance and siting of hydropower 
technologies. These efforts focus on increasing fish passage, 
investigating adequate environmental flows and improving water 
quality and will help ensure that increases in conventional 
hydropower generation are coupled with concurrent improvements 
in the environmental sustainability of the industry, issues 
that DOE has been working on since the mid 1990s. If realized, 
the additional funding authorized by S. 629 would help scale-up 
the advanced turbines and optimize operational scenarios.
    A quicker, two-year FERC licensing process, as proposed by 
S. 629 would help accelerate development of conventional 
hydropower resources. A streamlined licensing approach already 
has been implemented by FERC for small hydropower projects; 
expanding this quicker process would be welcomed by DOE and the 
hydropower industry. At the same time, we must be sure that 
this quicker licensing process does not sacrifice rigorous 
maintenance of environmental standards and ensures adequate 
opportunity to allow for public input. Providing a quicker 
regulatory process when all environmental and public concerns 
have been addressed is a valuable goal.
    S. 629 would require FERC and the Bureau of Reclamation to 
conduct workshops on small hydropower projects and conduit 
hydropower.\11\ These workshops would provide opportunities for 
the federal government, including natural resource agencies, 
industry, environmental organizations and other stakeholders to 
reach consensus on strategies to overcome barriers to greater 
hydropower deployment, including conflicting definitions of 
eligible projects and complicated, poorly understood permitting 
and licensing processes.
---------------------------------------------------------------------------
    \11\Conduits are defined as tunnels, canals, pipelines, aqueducts, 
flumes, ditches, or similar manmade water conveyance systems that 
distribute water for agricultural, municipal, or industrial consumption 
and not primarily for the generation of electricity.
---------------------------------------------------------------------------
    S. 629 would define a ``small hydroelectric power project'' 
according to the definition found in Section 4.30 of title 18 
in the Code of Federal Regulations. DOE finds this definition 
problematic in this context, since this definition specifies 
that a small hydroelectric power project cannot be ``owned or 
operated by the United States or by an instrumentality of the 
Federal Government.'' A majority of the non-powered dams that 
are proposed to be powered through this legislation are 
federally-owned by the U.S. Army Corps of Engineers and the 
Bureau of Reclamation. In fact, initial analysis by DOE for a 
forthcoming report indicates that the ten largest non-powered 
dams in the U.S. with potential to produce more than one 
megawatt are all operated by the Army Corps of Engineers.\12\ 
DOE accordingly recommends that the definition of small 
hydroelectric power project that appears in this legislation 
delete the requirement that the dam not be federally-owned or 
operated.
---------------------------------------------------------------------------
    \12\The National Hydropower Asset Assessment Project, to be 
released in April 2011.
---------------------------------------------------------------------------
    The Department appreciates that S. 629 recognizes the non-
application of this legislation to the PMAs. In addition, the 
PMAs believe that they should have the approval right for 
efficiency power or capacity additions, improvements or 
replacements at Federal projects, made in association with this 
legislation, where the Army Corps of Engineers and the Bureau 
of Reclamation seek appropriations.
    All other provisions of S. 629 would either build on or 
support current DOE activities and areas of interest.

 S. 630: MARINE AND HYDROKINETIC RENEWABLE ENERGY PROMOTION ACT OF 2011

    S. 630, the Marine and Hydrokinetic Renewable Energy 
Promotion Act of 2011, seeks to accelerate the growth of the 
MHK industry through additional federal aid, and expansion of 
the scope and scale of DOE's MHK activities. The additional 
funding authorized by this bill would represent a significant 
increase in DOE's program for MHK technologies and is 
significantly higher than either the FY 2012 Budget Request of 
$18 million or the FY 2010 Budget of $37 million.
    DOE already has several MHK systems engineering efforts 
underway, but the additional systems engineering required by S. 
630 would be used to accelerate these programs.
    S. 630 would also require DOE to devote more R&D funding to 
develop open interface standards. This would ensure consistent 
design and development and allow unbiased comparison between 
competing technologies to achieve optimal energy generation in 
resulting systems. As the U.S. market develops, it will be 
crucial to avoid the pitfalls seen in the development of MHK 
technologies in Europe, where, despite tremendous strides that 
have been made in device development and deployment, the 
interface standards with devices and data are still being 
developed.
    The creation of a competitive grant program for MHK RD&D 
test facilities would mimic similar innovative activities 
already sponsored by DOE for other renewable energy 
technologies. DOE is currently investing in three MHK test 
facilities that focus on the demonstration of multiple MHK 
technologies. Investment in these National Marine Renewable 
Energy Centers (NMRECs) is critically important in order to 
help MHK technologies realize their full potential and to 
support their rapid commercialization if done in an 
environmentally responsible way. Each Center is currently 
developing plans for the development of open-water test 
facilities. Further investment in NMRECs, as called for by this 
legislation, would enable the open-water test berths to be 
established. Third-party testing and evaluation of device 
performance and reliability would enable private sector 
investment in these emerging technologies.
    All three of DOE's existing NMRECs are unrestricted in 
terms of the device types they develop and support. Although 
none are geographically located for in-stream testing, tidal 
device research and development can substitute. It is 
unnecessary to distinguish between ``marine'' and 
``hydrokinetic'' centers as the existing NMRECs could conduct 
research on any type of device.
    On June 29, 2010, the Department of Energy and the 
Department of the Interior (DOI) signed an MOU for the 
coordinated deployment of renewable energy technologies on the 
OCS. The MOU's Action Plan includes a number of MHK-related 
activities, including coordination of studies and other 
activities to support future BOEMRE-issued MHK research leases, 
the development of environmental monitoring and mitigation 
protocols and collaboration on environmental study efforts, and 
development of a plan for MHK resource management and 
prediction. Additionally, on August 3, 2010, DOE announced the 
designation of Florida Atlantic University (FAU) as a national 
center for ocean energy research and development. With this 
designation, DOE awarded the new Southeast National Marine 
Renewable Energy Center $250,000 to undertake research and 
development of technologies capable of generating power from 
ocean currents and ocean thermal energy. FAU has applied for a 
five-year limited lease under BOEMRE's Interim Policy. If 
issued, this lease would allow for limited testing of ocean 
current devices on the OCS offshore Florida. DOE has also 
provided funding to the Northwest National Marine Renewable 
Energy Center to aid in the development of facilities to serve 
as an integrated, standardized test center for developers of 
wave and tidal energy, and the Hawaii National Marine Renewable 
Energy Center for the development of a site for the testing of 
wave energy conversion devices and ocean thermal energy 
conversion systems. DOE may seek to obtain research leases from 
DOI.
    If funding is realized under S. 630, development of MHK 
technologies would be accelerated, speeding their 
transformation from promising but fledgling technologies to 
commercially viable, clean, renewable energy sources.

TITLE I, SUBTITLE D OF THE AMERICAN CLEAN ENERGY LEADERSHIP ACT OF 2009

    Title I, Subtitle D of ACELA contains provisions that would 
create an energy-water clean technology grant program in DOE 
and would require several studies on the energy-water nexus.
    The grant program created under ACELA could serve as a 
useful way to spur industry to devote time and resources to 
develop strategies to minimize water consumption in energy 
processes. These provisions would also require DOE and other 
agencies to collaborate on several studies on this subject. The 
study that would be run by the Natural Academy of Sciences 
regarding the effects of energy development and production on 
U.S. water resources would be a useful, in-depth analysis. 
However, in this legislation, the analysis appears limited to a 
current assessment. While this in itself would be useful, DOE 
recommends that any such study also consider the expected 
increase in water demand from projected growth in energy 
production, and the water implications of moving to a clean 
energy economy. This will be especially important since certain 
clean energy technologies (carbon capture and storage, 
bioenergy, concentrated solar power, etc.) may result in 
increased water demands. The effects of climate change on water 
availability should also be analyzed in order to better 
understand the potential vulnerability of the energy sector to 
water constraints.
    One of the other studies included in ACELA would require 
the Department of the Interior (DOI) to evaluate the amount of 
energy used in water storage and delivery operations. This 
study would be useful, but DOE suggests that the proposed study 
would benefit from consultation with other agencies with 
expertise in the energy-water area, including DOE.
    In general, interagency consultation must be an integral 
component of our national strategy to address the energy-water 
nexus. Along with energy production, agriculture uses more 
water than any other sector in the U.S., so engagement with the 
U.S. Department of Agriculture will be essential. The U.S. Army 
Corps of Engineers must also play a vital role in developing 
more efficient water usage strategies. DOE welcomes efforts to 
build on existing collaborations with these and other agencies, 
such as the MOU referenced above.
    These provisions would also require DOE to develop an 
Energy-Water R&D Roadmap to define future RD&D and 
commercialization efforts necessary to address emerging water-
related challenges to future clean energy generation and 
production. DOE has already produced a report examining these 
issues, which it transmitted to Congress in January of 2007, 
and has developed a follow-up report, ``Energy-Water Challenges 
and Research and Development Issues,'' that we expect will be 
finalized and transmitted to Congress shortly.

                               CONCLUSION

    In conclusion, I would like to again thank this Committee 
for its leadership in supporting both conventional hydropower 
and MHK energy technologies and in confronting the challenges 
associated with the interrelation of our energy and water 
consumption.
    As Secretary Chu stated last year, ``While hydropower is 
the largest source of renewable electricity in the nation, 
hydropower capacity has not increaed significantly in decades. 
As the single largest owner of hydropower generation in the 
United States, it is important for the federal government to 
tap this valuable asset so it can continue to contribute to our 
clean energy portfolio and energy security.''\13\ S. 629 and S. 
630 both contain provisions that would help realize this goal; 
however, both bills contain authorizations significantly in 
excess of the 2012 Budget request within EERE for Water 
Programs. The President's FY 2012 budget represents DOE's 
priorities for applied R&D in energy efficiency and renewable 
energy technologies.
---------------------------------------------------------------------------
    \13\http://www.energy.gov/news/893.htm.
---------------------------------------------------------------------------
    Transitioning to a clean energy economy will be greatly 
enhanced if we also identify ways to minimize or eliminate 
water use associated with energy generation. The ACELA 
provisions could be the catalyst to finding these solutions.
    I would be pleased to address any questions the Committee 
might have.

   Testimony of Jeff C. Wright, Director, Office of Energy Projects, 
                  Federal Energy Regulatory Commission

Chairman Bingaman, Ranking Member Murkowski, and Members of the 
Committee:

    My name is Jeff Wright and I am the Director of the Office 
of Energy Projects at the Federal Energy Regulatory Commission 
(Commission or FERC). I appreciate the opportunity to appear 
before you to discuss S. 629, S. 630, and S. 1462. As a member 
of the Commission's staff, the views I express in this 
testimony are my own, and not those of the Commission or of any 
individual Commissioner.

                             I. BACKGROUND

    The Commission regulates over 1,600 hydropower projects at 
over 2,500 dams pursuant to Part I of the Federal Power Act 
(FPA). Together, these projects represent 54 gigawatts of 
hydropower capacity, more than half of all the hydropower in 
the United States. Hydropower is an essential part of the 
Nation's energy mix and offers the benefits of an emission-
free, renewable, domestic energy source with public and private 
capacity together totaling about nine percent of U.S. electric 
generation capacity.
    Under the FPA, non-federal hydropower projects must be 
licensed by the Commission if they: (1) are located on a 
navigable waterway; (2) occupy federal lands; (3) use surplus 
water from a federal dam; or (4) are located on non-navigable 
waters over which Congress has jurisdiction under the Commerce 
Clause, involve post-1935 construction, and affect interstate 
or foreign commerce.
    The FPA authorizes the Commission to issue either licenses 
or exemptions for projects within its jurisdiction. Licenses 
are generally issued for terms of between 30 and 50 years, are 
renewable, and carry with them the right to exercise federal 
eminent domain to obtain property necessary for the 
construction, operation, and maintenance of a project. 
Exemptions are perpetual, and thus do not need to be renewed, 
but do not permit the use of eminent domain. Congress has 
established two types of exemptions. First, section 30 of the 
FPA allows the Commission to issue exemptions for projects that 
utilize for generation only the hydroelectric potential of 
manmade conduits that are operated for the distribution of 
water for agricultural, municipal, or industrial consumption, 
and not primarily for the generation of electricity. Conduit 
projects must be located on nonfederal lands, and have a 
maximum capacity of 15 megawatts (40 megawatts if the exemptee 
is a state or local government entity). Second, in section 
405(d) of the Public Utility Regulatory Policies Act, Congress 
authorized the Commission to grant exemptions for small 
hydroelectric power projects having an installed capacity of 
5,000 kilowatts or less. To qualify for this type of exemption, 
a project must be located at an existing dam that does not 
require construction or the enlargement of an impoundment, or 
must use the hydropower potential of a natural water feature, 
such as a waterfall. Both types of exemptions are subject to 
mandatory fish and wildlife conditions provided by federal and 
state resource agencies.
    The Commission has established three licensing processes, 
with the intent of allowing parties to select the process that 
is best suited to individual proceedings. The integrated 
licensing process (ILP) frontloads issue identification and 
environmental study to the period before an application is 
filed, and is thus well-suited to complex cases with 
substantial issues. The alternative licensing process (ALP) 
allows participants significant flexibility to tailor licensing 
procedures in a manner that may work well for unique cases. The 
traditional licensing process (TLP), in which environmental and 
other work can occur after the application is filed appears to 
work best for less controversial matters. The TLP may be the 
process that is best-suited for many simple cases involving 
exemptions or small, low impact licenses. Commission staff has 
also developed a pilot licensing process for hydrokinetic 
projects in which, with the assistance of federal and state 
resource agencies, a project can be licensed in as little as 
six months.
    It is extremely important to note that project developers 
and other stakeholders, not the Commission, in most instances 
play the leading role in determining project success and 
whether the regulatory process will be short or long, simple or 
complex. The first key issue is site selection and proposed 
project operation. For example, the processing of applications 
tends to be expedited when applicants propose projects that: 
(1) are located at an existing dam where hydropower facilities 
do not currently exist, (2) would result in little change to 
water flow and use, (3) are unlikely to affect threatened and 
endangered species and are unlikely to need fish passage 
facilities, and (4) involve lands and facilities that are 
already owned by the applicant. To the extent that a proposed 
project, even one of small size, raises concerns about water 
use and other environmental issues, it may be difficult for the 
Commission to quickly process an application. It is important 
to remember that the small capacity of a proposed project does 
not necessarily mean that the project has only minor 
environmental impacts.
    Another, and related, factor is the extent to which project 
developers reach out to affected stakeholders. If a developer 
contacts concerned citizens, local, state, and federal 
agencies, Indian tribes, and environmental organizations, and 
works with them to develop consensus as to what information is 
needed to understand the impacts of a project and what 
environmental measures may be appropriate, and to develop 
support for the project, the application and review process is 
likely to be simpler and quicker. Where a project comes as a 
surprise to affected entities or where a developer does not 
respond to expressed concerns, the Commission's job becomes 
much more difficult, because the Commission must, and does, 
ensure that all expressed concerns are addressed.
    A final, and again related, matter is the development of 
the full record that the Commission needs to act on an 
application. A potential applicant needs to work with 
Commission staff and with federal and state resource agencies 
and other stakeholders to determine what information is needed 
to support an application, and to provide the Commission with a 
complete application. Where Commission staff or other 
stakeholders must ask an applicant to provide information that 
is missing from an application, the regulatory process slows 
down.
    The other entities with roles in the licensing and 
exemption process regarding small hydropower projects are also 
key to its success. The quickest, most efficient process can be 
achieved only where federal and state agencies, as well as 
other stakeholders, devote the resources early on to help 
project review move ahead, and where they display the 
flexibility to look at the merits of individual projects and 
the willingness to shorten the process in appropriate cases. 
Commission staff is dedicated to making the regulatory process 
as short and cost-effective as possible. We can only do that 
where applicants, resource agencies, and other stakeholders 
serve as willing partners in the process.

     II. COMMISSION EFFORTS REGARDING SMALL AND INNOVATIVE PROJECTS

    The majority of the hydropower projects regulated by the 
Commission are small projects, with about 71 percent having an 
installed capacity of 5 megawatts (MW) or less. In recent 
years, the Commission has seen a greatly increased interest in 
small hydropower projects, in innovative hydrokinetic projects, 
and in pumped storage projects, particularly closed loop pumped 
storage, which does not involve regular water withdrawals from 
rivers or other water sources. The Commission has responded by 
implementing a number of measures to facilitate efficient 
review of project proposals. In 2007, in order to provide 
personalized, responsive service to entities seeking to develop 
small hydropower projects, Commission staff established a 
dedicated phone line and email address for inquiries on small 
hydropower, developed a brochure to provide guidance to 
potential developers of small, low impact hydropower projects, 
and put these resources and a list of frequently-asked 
questions on the Commission's website.
    In light of the continued growing interest in such 
development, the Commission held a technical conference on 
December 2, 2009, at its Washington, D.C. headquarters to 
explore issues related to licensing, and exempting from 
licensing, small non-federal hydropower projects in the U. S. 
The December technical conference generated discussion on 
recommendations that could improve the process for authorizing 
small hydropower projects. In addition to insights received 
from the panelists and attendees at the December conference, 
written comments were solicited and over 40 comment letters 
were received from industry representatives; federal, state, 
and local agencies; private citizens; and non-governmental 
organizations. At the Commission's April 15, 2010 meeting, 
staff reported on the conference and the comments received, and 
presented an action plan to assist and expedite the review of 
small hydropower proposals. The action plan adopted the 
following immediate changes: (1) adding new web-based resources 
to the Commission's website (www.ferc.gov) to make it easier 
for applicants to understand and complete the licensing 
process; (2) updating or creating Memoranda of Understanding 
(MOUs) with other agencies to improve coordination; (3) 
continuing our small hydropower hotline and email address to 
answer applicant questions; and (4) educating potential small 
hydropower developers through a new education and outreach 
program.
    The Commission has, under its small hydro initiative, held 
numerous outreach meetings with small hydropower developers and 
interested stakeholders, and implemented web based tools, such 
as conduit application templates and application checklists, 
which potential applicants can use to prepare their 
applications. The small hydro website further contains guidance 
and sample letters that applicants can use to obtain waivers 
from fish and wildlife agencies for part of the prefiling 
consultation process. The Commission staff has also relaxed 
some of the standards, under Section 4.39 of its regulations, 
for exhibits and drawings for conduit applications. For those 
applicants that have filed complete and adequate applications, 
and for which the Commission has determined that impacts are 
minimal, the Commission has reduced the public notice period 
from 60 days to 30 days and the reply period from 45 days to 15 
days. A number of conduit exemptions have been approved in as 
short as two months from the date that an application has been 
deemed complete.
    Since the April 15, 2010 Commission meeting, we have signed 
an MOU with the State of Colorado to expedite the small hydro 
licensing process (August 2010); launched a small hydro program 
website (August 2010); participated in small hydro workshops in 
Oregon (September 2010), Massachusetts (October 2010), and New 
Hampshire (November 2010); conducted two webinars on our small 
hydro website (November/December 2010); and updated our small 
hydro brochure. Upcoming outreach efforts will include: 
participating in small hydro workshops in Washington, DC, 
Vancouver, BC, and California as well as conducting another 
webinar this summer. We have also completed an update on our 
MOU with the Army Corps of Engineers.
    The MOU with the State of Colorado provides an excellent 
example of a Federal-State solution for developing a pilot 
process to find flexible and innovative ways to reduce barriers 
to small hydro and conduit project development. In order to 
facilitate the Commission approval of such projects, the MOU 
provides that Colorado will prescreen any proposals and ensure 
that the applications are complete and meet Commission 
regulations before they are filed.
    With this background, I will turn to the draft legislation.

                              III. S. 629

    S. 629, the Hydropower Improvement Act of 2011, has the 
laudable goal of increasing hydropower capacity and generation 
in United States. I strongly support that goal, and offer 
comments on specific sections of the bill.
A. Sections 5 and 6
    Sections 5 and 6 of the bill would authorize the Secretary 
of Energy to issue grants to increase hydropower generation, 
and to support hydropower research, development, and 
demonstration projects. I support these sections, which would 
assist in the development of additional renewable energy.
B. Section 7
    Section 7 would require the Commission to investigate the 
feasibility of implementing a two-year licensing process, in 
particular, with respect to hydropower development at existing, 
non-powered dams, and for closed-loop pumped storage projects.
    I support the goal of an expedited licensing process. 
Indeed, as I have discussed, it is Commission staff's goal to 
act on all license applications as quickly as possible, and the 
Commission has established processes that allow for great 
flexibility and efficiency. I am thus not certain whether an 
additional licensing process is necessary. During the last few 
years, we have been able to issue some licenses in a matter of 
a few months, where the project proponent had selected a site 
wisely, stakeholders had agreed on information needs, and state 
and federal agencies performed their responsibilities quickly. 
Moreover, the Commission operates under significant constraints 
imposed by the FPA, and by other legislation affecting the 
licensing process--the Clean Water Act, Coastal Zone Management 
Act, Endangered Species Act, and National Historic Preservation 
Act among them. In the absence of the ability to waive sections 
of the FPA and other acts, or to set enforceable schedules in 
licensing proceedings, it is not clear that the Commission, 
under its existing authorities, can mandate a shortened 
process.
C. Section 8
    Section 8 would establish various measures to promote 
conduit and small hydropower projects. Again, this goal is 
consistent with Commission policy and has been a major focus of 
Commission's staff's effort in the last few years.
    Section 8(a)(1) would amend section 30 of the FPA to allow 
conduit projects to be located on federal lands. I support this 
provision, which would remove the current bar on siting conduit 
projects on federal lands. This section would also amend the 
FPA to provide conditioning authority to federal land 
management agencies. These agencies already have the ability to 
impose conditions on proposed projects through the requirement 
that developers obtain special use authorizations under the 
Federal Land Management and Policy Act, so this amendment may 
not alter the current regulatory regime. As a general matter, 
however, I do have some concern that authorizing additional 
mandatory conditioning authority may slow down the licensing 
process and result in increased potential bars to hydropower 
development.
    Section 8(a)(3) would require the Commission and the 
Commissioner of Reclamation to conduct regional public 
workshops on reducing barriers to conduit hydropower projects 
and thereafter report any recommendations to Congress. We have 
worked successfully with the Bureau of Reclamation in the past 
and are prepared to join Reclamation in this effort.
    Section 8(b) would require the Commission to conduct 
regional public workshops on reducing barriers to small 
hydropower projects, and to report the results of this effort 
to Congress. Noting the outreach efforts described above, we 
are prepared to undertake this additional effort should 
Congress deem it helpful.
D. Section 9
    Section 9 would amend the FPA to authorize the Commission 
to extend the term of a preliminary permit issued under FPA 
section 5 once for up to two years. Preliminary permits grant 
the permittee a ``first-to-file'' preference with respect to 
license applications for projects being studied under a permit. 
Commission staff has heard anecdotally that developers are 
concerned that the need for environmental studies in some 
instances makes it difficult to complete a license application 
within the current maximum three-year term of a permit, with 
the result that a developer which has invested substantial time 
and money studying a project may face the possibility of losing 
its project based on competition from other entities--
particular those with statutorily--granted municipal 
preference--if it needs to seek a subsequent permit. I 
therefore support the proposed FPA amendment, which could 
ameliorate this problem. It might be worth considering, as an 
alternative, authorizing the Commission to issue permits for 
terms of up to five years, which could avoid the need for 
developers to go through the process of seeking an extension.
E. Section 10
    Section 10 would require the Commissioner of Reclamation, 
in consultation with the Commission, to study barriers to non-
federal hydropower development at Bureau of Reclamation 
projects and to develop a memorandum of understanding to 
improve the coordination and timeliness of such development. We 
have already begun working with the Bureau of Reclamation on 
this matter, and we have no objection to Section 10.

 IV. THE MARINE AND HYDROKINETIC RENEWABLE ENERGY PROMOTION ACT OF 2011

    S. 630 would authorize the Secretary of Energy to take 
various steps to promote marine and hydrokinetic renewable 
energy technology. As a general matter, the bill is consistent 
with the Commission's initiatives to support the development of 
appropriate marine and hydrokinetic projects, which I have 
previously described. I have only two comments on the bill.
    Section 3 of S. 630 would allow the Secretary of Energy to 
issue grants to support national testing facilities for marine 
and hydrokinetic technology research, development, and 
demonstration. Commission staff has informally discussed this 
concept with DOE staff over the last year or so, and I believe 
that testing centers could be extremely helpful in the 
development of new renewable technologies. Section 3 provides 
that test centers may be nonprofit institutions, state or local 
governments, national laboratories, or National Marine 
Renewable Energy Research, Development, and Demonstration 
Centers established pursuant to section 634 of the Energy 
Independence and Security Act of 2007. The Federal Power Act 
contains no provisions allowing the Commission to authorize the 
testing of jurisdictional hydropower facilities; accordingly, 
with some limited exceptions, test centers operated by private 
entities or by state and local government may be required to be 
licensed by the Commission. Moreover, if a test center were to 
use a variety of technologies with differing environmental 
impact, the Commission might be required to issue separate 
authorizations for individual tests. This would not be the case 
for centers under the aegis of other federal entities, such as 
DOE, which do not fall within the Commission's jurisdiction. 
Therefore, to allow for the maximum flexibility and simplicity, 
it may be worth considering either placing any test centers 
under the authority of DOE or another federal agency or 
providing an exemption from the provisions of Part I of the FPA 
for such test centers.
    Second, section 6 of the bill would authorize the Secretary 
of Energy to issue grants to advance the development of marine 
and hydrokinetic renewable energy; to help fund the costs of 
environmental analysis, the collection and dissemination of 
environmental data; and to support demonstration projects. The 
provision of grant funding to address the environmental 
information needs surrounding these new technologies directly 
addresses an issue of concern to federal agencies and other 
stakeholders. Environmental information is essential to the 
development and regulation of energy projects, yet, because 
marine and hydrokinetic technology is relatively new, and 
because these projects may be sited in areas, such as coastal 
zones, where the environment is not as well understood as 
onshore areas, much necessary information has yet to be 
developed. The cost of obtaining environmental information 
falls in large part on pioneering developers, and may thus 
discourage their efforts. The Commission and other federal 
agencies are partnering to reduce this burden by assembling and 
sharing environmental information. However, there are still 
issues which will require new studies, some of which are 
relevant to many developers. Federal funding to support 
gathering such information will help the regulatory process and 
advance the development of the technology as a whole.

          V. THE AMERICAN CLEAN ENERGY LEADERSHIP ACT OF 2009

    Title I, subtitle D of the American Clean Energy Leadership 
Act deals with the integration of energy and water resources. 
While this subtitle would not impose any direct requirements on 
the Commission, I note that the Commission recognizes the link 
between energy development and the use of our Nation's water 
resources. In siting natural gas and hydropower projects, the 
Commission conducts thorough analyses of the impact of proposed 
projects on water resources, authorizes only those projects 
that appropriately balance energy development and environmental 
protection, and imposes mitigation measures to ensure that 
approved projects are developed in an environmentally 
responsible manner.

                            VIII. CONCLUSION

    There is a great deal of potential for the development of 
additional hydropower projects throughout the country, 
including small projects and marine and hydrokinetic projects. 
Working within the authority given it by Congress, the 
Commission continues to adapt its existing, flexible procedures 
to facilitate the review and, where appropriate, the approval 
of such projects. Commission staff remains committed to 
exploring with project developers, its sister federal agencies, 
Indian tribes, the states, local government, and other 
stakeholders every avenue for the responsible development of 
our nation's hydropower potential. The legislation under 
consideration will, as I have testified, assist in realizing 
that potential.
    This concludes my remarks. I would be pleased to answer any 
questions you may have.

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as ordered reported, are shown as follows (existing 
law proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                     WATER DESALINATION ACT OF 1996

                     Public Law 104-298, as amended

To authorize the Secretary of the Interior to conduct studies regarding 
the desalination of water and water reuse, and for other purposes

           *       *       *       *       *       *       *

SEC. 8. AUTHORIZATION OF APPROPRIATIONS.

    (a) Section 3.--There are authorized to be appropriated to 
carry out section 3 of this Act $5,000,000 per year for fiscal 
years 1997 through [2011] 2016. Of these amounts, up to 
$1,000,000 in each fiscal year may be awarded to institutions 
of higher education, including United States-Mexico binational 
research foundations and interuniversity research programs 
established by the two countries, for research grants without 
any cost-sharing requirement.
    (b) Section 4.--There are authorized to be appropriated to 
carry out section 4 of this Act [$25,000,000 for fiscal years 
1997 through 2011] $2,000,000 for each of fiscal years 2012 
through 2016.

           *       *       *       *       *       *       *

                 DEPARTMENT OF ENERGY ORGANIZATION ACT

                      Public Law 95-91, as amended

 AN ACT To establish a Department of Energy in the executive branch by 
the reorganization of energy functions within the Federal Government in 
 order to secure effective management to assure a coordinated national 
                 energy policy, and for other purposes

    Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, That this 
Act may be cited as the ``Department of Energy Organization 
Act''.

           *       *       *       *       *       *       *

TITLE II--ESTABLISHMENT OF THE DEPARTMENT

           *       *       *       *       *       *       *

ENERGY INFORMATION ADMINISTRATION

           *       *       *       *       *       *       *

SEC. 205.

           *       *       *       *       *       *       *

    (m) Renewable Fuels Survey.--(1) In order to improve the 
ability to evaluate the effectiveness of the Nation's renewable 
fuels mandate, the Administrator shall conduct and publish the 
results of a survey of renewable fuels demand in the motor 
vehicle fuels market in the United States monthly, and in a 
manner designed to protect the confidentiality of individual 
responses. In conducting the survey, the Administrator shall 
collect information both on a national and regional basis, 
including each of the following:
                  (A) The quantity of renewable fuels produced.

           *       *       *       *       *       *       *

    (3) This subsection does not affect the authority of the 
Administrator to collect data under section 52 of the Federal 
Energy Administration Act of 1974 (15 U.S.C. 790a).
    (n) Water-Related Energy Consumption.--
          (1) In general.--Not less than once during each 3-
        year period, to aid in the understanding and reduction 
        of the quantity of energy used in association with the 
        use of water, the Administrator shall conduct an 
        assessment under which the Administrator shall collect 
        information on energy use in various sectors of the 
        economy that are associated with the procurement, 
        treatment, or delivery of water.
          (2) Required sectors.--An assessment described in 
        paragraph (1) shall contain an analysis of water-
        related energy use for all relevant sectors of the 
        economy, including water used for--
                  (A) agricultural purposes;
                  (B) municipal purposes;
                  (C) industrial purposes; and
                  (D) domestic purposes.
          (3) Effect.--Nothing in this subsection affects the 
        authority of the Administrator to collect data under 
        section 52 of the Federal Energy Administration Act of 
        1974 (15 U.S.C. 790a).

           *       *       *       *       *       *       *

                                  

```