79–010 

Calendar No. 511 

115TH CONGRESS REPORT " ! SENATE 2d Session 115–297 

QUALIFYING CONDUIT HYDROPOWER FACILITY 

JULY 11, 2018.—Ordered to be printed 

Ms. MURKOWSKI, from the Committee on Energy and Natural 

Resources, submitted the following 

R E P O R T 

[To accompany H.R. 2786] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Energy and Natural Resources, to which was 

referred the bill (H.R. 2786) to amend the Federal Power Act with 

respect to the criteria and process to qualify as a qualifying conduit 

hydropower facility, having considered the same, reports favorably 

thereon with an amendment, and recommends that the bill, as 

amended, do pass. 

AMENDMENT

The amendment is as follows: 

On page 2, strike lines 7 through 12 and insert the following: 

(2) in paragraph (3)(C)(ii), by striking ‘‘5’’ and inserting ‘‘40’’. 

PURPOSE

The purpose of H.R. 2786 is to amend the Federal Power Act 

(FPA) with respect to the criteria and process to qualify as a qualifying conduit hydropower facility. 

BACKGROUND AND NEED

The Hydropower Regulatory Efficiency Act of 2013 (Public Law 

113–23) amended the FPA to allow FERC to issue ‘‘exemptions’’ 

(which are licenses granted in perpetuity) for hydroelectric projects 

of five megawatts or less utilizing manmade conduits that are operated primarily for purposes other than electricity generation. 


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Under current law, the Federal Energy Regulatory Commission 

(FERC) must make an initial determination on project eligibility 

within 15 days of a filing and publish a public notice of intent. Following the notice, a period of 45 days is provided for public comment on FERC’s initial determination as to whether a facility 

meets the qualifying criteria. If no entity contests whether the facility meets the qualifying criteria within 45 days, the facility is 

deemed to meet the criteria and its license is approved. 

Since its 2013 enactment, the process outlined above has resulted in 83 qualifying projects that have received the one-time license known as an ‘‘exemption,’’ with an average total processing 

timeline of just over two months (45-day public notice period). According to FERC, it has rarely received comments on a project’s 

qualifications, and supports Congress shortening the 45-day notice 

period and lifting the five megawatt cap in order to benefit a broader range of projects. 

LEGISLATIVE HISTORY

H.R. 2786 was introduced in the House of Representatives by 

Representative Hudson and Degette, on June 6, 2017, and referred 

to the Committee on Energy and Commerce. The Energy and Commerce Committee favorably reported the bill, as amended, by voice 

vote on July 12, 2017. H.R. 2786 passed the House of Representatives by a vote of 420–2 on July 18, 2017, and the bill was received 

by the Senate and referred to the Committee on Energy and Natural Resources on July 19, 2017. 

The Subcommittee on Water and Power held a legislative hearing on H.R. 2786 on February 28, 2018. 

The Committee on Energy and Natural Resources met in an open 

business session on May 17, 2018 and ordered H.R. 2786 favorably 

reported as amended. 

COMMITTEE RECOMMENDATION

The Senate Committee on Energy and Natural Resources, in 

open business session on May 17, 2018, by a majority voice vote of 

a quorum present, recommends that the Senate pass H.R. 2786, if 

amended as described herein. 

COMMITTEE AMENDMENT

During its consideration of H.R. 2786, the Committee adopted an 

amendment to increase the installed capacity for a qualifying conduit facility from five to 40 megawatts, instead of eliminating the 

cap altogether. 

SECTION-BY-SECTION ANALYSIS

Section 1. Qualifying conduit hydropower facilities 

Section 1 amends Section 30(a)(2)(C) of the FPA to reduce the 

time period to contest whether the conduit facility meets the qualifying criteria from 45 to 30 days. This section further amends section 30(a)(3)(C)(ii) of the FPA to raise the maximum installed capacity from five to 40 megawatts. 


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COST AND BUDGETARY CONSIDERATIONS

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

Under the Federal Power Act, the Federal Energy Regulatory 

Commission (FERC) licenses and regulates most nonfederal hydroelectric facilities. Under current law, hydroelectric projects with a 

capacity of less than 5 megawatts that generate power using water 

flowing through agricultural, municipal, or industrial conduits are 

exempt from FERC’s licensing requirements. H.R. 2786 would expand that exemption to include facilities with capacities of up to 40 

megawatts and would modify procedures for determining whether 

proposed facilities qualify for that exemption. 

CBO estimates that implementing H.R. 2786 would have no significant net effect on the federal budget. Expanding the size of 

projects that would be exempt from FERC’s licencing requirements 

could reduce the agency’s workload and costs to review and approve applications for licenses. However, because FERC recovers 

100 percent of its costs through user fees, any change in that agency’s costs (which are controlled through annual appropriation acts) 

would be offset by an equal change in fees that the commission 

charges, resulting in no net change in federal spending. 

Enacting H.R. 2786 would not affect direct spending or revenues; 

therefore, pay-as-you-go procedures do not apply. 

CBO estimates that enacting H.R. 2786 would not increase net 

direct spending or on-budget deficits in any of the four consecutive 

10-year periods beginning in 2029. 

H.R. 2786 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act. 

On July 18, 2017, CBO transmitted a cost estimate for H.R. 2786 

as reported by the House Committee on Energy and Commerce on 

July 12, 2017. Although the two versions of the legislation differ 

with regard to the capacity of projects that would be exempt from 

licensing requirements, neither would have a significant net effect 

on the federal budget. Thus, the estimated costs are the same for 

both pieces of legislation. 

The CBO staff contact for this estimate is Megan Carroll. The estimate was reviewed by H. Samuel Papenfuss, 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 

H.R. 2786. 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. 

Little, if any, additional paperwork would result from the enactment of H.R. 2786, as ordered reported. 

CONGRESSIONALLY DIRECTED SPENDING

H.R. 2786, as ordered reported, does not contain any congressionally directed spending items, limited tax benefits, or limited tariff 


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benefits as defined in rule XLIV of the Standing Rules of the Senate. 

EXECUTIVE COMMUNICATIONS

The testimony provided by the Federal Energy Regulatory Commission at the February 28, 2018, hearing on H.R. 2786 follows: 

FEDERAL ENERGY REGULATORY COMMISSION

Re S. 1142, H.R. 2457 and H.R. 2786. 

Hon. LISA MURKOWSKI, Chairman, Committee on Energy and Natural Resources, 

Washington, DC. 

DEAR CHAIRMAN MURKOWSKI: This letter is in response 

to a request by the Senate Committee on Energy and Natural Resources for my views on S. 1142 and H.R. 2457, two 

bills to authorize the extension of the time to begin construction of the original licenses for the Red River Lock 

and Dam No 3. (FERC Project No. 12756), Red River Lock 

and Dam No. 4 (FERC Project No. 12757), and Red River 

Lock and Dam No. 5 (FERC Project No. 12758), and H.R. 

2786, a bill to amend the Federal Power Act (FPA) with 

respect to criteria and process for a proposed project to 

qualify as qualifying conduit hydropower facility. 

H.R. 2786

Section 30(a) of the FPA exempts certain conduit hydropower facilities from the licensing requirements of the 

FPA. The provision requires an entity proposing to construct a qualifying conduit hydropower facility to file with 

the Commission a notice of intent to construct the facility, 

including sufficient information to demonstrate the facility 

meets the qualifying criteria. Once the notice of intent is 

filed with the Commission, section 30(a)(2)(B) requires the 

Commission to make an initial determination as to whether the facility meets the qualifying criteria within 15 days 

of receiving the notice of intent. The qualifying criteria, as 

defined in Hydropower Regulatory Efficiency Act (HREA) 

of 2013, include: 

i. the facility is constructed, operated, or maintained 

for generation of electric power and uses for such generation only the hydroelectric potential of a non-federally owned conduit; 

ii. the facility has an installed capacity that does not 

exceed 5 megawatts (MW); 

iii. on or before the date of the enactment of HREA 

of 2013 (August 9, 2013), the facility is not licensed 

under, or exempted from the license requirements. 

If the Commission makes an initial determination that 

the facility meets the qualifying criteria, section 30(a)(2)(B) 

requires the Commission to publish a public notice of the 

notice of intent to construct a qualifying conduit facility, 

giving the public the opportunity to comment on whether 

the facility meets the qualifying criteria. The FPA further 


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states that if, not later than 45 days after the date of the 

publication of public notice, no entity contests whether the 

facility meets the qualifying criteria, the facility shall be 

deemed to meet the criteria. Although an uncontested facility is automatically deemed to qualify at the end of the 

notice period, as a matter of general practice the Commission issues a letter confirming that the facility qualifies. If 

an entity contests whether the facility meets the qualifying 

criteria, section 30(a)(2)(C) requires the Commission to 

promptly issue a determination as to whether the facility 

meets the criteria. 

H.R. 2786 would modify the qualifying conduit hydropower facility process in two ways. First, the proposed bill 

would shorten the comment period for the public, including 

state and federal resource agencies, from 45 to 30 days. 

For your information, FERC staff, on average, completes 

review of qualifying conduit facility applications shortly 

after the 45-day notice period closes. In fiscal year 2017, 

Staff processed 22 notices of intent to construct qualifying 

conduits in an average of 58 days, and has processed four 

such notices, in an average of 56 days, thus far in fiscal 

year 2018. The shortened public notice period established 

by H.R. 2786 could slightly reduce the processing time. 

The second modification to section 30 of the FPA would 

eliminate the existing 5-MW limit on qualifying facilities, 

thus allowing projects of unlimited capacity to meet the 

criteria for a qualifying conduit facility. This change could 

potentially establish a larger subset of hydropower projects 

that would not be required to be licensed or exempted by 

the Commission. Section 30, giving the Commission the 

authority to exempt certain small hydroelectric facilities 

from the requirements of Part I of the FPA, was added to 

the FPA in 1978, and since that time, the Commission has 

issued only a handful of conduit exemptions over 5 MW. 

Accordingly, I am uncertain how many projects will be affected by this revision. 

Should Congress choose to remove the 5-MW ceiling on 

qualifying conduit hydropower facilities, such that these 

projects could be of any size, it might also consider removing the ceiling for conduit exemptions. Currently the maximum size of projects for which the Commission may issue 

conduit exemptions under its existing authority is 40 MW. 

It is not clear why there should be no limit on the size of 

qualifying conduit hydropower facilities and yet a 40-MW 

limit on conduit exemptions. 

If I can be of further assistance to you on this or any 

other Commission matter, please let me know. 

Sincerely, 

KEVIN J. MCINTYRE, 

Chairman. 

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 H.R. 2786 as 

ordered reported, are shown as follows (existing law proposed to be 


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omitted is enclosed in black brackets, new matter is printed in 

italic, existing law in which no change is proposed is shown in 

roman): 

THE FEDERAL POWER ACT 

* * * * * * * 

SEC. 29. That all Acts or parts of Acts inconsistent with this Act 

are hereby repealed: Provided, That nothing herein contained be 

held or construed to modify or repeal any of the provisions of the 

Act of Congress approved December 19, 1913, granting certain 

rights-of-way to the city and county of San Francisco, in the State 

of California: Provided further, That section 18 of an Act making 

appropriations for the construction, repair, and preservation of certain public works on rivers and harbors, and for other purposes, 

approved August 8, 1917, is hereby repealed. 

SEC. 30. (a)(1) A qualifying conduit hydropower facility shall not 

be required to be licensed under this part. 

(2)(A) Any person, State, or municipality proposing to construct 

a qualifying conduit hydropower facility shall file with the Commission a notice of intent to construct such facility. The notice shall 

include sufficient information to demonstrate that the facility 

meets the qualifying criteria. 

(B) Not later than 15 days after receipt of a notice of intent filed 

under subparagraph (A), the Commission shall— 

(i) make an initial determination as to whether the facility 

meets the qualifying criteria; and 

(ii) if the Commission makes an initial determination, pursuant to clause (i), that the facility meets the qualifying criteria, 

publish public notice of the notice of intent filed under subparagraph (A). 

(C) If, not later than ø45¿ 30 days after the date of publication 

of the public notice described in subparagraph (B)(ii)— 

(i) an entity contests whether the facility meets the qualifying criteria, the Commission shall promptly issue a written 

determination as to whether the facility meets such criteria; or 

(ii) no entity contests whether the facility meets the qualifying criteria, the facility shall be deemed to meet such criteria. 

(3) For purposes of this section: 

(A) The term ‘‘conduit’’ means any tunnel, canal, pipeline, 

aqueduct, flume, ditch, or similar manmade water conveyance 

that is operated for the distribution of water for agricultural, 

municipal, or industrial consumption and not primarily for the 

generation of electricity. 

(B) The term ‘‘qualifying conduit hydropower facility’’ means 

a facility (not including any dam or other impoundment) that 

is determined or deemed under paragraph (2)(C) to meet the 

qualifying criteria. 

(C) The term ‘‘qualifying criteria’’ means, with respect to a 

facility— 

(i) the facility is constructed, operated, or maintained for 

the generation of electric power and uses for such generation only the hydroelectric potential of a non-federally 

owned conduit; 


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(ii) the facility has an installed capacity that does not exceed ø5¿ 40 megawatts; and 

(iii) on or before the date of enactment of the Hydropower Regulatory Efficiency Act of 2013, the facility is not 

licensed under, or exempted from the license requirements 

contained in, this part. 

* * * * * * * 

Æ 


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