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[Senate Hearing 112-26]
[From the U.S. Government Publishing Office]

                                                         S. Hrg. 112-26

                               HYDROPOWER

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

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                                   TO

  RECEIVE TESTIMONY ON: S. 629, TO IMPROVE HYDROPOWER, AND FOR OTHER 
 PURPOSES; S. 630, TO PROMOTE MARINE AND HYDROKINETIC RENEWABLE ENERGY 
RESEARCH AND DEVELOPMENT, AND FOR OTHER PURPOSES; AND TITLE I, SUBTITLE 
  D OF THE AMERICAN CLEAN ENERGY LEADERSHIP ACT OF 2009 (S. 1462 FROM 
                            111TH CONGRESS)

                               __________

                             MARCH 31, 2011

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                       Printed for the use of the
               Committee on Energy and Natural Resources

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  66-811 PDF              WASHINGTON : 2011
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20402-0001

               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman

RON WYDEN, Oregon                    LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota            RICHARD BURR, North Carolina
MARY L. LANDRIEU, Louisiana          JOHN BARRASSO, Wyoming
MARIA CANTWELL, Washington           JAMES E. RISCH, Idaho
BERNARD SANDERS, Vermont             MIKE LEE, Utah
DEBBIE STABENOW, Michigan            RAND PAUL, Kentucky
MARK UDALL, Colorado                 DANIEL COATS, Indiana
JEANNE SHAHEEN, New Hampshire        ROB PORTMAN, Ohio
AL FRANKEN, Minnesota                JOHN HOEVEN, North Dakota
JOE MANCHIN, III, West Virginia      BOB CORKER, Tennessee
CHRISTOPHER A. COONS, Delaware

                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
               McKie Campbell, Republican Staff Director
               Karen K. Billups, Republican Chief Counsel

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Bingaman, Hon. Jeff, U.S. Senator From New Mexico................     1
Chalk, Steven G., Chief Operating Officer and Acting Deputy 
  Assistant Secretary for Renewable Energy, Office of Energy 
  Efficiency and Renewable Energy, Department of Energy..........     3
Connor, Michael L., Commissioner, Bureau of Reclamation, 
  Department of Interior.........................................    16
Munro, Andrew, President, National Hydropower Association........    41
Murkowski, Hon. Lisa, U.S. Senator From Alaska...................     2
Sean O'Neill, President, Ocean Renewable Energy Coalition, 
  Darnestown, MD.................................................    47
Seebach, John, Director, Hydropower Reform Initiative, American 
  Rivers.........................................................    33
Webber, Michael E., Ph.D., Assistant Professor, Department of 
  Mechanical Engineering, Associate Director, Center for 
  International Energy and Environmental Policy, Co-Director, 
  Clean Energy Incubator, The University of Texas at Austin, 
  Austin, TX.....................................................    49
Wright, Jeff C., Director, Office of Energy Projects, Federal 
  Energy Regulatory Commission...................................    10

                               APPENDIXES
                               Appendix I

Responses to additional questions................................    63

                              Appendix II

Additional material submitted for the record.....................    83

 
                               HYDROPOWER

                              ----------                              

                        THURSDAY, MARCH 31, 2011

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.

    The committee met, pursuant to notice, at 9:30 a.m. in room 
SD-366, Dirksen Senate Office Building, Hon. Jeff Bingaman, 
chairman, presiding.

     OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR 
                        FROM NEW MEXICO

    The Chairman. OK. Why don't we get started.
    Good morning. Welcome to today's hearing.
    Today we hear testimony regarding 3 pieces of legislation--
S. 629, which is the Hydropower Improvement Act of 2011, S. 
630, which is the Marine and Hydrokinetic Renewable Energy 
Promotion Act of 2011, and also the energy and water 
integration provisions from Title I, Subtitle D, of ACELA, the 
American Clean Energy Leadership Act of 2009, which was S. 1462 
in the previous Congress.
    Today we will hear from administration and other witnesses 
about the potential we have to produce more hydropower in this 
country through improved efficiency at existing hydropower 
facilities and adding hydropower capabilities to existing 
structures. Developing additional energy from hydropower can 
help to decrease our dependence on fossil fuels, can help 
reduce the Nation's carbon emissions.
    I'm glad to cosponsor the Hydropower Improvement Act with 
Senator Murkowski, and I appreciate her willingness to 
incorporate suggestions that I and others have made to 
encourage development of hydropower resources while protecting 
or even improving our natural resources. I am particularly 
interested in hearing about the opportunities for development 
of small hydropower projects that may be feasible, even in arid 
parts of the country like New Mexico.
    In addition, I'm pleased to, that we'll hear testimony 
today regarding legislation to recognize the connection between 
energy and water. In 2009, Senator Murkowski and I introduced 
the Energy and Water Integration Act. We received testimony and 
comments on the bill during the last Congress. The committee 
reported the bill as part of ACELA with bipartisan support. The 
Energy and Water Integration Act takes a first step toward 
integrating energy and water policy. Developing new policies 
that integrate energy and water solutions will become 
increasingly vital as populations grow and environmental needs 
increase, and a changing climate continues to affect our energy 
and water resources.
    I'm glad to welcome the witnesses that we have here today 
to give their views on the bills. The committee appreciates 
everyone's efforts to be here.
    Before I turn to the witnesses, let me call on Senator 
Murkowski for her opening comments.

        STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR 
                          FROM ALASKA

    Senator Murkowski. Thank you, Mr. Chairman, and good 
morning.
    I appreciate that we're having an opportunity this morning 
to really focus in on hydropower. As most folks know, I'm a 
pretty strong hydropower proponent. I consider it to be one of 
our hardest-working renewable resources and, unfortunately, one 
that sometimes gets overlooked a little bit in the clean energy 
debate. Coming from Alaska, we've got a lot of water, and we're 
figuring out how to harness it in good ways.
    There's certainly no question that hydropower is, and must 
continue to be, part of our energy solution. It's the largest 
source of renewable electricity in the United States. The 
100,000 megawatts of electro-, hydroelectric capacity we now 
have today provide about 7 percent of the Nation's electricity 
needs. Hydroelectric generation is carbon-free baseload power 
that allows us to avoid approximately 200 million metric tons 
of carbon emissions each year. It's clean, it's efficient, it's 
inexpensive. Yet, despite tremendous benefits, I'm amazed at 
how often it seems to be undervalued as a resource.
    It's a misconception that the hydropower resource is tapped 
out. In Alaska, hydro already supplies 24 percent of our 
State's electricity needs, and over 200 promising sites for 
future hydropower development have been identified.
    Today, as you mentioned, Mr. Chairman, we've got 2 
hydropowers--hydropower bills that I have recently introduced. 
We've got S. 629--the Hydropower Improvement Act, which seeks 
to substantially increase our Nation's hydropower capacity. I'm 
pleased that a number of those on the committee here have 
agreed to cosponsor that--yourself, Senator Risch, Senator 
Wyden, Senator Cantwell. I thank them for their support.
    This Act aims to spur on the development of a wide range of 
conventional projects to increase hydropower production--
everything from efficiency improvements and capacity additions 
at existing facilities, to electrifying non-powered dams, to 
conduits at irrigation districts, to small hydro projects, to 
large pump storage facilities. We also include Federal 
assistance for needed environmental studies and mitigation 
efforts which should help all types of hydropower projects.
    The other bill, S. 630, is the Marine and Hydrokinetic 
Renewable Energy Promotion Act. This is very similar to the 
provisions that this committee approved last Congress as part 
of ACELA, as you have noted. S. 630 is designed to speed up the 
development of renewable ocean energy--whether it's the wave, 
the current, tidal energy--in Alaska, all across the Nation.
    The Electric Power Research Institute has estimated that 
our Nation's oceans resources could generate 252 million 
megawatt hours of electricity, or 6.5 percent of our entire 
electricity generation. But to reach this potential, ocean 
energy must gain the same financial and research incentives 
that are currently enjoyed by other forms of renewable energy.
    Then, the last piece of legislation on today's agenda are 
then energy-water integration provisions. This legislation 
addresses the relationship between water and energy production. 
I think, given what we're seeing--the turmoil in North Africa 
and the Middle East--I find it interesting that the linkages 
between energy and water systems were first identified in 
studies in the 1970s, following the OPEC oil embargo. Since 
that time, though, I think it's fair to say that minimal 
investments in research and development have occurred.
    Of course, all forms of energy production, distribution and 
use either requires water, or affects water resources in some 
manner. By identifying the relative linkages between energy and 
water systems and key research needs, we'll see a greater 
return on our investment in research, development and 
commercialization of energy and water technologies.
    I look forward to the comments from the witnesses this 
morning, recognize that we've got some folks from here in town, 
and some that have traveled to be with us, so I appreciate 
their willingness to come and participate today.
    The Chairman. All right. Thank you very much.
    We have 2 panels.
    This first panel are Government witnesses--the Honorable 
Michael Connor, who is the Commissioner of the Bureau of 
Reclamation, is not yet here. He was unavoidably delayed, but 
will be here shortly; Mr. Steven Chalk, who is the Chief 
Operating Officer and Acting Deputy Assistant Secretary for 
Renewable Energy at the Department of Energy; Mr. Jeff Wright, 
who is the Director of the Office of Energy Projects with FERC, 
the Federal Energy Regulatory Commission.
    So, why don't we start with you, Mr. Chalk? Then you, Mr. 
Wright. If Mike Connors has arrived by the time you're through, 
we'll have him go ahead, or else we'll start with questions.
    So, Mr. Chalk, go right ahead.

   STATEMENT OF STEVEN G. CHALK, CHIEF OPERATING OFFICER AND 
ACTING DEPUTY ASSISTANT SECRETARY FOR RENEWABLE ENERGY, OFFICE 
OF ENERGY EFFICIENCY AND RENEWABLE ENERGY, DEPARTMENT OF ENERGY

    Mr. Chalk. Good morning, Chairman Bingaman and Ranking 
Member Murkowski, and the rest of the committee.
    Thanks for the opportunity to discuss the 3 pieces of 
legislation today.
    I've submitted detailed comments for the record, but I'd 
like to take this opportunity to give you a brief overview of 
the Department's activities on water power and the energy-water 
nexus.
    Conventional hydropower currently provides 7 percent of 
U.S. generation, and 65 percent of our renewable energy comes 
from hydropower. The big advantage of hydropower, of course, is 
no criteria pollutants and no greenhouse gasses associated with 
the actual energy production.
    Conventional hydropower generation capacity in the U.S. has 
been on the decline. However, significant amounts of hydropower 
resources remain undeveloped. The vast majority potentially can 
be utilized with relatively low environmental risk, and without 
construction of any new large hydroelectric dams or 
impoundments. In fact, DOE's interim Hydropower Resource 
Assessment, which was completed in 2009, identifies additional 
hydropower capacity of 300 gigawatts--about 3 times our current 
capacity.
    If S. 629, the Hydropower Improvement Act of 2011, is 
enacted, it would provide authorization to fund research; 
develop new technologies with improved costs and environmental 
performance characteristics, such as scale-up of fish-friendly 
turbines; and address environmental issues and other technical 
barriers to reduce the expense and the uncertainty of the 
regulatory process. It would also authorize funding to pursue 
efficiency and capacity upgrade opportunities at existing 
hydropower sites, as well as new opportunities to power 
existing dams where there are currently no turbines.
    Marine and hydrokinetic--or MHK technologies, as we call 
them--are energy-conversion devices that extract energy from 
moving water from wave devices, oceans, rivers, tidal areas, 
and even salinity gradients. In March 2007 the Electric Power 
Research Institute reported that its conservative estimate 
indicated that MHK power--and this is only for wave and tidal 
sources alone--could provide an additional 13 gigawatts of 
capacity by 2025. If Senate Bill 630, the Marine and 
Hydrokinetic Renewable Energy Promotion Act of 2011, is 
enacted, it would authorize funding to enhance the current DOE 
research program aimed at reducing MHK costs, to optimize 
system and array designs, and validate performance and 
reliability.
    DOE has already established National Marine Renewable 
Energy Centers which are similar to the test centers called for 
in Senate Bill 630. The goal of DOE's test centers is to 
provide open-water testing facilities which enable developers 
to test their technologies and validate their performance 
through a standardized, industry-recognized protocol. This 
third party testing capability could promote greater investment 
in deployment and commercialization of MHK technologies.
    We are also pleased to comment on the chairman's bill from 
S. 1462, subtitle D, Energy and Water Integration. DOE 
estimates 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 could reduce water consumption by 70 to 80 
percent compared to systems used today.
    The various provisions of this bill could contribute to 
more comprehensive understanding of the water-related 
challenges to energy production, as well as the identification 
of technologies and practices that will optimize water and 
energy efficiency in production of electricity and fuels. In 
addition, the energy-water roadmap could contribute to 
establishing a cost-effective strategy for the Department's 
future energy technology research, development, demonstration 
and deployment efforts for addressing emerging water-related 
challenges.
    We recommend that any studies on this subject consider 
potential increases in water demand that will result from 
projected growth of energy production, and that interagency 
collaboration and consultation be part of these studies, as 
adequate water availability is an issue for every sector of the 
economy.
    Finally, the President's fiscal year 2012 budget represents 
DOE's priorities for applied R&D in efficiency in renewable 
technologies.
    So, thanks for the opportunity to testify today on the 
proposed legislation, and I will be happy to answer any 
questions that you may have.
    [The prepared statement of Mr. Chalk follows:]

Prepared 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.netl.doe.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 1ERPl 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 non-technical 
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 US 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 increased 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.
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    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.

    The Chairman. Thank you very much.
    Mr. Wright, why don't you go right ahead?

    STATEMENT OF JEFF C. WRIGHT, DIRECTOR, OFFICE OF ENERGY 
         PROJECTS, FEDERAL ENERGY REGULATORY COMMISSION

    Mr. Wright. Chairman Bingaman, Ranking Member Murkowski, 
other members of the committee, I appreciate the opportunity to 
appear before you to discuss specifically S. 629 and S. 630.
    As a member of the Commission's staff, the views I express 
in my testimony are my own.
    The Commission regulates over 1,600 non-Federal hydropower 
projects at over 2,500 dams pursuant to Part I of the Federal 
Power Act, or FPA. Together, these projects represent 54 
gigawatts of hydropower capacity--more than half of all the 
hydropower in the U.S. The FPA authorizes the Commission to 
issue licenses and exemptions for projects within its 
jurisdiction.
    About 71 percent of the hydropower projects regulated by 
the Commission have an installed capacity of 6 megawatts or 
less. The Commission has seen an increased interest in small 
hydropower projects, and has responded by implementing measures 
to facilitate efficient review of project proposals, including 
the following: (1) adding new web-based resources at the 
Commission's website to make it easier for applicants to 
understand and complete the licensing process, including 
application templates; (2) updating or creating MOU's with 
other agencies to improve coordination, such as the MOU with 
the State of Colorado, and the recently updated MOU with the 
Army Corps of Engineers; (3) continuing our small hydropower 
hotline and email address to answer applicant questions; and 
(4) educating potential hydropower developers through a new 
education and outreach program.
    With this background I will turn to the draft legislation.
    Section 7 of S. 629 would require the Commission to 
investigate the feasibility of implementing a 2-year licensing 
process. I support the goal of expedited licensing. It's always 
been our goal to act on applications as quickly as possible, 
and the Commission has established processes that allow for 
greater flexibility and efficiency.
    However, the Commission operates under the constraints 
imposed by the FPA and by other legislation affecting the 
licensing process--the Clean Water Act, Coastal Zone Management 
Act, the Endangered Species Act, and the National Historic 
Preservation Act among them. Without the ability to waive 
sections of the FPA and other acts or to set enforceable 
schedules in licensing proceedings, a shortened process may be 
problematic.
    Section 8 would establish various measures to promote 
conduit and small hydropower projects, which have been a major 
focus of the Commission's staff effort in the last few years.
    I support section 8(a), which would amend section 30 of the 
FPA to allow conduit projects to be located on Federal lands. 
Section 8(a) would also require the Commission and the 
Commissioner of Reclamation to conduct regional public 
workshops on reducing barriers to conduit projects and report 
any recommendations to Congress. We are prepared to join them 
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 described earlier, we are well 
prepared to undertake this effort.
    Section 9 would amend the FPA to authorize the Commission 
to extend the term of a preliminary permit to up to 2 years, 
which I support. It might be worth considering, as an 
alternative, authorizing the Commission to issue permits for 
terms of up to 5 years, avoiding the need for developers to go 
through the process of seeking an extension.
    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 an MOU to improve the coordination and 
timeliness of such development. We have already begun working 
with the Bureau on this matter.
    S. 630 would authorize the Secretary of Energy to take 
various steps to promote marine and hydrokinetic renewable 
energy technology. I have 2 comments on this.
    Section 3 would allow the Secretary of Energy to issue 
grants to support national testing facilities for marine and 
hydrokinetic technology research, development and 
demonstration, which would be helpful in the development of new 
technologies. It may be worth considering either placing any 
test centers under the direct authority of DOE or another 
Federal agency, or providing an exemption from the provisions 
of Part 1 of the FPA for such test centers.
    Second, section 6 of the bill would authorize the Secretary 
of Energy to issue grants to advance development to help fund 
the cost of environmental analysis, and the collection and 
dissemination of environmental data, and to support 
demonstration projects. This will help the regulatory process, 
and advance the development of the technology as a whole.
    In conclusion, there is a great deal of hydropower 
potential throughout the country, including small projects, and 
marine and hydrokinetic projects. The Commission continues to 
adapt its procedures to facilitate the review and, where 
appropriate, the approval of such projects. The legislation 
under consideration will, as I have testified, assist in 
realizing that potential.
    This concludes my remarks, and I'll be pleased to answer 
any questions you may have.
    [The prepared statement of Mr. Wright follows:]

   Prepared Statement of Jeff C. Wright, Director, Office of Energy 
             Projects, Federal Energy Regulatory Commission
                          on s. 629 and s. 630
    Before the Committee on Energy and Natural Resources, United States 
Senate
    Legislative Hearing , to improve hydropower, and for other 
purposes; S. 630, to promote marine and hydrokinetic renewable energy 
research and development, and for other purposes; and Title I, subtitle 
D of the American Clean Energy Leadership Act of 2009 (S. 1462 from 
111th Congress).
    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 non-federal 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, tests 
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.

    The Chairman. Thank you very much.
    Mike, I introduced you when we, at the beginning, and 
indicated you were unavoidably detained but would be here, and 
we look forward to your testimony. Go right ahead.

    STATEMENT OF MICHAEL L. CONNOR, COMMISSIONER, BUREAU OF 
              RECLAMATION, DEPARTMENT OF INTERIOR

    Mr. Connor. Thank you, Mr. Chairman.
    My apologies to the committee for being late.
    I am pleased to be in familiar territory here, along with 
our Federal partners, to express the Department of the 
Interior's views on S. 629 and on Subtitle D of the American 
Clean Energy Leadership Act of 2009. I've submitted the written 
statements for the record.
    With respect to S. 629, the Hydropower Improvement Act of 
2011, there are a number of ongoing actions at Reclamation that 
relate to the provisions of the bill. As a threshold matter, I 
would say that our overall goal in carrying out those actions 
is to work in partnership with Federal, private and local 
governmental entities to identify and assess opportunities for 
sustainable hydropower development at Reclamation facilities.
    Hydropower is a clean and efficient way to produce reliable 
energy, and is a renewable resource. Reclamation has nearly 500 
dams and dikes, and owns 58 hydropower plants. Annually, these 
plants produce an average of 40 million megawatt hours of 
electricity, enough to meet the needs on an annual basis of 
over 9 million people.
    This afternoon Reclamation will publish the Hydropower 
Resource Assessment at Existing Reclamation Facilities, a 
comprehensive review of the potential for new hydropower 
development at Reclamation facilities. In addition to the 
assessment, Reclamation will soon be publishing 2 Federal 
Register notices and make available Lease of Power Privilege 
opportunities at Granby and Pueblo dams in Colorado. These 2 
facilities are identified as having good hydropower potential 
in the assessment I just mentioned.
    I should also note that Reclamation and DOE are working on 
a funding opportunity announcement to conduct pilot studies on 
low-head hydropower units at Reclamation facilities.
    Section 10 of S. 629 directs Reclamation to conduct a study 
of barriers to non-Federal hydropower development similar to 
the constraints analysis outlined in the assessment being 
released today. The assessment examines how regulations and 
legal requirements could potentially affect development of 
hydropower. Using historic data--land or water use regulations 
that could potentially affect development of hydropower, of 
hydropower sites--these were identified, and specific 
mitigation costs were accounted for in the economic analysis 
that's part of the assessment that's being released today.
    Section 10 also calls for Reclamation and FERC to develop 
and issue a memorandum of understanding to improve the 
timeliness of non-Federal development of hydropower resources 
at Reclamation facilities. Reclamation and FERC have an 
existing MOU developed in 1992 that addresses issues related to 
the timely development of non-Federal hydropower. I agree that 
the MOU needs updating. Reclamation and FERC recently met to 
discuss how to improve timeliness of the processes developed in 
the MOU and resolution of authority issues, and those 
discussions will continue.
    Section 8 of the bill allows low-head hydropower 
development on Reclamation-owned conduits to be eligible for 
inclusion in FERC's conduit exemption program. Currently, 
Reclamation is assessing the potential for developing low-head 
capacity on federally owned canals and conduits. A report 
similar to the Resource Assessment being released today is 
expected to be released for public review by year's end. 
Reclamation expects that the provisions in section 8 would 
address uncertainty in the approval process for new licenses 
and facilitate the development of new capacity at our existing 
facilities. Reclamation supports the opportunity to enter into 
new agreements to develop low-head hydropower potential in an 
environmentally sustainable manner.
    Overall, the Department shares the committee's view that 
interagency coordination can leverage Federal and private 
sector investment in additional hydropower development. This 
administration is committed to increasing the generation of 
sustainable, affordable hydropower for our Nation. We hope that 
the assessment and the new efforts described will provide a 
lasting contribution to the power supplies, just as past 
investments in Reclamation's water power and infrastructure 
have done. We will, of course, continue to coordinate with 
other agencies, and look forward to working with Congress in 
this important area.
    With respect to Subtitle D of S. 1462, I'll speak to 
sections 143 and 144, which involve the Bureau of Reclamation.
    Section 143 directs Reclamation to study the energy used in 
water storage and delivery on major Reclamation projects, with 
an emphasis on opportunities to reduce consumption and costs. 
We share the committee's interest in this area.
    Through our WaterSMART program, the Department is committed 
to integrating energy and water policies that promote 
sustainable use of our limited natural resources. WaterSMART 
grants and Title XVI Water Reuse projects funded in the last 
fiscal year are expected to conserve an estimated 149,000 acre-
feet of water once they're complete. With funds requested in 
fiscal year 2012, we'll seek to increase the total by an 
additional 140,000 acre-feet. Under WaterSMART, Reclamation 
incentivizes the conservation of energy in the delivery of 
water, and proposals receive additional consideration when they 
not only address water conservation, but also the use of 
renewable energy.
    In fiscal year 2010, Reclamation's 37 water and energy 
efficiency grants included several proposals exploring the 
relationship between water and energy savings. Simply put, 
water conservation can yield significant energy savings, too.
    Section 144 of the bill calls for specific research 
objectives and authorizes operations and cost recovery at the 
Brackish Groundwater National Desalination Research Facility in 
New Mexico. As the Chairman is well aware, desalination is one 
of an array of tools that will likely to be needed to face 
future water supply challenges that we face across the Nation.
    The directives in section 144 are consistent with and build 
upon ongoing activities at the research facility. Reclamation 
is currently partnered with New Mexico State University in a 
year research program with projects at the facility 
focused on research, education and outreach in water 
desalination. The bill calls on Reclamation to operate the 
facility to develop technologies that help create new water 
from municipal, agricultural, industrial or environmental uses. 
We support those goals and actions.
    As members of the committee know, one of the authorities 
used to operate and maintain the desalination research facility 
stems from Public Law 104-298, commonly called ``the Desal 
Act''. The Desal Act has been funding research leading to pilot 
and demonstration testing at the facility. This provides a 
venue for the award of competitive, cost-shared funding with 
universities and private sector organizations for research on 
creating usable water supplies in a cost-efficient manner.
    The Desal Act's current authority expires at the end of 
2011, and its extension by Congress would enable this important 
work to continue. The research also helps enhance U.S. 
competitiveness in providing solutions to worldwide water 
issues in the 21st Century, and we would be pleased to work 
with the committee in this area.
    This concludes my written statement. I will answer 
questions at the appropriate time. Thank you.
    [The prepared statements of Mr. Connor follows:]

   Prepared Statement of Michael L. Connor, Commissioner, Bureau of 
                Reclamation, Department of the Interior
                               on s. 629
    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 
discuss activities underway at the Department of the Interior 
(Department) as they relate to S. 629, the Hydropower Improvement Act 
of 2011.
    Hydropower is a clean and efficient way to produce energy and is a 
renewable resource. Each kilowatt-hour of hydroelectricity is produced 
at an efficiency of more than twice that of any other energy source. 
Where hydropower does have environmental impacts, particularly on fish 
species and their habitats, we work with our partner bureaus and 
agencies to evaluate and mitigate these impacts. Further, hydropower is 
very flexible and reliable when compared to other forms of generation. 
Reclamation has nearly 500 dams and dikes and 10,000 miles of canals 
and owns 58 hydropower plants, 53 of which are operated and maintained 
by Reclamation. On an annual basis, these plants produce an average of 
40 million megawatt (MW) hours of electricity, enough to meet the 
entire electricity needs of over 9 million people on average.
    Reclamation is the second largest producer of hydroelectric power 
in the United States, and today we are actively engaged in looking for 
opportunities to encourage development of additional hydropower 
capacity at our facilities. This afternoon, Reclamation will publish 
the Hydropower Resource Assessment at Existing Reclamation Facilities 
(Assessment), a comprehensive review of power potential at all 
Reclamation facilities. The Assessment benefitted from public comment 
received this past winter. The Assessment will detail our findings on 
hydropower potential, providing information on whether or not 
hydropower development at existing Reclamation facilities would be 
economically viable and warrant further investigation. In addition to 
the Assessment, Reclamation will be publishing two Federal Register 
notices in the near future regarding Lease of Power Privilege 
opportunities at Granby and Pueblo dams in Colorado (two facilities 
that were identified to have good hydropower development potential in 
the Assessment). Reclamation and DOE are also working on a funding 
opportunity announcement to conduct several pilot studies on a low-head 
hydropower unit at Reclamation facilities.
    I am pleased to report on these recent activities as they relate to 
the directives in S. 629. Subsection 10(a) of the bill calls for study 
of non-Federal hydropower development at Bureau of Reclamation 
projects. Reclamation is directed to conduct a study of barriers to 
non-Federal hydropower development at Reclamation projects. This 
provision may duplicate efforts already underway. For example, the 
constraints analysis outlined in Chapter 3 of the Assessment, titled 
Site Analysis Methods and Assumptions (specifically, Chapter 3.5 of the 
Assessment), examines how land or water use regulations and legal 
requirements could potentially affect development of hydropower. These 
factors were taken into account when assessing the potential for 
hydropower development on existing Reclamation facilities. Further, the 
identified regulatory constraints have been mapped within Reclamation's 
regions using Geographic Information System (GIS) data. Local 
information for fish and wildlife and fish passage constraints, issues 
that could add significant development costs to a project site but are 
important to address from an environmental and natural resource 
standpoint, were identified by Reclamation's regional and area offices 
and accounted for in the Assessment as well.
    Subsection 10(b) of S. 629 calls for Reclamation and FERC to 
develop and issue a memorandum of understanding to improve the 
coordination and timeliness of the non-Federal development of 
hydropower resources at Reclamation projects. Reclamation and FERC 
already have an MOU, signed in 1992, that addresses the establishment 
of processes for early resolution of issues related to the timely 
development of non-federal hydroelectric power at Bureau of Reclamation 
facilities. Reclamation and FERC recently met to discuss how to improve 
the timeliness of the processes developed in that MOU and other issues.
    Section 8 of the bill would allow low-head hydropower development 
on Reclamation-owned conduits to be eligible for inclusion in FERC's 
conduit exemption program. Currently, Reclamation is assessing the 
potential for developing low-head hydroelectric generating capacity on 
our Federally-owned canals and conduits. A report, similar to the 
Resource Assessment, is expected to be released for public review by 
the end of this year. We expect that the provisions in section 8 of the 
bill would help address uncertainty in the approval process for new 
licenses and would facilitate the development of new capacity at 
existing facilities. Reclamation supports the opportunity to enter into 
new agreements with private or quasi-public entities to develop low-
head hydropower potential in an environmentally-sustainable manner.
    Overall, the Department shares the Committee's view that 
interagency coordination can leverage Federal and private sector 
investment in additional hydropower development. This consideration was 
foremost in the Department's signing a Memorandum of Understanding with 
the Department of Energy and U.S. Army Corps of Engineers on March 24, 
2010, to increase communication between federal agencies and strengthen 
the long-term relationship among them to increase in a sustainable 
manner hydropower production at existing Federal facilities.
    In conclusion, Reclamation recognizes the importance of hydropower. 
We hope that the Assessment and the new efforts described will provide 
a lasting contribution to the power supplies of our nation. We will of 
course continue to coordinate with other agencies and look forward to 
working with the Congress in this important area to avoid duplication, 
and utilize existing authority and resources.
    This concludes my written statement. I am pleased to answer any 
questions the Committee may have.
                               on s. 1462
    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.

    The Chairman. Thans to all 3 of you for your excellent 
testimony.
    Let me start with a few questions.
    Maybe I'll ask you first, Mr. Chalk. You talked about the 
potential for more production of power from hydropower, as I 
understood your testimony. I'm just a little unclear as to 
where that potential comes. Is, there's some talk in your 
testimony also about conduit projects, and to what extent is 
that a significant part of the opportunity that has not yet 
been tapped? What are the other parts of the opportunity that 
haven't been tapped?
    Mr. Chalk. Yes, sir. So, we identify possibly 300 gigawatts 
of potential hydro. I would say roughly 12 gigawatts of 
capacity is from existing hydropower facilities from upgrading 
efficiency and capacity. A lot of these facilities are very 
old, so the turbines aren't very efficient. So, if we can put 
modern turbines in there, we could get probably about 12 
gigawatts of power----
    The Chairman. That's 12 out of the 300?
    Mr. Chalk. Twelve out of the 300.
    If we look at existing dams--and there's 80,000 dams in the 
U.S.--most of those are not powered. But we could probably get 
an additional 12 gigawatts from 595 of those dams if we put 
powerhouses on those, as long as it can be done in an 
environmentally sensitive way.
    The big potential, we estimate about 255 gigawatts, is in 
small hydro, and this potential is all over the country. In 
fact, there's 90 gigawatts of small hydro in Alaska. Incredible 
potential. Most of these locations have less than 5 megawatts 
of potential. So, that's where most of the growth could occur 
if we would look to grow hydropower. Then there's----
    The Chairman. Does that includes these conduit projects? Is 
that part of what you call----
    Mr. Chalk. Yes, it could. The conduit projects are gravity-
fed, with the natural difference in height the source of the 
potential energy. We have developers that are going after that 
market. We're designing turbines for that market.
    But if they're pumped already, we have to look at the 
pumping energy. We don't want to make power from the energy 
they use for pumping, because it just wouldn't make sense. So, 
if they're naturally gravity-fed from different elevations, if 
they're irrigation canals or somehow used by the municipality 
to move water, it's possible to get a small amount of capacity 
from that, and we have people looking at those markets.
    Then the last area is pump storage, which really is more of 
a capacity thing than energy. It actually uses more energy, 
because you have to pump the water back up the hill, and then 
it takes more energy to do that than you get when you need the 
power. But this is really important for backstopping and 
firming up intermittent renewables like wind and solar. So, 
this is a really important area. We estimate there's roughly 
about another 34 gigawatts of this type of power that's 
available.
    So, you add all of those up, it's a considerable amount of 
power that's available through conventional hydropower.
    The Chairman. OK.
    Mike, let me ask you about this resource assessment, 
hydropower resource assessment that you're releasing today. 
Could you give us a little more information about what that, 
what the main conclusions of that are, in your view?
    Mr. Connor. Absolutely. Absolutely, Mr. Chairman.
    The Assessment that we're releasing today has been a 
process that's been going on for about the last year. It 
started as a result of the MOU that we have between DOE and the 
Corps of Engineers and the Bureau of Reclamation to assess our 
existing facilities and build upon a previous study that was 
done as a result of section 1834 of the 2005 Energy Policy Act. 
So, we released the report at the end of last year for public 
review, took a lot of input, made some changes to the report, 
and that's what's being released today.
    The conclusions of that report are fundamentally, we looked 
at our 530 sites that we have--Reclamation dams, diversion 
dams, conduits, tunnels, canals, et cetera. What we've ended up 
finding--some of those we set aside. We're going to do a 
further study on, I think, at least 52 of those sites, which 
are conduits and tunnels, and low-head hydropower 
opportunities, so we set that aside. We basically looked at 191 
sites that had some potential.
    What we've concluded is that 70 of those sites bear a much 
more rigorous analysis--basically, feasibility study analysis. 
But, 70 of those sites, basically, on our preliminary 
analysis--which is pretty rigorous. We looked at all the 
generation capacity, the output that we could get from those 
sites. We looked at the various environmental issues associated 
with them, development costs, and then we also looked at the 
economic benefits that could be yielded--so, 70 of those sites 
had a preliminary benefit-cost ratio in excess of 0.75, which 
warrants further consideration, from our perspective. Overall, 
the capacity of those 70 sites is about 225 megawatts of 
capacity that we could bring online, which would serve about 
85,000 households.
    So, it's pretty significant. It's not the numbers, the 
gigawatt numbers that Mr. Chalk were, was talking about. But 
the reality is that, through this screen we've put them at, 
they demonstrate that they're economically feasible, and that 
makes sense for developers to come in and want to do that.
    The Chairman. Thank you very much.
    Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman.
    Gentlemen, thank you for your testimony this morning.
    Mr. Chalk, I like what you say about the potential. I 
clearly like what Secretary Chu has stated about hydropower, 
about it being an incredible source, and important for the 
Federal Government to tap this so that we can contribute to our 
clean energy portfolio.
    But then you go on to say that the President's fiscal year 
2012 budget represents DOE's priorities for applied R&D and 
energy efficiency in renewable energy technologies. So then, 
when you go to the budget, the proposed budget, it doesn't 
share that optimism that you have expressed and that the 
Secretary has stated. The water power program, excuse me, is 
cut by 20, by over 20 percent from fiscal year 2010 levels, 
while wind is plussed up by over 60 percent, solar is plussed 
up by over 87 percent, geothermal by 135 percent, biomass for 
57.5 percent.
    So, how am I to interpret this statement when you say that 
the Department's priorities are set by the budget? You clearly 
recognize the potential, and yet the support for it doesn't 
seem to be manifested.
    Mr. Chalk. These are really tough choices we have to make 
considering we're trying to balance the Federal budget. We're 
to do this as best we can. They're very, very hard choices.
    If you peel the onion back a little bit, you actually see 
our overall water power program is roughly flat and going down 
a little bit in fiscal year 2012. But the conventional hydro 
funding that we were talking about here is actually increasing. 
The program was zeroed out in 2006 and 2007, and we've been 
able to build it up. In fact, our 2012 request for conventional 
hydropower is $20 million of the total water program request of 
$38 million.
    So, the conventional hydropower piece is growing, because 
in fiscal year 2010 it was $13 million, for instance. So, we're 
growing that by almost 50 percent. The----
    Senator Murkowski. But you have to admit that that's pretty 
minimal, given the totality of the, of what hydropower has to 
offer.
    Mr. Chalk. I think it's a good start compared to where the 
program was a few years ago, zeroed out.
    The other thing that we did under the Recovery Act is we 
put an additional $30 million into hydropower, and we ran a 
solicitation. That $30 million was leveraged 5 to 1 by private 
industry. We were able to get 30 megawatts of additional power 
at a relatively low levelized cost of energy--2 to 4 cents per 
kilowatt hour. In the projects, where we did capacity and 
efficiency upgrades, we were actually able to increase the 
generation anywhere from 10 to 20 percent from where they were 
for a relatively low cost. Again, the cost was estimated to be 
between 2 and 4 cents per kilowatt hour. So, we were able to 
leverage that money. The hydropower portion of our water power 
budget is growing. We see lots of opportunities in the future.
    The marine and hydrokinetic portion has gone down a little 
bit, but in that particular area, the marine and hydrokinetic 
devices are really where the wind program was 20 years ago. 
These device designs are just emerging. There's been very 
little open water testing--almost no testing like you have wind 
farms today. We call them ``arrays,'' in the water. Almost no 
testing there.
    So, we feel like the amount of money that we're putting 
into the marine and hydrokinetic is the right amount for the 
current state of development, which is rather immature. But 
there is great hope there, as well. Developers are going to 
have excellent opportunities to market and grow that area.
    Senator Murkowski. I hear what you're saying. I guess I 
look at those budget numbers and would suggest that we're 
clearly picking winners and losers. We recognize fully the 
enormous potential of hydropower, and yet we are not doing 
justice, if you will, in terms of where we're spreading those 
hard to come by Federal dollars.
    Mr. Wright, I want to go to you very quickly, because I'm 
running out of time here. But, you mentioned the impediments to 
the licensing process, and I think that this is a very 
important issue that we deal with. You know that without the 
ability to waive sections of the Federal Power Act or to set 
some enforceable schedules, that there's little that FERC can 
do to shorten the licensing process under its current 
authorities.
    Can you give me some suggestions? Is there any remedy that 
we might be able to look to here to make the licensing process 
more efficient while, at the same time, we still keep in place 
those necessary environmental protections?
    Mr. Wright. I think most basic--and this is, reflective of 
our natural gas program--is having a situation where FERC would 
be the lead agency, if you will, charged with setting the 
schedule. We would get together with those agencies, find out 
what the schedules would be to do their necessary permitting, 
set a schedule--you could have a schedule whereby, if they go 
over the time that they agreed to, their permit is deemed 
either approved or waived, if you will, and then we go forward 
with the license itself.
    Senator Murkowski. OK.
    Mr. Chairman, I've got some other questions, but I will, 
I'll reserve them, or, have an opportunity to submit them 
later. Thank you.
    The Chairman. All right.
    Senator Coons.
    Senator Coons. Thank you, Chairman. Thank you, Chairman 
Bingaman and Ranking Minority Member Murkowski. I'm grateful 
for your convening this hearing today.
    I've long thought that this was an area that deserved more 
attention and investment in the renewable portfolio. My own 
State more than 200 years ago owed its early industrial 
development to river-based hydrokinetic power. So, your 
characterization of the enormous amount of hydroelectric power 
that is potentially accessible in existing dams and existing 
structures all over the United States will relatively modest 
investment is quite interesting to me, and something I hope 
we'll pursue further. I hope this legislation will make 
progress.
    In Delaware we've got an organization, UEK, that's doing 
demonstration projects on tidal hydrokinetic power at our very 
large Indian River Power Plant.
    I'd like to hear more from your vision of how the DOE might 
partner the development of offshore wind with hydrokinetic 
technologies in a way that, as you mentioned, Mr. Chalk, would 
then provide for some firming up of intermittent sources--one 
of the major challenges with wind, whether onshore or offshore, 
is it's intermittent.
    How do you see the technology development moving? What 
sorts of investments do you think would be responsible to 
accelerate that? What are the major challenges to the 
deployment of HDK technologies?
    Mr. Chalk. Yes. There are a lot of synergies between 
offshore wind and some of these offshore water devices. 
Materials, for instance. We have to use composite materials to 
prevent erosion, corrosion, and other similar phenomena.
    A major barrier is ensuring that we have the transmission 
for offshore wind, and for these smaller ocean or wave or tidal 
devices. Perhaps they could be tied together. How to finance 
that transmission, and how to go about installing it would 
actually be a significant hurdle that we would have to address.
    But there are many synergies there. Essentially, instead of 
dealing with the hydrodynamics of air, you're dealing with 
water, which is many times more dense. So, we have a lot of 
synergies in our modeling efforts on how to optimize the 
designs of these devices. That's really probably the area that 
we're looking at the most right now.
    Because the water devices are just emerging, we're trying 
to come up with reference models to help developers figure out 
what the best designs are, what are some of the benchmarks they 
ought to use in terms of the fluid mechanics codes, and things 
like that. All of that's being borrowed from the wind industry.
    So, there's a tremendous amount of synergies here to take 
advantage of.
    Senator Coons. The early estimates are that the West Coast 
has greater potential in MHK--at least, in current 
technologies, but I think there are ways in which the East 
Coast may also ultimately be a significant site. The University 
of Delaware has estimated 18 gigawatts in extractable power 
from the Gulf Stream from Florida through North Carolina, 
partly because it flows 24 hours a day, 7 days a week.
    Have you done anything in moving toward an estimate of the 
potential of offshore MHK technologies?
    Mr. Chalk. We have. First of all, with the Gulf Stream, we 
have a national test center at Florida Atlantic University----
    Senator Coons. That's right.
    Mr. Chalk [continuing]. Specifically looking at how to best 
extract energy from the Gulf Stream. We have estimates of 13 
gigawatts of MHK capacity by 2025. A lot of this is going to 
depend, if we can get the cost down, on how much market 
penetration we actually get.
    Senator Coons. Thank you.
    I appreciate the chance to ask a question.
    The Chairman. Senator Portman.
    Senator Portman. Thank you, Mr. Chairman.
    Gentlemen, thank you for being here this morning. It's good 
hear the potential. Although Ohio is not a State that has a lot 
of hydro--it's about 1 percent of our electricity currently--we 
have potential in Ohio, too. It primarily is on the Ohio River.
    As you probably know, we have four current projects 
underway. Each of them has the potential of creating a lot of 
jobs, economic development. They happen to be in areas of Ohio 
that are suffering from relatively high unemployment, so these 
are good jobs projects as well as good renewable energy 
projects.
    But there's frustration and roadblocks, as you can imagine. 
One project, Mr. Wright, I want to talk to you a little bit 
about this morning, because FERC's been involved with it. I 
worked with this project years ago when I was in the House, and 
I'm still working on it. It is a joint venture by the city of 
Hamilton, Ohio, and American Municipal Power, AMP. It's a 84 
megawatt plant. It's the Meldahal Hydro Plant, on the Ohio 
River, again. It's expected to be completed now in 2013, but 
the time period keeps getting pushed back because of various 
delays. City officials have recently approached me again to 
express their frustration with some of the permanent licensing 
issues. I will say, Mr. Wright, to the credit of your agency, 
their frustration is not so much with you. In fact, they have a 
good working relationship with you--I'm not just saying that to 
try to get you to help them more, but they actually do--but 
primarily with the Corps.
    I understand that last night there was a new, or, I think 
us said a moment ago, updated Memorandum of Understanding with 
the Corps, and that FERC and the Corps are now going to be 
working more closely together, particularly, the early 
involvement of FERC and the Corps during some of the pre-filing 
stages, including the environmental review process--I hope the 
archeological review process, which has been one of the great 
frustrations at this particular site--and then, a schedule 
between FERC and the Corps, sharing of more data, and finally, 
establishing FERC as the lead agency.
    I guess my question to you today is, one, Mr. Wright, do 
you have any specific thoughts on this project? Second, do you 
think this MOU is going to make a difference? Is this going to 
help move this progress--this project forward? More generally, 
since the committee's looking at this issue in the context of 
S. 629, is this going to help us to try to avoid some of these 
delays and--by the way, it's not just delays. We're killing 
projects through delay, because often the costs become 
prohibitive, particularly for these smaller municipalities. So, 
if you could comment on the MOU and comment on this particular 
project, I'd appreciate it.
    Mr. Wright. Thank you.
    Briefly, with regard to the city of Hamilton and the AMP 
project, the Commission did work very quickly on getting a 
license out and moving forward. But, like you point out, our 
work with the Corps sometimes would come sequentially, and that 
leads us toward the MOU that was updated, or, signed yesterday 
with the Corps, so that instead of sequential processing, if 
you will, we'll have more of a parallel processing. We'll bring 
the Corps in early on, so that we will be working together, so 
we will reach a decision, not only a FERC license decision, but 
a decision from the Corps--conditions, whatever they need to do 
to have the project on their facility--in a quicker timeframe 
and more responsive to the market and to the licensee.
    Senator Portman. How about the legislation that's being 
discussed today? Will S. 629 help? I notice there's a required 
report on the partnership between FERC and the Corps.
    Mr. Wright. We will definitely look into that if the bill 
goes forward. We will look into what we need to do to get to, 
for instance, the 2-year licensing--if that's a possibility at 
all. The MOU itself has a provision for us to get together for 
implementation. So, we will be working with the Corps to make 
sure this MOU works going forward.
    Senator Portman. But, in S. 629 have you looked at this 
requirement that there be a partnership between FERC and the 
Corps going beyond the MOU? Is that----
    Mr. Wright. Yes.
    Senator Portman [continuing]. Something you've looked at?
    Mr. Wright. Yes.
    Senator Portman. Do you think that'll help in terms of the 
kinds of problems we've had on these kinds of projects like the 
Ohio----
    Mr. Wright. I, anything will help. I believe that would be 
beneficial to the relationship between our agencies and to, and 
for the development of hydropower in an efficient and quick 
way.
    Senator Portman. Thank you.
    I would ask that you provide the committee with any 
additional suggestions you have to streamline these processes, 
and particularly, if you have any thoughts on how to move this 
particular project forward, I would appreciate it. Thank you, 
Mr. Wright.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Udall.
    Senator Udall. Thank you, Mr. Chairman.
    Good morning, gentlemen. Let me pick up on Senator 
Portman's theme of partnerships.
    Mr. Wright, I'm going to direct my questions and comments 
at you.
    I'm particularly interested in the agreement that FERC has 
signed with the State of Colorado last August--and you 
referenced it in your testimony--and the agreement is for a 
pilot program to expedite permitting for certain types of small 
scale hydro projects. In exchange for an expedited permitting 
process, the State has agreed to do significant pre-screening 
of applicants for the Federal permits that are involved. It's 
important to note the agreement includes strict standards for 
minimal environmental impacts resulting from these proposed 
projects. I'm very encouraged by what FERC and the State of 
Colorado are attempting, which, as I understand the legislation 
we're discussing today, is exactly the kind of agreement that 
the Hydropower Improvement Act would promote.
    So, in that vein, in your testimony you describe some of 
the reasons that permitting can take so long. I'm curious what 
you expect will be the lessons learned from these pilot 
projects out of the pilot program.
    So, a couple of questions: What parts of the permitting 
process do you feel should be streamlined, and that this pilot 
program will tease out? Going forward, which aspects of the 
pilot program do you believe will be applied to expedite the 
permitting process nationwide?
    Mr. Wright. Thank you, Senator.
    What we're seeing with the Colorado MOU and the agreement 
with Colorado is, the State and the State's energy office will 
be actually vetting projects, if you will--whether they are 
conduits, 5-megawatt exemptions, other small hydro projects--
they will be ``running the traps,'' if you will, going to the 
State agencies, the Fish and Wildlife agencies, the other 
agencies that will be, that have a role in issuing these 
permits. So, by the time it comes to FERC, or we're presented 
with projects, sites have been chosen that are appropriate, 
consultation has begun with the agencies that are going to be 
involved with the permitting, and a relatively complete 
application will be filed with us.
    That's, when those 3 things are done, we at FERC can get 
out licenses fairly quickly. We've done anywhere from 2 to 5 
months when those ``traps are run,'' if you will.
    Senator Udall. So, I hear you saying, then, that you 
believe all aspects of the permitting process could be applied 
nationally if this pilot program bears fruit.
    Mr. Wright. I would be, that would be my hope and dream--if 
we could do something like this and it is a success in 
Colorado, that it could be adapted and possibly spread 
nationwide.
    Senator Udall. So, let's move to Colorado itself. I'd like 
a little status update, if you will.
    It's my understanding that the States receive proposals for 
pre-screening, but no projects have been submitted for approval 
and permitting. Do you have a time when you think projects will 
begin? When do you expect to learn best practices from the 
pilot program that then could be applied in the ways we were 
just discussing?
    Mr. Wright. We're expecting 3 projects to be filed in the 
April to May timeframe that have been vetted by the Colorado 
Governor's Energy Office. Given that they achieve the goals of 
the MOU in terms of the hurdles they needed to get past to come 
to us, we would expect to be able to license those in anywhere, 
probably 3 to 6 months.
    Senator Udall. So, we're moving. There's----
    Mr. Wright. We are moving.
    Senator Udall. The whole of point of this is to move, to 
show the State, to show those who'd like to produce some 
innovative power, that we don't have to sit on our hands any 
longer.
    Mr. Wright. Yes.
    Senator Udall. Now, do you expect that changes to Federal 
permitting based on lessons learned from the Colorado program 
could be accomplished administratively? Or do you think we need 
to act legislatively? I know that's a speculative question, 
but----
    Mr. Wright. I could envision possibly a regulatory kind of 
change that may do this. But probably the structure of it is 
such that it may be a statutory change that may be necessary. 
Really, only when we kind of, as you say, when we look back and 
see, kind of, lessons learned will we know exactly maybe what 
we need, in addition to what we agreed with in the beginning on 
the MOU.
    Senator Udall. I look forward to working with you.
    I listened with interest to both the chairman and the 
ranking member's testimony. Particularly, I think, Senator 
Murkowski makes the case that there are almost, if not 
limitless, a very large number of micro-hydro projects that are 
just waiting to be developed.
    Mr. Wright. Right.
    Senator Udall. I hear this from ranchers, from farmers, 
from those who are involved in moving water from place to place 
in Colorado. We have extensive plumbing systems, if you will, 
to move water in our State. It just, it seems like it's an 
unrealized asset, and has great energy potential. So, I hope 
FERC will continue to move and work with all of us.
    It's been a long time coming, if I might make that 
editorial comment. But this is some good news. Let's take 
advantage of it.
    So, thank you.
    The Chairman. Senator Murkowski, did you have any 
additional questions of this panel?
    Senator Murkowski. If I can just ask one quickly of Mr. 
Connor, please.
    In your statement you asked for Congress to extend the 
Desal Act authorization. How long should it be extended? What 
cost annually? What are you thinking, in terms of parameters?
    Mr. Connor. I think we haven't thought through a lot of the 
details there. I think the extension's been going on 2-year 
increments. So, I think maybe the--it was longer in the 
initial--I think the Act has proved to be very valuable, not 
just for the Bureau of Reclamation, but for a lot of other 
entities. So, I think it's an authorization that should be 
looked at as a long-term extension now. It's very valuable. 
We're doing good, a lot of good public-private partnerships 
through those efforts. So, from that standpoint, I think for 
us, the Bureau of Reclamation--I'm not sure, you know, it 
applies to different Federal entities--for us, you know, we're, 
probably budgeting in the realm already of anywhere between $2 
million to $4 million per year specifically to create those 
research partnerships. So, that's, from our budget standpoint, 
where we're putting that to use.
    Senator Murkowski. Then, one last question for you, Mr. 
Wright, and this is as it relates to the marine hydrokinetic 
bill. You raise an interesting problem, that the FERC may be 
required to license the national test facilities that are 
called for in the bill, and that's clearly not the intention 
here. You offer up 2 possible solutions: 1, either place the 
centers under the authority of DOE, or to provide an exemption 
to part I of the fpa.
    Do you have a preference as to which would be more 
effective?
    Mr. Wright. No. I think either one. We don't license 
Federal facilities, so, simply put, it's easy to go, or, put it 
under the aegis of an agency like DOE. Possibly, DOE doesn't 
want that responsibility. I don't know. That was just a 
thought. Maybe more efficient would be the exemption under part 
I of the FPA for a test facility for the marine and 
hydrokinetic research.
    Senator Murkowski. Any comment from DOE?
    Mr. Chalk. I think we can work with the committee on that. 
I think of it as a small detail. You know, typically the 
government doesn't put its good housekeeping seal of approval--
we have organizations like the UL, and for solar hot water 
heaters we have an independent certifying organization.
    I think the real key here is to make sure we have protocols 
that have standardized testing procedures and we follow those 
so everything is tested in an uniform fashion. Then whoever the 
testing organization is can then certify that it was, in fact, 
done to that procedure. That way, results are comparable. You 
have apples to apples. I think that's really the important 
point here.
    Senator Murkowski. Let me ask just one quick question.
    I'm reviewing Mr. Webber's article, ``Water versus 
Energy.'' In it he suggests that we've got a Department of 
Energy, and given the incredible nexus between energy and 
water, that perhaps we need a Department of Water, that we've 
got different entities--EPA oversees water quality, USGS 
responsible for collecting data, but no Federal agency ensures 
the effective use of water.
    Do we need a Department of Water?
    Mr. Chalk. I think that's for others to determine.
    [Laughter.]
    Mr. Chalk. But I could tell you that they're very 
integrated. If you look at the challenges in siting a solar or 
thermal plant, it has a steam cycle to produce the energy, or a 
geothermal plant in the desert where there's no access to 
water, you have to come up with ways of, what we call dry 
cooling. You have to minimize water use. That's a tough R&D 
challenge because as you do that, a lot of times you reduce 
your efficiency in producing electricity.
    In biomass, for instance, if we're going to grow 
sustainable energy crops, it's a requirement that we have to 
use very little water--not like irrigating corn that we have 
today. We have to grow those crops with virtually just natural 
rainfall. Another example would be in our appliance standards 
program where we regulate standards for energy and water use 
for washing machines and dishwashers.
    So, it's very much integrated now, and it's very much an 
important factor.
    Senator Murkowski. But, it's integrated, most certainly.
    But you have, you've got these agencies that all have their 
different initiative, their different missions. It may be that 
you're focused on washing the cleanest clothes in one area, but 
you're not really keyed into, is there going to be enough water 
in this area?
    Mr. Connor, you look like you want to jump in.
    Mr. Connor. Yes--probably ill-advised on my part, but I'll 
jump in on that one.
    With, I think the idea is that water and energy policies 
have to be integrated. Sometimes that means, for the Bureau of 
Reclamation, we should be partnering with FERC. Sometimes that 
means we should be partnering with DOE. Sometimes it means we 
should be partnering up with the Department of Agriculture. 
That's what these MOUs are about.
    Until somebody else decides whether there should be a 
Department of Water, I think that stovepipe approach to 
governing has been very, very inefficient and has resulted in 
lost opportunities. I think that's what we're trying to do 
through these MOUs and these activities, is see those 
additional opportunities out there, get information to people 
that can bring in some private industry, or local governmental 
entities, to try and work with us on both energy and water 
policies. From that standpoint we'll start to have efficiencies 
and we'll start doing better in this area.
    Senator Murkowski. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman. I'm very glad 
you're holding this hearing today, Mr. Chairman. I saw your 
remarks yesterday talking about energy complacency, and I think 
they were spot-on. This gives us a chance--particularly with 
Senator Murkowski's leadership generally--in water-power 
technologies to really make a difference. So, I'm very much 
looking forward to working with you. I'm already a cosponsor of 
one of the Murkowski bills, and we're going to work out the 
issues on the wave energy legislation as well.
    Mr. Chairman and colleagues, my home State has led the 
country in both conventional hydropower generation and in the 
development of wave energy technology. In fact, an Oregon 
company, Oregon Ironworks, is building the first commercial 
scale wave energy buoy in the United States, and it's going to 
be deployed off our coast at Reedsport.
    Oregon State University has also been designated by the 
Department as a National Marine Energy Research Center and is 
developing a test bed on the coast that would allow U.S. 
designers and manufacturers to test their wave machines in real 
ocean conditions.
    So, Oregonians are very proud of what has been accomplished 
already. But I think we recognize--and this is why the 
legislation today is so important--that there is much more to 
be done.
    Now, the Hydropower Improvement Act is a piece of 
legislation that's going to help us tap the unused energy in 
existing dams and irrigation canals, and even city water 
systems, with minimal environmental impact. It's going to allow 
us to tap, in effect, untapped energy from water on its way to 
the kitchen tap that's now being wasted in water and irrigation 
systems, and it's my understanding that this bill is going to 
have broad support from hydro-developers, farmers and 
utilities. So, the opportunity to promote clean power 
generation and create domestic jobs, while at the same time 
addressing environmental safeguards that are going to be good 
for fish and other natural resources, are protected. So, I look 
forward to going forward with both of these bills.
    As I indicated, Senator Murkowski and I are going to work 
on the wave energy bill. But it is definitely legislation that 
my colleague has correctly initiated, and certainly on the 
right track. I'm of the opinion that wave and tidal and low-
impact hydro-technologies have an enormous amount of potential 
to help solve our energy problems, get beyond the complacency 
that Chairman Bingaman was talking about yesterday.
    That's, really, what my question to you, Mr. Chalk, is all 
about. I think Senator Murkowski touched on this as well. 
That's this budget question. I think my question is, is, what 
is it about the potential benefits for these low-impact water 
power technologies that the Department up to now how been 
unwilling to see? This is not only the smallest program in the 
Department's renewable energy budget--it's also a program which 
you proposed to cut 20 percent in the 2012 budget.
    Now, I'd be the first to acknowledge that this is not the 
first administration in the history of our country to be 
disinterested in this. But, if we are going to get beyond this 
question of complacency on energy--and particularly, the 
exciting opportunities--why isn't there more support for these 
particular technologies that we're looking at today at the 
Department of Energy?
    Mr. Chalk. Again, Senator Wyden, we really face difficult 
choices in coming up with the budget. It's very hard to try to 
keep overall balance in terms of the Federal budget and keeping 
the DOE budget as flat as possible.
    It's been, it's a decrease, as you say, but relatively 
stable, I think. In fiscal year 2009 the budget was $40 
million. It was $50 million in fiscal year 2010. The request 
was $40 million in 2011. Then, down $2 million, to $38 million 
in fiscal year 2012. So, it's relatively flat, decreasing a 
little bit.
    Due to the maturity of the technology, we think the 
funding's right. A lot of these devices, like wave devices that 
you talked about, are really in the early stages of design, so 
we're still doing a lot of analytical work, a lot of modeling, 
a lot of short testing. Many of these devices have not even 
been scaled up to their full scale yet. So, we think the money 
in this particular instance is appropriate.
    Now, as we gain success, perhaps in the out years, there 
will be growth in the budget. But at this particular time, 
given the maturity of the technology, we think our current 
funding request is appropriate.
    Senator Wyden. I guess what makes me question the 
commitment--I'm looking at a document indicating that the 
budget for renewable energy went up $1 billion in terms of the 
fiscal year 2012 request compared to the fiscal year 2010 
current appropriations. So, it's up $1 billion, and you're 
proposing to cut one of the most promising sources by more than 
20 percent.
    Now, I don't think that passes the smell test. I just think 
we've got to turn this around.
    My time is up, Mr. Chairman. I want to work with Senator 
Murkowski and you on this, because I think this is one of our 
best bets for the future. If we're going to get beyond what you 
correctly characterize as the early design stage, we've got to 
make it a priority now. When you look at these budget numbers, 
it is not a priority. That's what we've got to change, and on a 
bipartisan basis. I think you're going to find senators on this 
committee anxious to work with our chair and our ranking 
minority member to make it the priority that's warranted.
    So, thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    We appreciate this panel testifying. Excellent testimony.
    We have one other panel, so why don't we dismiss the 3 of 
you, and call the second panel forward.
    The second panel is--I'll introduce them as they're coming 
forward--Mr. John Seebach, who is the Director of Hydropower 
Reform Initiative with American Rivers; Mr. Sean O'Neill, who 
is the President of the Ocean Renewable Energy Coalition; Mr. 
Andrew Munro, who's President of the National Hydropower 
Association; and Mr. Michael Webber, who is with the Center for 
International Energy and Environmental Policy at the University 
of Texas in Austin.
    Thank you all for being here.
    Mr. Seebach, why don't you go ahead?
    If each of you would give us 5 or 6 minutes of testimony, 
making the main points you think we need to understand, we will 
include your full statement in the record as a thread, and then 
we'll have a few questions.
    Mr. Seebach.

    STATEMENT OF JOHN SEEBACH, DIRECTOR, HYDROPOWER REFORM 
                  INITIATIVE, AMERICAN RIVERS

    Mr. Seebach. Chairman Bingaman, Ranking Member Murkowski, 
and members of the committee, good morning, and thank you for 
inviting me to testify at this hearing today.
    My name is John Seebach, and I am the Director of American 
Rivers's Hydropower Reform Initiative.
    I'm a lifelong kayaker. I'm a former river guide. I love 
rivers, and I'm committed to protecting them. American Rivers 
is, too.
    We're the Nation's leading voice for healthy rivers and the 
communities that depend on them. We believe rivers are vital to 
our health, safety and quality of life.
    American Rivers supports S. 629, the Hydropower Improvement 
Act.
    We've been involved with improving hydropower wince we were 
founded nearly 40 years ago. We recognize that hydropower, done 
right, will be an important part of our Nation's future energy 
mix, especially given the urgent need to get off of fossil 
fuels. But the key lies in getting it right. When it's done 
wrong, hydropower can be far from clean.
    Hydropower is unique among renewable resources because of 
the scale at which it can damage the environment when it's done 
poorly. Unless a hydropower dam is sited, operated, and 
mitigated appropriately, it can have enormous impacts on river 
health and the livelihoods of future generations that will 
depend on those rivers. Poorly done hydropower has caused some 
species to go extinct, and put others, including some with 
extremely high commercial value, at grave risk. That's not 
something we should take lightly.
    Now, the good news is, we've come a long way over the past 
few decades. Thanks to modern environmental laws and values, 
coupled with FERC's regulatory process, hydropower's 
environmental performance is much better today.
    When NHA approached us a couple years ago to share their 
vision for increasing hydropower capacity, we proposed linking 
that capacity--that increase in capacity, with a huge increase 
in environmental performance and quality as well. This joint 
vision, in my belief, should be the hallmark of a balanced 
hydropower policy, pursuing better environmental performance 
and new generation together, as 2 goals that we can achieve 
simultaneously, rather than an either-or, zero-sum game.
    I'm proud that the Hydropower Improvement Act is the result 
of that spirit of collaboration, both among our organizations 
and among senators from both sides of the aisle here.
    Here's why I think the Hydropower Improvement Act does a 
good job of getting this balance right.
    First, the Act encourages appropriate hydropower 
development. It creates a competitive grant program for new 
hydropower projects, but it limits those grants to projects 
that improve existing water infrastructure, such as adding 
turbines to non-powered dams, canals, and pipes, or adding 
updated, more efficient equipment to existing hydropower dams.
    Now, this is not a silver bullet. Some individual projects 
may have tricky environmental issues that make them 
inappropriate to build. But, as a class, these projects are 
likely to have far fewer serious impacts per kilowatt than any 
other type of new hydropower development. They're also more 
cost-effective. Many of these projects, if done right, can 
actually result in improved environmental outcomes.
    Second, the Act considers the environmental cost of 
hydropower and proposes to do something about it. The 
competitive grant program I've just described also provides 
funding for environmental studies and mitigation measures. This 
is a great idea. Being able to measure environmental impacts 
and then do something to fix them is critical to getting 
hydropower right. It has to be done. Developers often complain 
that these measure--excuse me--these measures are costly. So, 
this will help otherwise good projects with a couple of 
environmental issues get past those issues and get built.
    The Act also directs the Department of Energy to provide 
technical assistance on environmental issues and environmental 
studies. This will help ensure that developers will have better 
access to good ideas and best practices for dealing with tricky 
problems.
    Finally, the Act aims to see if the regulatory process can 
be improved, while avoiding the stale concept that regulations 
are just barriers that need to be removed, or hurdles that need 
to be overcome. We're not fans of process for its own sake. 
Time is money for environmental NGO's just like it is for the 
industry. If we can find ways to make the regulatory process 
work more efficiently without sacrificing quality--great. But 
make no mistake, it is because--not in spite of--our existing 
regulatory system that hydropower is much cleaner today than it 
used to be. It's because of these rules that hydropower 
operators have done great things, like put water back into 
dewatered river reaches and build fish passage.
    Sometimes getting to the solutions--especially when the 
problems are tricky--takes careful study and time, and 
sometimes that can take longer than 2 years. These laws and 
regulations are there for a good reason, and they work really 
well.
    But that doesn't mean they can't be improved. We agree with 
NHA that there are quite a few good projects that could get 
licensed in 2 years or less, and we've seen that happened at 
FERC. A one-size-fits-all approach probably wouldn't work. We 
want good projects to go, to be--excuse me. We want good 
projects to get built faster, but it's not good for rivers or, 
frankly, for the industry, if a bad project gets fast-tracked 
and does some real damage. Again, the Act gets this right by 
asking questions without dictating solutions, and creating a 
space where stakeholders can continue to work together to find 
the right answers.
    This is a tricky problem to solve, but few things worth 
doing are easy to do. It'll require careful thought, improved 
cooperation among FERC and other Federal and State agencies, 
and probably some trial and error. But we're committed to 
working with NHA and others to see if it can be done in a way 
that achieves the twin goals of increasing capacity and 
improving environmental outcomes.
    Thank you for the opportunity to testify before this 
committee today. I look forward to your questions.
    [The prepared statement of Mr. Seebach follows:]

    Prepared Statement of John Seebach, Director, Hydropower Reform 
                 Initiative, American Rivers, on S. 629
Introduction
    Chairman Bingaman, Ranking Member Murkowski, and Members of the 
Committee: thank you for this opportunity to testify and share American 
Rivers' perspective on the three bills that are before your committee 
today.
    American Rivers is the nation's leading voice for healthy rivers 
and the communities that depend on them. We believe rivers are vital to 
our health, safety and quality of life. American Rivers mobilizes an 
extensive network comprised of tens of thousands of members and 
activists located in every state across the county. We have been 
working to protect and restore the health of rivers that have been 
impacted by hydropower dams since we were founded in 1973. We also 
serve on the Steering Committee of the Hydropower Reform Coalition, a 
broad consortium of more than 150 national, regional, and local 
organizations with a combined membership of more than one million 
people. In doing so, we represent stakeholders--from canoeists to 
conservationists to lake homeowners--that seek to improve the water 
quality, fisheries, recreation, and general environmental health of 
rivers that have been damaged by antiquated hydropower dam operations. 
Coalition members are active in most of the hydropower licensing 
proceedings currently pending before the Federal Energy Regulatory 
Commission (FERC), the Bureau, and the Corps, and have constructively 
contributed to numerous hydropower-related policy discussions. Most 
recently, we worked with your staff, the staff of other Senate offices, 
and industry representatives as you developed S. 629, the Hydropower 
Improvement Act that is before your committee today.
    We support S. 629, and while we believe that S. 630 has promise, we 
oppose section 9 of S. 630 as it is currently written.
2 Towards a balanced Federal hydropower policy that encourages 
        environmentally responsible hydropower development and 
        operation
    American Rivers is emphatically not anti-hydropower. Conventional 
hydropower is one of the oldest and most well-established among a 
growing number of technologies that provide low-emissions alternatives 
to fossil-fuel energy. Nationally, hydropower provides about 96,000 
megawatts of capacity, representing nearly 7% of total generation. We 
expect that hydropower will continue to be a part of our nation's 
energy mix for years to come, and accordingly we have signed dozens of 
agreements supporting the operation of hydroelectric dams that together 
provide our nation with thousands of megawatts of generating capacity. 
Reasonable modifications have dramatically improved the performance of 
these dams, providing fish passage, improving flows, enhancing water 
quality, protecting riparian lands, and restoring recreational 
opportunities.
    American Rivers supports the development of new hydropower 
resources that can be brought online while avoiding significant 
additional harm to local ecosystems. In recent years, we worked closely 
with the National Hydropower Association to craft renewable energy 
legislation that provides incentives for new hydropower development. In 
short, we support hydropower that is developed and operated in a 
responsible manner that avoids harm to America's precious river 
resources. Given the very real environmental and social impacts of 
global climate change--especially on vital freshwater systems--we 
understand the need to develop new sources of energy that can replace 
America's reliance on fossil fuels. Hydropower will be an important 
part of this mix.
    However, we also know that the energy we receive from hydropower 
comes at an enormous cost to the health of our nation's rivers and 
communities. Hydropower is unique among renewable resources in the 
scale at which it can damage the environment. Hydropower's 
environmental and social impacts are serious and extremely well 
documented. Hydropower dam operations are responsible for the 
extinction and near-extinction of a number of species. Hydropower 
plants often divert water around entire sections of river, leaving them 
dry or constantly alternating between drought and flood-like 
conditions. Hydropower dams have flooded forests, destroyed fisheries, 
diminished recreational opportunities, and decimated the local--mostly 
rural--economies that depend on those resources.
    The harm caused by most hydropower dams can be avoided if 
hydropower is sited, constructed, and operated in a responsible manner, 
particularly if management decisions are made at a basin-scale rather 
than at the individual project level. A few simple changes can make an 
enormous difference in the health of a river. Hydropower operators can 
change the timing of power generation to mimic a river's natural 
hydrologic conditions, stabilize lake levels and dam releases to 
protect riverside land from erosion, provide fish ladders and other 
measures that protect fish and allow them to pass safely upstream and 
downstream of dams, restore habitat for fish and wildlife, alter the 
design and operation of plants to maintain appropriate temperature and 
oxygen levels in rivers, and provide public access and release water 
back into rivers so that people can fish, boat, and swim. These types 
of changes have a miniscule impact on overall generation: when FERC 
studied more than 240 non-federal dams where such measures had been 
introduced, it found that such changes cost, on average, only 1.6% of 
power generation. Indeed, since many of these modifications involve 
replacing outdated generating equipment with more efficient modern 
technology, overall generating capacity has actually increased by 4.1%. 
The benefits to human and natural communities have been immense.
    When it comes to water, climate changes everything--when, where and 
how much water is available, how water is used, and the ecosystems in 
which humans, fish and wildlife live. Warmer temperatures are 
increasing evaporation and lowering water levels in rivers and 
aquifers. Mountain snowpack, which acts as a natural reservoir that 
releases water throughout summer months, is shrinking and melting 
earlier in the year. Precipitation is also becoming more erratic and 
shifting towards winter months. As a result, droughts and floods alike 
are becoming more frequent and more intense. These changes may make our 
hydropower system less reliable in the coming decades. They also 
highlight the urgent need to improve the environmental performance of 
existing hydropower dams. Poorly operated hydropower plants radically 
alter the timing, magnitude, and duration of streamflows, change water 
temperature, and stress aquatic species. In other words, hydropower 
operations anticipate--and exacerbate--the impacts of climate change on 
our rivers and watersheds.
    The threat of global warming demands urgent action on two major 
fronts. First, we must dramatically reduce greenhouse gas emissions. 
But even if we bring emissions under control, the carbon already in the 
atmosphere from historic emissions will cause inevitable changes to the 
climate. We must therefore also take immediate action to help both 
human and natural communities adapt to inevitable climate changes by 
making them more resilient. Resilient communities are able to withstand 
extreme events and recover quickly from disasters. By protecting and 
restoring healthy watersheds, increasing water efficiency and improving 
the quality of our infrastructure we can build resilient communities 
and ecosystems that stand a better chance of weathering the impacts of 
global warming.
    Hydropower policy must play a role on both fronts. Developed 
responsibly, hydropower can increase our nation's portfolio of 
emissions-free energy. However, we must consider more than just 
increased megawatts. America is still blessed with many healthy, free-
flowing watersheds, wetlands and floodplains that provide numerous 
services and values. We must preserve these intact systems and promote 
them as a vital part of our water supply and flood protection 
infrastructure. At the same time, we must rehabilitate rivers and 
streams that have been damaged by existing hydropower projects, and 
protect habitat from further degradation. A failure to improve the 
health of rivers now will doom more species to extinction as the world 
warms. Now and in the years to come, we need hydropower projects that 
are sited, built, and operated to produce power while minimizing 
impacts to the rivers that sustain America's human and natural 
communities. Federal agencies with a role in U.S. hydropower policy, 
including the Bureau of Reclamation, the U.S. Army Corps of Engineers, 
the Department of Energy, and the Federal Energy Regulatory Commission 
must make the enhancement of environmental quality--at existing and new 
sites alike--a top priority.
    A balanced and responsible hydropower policy must take seriously 
both the promise of hydropower and the risks of hydropower development. 
It must encourage responsible development while also continually 
holding developers and federal operators accountable for their 
environmental impacts and insisting on the strictest performance 
standards. It must remove obstacles to development while recognizing at 
the most fundamental level that a high level of environmental 
performance and the costs of achieving that performance are not an 
``obstacle'' to development but a fundamental and necessary component 
of it. It must encourage new development to take place while also 
accepting that some sites are simply not appropriate for new or 
increased hydropower production. Congress must address both sides of 
this equation equally.
3 The Hydropower Improvement Act (S. 629)
    The Hydropower Improvement Act (S. 629) is a good step towards a 
well-balanced U.S. hydropower policy like the one described above. 
American Rivers joined the National Hydropower Association in working 
with the bill's sponsors to help them to craft a bill that would meet 
the twin goals of encouraging the development of new hydropower 
capacity while enhancing hydropower's environmental performance. This 
bill represents a substantial improvement over the Hydropower 
Improvement Act (S. 3570) that was introduced in the previous Congress. 
American Rivers is pleased to support this bill. We would like to thank 
all of the parties involved with drafting this bill for their extremely 
hard work and willingness to incorporate our perspective.
    American Rivers supports this bill for three main reasons. First, 
we believe that it appropriately distinguishes between those hydropower 
projects which should be encouraged and those which should not and 
directs its attention towards the former. Second, it has a strong focus 
on research and development that focuses on improving hydropower's 
environmental and technical performance, recognizing that both are 
equally important. Third, it encourages regulators and stakeholders 
alike to work together to find creative and innovative ways to improve 
the existing regulatory process without falling into the all-too-common 
trap of equating critical environmental protections with ``regulatory 
barriers.''
3.1 S. 629 encourages appropriate hydropower development
    American Rivers supports the development of hydropower projects 
that are sited, constructed, and operated in a responsible manner so as 
to avoid harm to America's precious river resources. S. 629 recognizes 
that not all hydropower development is appropriate by focusing on those 
types of projects which can be brought online with the least impact to 
aquatic resources. Hydropower projects that re-use existing water and 
hydropower infrastructure are the best candidates for responsible 
development.
    Section 5 of S. 629 would create a competitive grant program which 
would encourage projects which upgrade aging facilities or provide 
power to non-powered dams. This section also recognizes that solid 
environmental performance is critical to any new development, providing 
funding for studies and mitigation measures that can help to reduce a 
project's environmental footprint.
    American Rivers has long advocated for policies that would 
encourage or require hydropower operators to upgrade aging turbines and 
generating equipment with updated, modern equipment. We believe that 
the public should receive the full benefit of each drop of water that 
passes through a turbine, and antiquated, inefficient equipment dilutes 
these benefits. Efficiency improvements are relatively lowcost, use 
turbines and equipment that is manufactured in the United States, and 
can often contribute to improved environmental outcomes. These 
efficiency upgrades are the simplest, most cost-effective, and lowest-
impact means of increasing hydropower generation. The potential gains 
in generation are significant: in many cases, these upgrades can result 
in a 10-20% increase in generation from the same amount of water. There 
are substantial environmental benefits to these upgrades as well: 
modern turbines often feature designs which are less harmful to fish, 
and can operate efficiently across a different range of release levels, 
allowing for managed flow regimes which more closely mimic a natural 
river.
    Turbines can also be added to many existing hydropower and non-
hydropower dams. While these retrofits are not appropriate in every 
case, they offer new capacity for minimal additional environmental 
impacts when done right. In some cases, retrofitting existing dams for 
hydropower can leverage additional environmental improvements to the 
affected river reach. For instance, a pending retrofit at the Holtwood 
project on the Susquehanna River in Pennsylvania will more than double 
that project's generating capacity while also providing for 
substantially improved fish passage. Several years ago, American Rivers 
worked closely with the hydropower industry and members of Congress to 
craft legislative language that would encourage such forward-thinking 
development. This language has since been incorporated into the federal 
law which provides a Production Tax Credit for Renewables, providing 
developers with an incentive to develop at existing dams that are 
currently operated for flood control, navigation, and water supply and 
that could be developed without harmful changes to river flows. S. 629 
carries this basic concept further in two ways: Section 5 provides 
grant funding for these types of projects, while sections 7 and 8(b) 
encourage regulators and stakeholders to test new ways to improve the 
regulatory process for these projects in order to allow capacity to be 
brought online faster without sacrificing critical environmental 
safeguards. Finally, an increasing number of developers--especially in 
the west--are exploring off-stream hydroelectric development. Some 
developers propose to place turbines in existing water conveyance 
pipes. Others are adding hydropower capacity to irrigation canals. 
Still others are placing turbines in municipal water treatment 
facilities. Many of these projects have the potential to create 
substantial environmental benefit. For instance, some irrigation 
districts are using the revenue from power sales to fund projects that 
will result in the more efficient use of water, leaving more water in 
the river to provide ecosystem services. S. 629 encourages these types 
of projects in five ways: Section 5 provides grant funding for 
developing these projects; Section 8(a)(1) updates the conduit 
exemption provisions in the Federal Power Act to allow projects on 
Federal land to qualify while preserving critical environmental 
protections; Section 8(a)(2) encourages federal agencies to better 
coordinate their review of these projects; Section 8(a)(3) opens a 
public dialogue about ways that the regulatory process for these 
projects might be improved to bring capacity online faster while 
protecting the environment and public health and safety; and the 
updated definition of ``conduit'' in Section 3 will prevent abuse of 
the existing exemption by ensuring that it is only applied to 
appropriate projects that use water infrastructure that was built for 
some other legitimate beneficial use.
3.2 S. 629 has an appropriate focus on hydropower research and 
        development
    Section 6 of S. 629 directs the Secretary of Energy to develop a 
plan for research and development which will facilitate new hydropower 
generation and improve the environmental performance of hydropower 
technology. It also provides dedicated funding for this work. This 
would build on the excellent work that the Department of Energy's 
Office of Energy Efficiency and Renewable Energy Water Power Program is 
already doing in this area, both on its own initiative and as part of 
the Federal hydropower MOU that was signed in 2010. This section 
appropriately places increased generation and improved environmental 
quality as co-equal goals. American Rivers is particularly heartened by 
this section's requirement that the secretary provide technical 
assistance to project proponents that will help them to address 
environmental issues through studies and mitigation measures, as well 
as the requirement that the Secretary consult with other federal 
agencies that play important roles in protecting non-power public 
resources affected by hydropower projects.
3.3 S. 629 aims to improve the regulatory process for hydropower 
        without falsely equating critical environmental protections 
        with ``regulatory barriers''
    Sections 7 and 8 of S. 629 direct FERC to explore ways ``to improve 
the regulatory process and reduce delays and costs'' associated with 
hydropower development. As a frequent participant in regulatory 
proceedings for individual hydropower projects, American Rivers has an 
interest in reducing inefficiencies in these regulatory proceedings as 
well as the costs associated with participating in them.
    Our enthusiasm for regulatory reform, however, is tempered by our 
recognition that the existing permitting system for hydropower provides 
critical protections for the ecological health of rivers, public 
safety, recreation, and many other non-power values. American Rivers 
emphatically does not subscribe to the notion that our nation's 
environmental, health, and safety regulations constitute ``barriers'' 
in need of streamlining, ``delays'' that must be shortened, or 
``costs'' that need to be reduced. Hydropower is not intrinsically 
clean energy: it must be sited, constructed, and operated in an 
appropriate manner, or it can cause enormous environmental damage. Laws 
like the Federal Power Act, the Clean Water Act, the National 
Environmental Policy Act, and the Endangered Species Act are critical 
to ensuring that hydropower is done right. We encourage this Committee 
to be clear that any proposed modification to the regulatory process 
for hydropower that would weaken any of these vital environmental 
protections would be unacceptable.
    In our view, S. 629 largely gets this distinction right, 
recognizing FERC's willingness to innovate to help good projects get 
built more quickly. When developers choose appropriate sites for 
hydropower projects and invest in addressing resource issues up front, 
FERC has shown remarkable flexibility in processing license 
applications quickly and efficiently. For example, we have seen FERC 
staff waive pre-filing requirements with the concurrence of 
stakeholders in cases where there are no controversial resource issues. 
FERC recently published a list\1\ on its website of more than 20 
hydropower projects that have been permitted in less than one year 
since 2006. The Commission also recently signed an innovative 
Memorandum of Understanding with the State of Colorado\2\ that 
identifies classes of projects that are likely to be permitted quickly, 
with FERC agreeing to expedite the processing of those applications 
where the state has conducted pre-screened to ensure that there are no 
complex or contentious resource issues at stake.
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    \1\ http://ferc.gov/industries/hydropower/gen-info/licensing/small-
low-impact/expedite-process/projectsexpedited.xls
    \2\ http://ferc.gov/legal/maj-ord-reg/mou/mou-co.pdf
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    Despite FERC's willingness to be flexible, there are a number of 
points in the process where FERC can do better. For instance, FERC's 
Integrated Licensing Process was designed to synchronize FERC's NEPA 
scoping and record development with the information requirements of 
other state and federal agencies that have separate--and critical--
statutory responsibilities. These other agencies can now can identify 
at the beginning of a licensing those information gaps that must be 
filled in order for them to complete their own processes. Some 
applicants are unwilling to provide this information because it might 
result in additional requirements to mitigate project impacts. The 
resulting stalemate is a perennial source of delay in licensing. While 
FERC staff have the authority to order applicants to provide this 
information, they often choose not to do so, arguing that the 
information is not necessary for FERC's licensing decision. This may be 
technically true--FERC may not consider the information necessary for 
its own analysis--but the reality is that FERC cannot issue a license 
until it has received a Water Quality Certification from the state and 
all required ESA consultation is complete. Staff may be able to work 
with agencies to narrow the scope of the necessary information, but 
ultimately those agencies must decide what information is necessary for 
them to act. The Commission should direct its staff to improve their 
cooperation with other federal and state agencies, especially where 
those agencies have identified a need for information that will enable 
them to fulfill their own responsibilities and clear the path for FERC 
to issue a license. By doing so, FERC would substantially increase the 
likelihood that licenses will be issued on time and with an appropriate 
set of environmental protections.
    S. 629 directs FERC to solicit recommendations like these from the 
public and examine how it might implement such improvements to the 
licensing process. It then directs the Commission to test some of those 
ideas through a pilot process and ultimately report to Congress on what 
works, what does not, and how it intends to translate those lessons 
into more formal policies that improve the licensing process. This 
gives FERC the flexibility to conduct controlled experiments, further 
refining some of the tools it is already using to permit 
noncontroversial projects more quickly. Any resulting policy change 
will be better by virtue of having been tested in a real-world 
situation first.
    S. 629 also gives FERC the ability to limit this flexibility to 
only those projects where it is likely to work. A one-size-fits-all two 
year process is unlikely to be appropriate for all projects. Hydropower 
projects that feature more complex resource issues often need more time 
to process, and this is entirely appropriate. Consider, for instance, 
two proposals to add hydropower to an existing dam. The first would add 
a turbine to an existing control structure at the base of the dam to 
capture uncontrolled flows that are already passing through the dam. 
The second proposes to divert water from behind an existing dam to a 
powerhouse two miles downstream, dewatering a section of river that is 
known as a highquality trout stream and a popular destination for 
canoeing. While the first project might be quite simple to license, the 
second would almost certainly require one or more season of studies in 
order to determine appropriate operating guidelines that would protect 
the river's fisheries and recreational resources; it would be very 
difficult to fit such a project into a two-year process without 
glossing over these complex resource issues.
    American Rivers supports this inquiry, and we look forward to 
participating in the Commission's examination of its licensing 
processes. We also encourage the Committee to ensure that FERC will 
have sufficient resources to complete this undertaking. FERC has more 
new applications for preliminary permits and hydropower licenses before 
it now than at any other time in recent memory. The new requirements 
that S. 629 proposes to place on the Commission should not become a 
workload burden for Commission staff that creates the very processing 
delays that it was designed to reduce.
4 Hydrokinetic and Marine energy (S. 630)
    There has been a great deal of discussion about damless 
hydrokinetic technologies that use free-flowing rivers, waves, ocean 
currents, or other means to generate electricity. As a river 
conservation group, American Rivers does not claim to be an authority 
on Marine energy. However, we have followed the development of instream 
hydrokinetic technologies closely. Moreover, since ocean and instream 
hydrokinetic technologies are often lumped together, we have 
participated in a number of policy discussions that have addressed both 
technologies.
    We are hopeful that these new technologies will eventually allow us 
to harness the power of moving water in a responsible manner that 
avoids the devastating impacts associated with dam-building. 
Unfortunately, there is still precious little information available 
about how these technologies interact in a natural setting. As of 
today, we are aware of only one instream hydrokinetic project that is 
currently licensed to generate in U.S. waters, and our understanding is 
that it is currently out of service. With so little information 
available, it is difficult to assess the environmental impacts of these 
technologies, let alone their commercial feasibility. We can only 
speculate as to what the costs and benefits of these technologies might 
be.
    It is clear, then, that there is a need for more testing, as well 
as for research into the potential environmental impacts and new and 
innovative ways that those impacts might be avoided. There is also a 
need for strong siting criteria that take into account environmentally 
sensitive areas or areas that are vital to economic activity (like 
transportation or commercial fishing), and consider the risk that the 
cumulative impacts of additional development may simply be too high in 
some watersheds that are already highly impacted by existing hydropower 
development.
    S. 630 largely addresses these needs, focusing on research, 
development, and the creation of testing zones where environmental and 
operating data can be collected in a controlled environment. The 
proposed amendments to The Energy Independence and Security Act of 2007 
are an incremental improvement to a public policy that is already 
largely good. The adaptive management and environmental grant program, 
like the program proposed by Section 6 of S. 629, is a particularly 
good idea. While we believe that the information gaps about the 
environmental impacts of these technologies need to be filled before 
these projects are deployed at a full commercial scale, we also 
recognize that the cost of filling these gaps places the initial 
developers of these technologies in an extremely precarious financial 
situation. It makes sense to devote public resources towards filling 
these gaps, both at the macro level and the individual project level, 
in order to take some of this pressure off of the individual project 
developers. The bill also insures that the public receives a return on 
this investment by requiring that most information developed as a 
result of studies performed under this grant program be made publicly 
available. This is good policy, and will accelerate the responsible 
development of these technologies.
    American Rivers is, however, opposed to section 9 of S. 930 as it 
is currently written. Section 9 would authorize federal funds to be 
granted for the construction of new hydropower dams. Given the 
relatively high economic, environmental, and social costs associated 
with new dam construction and the enormous amount of new hydropower 
capacity that can be developed without constructing new dams, we do not 
think it makes sense for federal funds to be obligated to projects that 
involve new dam construction. Rather, scarce taxpayer dollars should be 
directed towards projects that minimize environmental harm by making 
use of existing water infrastructure like the projects that would be 
eligible for grants under Section 5 of S. 629.
    We understand that the intent behind this section was to encourage 
the development of new sources of renewable energy in remote 
communities that rely primarily on expensive sources of fossil-fuel 
fired generation for their electricity. We agree that this is a 
laudable goal, and we recognize that this bill attempts to give 
priority to grants to communities that find themselves in this 
situation. We recognize that in some rare and exceptional cases, the 
construction of a new hydropower dam may be the only feasible renewable 
energy alternative for some of these communities. If federal funds are 
to be obligated for the construction of new non-federal dams--something 
which in general we do not support--then it should only be limited to 
exceptional cases where the construction of a dam is truly a last 
resort. As it is currently written, the bill's support for new dam 
construction is too broad, and could be used to fund the constructions 
of dams that simply should not be built. We recommend that the 
Committee explore alternate approaches to achieving what is an 
otherwise worthy goal of encouraging renewable energy development, and 
we stand willing to offer our assistance.
5 Conclusion
    A balanced U.S. energy policy must recognize that hydropower has 
impacts as well as promise, and it should address both. New hydropower 
development must be sited, operated, and mitigated responsibly, and it 
must simultaneously encourage increased generation and improved 
environmental stewardship at new and existing projects. American Rivers 
supports the development of new hydropower resources that can be 
brought online responsibly, avoiding significant additional harm to 
local ecosystems. S. 629 represents a substantial step forward down 
this path, and American Rivers is pleased to be able to support it.
    Thank you again for this opportunity to testify before the 
Committee today. I look forward to answering your questions.

    The Chairman. Thank you very much.
    Mr. Munro, go right ahead.

   STATEMENT OF ANDREW MUNRO, PRESIDENT, NATIONAL HYDROPOWER 
                          ASSOCIATION

    Mr. Munro. Good morning, Chairman Bingaman, Ranking Member 
Murkowski, and members of the committee.
    Thank you for this opportunity to share with you the 
National Hydropower Association's perspective on S. 629 and S. 
630. We strongly support both measures, and we urge the 
committee to proceed swiftly to marking up these bills.
    I'd also like to particularly acknowledge my Senator, 
Senator Maria Cantwell, who is, like myself, from ``the other 
Washington.'' Thank you for being here.
    My message today is simple: There's a real opportunity with 
these bills to increase U.S. hydropower capacity that will 
support our economy, support our environment, and increase our 
energy supplies. Think about this one statistic for a moment: 
Of the 80,000 dams that currently exist in the U.S., just 3 
percent are utilized to generate electricity.
    You're familiar with hydropower's current contributions--I 
heard those today--that it's the largest source of renewable 
electricity in the U.S., providing 7 percent overall of our 
generation, and 2 thirds of all renewable energy.
    Hydropower also employs 300,000 Americans. Hydro-generation 
avoids 200 million metric tons of carbon emissions, and they 
did so in 2009 alone.
    In addition, hydro provides many other benefits, including 
managing river flows for species and habitat protection, 
recreation, irrigation, flood control, and navigation. 
Importantly, hydropower, as well as pump storage, help to 
balance our electricity grid, provides a reliable grid, and 
also enables the greater use of variable energy, such as wind 
and solar, by balancing demand and supply.
    I'm happy to say that I believe the old view of hydro, is, 
that it's tapped out is in the past. Today's hydro has a lot 
more to offer. According to a study by Navigant Consulting, 
hydropower can create 1.4 million jobs in the next 15 years, 
both inside and outside of the industry. These are domestic, 
good-paying, family sustaining jobs in manufacturing, 
construction, engineering, and operations. We could do this by 
adding 60,000 megawatts of additional sustainable hydropower 
capacity to the U.S. electric grid. In fact, 88,000 megawatts 
are in the FERC queue today.
    The U.S. hydropower industry is committed to future growth 
that is sustainable in every way. NHA commends the sustainable 
nature of the Hydropower Improvement Act because it recognizes 
that much of the near term growth can be achieved by increasing 
and maximizing capacity at existing U.S. infrastructure. For 
example, the bill supports adding electric-generating equipment 
to dams that have none today. As mentioned before, 97 percent 
of the dams are not used to generate electricity.
    My utility, Grant PUD in the central part of Washington 
State, illustrates another sustainable way to expand our 
renewable capacity, through modernizing existing hydro-projects 
with more efficient technologies and environmental enhancement 
technologies.
    At our Wanapum Dam on the mid-Columbia River we are 
installing new, advanced designed hydroturbines which boost the 
project's output by 12 percent and, maybe more importantly, has 
a fish passage rate of 97 percent, which is above our license 
requirement of 95 percent. We also built a 35-million-fish 
slide--it's a bypass system--which has a fish passage survival 
rate of 99 percent for steelhead that use the slide. These are 
modern technologies that improve safe fish passage, and 
increase energy output. We can have both fish and renewable 
generation at hydroelectric facilities.
    While grants work spotlights growth opportunities in the 
industry, without the right Federal policy, such as the 
Hydropower Improvement Act, we will not realize this full 
potential.
    Crucial near term policy changes are needed, such as a 
smarter, more efficient licensing process, and 
intergovernmental agency cooperation, which we've heard 
testimony today about.
    Also, tax policies that encourage more investment in 
hydropower technologies in deployment and environmental 
efficiencies, reinvestment in the Federal hydropower system, as 
well as the renewed commitment to hydropower R&D initiative--
and I'm glad to hear that today.
    These 2 bills are an important policy step forward and 
should pass.
    Briefly, we concur with the provisions in both bills that 
would direct the Department of Energy to ramp up domestic 
hydropower production and establish a competitive grants 
program to improve environmental performance as well as output. 
These are common-sense initiatives.
    Last, I do want to acknowledge 2 organizations before you 
today--American Rivers and the National Hydropower Association. 
Over the past several years we have purposely committed 
ourselves to working together collaboratively to demonstrate 
leadership, and moving us in a sustainable energy future. We 
both jointly support the Hydropower Improvement Act, and we 
commend--I commend the sponsors of the legislation, appreciate 
Senator Murkowski taking the lead on this legislation, as well 
as all of the sponsors. We think that this is a smart bill, and 
it should proceed forward.
    Thank you.
    [The prepared statement of Mr. Munro follows:]

  Prepared Statement of Andrew Munro, President, National Hydropower 
                              Association
                          on s. 629 and s. 630
Introduction
    Good morning Chairman Bingaman, Ranking Member Murkowski and 
members of the Committee. I am Andrew Munro, President of the National 
Hydropower Association (NHA). I am also the Director of External 
Affairs for the Grant County Public Utility District located in the 
central part of the state of Washington. Grant County PUD is a 
consumer-owned utility that serves a rural, predominantly agricultural 
population. Hydropower, irrigation-canal hydro and wind power comprise 
our total combined generating capacity of approximately 2,000 MW. I 
would also like to acknowledge Senator Maria Cantwell, who is my 
Senator from the ``other Washington''.
    The National Hydropower Association greatly appreciates this 
opportunity to discuss with you two important pieces of legislation--
S.629, the Hydropower Improvement Act of 2011, and S.630, the Marine 
and Hydrokinetic Renewable Energy Promotion Act of 2011, both of which 
we strongly support.
    My message today is simple--There is a real opportunity to increase 
U.S. hydropower generation that will strengthen our economy, 
environment and renewable energy supplies.
    I will go into further details on each bill later in my testimony, 
but to summarize, NHA believes S.629 and S.630 represent significant 
steps forward to promote increased deployment of clean and renewable 
hydropower, pumped storage and marine and hydrokinetic (MHK) projects. 
We urge the Committee to proceed swiftly to mark-up on these bills, and 
we support full Senate passage as soon as possible.
Background
    NHA is a national association dedicated exclusively to advancing 
the U.S. hydropower industry, including conventional hydropower, pumped 
storage, conduit power and marine and hydrokinetic technologies. We 
seek to secure hydropower's place as an available, reliable, affordable 
and sustainable energy resource that serves our national environmental, 
energy, and economic policy objectives.
    NHA represents more than 180 companies in the hydropower industry, 
from Fortune 500 corporations to family-owned small businesses. Our 
members include both public and investor-owned utilities, independent 
power producers, project developers, manufacturers, law firms and 
environmental and engineering consultants.
    Today, hydropower projects generate power in every region of the 
country and are America's leading source of domestic renewable 
electricity. Hydropower accounts for approximately 7 percent of the 
nation's total electricity generation and two-thirds of our renewable 
electricity generation. Hydropower capacity in the United States is 
currently about 100,000 MW. Hydropower generation avoids millions of 
metric tons of carbon emissions each year. In fact, regions that rely 
on hydropower as a primary energy source, such as Grant County and 
Washington State, reap the benefits of significantly cleaner air. 
Satellite imagery has shown that the Pacific Northwest, home to the 
most hydropower in the United States, is an island of low carbon 
emissions.
    In addition to this clean energy, hydropower infrastructure also 
provides a myriad of other important benefits, including managing river 
flow for species and habitat protection, water supply, recreation 
opportunities, irrigation, flood control and navigation.
    And importantly, hydropower and pumped storage assets provide 
essential grid reliability and stability services such as the ability 
to quickly meet changing demand in load, firming for intermittent 
variable energy resources, and blackstart capability in times of outage 
(such as the August 2003 East Coast blackout, where hydropower projects 
in New York and Canada operated continuously and also served as the 
base for restoring power to millions of Americans).
    Hydropower is a proven renewable energy resource--one that has been 
in use in our country for well over 100 years. However, hydropower is 
also an energy resource for our future, with tremendous growth 
potential. One of the many myths about hydropower is that there are no 
new opportunities for growth in our industry. In fact, the opposite is 
the case.
    Right now, there are proposed projects totaling over 88,000 MW with 
pending license applications and preliminary permits filed with the 
Federal Energy Regulatory Commission (FERC). These projects span every 
sector of the waterpower industry. And while not every single one of 
these projects may be built, the list demonstrates the universe of 
untapped hydropower potential that exists.
    In 2009, NHA commissioned a study examining the hydropower 
industry's job-creation and growth potential. That assessment confirmed 
what Energy Secretary Steven Chu has described as an ``incredible 
opportunity'' to develop America's ``lowest-cost energy option.''
    The study found that the industry could add up to 60,000 MW of 
capacity by 2025, which could support the creation of approximately 1.4 
million cumulative direct, indirect and induced jobs across the 
country.
    In the study, Navigant Consulting estimated that 9000 MW alone 
could come from upgrades and additions of capacity at existing hydro 
facilities, with another 10,000 MW by converting non-powered dams into 
generating assets.
    The result of the study, confirmed by the project development 
pipeline before FERC, led NHA to adopt an ambitious, but achievable, 
goal of doubling the U.S. hydropower industry's contribution to the 
electric system. And in January, NHA, in response to President Obama's 
State of the Union address, committed to meet 20 percent of the 80 
percent clean energy goal by 2035.
    NHA believes America should take maximum advantage of our nation's 
infrastructure. Adding capacity and increasing efficiencies at existing 
hydropower facilities and installing generation equipment to existing 
non-powered dams are two near-term steps to reach this goal, as we also 
look to the long-term effort to expand hydropower resources. For 
example, only about 3 percent of the nation's approximately 80,000 dams 
currently generate hydropower; just 3 percent.
    My utility, Grant County PUD, illustrates how our nation can better 
maximize our existing infrastructure and sustainably increase renewable 
energy generation--through modernizing existing hydro facilities with 
more efficient electric generating equipment and environmental 
enhancement technologies. The PUD is in the process of a major upgrade 
at one of our hydropower projects. At our Wanapum Dam, we are 
installing new, advanced-designed hydro turbines and new generators, 
which will result in a 12 percent generating capacity boost and support 
our fish survival rate of 95 percent. We also built a $35 million, 290-
foot fish ``slide'' for which studies show a fish survival rate of 99 
percent for steelhead salmon using the slide.
    These are examples of modern technologies that allow hydropower 
operators to improve safe fish passage, while also expanding renewable 
energy generation. We can have both fish and renewable generation at 
hydropower facilities.
    While Grant PUD's work spotlights the opportunities for growth in 
the hydropower industry, additional policy support from the federal 
government is needed to promote these opportunities nationwide. Simply 
put, conducting business as usual will not provide the incentive to 
fully realize the untapped potential available throughout the country. 
Crucial near-term policy changes include:

   A more efficient licensing and permitting process with 
        greater intergovernmental cooperation;
   Tax policies that encourage more investment in hydropower 
        technologies and deployment;
   Re-investment in the federal hydropower system; and
   Renewed commitment to R&D initiatives.

    In NHA's opinion, the Hydropower Improvement Act of 2011 and the 
Marine and Hydrokinetic Renewable Energy Promotion Act of 2011 take a 
substantial policy step forward to expand our hydro resources in a pro-
active and balanced approach.
The Hydropower Improvement Act of 2011
    As stated earlier in my testimony, NHA fully and strongly supports 
this bipartisan bill and commends the leadership shown by the original 
cosponsors of the legislation.
    The Hydropower Improvement Act of 2011 sets a dynamic hydropower 
agenda for the nation. The bill will advance project deployment (from 
conduit power and small hydro to non-powered dams to pumped storage) by 
requiring better interagency coordination; through funding of 
competitive grants for increased production; and with continued support 
for research and development activities. All of this while ensuring 
continued environmental reviews and public participation are part of 
the process.
    NHA believes the Hydropower Improvement Act of 2011 represents a 
common-sense result, achieved through outreach to the agencies, 
industry, the environmental community and other stakeholders. It not 
only seeks to stimulate deployment and increase clean energy 
generation, but takes a moderate approach that respects and values the 
environmental principles and the public participation standards that 
have been an important part of the hydropower development process. I 
will now highlight some of the provisions of particular interest to NHA 
and the hydropower industry.
    Section 7 of the bill would promote development at existing non-
powered dams and closed-loop pumped storage by requiring FERC to 
investigate a 2-year pilot licensing process for these projects.
    NHA and the industry appreciate the work of Congress, FERC, and 
other agencies and stakeholders on past improvements to the regulatory 
environment for hydropower development (for example, the consensus 
provisions contained in EPAct of 2005 and the 2003 integrated licensing 
process (ILP)). However, the hydropower regulatory process, in 
comparison to those for other energy resources such as wind or natural 
gas, remains considerably longer. The ILP is structured to be completed 
in 5 to 5.5 years followed by the time needed for construction, while 
the development timeline for wind and natural gas projects, for 
example, can be as short as 18-24 months.
    At a time when project developers are competing for a limited pool 
of funding from investors, or when utilities are seeking the quickest 
return on investment for their customers and shareholders, hydropower 
project development is put at a competitive disadvantage. Section 7 
attempts to address this disparity. It does not mandate a 2-year 
process, but requires FERC to examine the possibility and move forward 
with a pilot process or report back to Congress if such a process is 
deemed not practicable. However, NHA believes a 2-year process is 
possible and improvements can be made while maintaining environmental 
standards and resource protection.
    Section 5 of the bill creates a competitive grants program for 
increased hydropower production. While the section focuses on existing 
infrastructure and conduits, it also includes applications to develop 
and perform environmental studies and carry out environmental 
mitigation measures. These costs can be significant and affect the 
economics of projects, particularly small projects. Providing a 
mechanism to support these activities is a win-win, ensuring that 
environmental data is collected and mitigation, if needed, conducted 
while gaining the benefits of additional renewable electricity 
generation.
    Section 8 allows for conduit projects on federal lands and directs 
FERC and other federal agencies to enter into a Memorandum of 
Understanding (MOU) to better coordinate reviews of these projects. It 
also requires regional workshops to seek public input to reduce 
barriers and investigate improvements to the regulatory process for 
small hydro and conduit projects. NHA believes there is significant 
growth potential in the small hydro/conduit power sectors of the 
industry.
    NHA has seen numerous towns and counties across the country re-
examine the feasibility of retrofitting their local dam infrastructure 
to add power generation equipment as well as to invest in irrigation 
power projects and others. Increasing the efficiencies in the process 
to support these projects makes sense--as we have seen recently with 
the MOU between FERC and Colorado to simplify the procedures for 
developing small-scale hydro in the state.
    NHA also supports the provisions in the bill to increase deployment 
of federal hydropower resources. Section 13 requires a report to 
Congress updating the status of the federal hydropower MOU signed by 
the Departments of Energy (DOE) and Interior and the Army Corps of 
Engineers (Corps). Section 10 requires FERC and the Bureau of 
Reclamation (Bureau) to complete a new MOU to improve the coordination 
and timeliness of non-federal hydropower development at Bureau 
projects.
    The federal system makes up approximately 50 percent of U.S. 
hydropower generation. As such, the Bureau and the Corps will play a 
major role in meeting the growth potential goals of the industry. NHA 
and the industry want to work as partners with these agencies. 
Recently, we were pleased to see the Bureau re-examine potential 
opportunities for new hydro facilities on their projects as well as the 
outreach they have conducted on conduit opportunities. NHA also 
understands that the Corps and FERC are close to updating their MOU on 
non-federal hydropower development at Corps facilities.
    Section 6 of the bill requires the Department of Energy continue to 
fund R&D activities and provides for a new technical assistance program 
to assist applicants applying for a new license or for re-licensing. 
NHA believes the DOE waterpower program is critical to support 
advancements in technology research and project deployment, with 
tremendous benefits for hydropower projects both federal and non-
federal. We appreciate the work of the Department and the recent 
funding levels that have supported it (though the FY 2012 budget 
proposes a funding cut). We believe Congress must continue to invest, 
not retreat, from the waterpower program--the smallest of the renewable 
energy programs at the Department. NHA understands that the Department 
will be releasing new details on the status of the U.S. hydro system as 
well as potential development on non-powered dams. It is work such as 
this that highlights the importance of the waterpower program.
    Lastly, the bill directs a series of studies to be conducted 
including: a DOE study of pumped storage project opportunities on 
federal and non-federal lands near existing or potential sites of 
intermittent renewable resource development; another DOE study of 
potential from existing conduits; and a Bureau of Reclamation study on 
barriers to non-federal development at Bureau projects. These studies 
and reports will provide the baseline resource data on the growth 
potential for these sectors--data that is currently incomplete or has 
never been compiled.
    With all of these provisions, the Hydropower Improvement Act is a 
comprehensive piece of legislation that recognizes the vital role of 
hydropower as an affordable, reliable, available and sustainable 
domestic energy source and sets a course to significantly increase its 
contribution to our nation's electricity supply.
The Marine and Hydrokinetic Renewable Energy Promotion Act of 2011
    NHA also strongly supports the Marine and Hydrokinetic Renewable 
Energy Promotion Act of 2011, S.630. Marine and hydrokinetic 
technologies represent a huge opportunity to create reliable, clean 
energy. While these technologies are currently in various stages of 
research, development and deployment, thousands of megawatts of 
potential are available from ocean energy projects from New England to 
the West Coast and Alaska, and in-river hydrokinetic projects proposed 
along the Mississippi River and others.
    Focusing on these new technologies, the National Hydropower 
Association established an Ocean, Tidal and New Technologies Council. 
The council examines potential growth opportunities of emerging 
technologies, shares information among industry members, and provides a 
forum in which to discuss the various challenges ocean, tidal, 
hydrokinetic and emerging water technologies face.
    The Marine and Hydrokinetic Renewable Energy Promotion Act 
particularly addresses the needs of the MHK industry by creating 
programs to develop these technologies, test devices, gain 
environmental and other data, and deploy. Section 3 is a critical piece 
of the bill, as it provides for the establishment of MHK test 
facilities to demonstrate technologies in actual operating environments 
here in the United States.
    The international MHK industry has seen the benefit of such 
facilities, particularly in Europe. The United Kingdom established the 
European Marine Energy Center in Scotland almost a decade ago.
    The center has directly assisted the advancement of the European 
MHK industry by providing independent assessment of devices' energy 
conversion capabilities, structural performance and survivability; 
research and engineering support; testing validation; and other 
services. In addition to the test centers, Section 5 of the bill would 
establish a similar device verification program and Section 6 would 
also create an MHK grants program.
    Finally, the bill also seeks to better coordinate and reduce 
duplication of activities across the federal agencies supporting MHK 
development. As in the conventional hydropower industry, NHA believes 
that regulatory improvements are possible for MHK project development, 
while still maintaining environmental standards and resource 
protection.
    The United States must lead in the development and deployment of 
MHK technologies, not lag behind. Not only will this increase the 
amount of our clean energy generation, but it will create new markets, 
both domestically and internationally, for U.S. companies and American 
products and technologies--markets that will stimulate domestic job 
growth and new economic opportunities.
Conclusion
    In closing, I would like to acknowledge collaboration demonstrated 
by the organizations appearing before you today. Over the past several 
years, American Rivers and the National Hydropower Association have 
mutually and purposely called upon our respective organizations to 
demonstrate leadership together in an effort to move our country 
forward on sustainable energy policy.
    We have jointly supported hydropower technologies in renewable 
energy and tax policies over the past several years. Speaking for NHA, 
I encourage Congress and the Administration to join us in working 
together on a balanced and sustainable energy future--that grows our 
economy, expands renewable energy and enhances our environment. The 
Hydropower Improvement Act of 2011 has built on that partnership and we 
look forward to further collaboration on the bill to move it forward. 
NHA also appreciates the cooperative relationship with the Ocean 
Renewable Energy Coalition. Both of our organizations believe that 
marine and hydrokinetic technologies will play a critical role in 
meeting our country's clean energy goals and we both support policies 
that promote their commercial development.
    Every state in the Union is already home to hydropower projects, 
hydro equipment manufacturing plants, companies that benefit from the 
hydropower supply chain and consumers who enjoy hydro's lower 
electricity costs. This job-sustaining sector of our economy has the 
potential for substantial growth, and we believe the bills you are 
considering today provide key support to fully realizing this growth.
    There is much at stake and hydropower, America's leading 
affordable, reliable, and renewable domestic energy resource, stands 
ready to help meet our common clean energy goals. We look forward to 
working further with the Committee and other groups on these bills, as 
we also continue to advance additional policies to stimulate 
development of the country's untapped hydropower resources.
    I thank the Committee for providing me this opportunity to testify 
on hydropower's current and future role in meeting our nation's 
environmental, energy and economic objectives and look forward to 
answering your questions.

    The Chairman. Thank you very much.
    Mr. O'Neill.

 STATEMENT OF SEAN O'NEILL, PRESIDENT, OCEAN RENEWABLE ENERGY 
                   COALITION, DARNESTOWN, MD

    Mr. O'Neill. Thank you, Mr. Chairman and Ranking Member 
Murkowski, and your, thank all of your colleagues today for 
devoting time to this very important topic--time and resources.
    The Ocean Renewable Energy Coalition is the national trade 
association for what we call the MHK industry--marine and 
hydrokinetic, including wave, tidal, ocean thermal energy, and 
offshore wind.
    I hope today to provide some additional justification and 
some context in asking for your support of S. 630. This bill 
adds important elements to EPA 2005 and EISA 2007. 
Specifically, and most importantly, the bill would provide much 
needed research and development funds to continue the excellent 
work that the Department of Energy has done, and other 
agencies, to foster the responsible commercialization of this 
industry.
    S. 630 adds advanced systems engineering and systems 
integration to identify critical interfaces and develop open 
standards for marine and hydrokinetic renewable energy. It also 
provides for 3 open water test centers and a device 
verification program. Combined, these 3 programs address 
technology development from turbine design, to how arrays 
function and affect efficiency and environmental performance, 
as well as grid integration and environmental data collection. 
These synergistic programs will bring technology from initial 
testing to pre-commercial demonstrations and ultimately full 
grid integration.
    The MHK industry benefits greatly from other industries--
other renewables, the marine industry, the maritime, 
traditional power. For example, when I mention the test centers 
I think about the National Wind Test Center just north of 
Denver, Colorado, where they had a 10-diameter, 1-kilowatt 
turbine when they first started in 1977. Today they've got 3 
megawatt turbines that are 100 meters in diameter. They're 
still improving that technology.
    The wind industry also initiated a turbine verification 
program to assist in the performance verification and grid 
integration, and continues to be actively involved in improving 
international standards and other R&D.
    We're actively involved in creating international standards 
in the MHK industry because of funding from the Department of 
Energy, and we're helping to prompt the global development of 
this new renewable energy technology.
    Now, the test centers have been identified to support wave, 
tidal, and ocean current research, and S. 630 will provide 
greatly needed support to those 3 already identified test 
centers. Utility systems engineering will provide the last, and 
key, element for ultimate grid integration for these new energy 
sources.
    Our industry has learned a lot from the international 
community as well, where Marine Current Turbines in the United 
Kingdom has a 1.2 megawatt tidal turbine operating in 
Strangford Lough, Northern Ireland--1.2 megawatt that has been 
operating, is grid connected, providing 1,500 homes with power, 
and also demonstrating the environmentally friendly nature of 
this technology, despite the fact it's only be operating since 
2008. While this is only anecdotal information, it's similar to 
the Roosevelt Island Tidal Project that Verdant Power had in 
New York City, where we witnessed fish swimming around the 
tidal turbines. With marine current turbines, we've been 
watching marine mammals swim around that, and, nicely 
coexisting with the turbines in Strangford Lough.
    Measuring environmental performance is another key facet in 
S. 630. The Adaptive Management Grant Program provides public 
funding for environmental studies of our public waterways, our 
oceans, with the data being placed in the public domain. This 
is a key element that was developed in 2007 with the help of 
committee staff, my friend over here--John Seebach--and other 
environmental organizations and industry. It addresses the 
common need to put public information and more environmental 
data into the public domain.
    Last, S. 630 encourages cooperative efforts between 
universities, industry, national labs, and government agencies. 
Similar to the great work done by committee staff on this bill, 
the industry is witnessing new rulemaking and accelerated 
decisionmaking processes that are helping get projects in the 
water, like ORPC's project in Eastport, Maine, or Columbia 
Power Company's recent wave buoy deployment in Puget Sound; 
Ocean Power Technologies' PowerBuoy in the Marine base at 
Kaneohe Bay, and Verdant Power's Roosevelt Island Tidal Energy 
Project, which is undergoing its final commercial licensing.
    We are at a stage right now where these young companies 
need your support in order to continue the great work that 
they've been doing in the past several years.
    Thank you very much for the opportunity to speak. Thank you 
for your support of this promising new industry.
    [The prepared statement of Mr. O'Neill follows:]

 Prepared Statement of Sean O'Neill, President, Ocean Renewable Energy 
                       Coalition, Darnestown, MD
                               on s. 630
    Thank you, Mr. Chairman. I thank you and your colleagues for 
devoting your time and resources to this important topic. The Ocean 
Renewable Energy Coalition is the national trade association for marine 
and hydrokinetic renewables, otherwise known as MHK, including wave, 
tidal, ocean thermal energy, and offshore wind. We're made up of 54 
companies ranging from small technology and project developers, to 
large investor-owned utilities, publicly owned utilities, engineering 
consulting and law firms.
    I hope today to provide some additional justification and context 
in asking for your support of S. 630, the Marine and Hydrokinetic 
Promotion Act of 2011. This bill adds important elements to the Energy 
Policy Act of 2005 and the Energy Independence and Security Act of 
2007. Specifically, and most importantly, the Bill would provide much 
needed research and development funding to continue the excellent work 
done by the Department of Energy and other agencies to foster the 
responsible commercialization of this industry.
    S. 630 adds advanced systems engineering and system integration 
methods to identify critical interfaces and develop open standards for 
marine and hydrokinetic renewable energy. It also provides for three 
open water test centers and a device verification program. Combined 
these three programs address technology development from turbine design 
to how arrays of devices affect efficiency and environmental 
performance as well as grid integration and environmental data 
collection. These synergistic programs will bring technology from 
initial testing to pre-commercial demonstrations and ultimately full 
grid integration.
    The marine and hydrokinetic renewable energy industry benefits 
greatly from other industries including: other renewables, maritime, 
and traditional power. For example, when I mention test centers the 
National Wind Test Center just north of Denver, Colorado began 
operating in 1977 with a single 1 kilowatt machine with a turbine ten 
feet in diameter. Today, single turbines with one hundred meter 
diameters are producing more than three megawatts. The wind industry 
also initiated a turbine verification program to assist in performance 
verification and grid integration, and continues to be actively 
involved in research and development, and improvement of international 
standards today.
    The MHK industry has benefited from all these experiences and, with 
the help of federal funding, is actively involved in the creation of 
international standards to prompt global development of this new 
renewable energy technology. Test centers have been identified to 
support wave, tidal and ocean current research and S. 630 will provide 
greatly needed support to bring these centers into fully functioning 
reality. Utility systems engineering will provide the key element for 
the ultimate grid integration of this new energy source.
    Our industry has also learned a great deal from the international 
community where devices are in the water, grid connected, and 
establishing a record of accomplishment in technology and environmental 
performance. For example, Marine Current Turbines based in the United 
Kingdom has successfully operated a one point two (1.2) megawatt tidal 
device in Strangford Lough, Northern Ireland since 2008. The project is 
grid connected and provides enough electricity for 1500 homes. While 
anecdotal at this time, the experience in Strangford Lough is 
demonstrating the environmentally benign nature of this technology. 
Similar to the fish that swam around the turbines at Verdant Power's 
Roosevelt Island Tidal Energy Project in New York City, marine mammals 
are co-existing nicely with the Marine Current Turbines tidal device.
    Measuring environmental performance is another key facet of S. 630. 
The Adaptive Management Grant program provides public funding for 
environmental studies of our public waterways and oceans with the data 
being placed in the public domain. This is a key element that was 
developed in 2007 with input from Committee Staff, environmental 
organizations, and industry. It addresses the common need for more 
publicly available data on our oceans and waterways.
    Lastly, S. 630 encourages cooperative efforts between universities, 
industry, national labs and government agencies. Similar to the great 
work done by Committee staff in preparing this bill, cooperation across 
sectors is bearing fruit and the industry is witnessing new rulemakings 
and accelerated decision making that is allowing pilot and 
demonstration projects to be deployed. Projects like Ocean Renewable 
Power company's tidal energy facility in Eastport Maine, Columbia Power 
Company's recent wave buoy deployment in Puget Sound; Ocean Power 
Technologies' PowerBuoy at the Marine Base in Kaneohe Bay, Hawaii; and 
Verdant Power's Roosevelt Island Tidal Energy Project which is 
undergoing its final commercial licensing.
    Thank you for the opportunity to speak. And thank you for your 
support of this promising new industry.

    The Chairman. Thank you very much.
    Dr. Webber, you're our final witness. Go right ahead.

   STATEMENT OF MICHAEL WEBBER, PH.D., ASSISTANT PROFESSOR, 
   DEPARTMENT OF MECHANICAL ENGINEERING, ASSOCIATE DIRECTOR, 
 CENTER FOR INTERNATIONAL ENERGY AND ENVIRONMENTAL POLICY, CO-
 DIRECTOR, CLEAN ENERGY INCUBATOR, THE UNIVERSITY OF TEXAS AT 
                       AUSTIN, AUSTIN, TX

    Mr. Webber. Mr. Chairman and members of the committee, 
thank you so much for your invitation to testify on the nexus 
of energy and water.
    My name is Michael Webber. I'm the Associate Director of 
the Center for International Energy and Environmental Policy at 
the University of Texas at Austin.
    My testimony today will make four main points. The first 
point is that energy and water are interrelated. The second 
point is that the energy-water nexus is already under a strain 
today. The third point is that trends imply these strains will 
be exacerbated because of population growth, economic growth, 
climate change, and because of policy choices. The fourth point 
is that there are policy actions available at the Federal level 
that can help, and I will elaborate on each of these points 
during this testimony.
    The first point is that energy and water are interrelated. 
We use energy for water, and water for energy. We use energy to 
heat, treat and move water. For example, the public water 
supply system requires about 4 percent of national energy 
consumption, about 6 percent of national electricity 
consumption. This is about the same as lighting, or about a 
quarter of all light duty vehicle transportation, so this is a 
big enough number to care and make it relevant.
    We also use water for energy directly, the other way 
around. We use water for hydroelectric power, as you've heard, 
and indirectly as a coolant for thermoelectric power plants. 
These are power plants that you use heat to generate steam to 
make power. We use water as a critical input for the production 
of biofuels.
    In particular, the thermoelectric power sector, like 
nuclear, coal, natural gas, is the single largest water user in 
the United States. They withdraw about 200 billion gallons of 
water every day. This is about the same as agricultural, in 
terms of withdrawals, or use. That's an average of between 1 to 
40 gallons of water for every kilowatt hour of electricity.
    In this room, during this testimony at this hearing today 
over a couple of hours, several kilowatt hours of electricity 
will be used for the lights and the cameras and things like 
that. That implies a couple hundred gallons of cooling water 
were used to generate electricity for this hearing. Very little 
of that water is actually consumed. Most of it is returned to 
the water source from which it was taken, but it's at a 
different temperature and a different quality.
    The use of water depends on the fuel type and the 
generation technology, and the cooling system. Nuclear power 
plants tend to use the most water, followed by coal, followed 
by natural gas, followed by wind, and solar PV. So, the type of 
fuel that your using and the type of cooling system you are 
implementing affects how much water you need.
    The second point is that the energy-water relationship's 
already under strain today. This strain introduces 
vulnerabilities from one sector to another. For example, we can 
have heat waves, or droughts, that can strain energy, and we 
can have energy outages that can strain water. For example, we 
have heat waves--there was one in 2003 in France that killed 
over 10,000 people, where the nuclear power plants had to dial 
back their output by about 15 percent because the river 
temperatures were to hot to effectively cool the power plants 
without violating thermal pollution limits. We also have 
droughts in places like in the southeastern United States 3 
years ago, where nuclear power plants were within days of 
shutting off because of water availability problems. Then we 
had blackouts in New Mexico and Texas a few weeks ago that were 
caused because a couple power plants went offline when their 
water pipes froze. So, you can have heat waves, droughts, or 
freezes that affect your water availability--if you don't have 
the water, then you don't have power.
    It goes the other way around--if you don't have power, you 
can't get the water treatment or movement you always need, so 
we have hurricanes that can knock power out, then you might 
have water outages afterwards.
    The good news is--there's a corollary. If you have energy, 
then you have water availability, and vice versa. With 
unlimited energy, we have unlimited water, and with unlimited 
water, we have unlimited energy.
    The third point is that the strains in this nexus will be 
exacerbated because of population growth--more people who need 
energy and water, economic growth--which means we all want more 
energy and water than we used to, climate change--which 
intensifies the hydrological cycle affecting droughts and heat 
waves and snow melt, and things that affect the energy system, 
and policy choices, where we are electing to move toward more 
energy-intensive water and more water-intensive energy.
    More energy-intensive water shows up in places where we 
need to move water from further away or drill deeper because of 
water tables falling, or use more low-quality sources, like 
desalination or brackish sources, and that implies more energy.
    More water-intensive energy is because of motivation for 
domestic decarbonized sources, which means we might go to, more 
toward nuclear power, which uses more water than coal or 
natural gas, and the counter-trend there is actually solar and 
wind, and other forms, natural gas, that use less water for 
electricity. Then, in the transportation fuel sector, all the 
unconventional fossil fuels require more water to produce. 
Electricity needs a little more water to produce than 
conventional gasoline. But, in particular, biofuels need a lot 
of water. So, this is something for us to be aware of as we 
move forward.
    In particular, the Energy Policy Act of 2005 and the Energy 
Independence and Security Act of 2007 have biofuels mandates 
that are essentially water mandates, depending on how we make 
these biofuels. They dictate that water use for biofuels go up 
by a couple trillion gallons a year out of 36 trillion gallons 
a year--our national consumption.
    The fourth point is that there are different policy actions 
that can help. Because rivers, watersheds, basins and aquifers 
can span several States and several countries, it's hard for 
one State to always manage the water, so there is a role for 
Federal engagement on energy-water issues. But there are some 
policy pitfalls to be aware of.
    First of all, energy and water policymaking are 
disaggregated--they have different funding oversight, different 
agencies and committees with no clear authority. Water planners 
often assume the have the energy they need, and energy planners 
often assume they have the water they need. Energy tends to be 
top-down, with strong Federal agencies and weak local agencies, 
and water's the other way around--strong local agencies and 
weak Federal agencies. Then, the data on water quantity are 
sparse, out of date, error-prone, or inconsistent, so there's a 
lot of problems. People talk about water in the East in terms 
of gallons--in the West they use acre-feet--a acre-foot has 
hundreds of thousands of gallons, so there's a mismatch in the 
language they use, and that leads to problems.
    The good news is, there are policy opportunities at the 
energy-water nexus. Conservation is synonymous. If you want to 
achieve energy conservation, then you should push for water 
conservation. If you wish to achieve water conservation, push 
for energy conservation. because they go hand in hand.
    There's a big role federally for collecting, maintaining 
and making available accurate, updated and comprehensive water 
data--perhaps through the U.S. Geological Survey, or the Energy 
Information Administration. The EIA has a lot of energy stats. 
We could use an equivalent for water. Policymakers need good 
data to make good decisions.
    We can invest in water-related R&D to match increases in 
energy-related R&D. The energy industry gets mocked for 
spending less on R&D that the dog food industry, and the water 
industry spends even less than the energy industry. We have 
increased energy R&D in the last few years, but not water R&D, 
so it would be great to see more of that. That includes low-
energy water treatment, novel approaches to desalination, leak 
detectors to find water leaks--15 percent of our water supply 
actually leaks underground. We could encourage resource 
substitution of fuels that have water, emissions and security 
benefits, like natural gas, solar PV, and wind.
    We could support the use of reclaimed water for irrigation 
or process fueling, and look at dry or hybrid wet-dry cooling 
at power plants. We could also look at strict standards in 
building codes for water efficiency. So, we have a lot of 
opportunities.
    In summary, the energy-water nexus is complicated and 
important, and I'm very pleased to know you're being attentive 
to this matter.
    That concludes my testimony. I'll be pleased to answer 
questions at the appropriate time.
    [The prepared statement of Mr. Webber follows:]

 Prepared Statement of Michael E. Webber, Ph.D., Assistant Professor, 
 Department of Mechanical Engineering, Associate Director, Center for 
 International Energy & Environmental Policy Co-Director, Clean Energy 
        Incubator The University of Texas at Austin, Austin, TX
    Mr. Chairman and Members of the Committee, thank you so much for 
the invitation to speak before your committee on the nexus of energy 
and water. My name is Michael Webber, and I am the Associate Director 
of the Center for International Energy and Environmental Policy and 
Assistant Professor of Mechanical Engineering at the University of 
Texas at Austin. I am here to share my perspective on important trends 
and policy issues related to this nexus.
    My testimony today will make four main points:

          1. Energy and water are interrelated,
          2. The energy-water relationship is already under strain,
          3. Trends imply these strains will be exacerbated, and
          4. There are different policy actions that can help.

    I will briefly elaborate on each of these points during this 
testimony.*
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    * All figures and tables have been retained in committee files.
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    However, regionally, that number can be much higher. In California, 
where water is moved hundreds of miles across two mountain ranges, 
water is responsible for more than 19% of the state's total electricity 
consumption. Similarly large investments of energy for water occurs 
wherever water is scarce and energy is available.
    In addition to using energy for water, we also use water for 
energy. We use water directly through hydroelectric power generation at 
major dams, indirectly as a coolant for thermoelectric power plants, 
and as a critical input for the production of biofuels. The 
thermoelectric power sector-comprised of power plants that use heat to 
generate power, including those that operate on nuclear, coal, natural 
gas or biomass fuels-is the single largest user of water in the United 
States. Cooling of power plants is responsible for the withdrawal of 
nearly 200 billion gallons of water per day. This use accounts for 49% 
of all water withdrawals in the nation when including saline 
withdrawals, and 39% of all freshwater withdrawals, which is about the 
same as for agriculture.
    The amount of water required by powerplants depends on the type of 
fuel, power generation process, and cooling technology. Nuclear is the 
most water-intensive, while solar PV, wind, and some uses of natural 
gas are very water lean.
    Typically, anywhere between 1 to 40 gallons of water is needed for 
cooling for every kilowatt-hour of electricity that is generated. 
However, while power plants withdraw vast amounts of water, very little 
of that water is actually consumed; most of the water is returned to 
the source though at a different temperature and with a different 
quality. Thus, while power plants are major users of water, they are 
not major consumers of water, which is in contrast with the agriculture 
sector, which consumes all the water it withdraws.
The Energy-Water Relationship Is Already Under Strain
    Unfortunately, the energy-water relationship introduces 
vulnerabilities whereby constraints of one resource introduce 
constraints in the other. For example, during the heat wave in France 
in 2003 that was responsible for approximately 10,000 deaths, nuclear 
power plants in France had to reduce their power output because of the 
high inlet temperatures of the cooling water. Environmental regulations 
in France (and the United States) limit the rejection temperature of 
power plant cooling water to avoid ecosystem damage from thermal 
pollution (e.g. to avoid cooking the plants and animals in the 
waterway). When the heat wave raised river temperatures, the nuclear 
power plants could not achieve sufficient cooling within the 
environmental limits, and so they reduced their power output at a time 
when electricity demand was spiking by residents turning on their air 
conditioners. In this case, a water resource constraint became an 
energy constraint.
    In addition to heat waves, droughts can also strain the energy-
water relationship. During the drought in the southeastern United 
States in early 2008, nuclear power plants were within days or weeks of 
shutting down because of limited water supplies. Today in the west, a 
severe multi-year drought has lowered water levels behind dams, 
reducing output from their hydroelectric turbines. In addition, power 
outages hamper the ability for the water/wastewater sector to treat and 
distribute water.
    While constraints in one resource introduce constraints on the 
other, the corollary of that relationship is also true: with unlimited 
energy, we could have unlimited freshwater; with unlimited water, we 
could have unlimited energy.
Trends Imply These Strains Will Be Exacerbated
    While the energy-water relationship is already under strain today, 
trends imply that the strain will be exacerbated unless we take 
appropriate action. There are four key pieces to this overall trend:

          1. Population growth, which drives up total demand for energy 
        and water,
          2. Economic growth, which can drive up per capita demand for 
        both energy and water,
          3 Climate change, which intensifies the hydrological cycle, 
        and
          4. Policy choices, whereby we are choosing to move towards 
        more energy-intensive water and more water-intensive energy.
            Population Growth Will Put Upward Pressure on Demand for 
                    Energy & Water
    Population growth over the next few decades might yield another 100 
million people in the United States over the next four decades, each of 
whom will need energy and water to survive and prosper. This 
fundamental demographic trend puts upward pressure on demand for both 
resources, thereby potentially straining the energy-water relationship 
further.
            Economic Growth Will Put Upward Pressure on Per Capita 
                    Demand for Energy & Water
    On top of underlying trends for population growth is an expectation 
for economic growth. Because personal energy and water consumption tend 
to increase with affluence, there is the risk that the per capita 
demand for energy and water will increase due to economic growth. For 
example, as people become wealthier they tend to eat more meat (which 
is very water intensive), and use more energy and water to air 
condition large homes or irrigate their lawns. Also, as societies 
become richer, they often demand better environmental conditions, which 
implies they will spend more energy on wastewater treatment. However, 
it's important to note that the use of efficiency and conservation 
measures can occur alongside economic growth, thereby counteracting the 
nominal trend for increased per capita consumption of energy and water. 
At this point, looking forward, it is not clear whether technology, 
efficiency and conservation will continue to mitigate the upward 
pressure on per capita consumption that are a consequence of economic 
growth. Thus, it's possible that the United States will have a 
compounding effect of increased consumption per person on top of a 
growing number of people.
            Climate Change Is Likely To Intensify Hydrological Cycles
    One of the important ways climate change will manifest itself it 
through an intensification of the global hydrological cycle. This 
intensification is likely to mean more frequent and severe droughts and 
floods along with distorted snowmelt patterns. Because of these changes 
to the natural water system, it is likely we will need to spend more 
energy storing, moving, treating and producing water. For example, as 
droughts strain existing water supplies, cities might consider 
production from deeper aquifers, poorer-quality sources that require 
desalination, or long-haul pipelines to get the water to its final 
destination. Desalination in particular is energy-intensive, as it 
requires approximately ten times more energy than production from 
nearby surface freshwater sources such as rivers and lakes.
            Policy Choices Exacerbate Strain in the Energy-Water Nexus
    On top of the prior three trends is a policy-driven movement 
towards more energy-intensive water and water-intensive energy.
    We are moving towards more energy-intensive water because of a push 
by many municipalities for new supplies of water from sources that are 
farther away and lower quality, and thereby require more energy to get 
them to the right quality and location.
    At the same time, for a variety of economic, security and 
environmental reasons, including the desire to produce a higher 
proportion of our energy from domestic sources and to decarbonize our 
energy system, many of our preferred energy choices are more water-
intensive. For example, nuclear energy is produced domestically, but is 
also more water-intensive than other forms of power generation. The 
move towards more water-intensive energy is especially relevant for 
transportation fuels such as unconventional fossil fuels (oil shale, 
coal-to-liquids, gas-to-liquids, tar sands), electricity, hydrogen, and 
biofuels, all of which can require significantly more water to produce 
than gasoline (depending on how you produce them). It is important to 
note that the push for renewable electricity also includes solar 
photovoltaics (PV) and wind power, which require very little water, and 
so not all future energy choices are worse from a water-perspective.
    Almost all unconventional fossil fuels are more water-intensive 
than domestic, conventional gasoline production. While gasoline might 
require a few gallons of water for every gallon of fuel that is 
produced, the unconventional fossil sources are typically a few times 
more water-intensive. Electricity for plug-in hybrid electric vehicles 
(PHEVs) or electric vehicles (EVs) are appealing because they are clean 
at the vehicle's end-use and it's easier to scrub emissions at hundreds 
of smokestacks millions of tailpipes. However, most powerplants use a 
lot of cooling water, and consequently electricity can also be about 
twice as water-intensive than gasoline per mile traveled if the 
electricity is generated from the standard U.S. grid. If that 
electricity is generated from wind or other water-free sources, then it 
will be less water-consumptive than gasoline. Though unconventional 
fossil fuels and electricity are all potentially more water-intensive 
than conventional gasoline by a factor of 2-5, biofuels are 
particularly water-intensive. Growing biofuels consumes approximately 
1000 gallons of water for every gallon of fuel that is produced. 
Sometimes this water is provided naturally from rainfall. However, for 
a non-trivial and growing proportion of our biofuels production, that 
water is provided by irrigation.
    Note that for the sake of analysis and regulation, it is convenient 
to consider the water requirements per mile traveled. Doing so 
incorporates the energy density of the final fuels plus the efficiency 
of the engines, motors or fuel cells with which they are compatible. 
Conventional gasoline requires approximately 0.2 gallons of water per 
mile traveled, while irrigated biofuels from corn or soy can consume 20 
to 100 or more gallons of water for every mile traveled.
    If we compare the water requirements per mile traveled with 
projections for future transportation miles and combine those figures 
with mandates for the use of new fuels, such as biofuels, the water 
impacts are significant. Water consumption might go up from 
approximately one trillion gallons of water per year to make gasoline 
(with ethanol as an oxygenate), to a few trillion gallons of water per 
year. To put this water consumption into context, each year the United 
States consumes about 36 trillion gallons of water. Consequently, it is 
possible that water consumption for transportation will more than 
double from less than 3% of national use to more than 7% of national 
use. In a time when we are already facing water constraints, it is not 
clear we have the water to pursue this path. Essentially we are 
deciding to switch from foreign oil to domestic water for our 
transportation fuels, and while that might be a good decision for 
strategic purposes, I advise that we first make sure we have the water.
There are Different Policy Actions That Can Help
    Because there are many rivers, watersheds, basins and aquifers that 
span several states and/or countries, there is a need for federal 
engagement on energy-water issues.
    Unfortunately, there are some policy pitfalls at the energy-water 
nexus. For example, energy and water policymaking are disaggregated. 
The funding and oversight mechanisms are separate, and there are a 
multitude of agencies, committees, and so forth, none of which have 
clear authority. It is not unusual for water planners to assume they 
have all the energy they need and for energy planners to assume they 
have the water they need. If their assumptions break down, it could 
cause significant problems. In addition, the hierarchy of policymaking 
is dissimilar. Energy policy is formulated in a top-down approach, with 
powerful federal energy agencies, while water policy is formulated in a 
bottom-up approach, with powerful local and state water agencies. 
Furthermore, the data on water quantity are sparse, error-prone, and 
inconsistent. The United States Geological Survey (USGS) budgets for 
collecting data on water use have been cut, meaning that their latest 
published surveys are anywhere from 5 to 15 years out of date. National 
databases of water use for power plants contain errors, possibly due to 
differences in the units, format and definitions between state and 
federal reporting requirements. For example, the definitions for water 
use, withdrawal and consumption are not always clear. And, water 
planners in the east use ``gallons'' and water planners in the west use 
``acre-feet,'' introducing additional risk for confusion or mistakes.
    Despite the potential pitfalls, there are policy opportunities at 
the energy-water nexus. For example, water conservation and energy 
conservation are synonymous. Policies that promote water conservation 
also achieve energy conservation. Policies that promote energy 
conservation also achieve water conservation.
    Thankfully, the federal government has some effective policy levers 
at its disposal. I recommend the following policy actions for the 
energy-water nexus:

          1. Collect, maintain and make available accurate, updated and 
        comprehensive water data, possibly through the USGS and EIA. 
        The Department of Energy's Energy Information Administration 
        maintains an extensive database of accurate, up-to-date and 
        comprehensive information on energy production, consumption, 
        trade, and price available with temporal and geographic 
        resolution and standardized units. Unfortunately, there is no 
        equivalent set of data for water. Consequently, industry, 
        investors, analysts, policymakers and planners lack suitable 
        data to make informed decisions.
          2. Invest heavily in water-related R&D to match recent 
        increases in energy-related R&D. R&D investments are an 
        excellent policy option for the federal government because 
        state/local governments and industry usually are not in a 
        position to adequately invest in research. Consequently, the 
        amount of R&D in the water sector is much lower than for other 
        sectors such as pharmaceuticals, technology, or energy. 
        Furthermore, since energy-related R&D is expected to go through 
        a surge in funding, it would be appropriate from the 
        perspective of the energy-water nexus to raise water-related 
        R&D in a commensurate way. Topics for R&D include low-energy 
        water treatment, novel approaches to desalination, remote leak 
        detectors for water infrastructure, and air-cooling systems for 
        power plants. In addition, DoE's R&D program for biofuels 
        should emphasize feedstocks such as cellulosic sources or algae 
        that do note require freshwater irrigation.
          3. Encourage resource substitution to fuels that have water, 
        emissions and security benefits. Some fuel sources such as 
        natural gas, wind, and solar PV are domestic, need much less 
        water, and reduce emissions of pollutants and carbon.
          4. Support the use of reclaimed water for irrigation and 
        process cooling. Using reclaimed water for powerplants, 
        industry, and agriculture can spare a significant amount of 
        energy and cost. However there are financing, regulatory and 
        permitting hurdles in place that restrict this option.
          5. Support the use of dry and hybrid wet-dry cooling at 
        powerplants. Not all powerplants need wet cooling all the time. 
        Finding ways to help plants upgrade their cooling to less 
        water-intensive versions can spare significant volumes of water 
        to meet public supply or in-stream flow requirements.
          6. Establish strict standards in building codes for water 
        efficiency. Building codes should include revised standards for 
        low-flow appliances, water-heating efficiency, purple-piping 
        for reclaimed water, rain barrels and so forth in order to 
        reduce both water and energy consumption.
          7. Invest aggressively in conservation. Water conservation 
        can be a cost-effective way to save energy, and energy 
        conservation can be a cost-effective way to save water. 
        Therefore, conservation has cross-cutting benefits.

    The energy-water nexus is a complicated, important issue, and so I 
am very pleased to know that you are being attentive to the matter.
    Mr. Chairman, that concludes my testimony. I'll be pleased to 
answer questions at the appropriate time.
  SUMMARY--Trends and Policy Issues For The Nexus of Energy and Water
There are four main points:

          1. Energy and water are interrelated,
          2. The energy-water nexus is already under strain,
          3. Trends imply these strains will be exacerbated, and
          4. There are different policy actions at the federal level 
        that can help.
Point #1: Energy and Water Are Interrelated
   We use energy for water, and we use water for energy.
   Energy for Water--US public water supply requires 4% of 
        national energy and 6% of national electricity consumption
   Water for energy--Half of all water withdrawals are for 
        power plant cooling (most is returned to the water source); 
        water needs vary with fuel type and cooling system
Point #2: The Energy-Water Relationship Is Already Under Strain
   The energy-water relationship is already under strain: 
        constraints are cross-sectoral

           Heat waves and droughts can constrain energy
           Energy outages can constrain water

   Corollary: with unlimited energy, we could have unlimited 
        freshwater and vice-versa
Point #3: Trends Imply These Strains Will Be Exacerbated
   Trends imply that the strain will be exacerbated unless we 
        take appropriate action

          1. Population growth, which drives up total demand for energy 
        and water,
          2. Economic growth, which can drive up per capita demand for 
        energy and water,
          3. Climate change, which intensifies the hydrological cycle 
        (droughts and heat waves) causing more energy for water 
        storage, conveyance and treatment
          4. Policy choices: moving to energy-intensive water & water-
        intensive energy.

           Energy-intensive water: Long-haul, Deeper aquifer 
        production, Desalination
           Water-intensive energy: Motivation: domestic, 
        decarbonized sources

    --Nuclear power and biofuels
    --Counter trend: natgas/Solar PV/wind lower the water use of 
            electricity
Point #4: There are Different Policy Actions That Can Help
   Because Rivers, watersheds, basins and aquifers can span 
        states and countries

           There is a need for federal engagement on energy-
        water issues.

   There are some policy pitfalls at the energy-water nexus.
   There are policy opportunities at the energy-water nexus

           Water conservation and energy conservation are 
        synonymous.
           Collect, maintain and make available accurate, 
        updated and comprehensive water data, possibly through the 
        USGS.
           Invest in water-related R&D to match increases in 
        energy-related R&D.

    --Low-energy water treatment,
    --Novel approaches to desalination,
    --Remote leak detectors for water infrastructure,
    --Air-cooling systems for power plants
    --Biofuels that don't require freshwater irrigation (algae, 
            cellulosic)

           Encourage resource substitution to fuels with water/
        emissions/security benefits

    --Natural gas, solar PV, wind

           Support the use of reclaimed water for irrigation 
        and process cooling.
           Support the use of dry and hybrid wet-dry cooling at 
        power plants

    --R&D and infrastructure swap-outs

           Establish strict standards in building codes for 
        water efficiency.

    --low-flow appliances, water-heating efficiency, purple-piping for 
            reclaimed water, rain barrels, etc.

           Invest aggressively in conservation

    The Chairman. Thank you. Thank you for the testimony.
    Thank you all for your testimony.
    Senator Murkowski wanted to make a statement here, and I'll 
defer to her.
    Senator Murkowski. Thank you, Mr. Chairman.
    I apologize, gentlemen. I have to excuse myself to go 
attend another hearing.
    I appreciate the testimony that you each have provided, and 
the level of detail.
    Dr. Webber, I really appreciate it, because you've given a 
whole laundry list of things. You speak very quickly, but I 
heard it all.
    [Laughter.]
    Mr. Webber. I saw the timer ticking down. Yes.
    Senator Murkowski. That's right. But, I also appreciated 
your article about Water versus Energy, and just the very, the 
way that you articulated the nexus. I don't think it's 
something that we appreciate as fully as we need to. When we're 
talking about energy we need to understand how water really is 
so integrally tied in there. I think you've laid it out well. 
I'm not sold on the idea of creating yet another department 
here. I don't think from a budget perspective we're there yet. 
But I do agree that we must do more to really understand what 
that nexus is, and how it works.
    I'd also like to recognize you, Mr. Seebach and Mr. Munro, 
as representatives from American Rivers and the National 
Hydropower Association. I do think that through your efforts we 
do have a better piece of legislation that is moving forward. I 
appreciate the collaboration there. I really think that that 
has helped us.
    Mr. O'Neill, I'm really excited about what our potential is 
with our ocean energy resources, and look forward to working 
with you on that.
    I do have questions. I will present those to you for your 
written responses. Again, I appreciate you being here.
    Thank you for the courtesy, Mr. Chairman.
    The Chairman. All right. Thank you.
    Senator Shaheen, go right ahead. Why don't--you haven't had 
a chance to ask questions. Go right ahead.
    Senator Shaheen. Thank you, Mr. Chairman.
    Thank you all very much for your testimony. It was 
particularly fascinating, and a good reminder of just how 
related energy and water are.
    I'm particularly interested, Mr. O'Neill, in what you had 
to say about the potential of our oceans and rivers for energy 
production. This is an interest for me because at the 
University of New Hampshire, where I'm from, New Hampshire, 
they're doing some of the cutting-edge research around tidal 
and wave energy. We also have one of the fastest-flowing rivers 
in North America, so it makes a good place to do some of that 
research.
    Can you talk a little bit about how much potential there 
is, or, we think there is, in terms of ocean and river energy? 
Then, if you, if we have breakdowns, how that breaks down for 
the Northeast?
    Mr. O'Neill. Thank you very much.
    I want to call you Governor Shaheen, Senator Shaheen.
    Senator Shaheen. I get that a lot.
    Mr. O'Neill. Actually, when you were Governor I was working 
for the Merrimack River Watershed Counsel.
    Senator Shaheen. Ah. Good. I knew I liked you.
    Mr. O'Neill. The Electric Power Research Institute has 
estimated 250 megawatt hours--252 million megawatt hours of 
wave potential alone in the United States. A lot of that is in 
Alaska. Professor Martin Wosnick at UNH, who's doing a lot of 
that cutting-edge research that you mentioned--we do have great 
rivering resources in New Hampshire. You also have, up north in 
Maine, especially, you've got tremendous tidal resources. But 
we're looking at--the first rivering resource assessment was 
done in 1986, and that has stood alone by itself until just 
recently, when DOE funded the Electric Power Research Institute 
to update that. We're looking at probably 3.5 percent of our 
capacity in the United States coming from tidal and rivering 
resources. So, when you can, add wave and tidal and river 
resources together, it's about 10 percent.
    Senator Shaheen. What's the, what are the best projections 
on how long it's going to take us to get to commercialization 
for the research that's being done? If I could ask you to also 
talk about, what are the biggest obstacles to moving forward 
with the research, to get all of these efforts to 
commercialization?
    Mr. O'Neill. Fear of the unknown. We do not have a real-
time experience in research and development on projects in the 
water. That data is just starting to come out. Most of it's 
coming from overseas right now. I mentioned the Strangford 
Lough project.
    Permitting is a very difficult aspect of this technology 
because we're not exactly certain. We've--in our gut we 
understand that these are going to be pretty benign, but the 
risk of catastrophic disaster is tiny when we look at the 
anecdotal evidence in terms of the Verdant project or MCT--we 
saw that the fish are actually swimming around the turbines. 
So, we're getting that anecdotal information. It is going to be 
technology-specific. It's going to be site-specific. So, 
getting past those things.
    Now, people have been really working hard at this. FERC has 
been working hard at it. The Bureau of Ocean Energy Management 
Resources and Enforcement has been working hard at this. We 
have ARPA-E at the Department of Energy that has a categorical 
exclusion rulemaking in process right now. We've got the Army 
Corps of Engineers that wants to have a national permit that 
would include test center transmission lines.
    So, we're making great headway. We're standing on the 
shoulders of other renewables. I think it was Mr. Chalk this 
morning who mentioned that we're 20 years behind wind. I think 
5 years ago that would be right on point. But I think we're 
making--just in the last 3 months, the great progress that has 
happened is, has just been tremendous. So, we're getting there 
much quicker than we thought.
    Senator Shaheen. My time is almost up, but if I could just 
do one follow-up.
    How big an issue is funding to do the research and get the 
dollars that are needed?
    Mr. O'Neill. Once you start funding these companies and 
projects like this, if the funding goes away for 6 months or 
for a year, those companies could die on the vine.
    Senator Shaheen. Is there much private sector investment?
    Mr. O'Neill. About $500 million is, in equity valuation 
today.
    Senator Shaheen. Can you compare that for us to, say, 
what's going on in wind or solar?
    Mr. O'Neill. It's tiny compared to wind----
    Senator Shaheen. Yes.
    Mr. O'Neill. [continuing]. Or solar. In fact, one of the 
problems that we've had is, when wind and solar first started 
they had huge utility-scale tests, where you had 9 square miles 
in the Mojave Desert in California. Now, they learned a lot 
from those tests. The wind industry also had over 4,000 
turbines in the same area. Huge, huge utility-scale projects. 
But when you're working in public waterways--and I think our 
friends from FERC----
    Senator Shaheen. Sure.
    Mr. O'Neill. [continuing]. Have described that. It takes a 
lot of, as many as 17 to 25 State and Federal agencies to get 
your permits.
    Senator Shaheen. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Let me just ask, and maybe, Dr. Webber, you'd 
have a point of view on this, or any of the rest of you. But my 
impression from the previous panel is that we're talking here 
about very low-cost power generation, as compared to other ways 
that we can generate power. I mean, the investment is not that 
great. I think, one of the witnesses--maybe Mr. Chalk--talked 
about how 30, I guess, $30 million had gone, had been, come out 
of the Stimulus Act--or maybe it was $30 billion----
    Mr. O'Neill. Million.
    The Chairman.--$30 billion was used for projects--
hydroelectric projects, as I understood it, and that those 
projects were producing power in the range of 2 to 3 cents per 
kilowatt hour. I thought I heard him say that. Two to four 
cents per kilowatt hour.
    If that's true, what's the problem that is keeping 
utilities from making this choice when they need to add power, 
or need to add renewable power? Why is it that they are not 
going ahead and choosing this if, in fact, you can produce 
power at 2 to 4 cents per kilowatt hour, rather than at 10 
cents per kilowatt hour, which might be the cost of solar?
    Mr. Webber. The, with a lot of these opportunities for 
power, the capital costs up front are very expensive. But once 
you've paid to build it, the cost of incremental generation's 
quite cheap. So, once you've built a hydroelectric system it 
generates power very cheaply, but it costs money up front to 
build it. So, sometimes that price is just the marginal cost of 
each additional kilowatt hour.
    The Chairman. So, you think the 2 to 4 cents per kilowatt 
hour is just the marginal cost once the capital investment's 
been made?
    Mr. Webber. Typically, for the numbers I see--these 
gentlemen can correct me if I'm wrong--so, that's one issue, is 
that capital costs versus marginal costs. A lot of the water-
based technologies are very cheap to operate, very inexpensive 
to operate. Very clean to operate. But are expensive up front 
to build. Then, for some States, like, Texas, New Mexico, 
others, there water resources are unavailable. So, this is 
geographically unequal. Some State have better resources 
available than others. So, you have, first of geographical or 
geological resource constraint, and after that, price 
competition. Usually for the capital, once its built it's very 
cost-competitive.
    The Chairman. Mr. Munro, did you have a thought on this?
    Mr. Munro. Yes, Mr. Chairman.
    So, as a public utility in the Northwest, we, part of 
integrated resource plan, we evaluate all the various resources 
from, you know, coal to hydroelectric generation, to nuclear, 
and so, we look at it from a variety of lenses, one being cost, 
another being, how clean is it? Another being, is, how quickly 
can you get this online? So, from our perspective, the most 
inexpensive research right now is conservation. So that's where 
we put a lot of our efforts. Of course, we're upgrading our 
current hydro facilities.
    The costs on new hydro can range, as you mentioned, but, 
I'll put it to a megawatt hour, it's about $70 to $95 a 
megawatt hour. Compare that to a combined cycle gas plant, it's 
about $90. Then you look at other resources--they get more 
expensive, other renewables are more expensive. So, actually, 
we considered a combined cycle gas plant primarily because we 
could get that permitted in 2 years, versus the Cle Elum hydro 
project we were looking at--it's an existing dam--we looked at 
about a 5-year plus timeline to get that online.
    So, we've shelved the gas plant for right now, but we think 
that, like, a policy like the Hydropower Improvement Act, we 
believe that will help us have a smarter, you know, process. 
We're encouraged by that.
    But, again, we're going to pursue conservation. We'd like 
to do more hydro, like to see pump storage, because of it's 
ability to integrate intermittent resources.
    The Chairman. So, from your perspective, it's not so much 
that the power from hydropower is more expensive than natural 
gas--it's not.
    Mr. Munro. Right.
    The Chairman. But, it just takes so much longer to get the 
permits and to get it constructed, and online.
    Mr. Munro. That's true. Also, gas is a firm--it's a real 
firm resource, meaning it's there when you need it. You know, 
hydropower would be a great alternative because of its 
renewable nature. But, that's absolutely right. There's more to 
it than that, but you've basically got the gist of it.
    The Chairman. OK. All right.
    Senator Shaheen, did you have other questions? If so, go 
ahead.
    Senator Shaheen. I'm sorry--Mr. Seebach's testimony, but, 
are there, can you talk a little bit about what kinds of 
environmental mitigation measures that we ought to be looking 
at in terms of hydropowers? We're thinking about getting--in 
New Hampshire we have a lot of small hydropower dams. Many of 
them are community owned. Many of them are not producing 
electricity anymore, and one of the concerns is just what the 
impact would be on the environment, the fish in particular, of 
starting those again. In fact, I have to say, when I was 
Governor one of the things that we were very proud of was that 
we dismantled a number of those dams because we thought it was 
going to be better for the rivers and the environment in the 
rivers. So, could you speak a little bit to that issue?
    Mr. Seebach. Yes, Senator. Thank you.
    I think, hydropower is very site-specific, so there are a 
series of impacts that we look at when we're evaluating a 
project. Obviously, things like fish passage--ensuring that if 
part of the river is being dewatered to divert water to a 
powerhouse, that that section of river has adequate flows to 
support aquatic life.
    But I think when you're looking at individual projects, the 
keys are really some of the same things that Mr. Wright said in 
his testimony. The first important thing is that you're 
choosing a good site and that you have good project design. So, 
a good site is a site that does not have significant resource 
issues. There's a difference between building on a dam--on a 
stretch of river that doesn't have a high value fishery 
compared to, say, building a new dam in a fish--in a river with 
a critical run of salmon, for example.
    I think the second thing that developers can do is reach 
out early and often to stakeholders, both environmental groups, 
and particularly resource agencies and regulators, to make sure 
that they understand what will be required of them, and to 
really keep those lines of communication clear and, really, 
work hard to provide that information as quickly as possible.
    I think the other thing that's really important to making 
sure projects are appropriately mitigated is improved 
coordination between the multiple Federal agencies that work on 
hydropower projects, and, the Federal and State agencies. I 
think there are things they do well together. But I think it 
could be done better.
    Senator Shaheen. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you all very much. It's been useful 
testimony.
    We will ask that any additional statements, written 
statements that anyone wants to provide to the committee be 
provided no later than Tuesday. We're hoping that sometime in 
the next couple of weeks we can have a markup and proceed with 
these bills.
    Thank you all very much.
    [Whereupon, at 11:14 a.m., the hearing was adjourned.]
                               APPENDIXES

                              ----------                              

                               Appendix I

                   Responses to Additional Questions

                              ----------                              

     Responses of Jeff C. Wright to Questions from Senator Bingaman
    Question 1. Some of the testimony we have received today has 
asserted that the licensing process for hydropower projects is much 
slower than the process for other types of renewable energy such as 
wind and solar projects--if that is the case, are there steps that FERC 
has taken to make the licensing process for hydropower projects more 
efficient, and are there any areas where there is still room for 
improvement?
    Answer. The Commission has taken a number of steps to improve the 
efficiency of the hydropower licensing process. These include 
developing three separate licensing processes, so that developers and 
other stakeholders can select the process that is best suited for a 
particular case, as well as the expedited pilot process for 
hydrokinetic projects; creating model applications and other web-based 
tools designed to make the process of small hydropower development 
easier; entering into memoranda of understanding with several states 
and with federal agencies; conducting public outreach; and working one-
on-one with potential applicants.
    There is undoubtedly room for improvement, but the Commission's 
ability to shorten the licensing process is greatly constrained by 
current law. The Federal Power Act gives federal land management and 
resource agencies the authority to impose mandatory conditions on 
hydropower licenses. The courts have held that the statute does not 
give the Commission the authority to set deadlines for these agencies 
to act. In addition, the Commission must comply with other statutes, 
such as the Clean Water Act, the Endangered Species Act, the Coastal 
Zone Management Act and the National Historic Preservation Act. As with 
the Federal Power Act, the Commission lacks authority to require the 
agencies with authority under those statutes to act within a set 
timeframe. As a result, licensing proceedings are often delayed, after 
the Commission has reviewed the application and prepared its 
environmental analyses, waiting for other entities to act. 
Approximately one-fourth of the applications currently pending before 
the Commission have been delayed, in some cases for up to six years, 
because other agencies have not completed their respective processes. 
As I stated in my testimony, if Congress were to make clear that the 
Commission can establish enforceable schedules for license application 
processing, delays of this nature could be eliminated.
    With respect to small hydropower projects, we have taken several 
steps to make the licensing process more efficient. When adequate 
consultation has been conducted, we have been able to waive some pre-
filing consultation requirements (with resource agency cooperation) and 
combine environmental scoping with pre-filing consultation. We have 
also been able to combine public noticing requirements and shorten 
comment periods to expedite the licensing process. On some projects, 
encouraging applicants to coordinate with resource agencies during pre-
filing has resulted in obtaining these agencies' final terms and 
conditions with the license or exemption application.
    Question 2. I am aware of at least one project in New Mexico, for 
the City of Santa Fe, that was able to receive an authorization to 
proceed with a ``conduit'' hydropower project within two months of 
filing an application. The project is estimated to save the City 
approximately $20,000 per year in electricity costs. What are some 
suggestions you might make for applicants to enable them to quickly 
move through the application process? For example, your testimony 
suggests that the process works most efficiently when applicants work 
in advance with resource agencies and other stakeholders--how are you 
encouraging applicants to do that?
    Answer. The main reason that the City of Santa Fe's conduit 
application was processed so quickly was that the city's application 
was substantially complete when filed. The city had discussions with 
Commission staff prior to filing the application. Staff referred the 
city to the Commission's small hydro website, where there was guidance 
on how to move efficiently through the prefiling process, including 
several templates that the applicant could use to prepare its 
application and request waivers of consultation from resource agencies. 
The City followed that guidance. In addition, the city, after preparing 
its initial consultation document, submitted that draft document to 
Commission staff for review, and staff was able to point out portions 
of the document that required revision before the application was 
filed. When the application was filed, because the City demonstrated 
that proposed project would likely have few potential environmental 
effects, staff was able to shorten the public notice period, further 
facilitating the application's swift approval.
    Commission staff has made substantial efforts to alert developers 
and other stakeholders of the tools that the City used to shorten the 
authorization process. Staff has conducted a number of outreach 
sessions, attended by over 100 potential small hydro developers, as 
well as by other stakeholders and is planning more over the next six 
months. I believe that the Commission's enhanced web site is also 
serving as a valuable tool. In addition, Commission staff is available 
to the public and spends a substantial amount of time working with 
potential applicants, as it did with the City, to ensure that they 
understand the application process and prepare the best possible 
application. This one-one-one approach continues to be very successful.
    Responses of Jeff C. Wright to Questions From Senator Murkowski
    Question 1. Currently, there are proposed projects totaling over 
88,000 MW with pending license applications and preliminary permits 
filed with FERC. That alone should demonstrate that the hydropower 
resource is not tapped out. For what types of projects are you 
receiving applications? What trends do you see in applications?
    Answer. Although relicense applications still outnumber 
applications for new projects, we have seen an increase in the number 
of applications for new projects (licenses and exemptions) in recent 
years. The number of currently pending applications (94, representing 
about 12,304 MW) breaks down as follows: original licenses (26, 
representing about 2,000 MW); 5-MW exemptions (7, representing about 3 
MW); conduit exemptions (3, representing about 1 MW); and relicenses 
(58, representing about 10,300 MW). Nearly all of the pending 
applications for original licenses are for conventional hydro projects 
at existing dams; one is for a pumped storage project and three are for 
hydrokinetic projects.
    There has also been a sharp rise in the number of preliminary 
permits the Commission has issued in recent years, including 
competition for permits. Of the nearly 400 permits that are in effect 
(representing about 49,600 MW), 25 are for conventional projects (3,500 
MW), 90 are for hydrokinetic projects (10,200 MW), and 48 are for 
pumped storage projects (35,900 MW). There are also over 300 permit 
applications pending which could represent a significant amount of 
potential additional capacity. I note, however, that the capacity 
numbers for projects in the permit stage are not firm, because there is 
competition for the permit at many sites and only one entity will 
receive the permit; and if an application is ultimately filed, the 
capacity of the proposed project often changes.
    Question 2. S. 629 opens federal lands to the conduit ``exemption'' 
licensing process for the first time. In response to concerns raised by 
environmental groups, the legislation authorizes the federal land 
management agencies to impose conditions on proposed projects on their 
lands. The Fish and Wildlife Service and the National Marine Fisheries 
Service already have this authority. In your testimony before the 
Committee, you noted some concern with this authorization of additional 
mandatory conditioning authority because it may slow down the licensing 
process. Please elaborate on this point.
    Answer. In authorizing the Commission to issue conduit exemptions--
and subsequently exemptions to small project of 5 megawatts or less--
Congress provided in section 30(c) of the Federal Power Act that 
exemptions must include fish and wildlife conditions imposed by federal 
and state resource agencies. In our experience, this process has worked 
reasonably well, with little delay and few conflicts arising regarding 
conditions for exemptions. While I recognize the valid interest that 
federal land management agencies have in protecting the lands entrusted 
to their supervision, I also have some concern that the more entities 
that have mandatory conditioning authority under the Federal Power Act 
or other Federal statutes, the more likely it is that the exemption 
process will become more cumbersome and slow, and that conditions will 
be imposed that make projects infeasible. This concern could be to some 
extent ameliorated if Congress were to make clear that the Commission 
can establish enforceable schedules for processing hydropower cases.
    Question 3. Please elaborate on how assembling and sharing 
environmental information may speed up the advance of the marine 
hydrokinetic industry. How expensive is the permitting process at 
present for individual projects and how long does it take to complete 
baseline studies? In 2007 there were discussions regarding funding a 
generic environmental impact statement for hydrokinetic devices. This 
proposal somewhat replaces that idea. Please comment on its ability to 
expedite the licensing of such devices.
    Answer. Because marine hydrokinetic technology is relatively new 
and the sites for proposed projects--particularly offshore--are not 
well-studied, it is necessary to develop the information needed to 
understand the potential environmental impacts of these projects, as 
well as technological issues. To the extent that this information can 
be developed and shared in a centralized manner, rather than requiring 
each applicant to fund and perform its own studies, time, effort, and 
money can be saved. Some of the pioneer developers in the marine 
hydrokinetic industry consider their collected environmental data to be 
proprietary, due to the high costs that they incur in collecting them. 
Aiding to fund some of the costs of these studies would alleviate some 
of the economic burden of these pioneer developers and promote 
information-sharing. Also, the assembling and sharing of information 
would facilitate efficient government oversight of the development of 
the industry by expanding the baseline knowledge of environmental 
effects and monitoring methods. Further, a greater understanding of the 
environmental effects and monitoring methods related to marine 
hydrokinetics could foster public acceptance and so help to advance the 
industry. The expense of the application process varies too widely to 
give a fixed number, but the three developers who have filed 
applications for hydrokinetic projects reported costs of, 
approximately, $1 million, $2 million and $3 million. Because these 
were among the first hydrokinetic projects and involved some testing of 
equipment, I cannot say whether these figures will be predictive of 
costs in future cases. From the Commission's limited experience to date 
with marine hydrokinetic project proposals, the baseline studies 
necessary for project authorization typically take one to two years.
    Question 4. S. 629 calls on FERC to conduct a series of regional 
workshops for both conduit and small hydropower projects. You noted in 
your testimony that the Commission has already done local outreach on 
small hydro projects. Given the Commission's previous work in this 
area, do you think additional regional public workshops for small hydro 
projects are unnecessary?
    Answer. As I discussed in my testimony, the Commission has 
conducted extensive outreach with respect to small hydro and, based on 
what we heard, has set up a number of web-based tools, including 
``fill-in-the-blank'' applications, to provide information to those 
interested in developing small hydro projects and to make the 
application process easier. To date, we have conducted a number of 
outreach sessions, attended by over 100 potential small hydro 
developers, as well as by other stakeholders and we are planning more 
over the next six months. Given this outreach and regulatory effort, I 
am not certain that additional workshops are necessary. However, we are 
certainly prepared to conduct them, should Congress deem it 
appropriate.
    Question 5. Please describe the recent Memorandum of Understanding 
the Commission entered into with the State of Colorado, and please 
specifically describe the simple application process for certain types 
of micro-conduit hydropower projects.
    Answer. The Memorandum of Understanding (MOU) between the 
Commission and the State of Colorado established simplified procedures 
for developing small-scale hydropower projects in Colorado. Under the 
MOU, Colorado has developed a pilot program to assist developers in 
consulting with the relevant agencies, developing applications for 
small projects, and prescreening those applications for compliance with 
the Commission's regulations. In turn, Commission staff has agreed to 
waive certain consultation requirements (when all relevant agencies 
agree to do so), combine public noticing requirements, and shorten 
comment periods, in order to expedite the licensing of these projects. 
The MOU states that Colorado's pilot program will continue until 20 
projects have completed the program, at which point Colorado and FERC 
will evaluate the effectiveness of the pilot program. Should the 
procedures or some aspects thereof prove successful, both Colorado and 
FERC intend that these approaches be continued. Beginning in May 2011, 
Colorado proposes to submit three conduit exemption applications in a 
six-month period. This approach shows great promise for expediting 
action on small hydropower projects and we look forward to working with 
Colorado.
      Responses of Jeff C. Wright to Questions From Senator Wyden
    Question 1. Micro-hydropower conduit projects application 
requirements--We hear from small conduit developers in Oregon that the 
Commission has made its conduit exemption application process more 
user-friendly, with changes like the Commission's new template. 
However, we also hear that more can be done. Farmers and small 
developers assert that particular aspects of the application are 
burdensome and unnecessary for no-impact micro-hydropower projects. For 
example, FERC's requirement of three copies of surveyor-stamped maps 
and drawings from three different angles have been cited as adding to 
the cost of these small, no-impact projects. As a result, developers 
have cited costs to move through the FERC conduit exemption process 
that range from $6,000 to $8,000 in a good case, and often up to 
$10,000 or $20,000. For very small projects, these costs can become 
prohibitive. For example, a typical 5 kw irrigation pipe turbine may 
generate $300 of electricity a month during the irrigation season, or 
$1,500 a year. What additional actions could FERC take to reduce 
application requirements for no-impact micro-hydropower projects, such 
as projects involving municipal pressure reduction valves and existing 
irrigation conveyances?
    Answer. The Commission is prepared to consider any suggestions for 
ways to make the small hydro process simpler and less expensive. This 
may be particularly fruitful for conduit projects, with respect to 
which the Commission already has issued a categorical exemption from 
NEPA review, based on the premise that construction of the conduit on 
which such a project is located has already been approved by a state or 
federal agency, which has examined and required appropriate mitigation 
for the environmental impacts of that action. It is more difficult to 
develop similar, generally-applicable steps for non-conduit small 
hydro, because the small size of an in-stream project will not always 
guarantee minor environmental impacts (for example, a 200-kilowatt 
project could be located on a stretch of river where there are 
endangered species or important spawning grounds). However, the ``pre-
approval'' approach being taken by the State of Colorado holds great 
promise. Where state and federal resource agencies, along with other 
stakeholders, have been able to agree that a proposed project has few 
environmental impacts, the Commission has already been able, under its 
existing processes, to authorize the project very quickly, with little, 
if any, additional burden on the applicant. As I discussed in response 
to a question from Senator Murkowski, giving the Commission the ability 
to set enforceable schedules in hydropower licensing proceedings would 
help ensure that these cases are resolved in a timely manner. With 
respect to the surveys and maps that you mention, the requested data is 
needed so that the Commission can plot, using the global information 
system (GIS), the precise locations of projects it authorizes. However, 
we would certainly be willing to consider whether there are less 
expensive ways to develop this important information.
    Question 2. Micro-hydropower outreach requirements--Another concern 
raised by Oregon developers of micro-hydropower projects is the 
significant outreach required to consult with stakeholders. The same 5 
kw turbine in a rural Oregon irrigation pipe requires outreach to over 
a dozen different agencies, agencies that invariably have no concerns 
with the project. Why can't the Commission establish a process whereby 
Commission staff consolidates outreach notifications for micro-
hydropower projects by maintaining lists of stakeholders in various 
states, and then once a month Commission staff could send a batched 
notice out of any pending micro-hydropower projects? Is it really 
necessary to maintain the typical three-stage consultation process for 
this class of projects?
    Answer. I agree that it makes sense to simplify the process for the 
consideration of micro-hydropower projects as much as possible. The 
Federal Power Act establishes a regulatory scheme that is premised on 
notice to the public and on shared decisionmaking, in which agencies 
other than the Commission have statutory authority to be consulted and 
to impose conditions with respect to proposed hydropower projects. It 
is not possible for the Commission to predict in advance whether local, 
state, and federal agencies will express concerns about, or decide to 
impose conditions on, any given project. Moreover, the Commission 
cannot waive statutory notice requirements or authority that Congress 
has given to other entities. If, however, those entities--particularly 
the federal and state resource agencies--show a willingness to waive 
some or all of the consultation and conditioning process or to sign off 
in advance on certain types of projects, it might be possible for the 
Commission to establish an expedited process, such as that which you 
suggest. We are willing to consult on batches of similar projects, and 
have already done so in some instances.
                                 ______
                                 
   Responses of Michael E. Webber to Questions From Senator Bingaman
    Question 1. Your testimony points out that this issue is not just a 
western issue, but that water shortages in other areas of our country 
may also impact power generation. For example, you note that during the 
drought in the southeastern U.S. in 2008, nuclear power plants were 
within days or weeks of shutting down because of limited water 
supplies. How can a greater understanding of the connection between 
energy sources and water supplies help to avoid those types of 
conflicts?
    Answer. The relationship between water and energy is a global 
issue, though some regions of the world, such as the western U.S., feel 
the tensions in this relationship very acutely. A greater understanding 
of the connection between energy sources and water supplies can help 
avoid those types of conflicts by: 1) integrating decision-making such 
that water planners and energy planners work together, 2) pursuing 
synergistic R&D programs (for example, to develop energy-lean sources 
of water and water-lean sources of energy), and 3) building resiliency 
into our energy system so that it is less vulnerable to water scarcity 
and building resiliency into our water system so that it is less 
vulnerable to energy shortages.
    Question 2. Your testimony highlights the need to investigate the 
water supply needs associated with electricity generation AND 
transportation fuels, which our legislation seeks to do. You have also 
indicated that a ``switch from gasoline to electric vehicles or 
biofuels is a strategic decision to switch our dependence from foreign 
oil to domestic water''. Can you please elaborate on your thoughts 
there?
    Answer. Today, petroleum-based fuels supply more than 95% of our 
energy for transportation. Because of converging desires to switch to 
lower-carbon, less volatile, and domestic forms of transportation 
fuels, a variety of policy mechanisms support the displacement of 
imported petroleum with electricity, biofuels, unconventional fossil 
fuels, hydrogen, and natural gas. In general, gasoline and diesel are 
relatively water-lean to produce. By contrast, most of the alternative 
transportation fuels-in particular biofuels, unconventional fossil 
fuels, some forms of electricity, and some forms of hydrogen-are more 
water-intensive. Thus, by switching from imported petroleum to these 
domestic options, we are essentially substituting the use of domestic 
water for petroleum. While this tradeoff has important strategic 
benefits, it can be problematic from a water resources perspective.
    Question 3. As someone who has been thinking about the connection 
between energy and water for a longer time than most of us, do you have 
any recommendations for how to get out ahead of this issue before we 
are dealing with a crisis situation such as shutting down power plants?
    Answer. I recommend that the federal government use its convening 
power to bring together leading experts in national labs, academia and 
industry, possibly through the National Academies or some similar 
institution, to develop an energy-water roadmap. This roadmap could 
serve policymakers in many ways, including the following: identifying 
cross-sectoral vulnerabilities, creating a geographically-resolved 
inventory of energywater relationships nationwide, laying out a 
strategic research plan for relevant technical innovation, and making 
recommendations for federal, state and local policymakers. In addition, 
it would be valuable for the federal government to gather data that are 
lacking. Because many water and energy systems span several states, it 
is difficult for any one state agency to gather all the pertinent 
information that planners need.
    Question 4. Many of us are familiar with the concept of ``peak 
oil''. Can you please elaborate on the concept of ``peak water''?
    Answer. ``Peak Water'' is a reference to the concept of declining 
productions rates for freshwater. In contrast with ``Peak oil,'' which 
refers to a finite resource (petroleum), water is very abundant 
globally. However, most of that water is available in a form, location, 
or time of year that is inconvenient or unusable for many people. 
Consequently, significant amounts of energy are invested to move that 
water in place, time and form (through pipelines, storage reservoirs 
and treatment plants) such that it is clean, potable, and available 
when and where we want it. If energy sources become constrained or 
prohibitively expensive, then clean, piped water might also become 
constrained or prohibitively expensive in certain locations or 
particular times of year. Consequently, ``Peak Energy'' could trigger a 
decline in production of freshwater.
   Responses of Michael E. Webber to Questions From Senator Murkowski
    Question 1. Please describe how the United States can satisfy all 
the expected water needs of newly proposed power plants, including 
concentrated solar, in arid and semi-arid regions.
    Answer. Traditional steam-electric (or thermoelectric) power 
plants, including many of those powered by nuclear, coal, biomass, 
natural gas, or concentrated solar power, use extensive amounts of 
water for cooling. Locating these power plants in arid or semi-arid 
regions, where water resources are scarce, exposes the plants to the 
risk that they will compete with other municipal, agricultural, 
industrial or ecological needs for that water. Ensuring that the water 
needs will be met by the power plants will be challenging if 
conventional cooling technologies and freshwater sources are used. 
However, novel dry-cooling and wet-dry-hybrid cooling systems require 
much less water for power plants, and therefore might be a promising 
option. For example, some new concentrated solar power systems that use 
dry cooling have been proposed in Nevada. While these types of systems 
significantly reduce the amount of water that is needed by power 
plants, they have a tradeoff of 1) requiring more capital up front to 
build the cooling systems and 2) reducing the operating efficiency of 
the power plant. Other options include the use of reclaimed water or 
saline water for cooling, or building power plants with water-lean 
combinations of fuels and technologies, such as solar PV, wind 
turbines, and natural gas simple cycle combustion turbines.
    Question 2. Does your research show any regions in the country that 
are not expecting a significant water problem over the next decade?
    Answer. Generally speaking, the northern latitudes of the U.S. have 
more abundant sources of water available. However, even ``water-rich'' 
regions of the country can be exposed to periods of drought. In 
addition, water abundance can lead to flooding, which also puts the 
energy sector at risk. Thus, the risk of water problems are widespread.
    Question 3. What are the most significant data gaps inhibiting our 
understanding of the current and potential future demand for water by 
the energy sector? Does you research indicate that currently funded 
efforts to improve federal water and energy data address these gaps 
within the next few years, or will key data remain uncollected?
    Answer. The current funding for data collection at the energy-water 
nexus is insufficient to provide adequate information to policy makers 
for informed decision making. There are many data gaps, a few of which 
are listed here: 1) data about water withdrawals, consumptions, 
diversions, and returns by sector, county, and time of year are 
lacking, 2) data about the energy use by the water sector (in 
particular by water treatment plants, wastewater treatment plants, 
residential sector, commercial sector, agriculture and industry) are 
lacking, and 3) water flows (withdrawals, evapotranspiration, returns) 
for agriculture based on crop, time of year and location are unknown.
    Question 4. What are the benefits and the opportunity cost to the 
economy and society of the energy sector's growing water use?
    Answer. The energy sector's growing water use, primarily for 
irrigating biofuels crops, provides a benefit of displacing some 
petroleum use, but introduces a risk of competition for water 
resources. By displacing petroleum, we reduce our exposure to oil price 
volatility tied to geopolitical events. However, we exchange those 
risks for water-related risks driven by climate and weather systems. 
These risks can show up in the form of higher energy prices, which can 
impact economic growth. Developing more energy-efficient water systems 
and more water-efficient energy systems can be economically beneficial 
because they mitigate the downside risks. Building more energy-
intensive water systems and more water-intensive energy systems 
exacerbates the exposure to risk.
    Question 5. Options to reducing freshwater use by the energy sector 
include using impaired water sources or increasing reuse of water 
within the energy sector. What are the most significant barriers to 
using impaired water to meet energy sector water demands? For instance, 
what are the barriers to using saline water for power plant cooling, 
and is currently funded research anticipated to significantly reduce 
this barrier?
    Answer. Using reclaimed water or saline water at power plants 
reduces the need for freshwater in the power sector and can save on 
water costs for plant operators. Such systems have been built. For 
example the Palo Verde nuclear power plant in Arizona, and the Sand 
Hill natural gas power plant in Austin, Texas both use reclaimed water. 
And, coastal nuclear power plants use saline water. However, these 
water sources can be more corrosive or cause mineral build-up and thus 
might require more expensive piping and heat exchanger materials and 
additional maintenance. Furthermore, in some cases the use of reclaimed 
water requires permitting approval from relevant agencies and 
significant up-front capital-intensive infrastructure investments to 
connect reclaimed water sources from wastewater treatment plants to the 
electricity stations. Supporting R&D in the areas of demineralizing 
water, creating novel materials that have improved fouling-resistance, 
and improving the efficiency of cooling systems would be worthwhile.
    Question 6. Please describe the current research being undertaken 
to understand the water intensity for MWh of electricity for different 
fuels and different generation technologies.
    Answer. A variety of research groups, including mine at the 
University of Texas at Austin, are studying the water intensity of 
power plants based on fuels, generation technologies, and cooling 
technologies. The Department of Energy's (DoE) National Renewable 
Energy Laboratory (NREL) released a report on the topic in Spring 2011. 
While the basic relationship of water for power plants based on fuel 
type, generation technology and cooling system is known, additional 
research to understand the relationship under varying climatic 
conditions and usage patterns is warranted.
    Question 7. How have other countries integrated freshwater concerns 
into efforts to promote domestic and clean energies? What are some ways 
in which water quantity and quality impacts have been integrated into 
clean energy and biofuel policies internationally?
    Answer. In general, most countries globally fail to properly 
integrate energy and water policymaking. Thus, the water quantity and 
quality impacts of biofuels and other energy options have not been 
integrated broadly into international energy policies. Israel, which 
has scarce resources of both energy and water, seems to have 
sophisticated thinking in terms of integrating water and energy 
policymaking. Many countries have not addressed the issues directly, 
and are at risk of confronting serious shortages in one commodity or 
the other.
    Question 8. Please describe the impact on energy use with stricter 
treatment standards for water and wastewater. Are there any energy 
related tradeoffs that may occur with stricter treatment standards?
    Answer. In general, stricter water treatment standards correlate 
with higher energy intensity of the water and wastewater treatment 
plants. That is, raising water quality standards tends to cause higher 
energy consumption for water treatment. At the same time, treatment 
plants improve their efficiency year-over-year. The consequence of 
these two competing effects (tighter standards driving energy 
consumption up and improved efficiency driving energy consumption down) 
is to roughly cancel each other out.
                                 ______
                                 
      Responses of John Seebach to Questions From Senator Bingaman
    Question 1.1 Your testimony describes a ``basin-scale'' approach to 
hydropower development--can you please elaborate on what that means and 
how it is different that what the normal practice is today?
    Answer. When the operation, management, and environmental impacts 
of multiple facilities located on the same river basin are addressed in 
a coordinated manner, it is possible to get an increase in generation 
and significant improvements in environmental quality. The Federal 
Power Act requires that the Federal Energy Regulatory Commission (FERC) 
balance all of the competing interests that are potentially affected by 
hydropower development in order that the American public would receive 
the greatest amount of benefit from its waterways. FERC must ensure 
that its licenses for hydropower projects:

          ``shall be such as in the judgment of the Commission will be 
        best adapted to a comprehensive plan for improving or 
        developing a waterway or waterways for the use or benefit of 
        interstate or foreign commerce, for the improvement and 
        utilization of water-power development, for the adequate 
        protection, mitigation, and enhancement of fish and wildlife 
        (including related spawning grounds and habitat), and for other 
        beneficial public uses, including irrigation, flood control, 
        water supply, and recreational and other purposes'' 16 U.S.C. 
        Sec. 803(a)(1).

    While the Federal Power Act envisioned that FERC would prepare 
comprehensive plans on a broad ``waterway'' scale (and the Federal 
Power Commission--FERC's predecessor--did in fact prepare a handful of 
such plans in the 1920s), FERC interprets its comprehensive planning 
responsibility to mean its comprehensive analysis of an individual 
project. As a result, FERC generally treats a basin as the sum of its 
parts rather than a coherent whole. Each individual hydropower project 
in a river basin is analyzed separately on its own terms, the subject 
of its own relatively narrow comprehensive plan. ``Waterway'' simply 
refers to the stretch of river in the immediate vicinity of the 
project. The Commission does not perform a larger-scale analysis to 
determine how the individual pieces could be fit together in order to 
maximize the public interest.
    This narrow, project-level approach to planning leads to missed 
opportunities. Individual hydropower projects do not exist in a vacuum. 
The decision to construct and operate a hydropower dam requires a 
number of tradeoffs between multiple beneficial uses of a waterway: 
energy, the health of commercial fisheries, water quality, water 
allocation, power generation, flood control, and recreation. In the 
context of a single dam, it can be difficult to strike an equitable 
balance. However, when one steps back and consider an entire river 
basin, considering multiple dams on a connected set of rivers and 
tributaries, opportunities to achieve a much better balance begin to 
emerge.
    For instance, consider Maine's Penobscot River basin. For decades, 
a series of dams in this basin blocked access to high-quality habitat 
and all but wiped out the river's valuable Alewife, Atlantic Salmon, 
and Shad fisheries. When these projects were relicensed by FERC, 
parties examined the entire basin and came up with a plan that would 
restore more than 1000 miles of habitat--and millions of fish--by 
removing two dams, bypassing a third with a nature-like fishway, and 
installing fishways at others. This plan also allows the remaining dams 
to generate more power, concentrating environmental restoration 
measures where they are most needed and concentrating power production 
where it will have the least impact on the basin as a whole. Had the 
Penobscot River been considered as a whole rather than the sum of its 
parts before any of its dams were built, this is likely how it would 
have been developed in the first place.
    The Penobscot agreement demonstrates how the coordinated review and 
planning of hydropower in a basin can result in more power and better 
environmental outcomes. Unfortunately, the unique circumstances on the 
Penobscot--where all of the dams were owned by a single entity and 
subject to the jurisdiction of a single agency--are the exception 
rather than the rule. There is an urgent need for the type of basin-
scale planning and coordination of hydropower projects that led to the 
Penobscot agreement.
    The ``Integrated Basin Scale Opportunity Assessments'' initiative 
in the DOE/DOI/Corps hydropower MOU signed in 2010 is an excellent 
first step. This pilot program will develop methods for such planning 
and test them in several pilot basins to see if additional 
opportunities for generation and environmental restoration will emerge. 
We encourage Congress to follow this work closely and, should it be 
successful, direct FERC and the federal hydropower operators to 
cooperate to address multiple projects in a coordinated fashion to 
increase power generation and environmental outcomes at the basin--not 
project--scale. For instance, when FERC is licensing a new project or 
relicensing an existing project in a basin where the Corps or the 
Bureau also operate hydropower projects, those agencies should 
participate as cooperating agencies in FERC's analysis and use that 
opportunity to review the operations of their own projects in 
coordination with the FERC-licensed projects in order to maximize power 
production and environmental performance.
    Question 1.2 With regard to S. 630, the Marine and Hydrokinetic 
Renewable Energy Promotion Act, you emphasize the need to continue to 
collect data regarding the environmental impacts associated with the 
technologies that are emerging for hydrokinetic energy development. 
What are some of the potential impacts we should be concerned about?
    Answer. A number of issues have been identified in individual 
licensing proceedings for these projects. These include (but are not 
limited to):

   Aquatic Species' interaction with devices and anchoring 
        systems (including Marine mammals, sharks, fish, etc.). 
        Potential risks include avoidance, behavior change, collision, 
        entrainment, or mortality.
   Effects due to the removal of energy from waves and 
        currents. Potential risks include altered sediment transport 
        and changes in flow velocity, tidal exchange, and water 
        quality.
   Effects of noise, vibration, lighting, EMF from transmission 
        cables, and releases of chemicals (lubricants, oils, etc.) on 
        aquatic and avian species.
   Effects of exclusion / restriction zones on recreation, 
        navigation, commercial fishing, etc.

    For a much more detailed discussion of some of these impacts, we 
recommend the following excellent documents:

   The U.S. Department of Energy's Wind and Hydropower 
        Technologies Program's December 2009 ``Report to Congress on 
        the Potential Environmental Effects of Marine and Hydrokinetic 
        Energy Technologies.'' (http://www1.eere.energy.gov/
        windandhydro/pdfs/doe__eisa_633b.pdf)
   The West Coast Framework's sections on environmental 
        impacts: (http://www.advancedh2opower.com/framework/
        Hydrokinetics%20Knowledge%20Base/Environmental%20Effects.aspx)

    Question 1.3 You indicate there may be some room for improvement 
with respect to the current FERC application processes. What are some 
suggestions you might make for applicants as they move through the 
permitting process? For example, your testimony suggests that the 
process works most efficiently when applicants work in advance with 
resource agencies and other stakeholders--how are you encouraging 
applicants to do that?
    Answer. Over the past several years, we have heard from a number of 
potential developers of new hydropower projects. Many of these 
developers are responsible and committed to working with stakeholders 
to develop only those projects that can be brought online in an 
environmentally sensitive manner. Others do not share this ethic, and 
appear determined to withhold information from stakeholders, agencies, 
and regulators in order to limit their responsibility for mitigating 
environmental impacts. Still others (perhaps the largest group) simply 
lack experience with developing hydropower projects. We encourage all 
developers to emulate the first group.
    First, developers should engage as soon as possible with key agency 
staff and stakeholders that are likely to take an interest in their 
proposed projects. Early and extensive public outreach is critical in 
ensuring the success of a hydropower project, and too often American 
Rivers or its partners learn about proposed hydropower projects only 
through formal notice of a preliminary permit or license application. 
Developers that approach stakeholders first and engage them 
constructively throughout the licensing process are more likely to meet 
with success.
    Second, if this consultation reveals that a site has particularly 
sensitive resource issues, then the developer should seriously consider 
finding a site that is not similarly constrained. It may be possible to 
develop a good project at a site with sensitive resource issues, but it 
will take longer and cost more.
    Third, developers should work with agencies and stakeholders to 
address information needs and potential resource issues, and then make 
a good-faith effort to provide requested information in a timely 
manner. Once resource issues are quantified, the developer should work 
with agencies and stakeholders to develop mutually acceptable 
solutions. Again, time spent fighting over whether or not information 
is needed or a proposed environmental mitigation measure is necessary 
will only increase the costs and time associated with licensing.
    FERC staff can also play a role in improving the process. First, 
FERC should regularly update its statelevel or regional mailing lists 
of stakeholders and agency staff that have previously expressed 
interest in hydropower licensings and require potential license 
applicants to demonstrate that they have made a good-faith effort to 
contact those individuals or organizations early in the process.
    Second, FERC could do more to reach out directly to new developers 
(either through workshops or individually) to guide them through the 
process. FERC staff have done a tremendous job of improving the quality 
of this outreach and education over the past several years, but they 
are constrained by resources and the record number of new applications 
that they are being asked to process. If FERC were given the resources 
necessary to assign one or two full time staff members to developer 
outreach, they could significantly improve the quality of new license 
applications.
    Third, FERC must cooperate better with its sister federal and state 
agencies that have a defined role in recommending license conditions to 
protect public resources, as well as agencies that have independent 
responsibilities under the Clean Water Act or the Endangered Species 
Act. These agencies need reliable, accurate scientific information in 
order to fulfill their responsibilities. Some applicants are unwilling 
to provide this information because they are reluctant to incur the 
cost of studies, especially if that information may require them to do 
more to mitigate project impacts. Unlike FERC, most resource agencies 
lack the tools to compel applicants to provide this information. The 
resulting stalemate is a perennial source of delay in licensing.
    While FERC staff have the authority to order applicants to provide 
this information, they often choose not to do so, arguing that the 
information is not necessary for FERC's licensing decision. This may be 
technically true--FERC may not consider the information necessary for 
its own analysis--but the reality is that FERC cannot issue a license 
until it has received a Water Quality Certification from the state and 
all required ESA consultation is complete. FERC Staff may be able to 
work with agencies to narrow the scope of the necessary information, 
but ultimately those agencies must decide what information is necessary 
for them to act. FERC should improve its cooperation with other federal 
and state agencies, especially where those agencies have identified a 
need for information that will enable them to fulfill their own 
responsibilities and clear the path for FERC to issue a license. FERC 
must bear the responsibility for delays that result when it fails to 
support other agencies' stated information needs.
     Responses of John Seebach to Questions From Senator Murkowski
    Question 2.1 Although your organization is generally opposed to the 
construction of new dam infrastructure, the lower 48 states are in a 
different situation than Alaska. Alaska has both tremendous hydropower 
potential and a desire to get its villages off of diesel power. What 
are your thoughts on the construction of new conventional hydropower 
facilities in Alaska?
    Answer. American Rivers is generally opposed to the construction of 
new dams, but we are not categorically opposed: we approach each 
proposal with an open mind. Our decision to support or oppose any given 
project is based on the unique facts and circumstances of the proposal 
and the natural resources that would be affected. The tradeoffs that 
would be involved in developing a new hydropower project in Alaska are 
the same set of tradeoffs that must be addressed in evaluating any 
hydropower project that is being proposed anywhere in the world: the 
power from a given project must be weighed alongside the economic, 
environmental, and social costs associated with developing it. Alaska 
is different from the lower 48 states in a number of ways, and those 
differences will certainly inform the way that these tradeoffs are 
calculated. But we cannot say--especially in the hypothetical--how 
these differences might affect a decision to build or not build an 
individual dam. Each river and each proposed dam is different.
    While each project is different, the process for developing then 
should not be. The decision to build a project or not should be a fair 
one. American Rivers has advocated for years that decisions about 
hydropower dam operations should be based on an open public process 
that features the highest quality scientific information, a robust 
analysis of alternatives, and fully transparent decisionmaking. 
Proposals to build new conventional hydropower projects should be held 
to an equally high standard, and if a new project is deemed by 
regulators to be in the public interest, then its ecological and social 
impacts must be accurately quantified and fully mitigated.
    Question 2.2 Section 9 of S. 630, the Marine and Hydrokinetic bill, 
is a provision intended to clarify that the Renewable Energy Deployment 
Grant Program I authored in the 2007 energy bill is open to all states 
and not limited to only Alaskan utilities. I believe you are concerned 
that this provision may be used to help fund new dam construction, is 
that correct? Do you have any proposals to modify this provision 
further in a way that your organization may find acceptable? Do you 
support the requirement that aid be prioritized to areas where 
electricity costs exceed 125% of the national average or where it will 
be used to replace fossil fuel projects?
    Answer. Yes, our primary concern was with the provision being used 
to fund new dam construction with Federal tax dollars. Hydropower dams 
are unique among renewable energy projects in terms of the scale of 
environmental damage that they can cause, and we do not support federal 
funding for the construction of new dams. Section 9 of S. 630 expands 
the existing provision both in terms of geographic scope and the type 
of hydropower projects that could qualify: instead of being limited to 
small hydroelectric projects in Alaska, the provision would expand the 
grant program to large or small hydropower dams constructed anywhere.
    As we wrote in our testimony, we understand that the intent behind 
this section was to encourage the development of new sources of 
renewable energy in remote communities that rely primarily on expensive 
sources of fossil-fuel fired generation for their electricity, and we 
support this goal. Assuming that the goal of the program in Section 9 
of S. 630 is to help remote communities transition away from expensive 
and inefficient fossil fuel projects, the following recommendations may 
help the program to achieve its goal in an environmentally sustainable 
manner.
    First, if any federal funding is to be used to construct non-
federal hydropower dams, it should only be limited to exceptional cases 
where the construction of a dam is truly a last resort and the only 
feasible alternative to fossil-fuel burning generation. We recommend 
the following changes to the program in order help ensure that this is 
the case:

   Section 9 needs to clarify that the grant program should not 
        be used to help utilities comply with state or municipal 
        Renewable Energy Standards. The federal taxpayer should not be 
        asked to foot the bill for utilities' compliance with 
        applicable state or local laws.
   Section 9 should also clarify that all new energy generation 
        will be used locally instead of exported.
   As it is currently written, the program would prioritize 
        grants to two kinds of utilities: those with high energy costs 
        or those that intend to replace an existing fossil fuel 
        project. The goals of Section 9 would be better met if 
        utilities were required to meet both of these criteria instead 
        of one or the other. To demonstrate actual replacement of 
        fossil fuel generation, all recipients must be required to 
        demonstrate that a corresponding amount of fossil-fuel fired 
        capacity is actually taken offline as the result of the grant. 
        This would ensure that the aid goes only to those communities 
        that truly need of it.
   The requirement that grant funds be prioritized to 
        communities meeting the above criteria is not sufficient to 
        ensure that the program is used to accomplish its goal. The 
        program must be limited to communities that meet these 
        criteria.

    Second, we recommend that the definition of eligible hydropower be 
restricted so that any new hydropower is least likely to cause new 
environmental damage. While American Rivers cannot support any federal 
funding for new dam construction, the following types of hydropower may 
help to minimize the environmental impacts of the program:

   Efficiency upgrades, hydropower capacity added to existing 
        upgrades, conduit hydropower, and marine and hydrokinetic 
        energy should be eligible for grants.
   New conventional hydropower construction should be limited 
        to projects where all essential project works (dams, 
        powerhouses, etc.) are located above a natural fall line above 
        which no ocean going fish such as salmon may migrate. New 
        conventional projects should not create a significant new 
        bypassed or dewatered reach of river, and should not 
        significantly modify natural flows.
                                 ______
                                 
      Responses of Sean O'Neill to Questions From Senator Bingaman
    Question 1. The testimony we have heard today indicates that the 
technology associated with hydrokinetic energy is still emerging and 
that further studies of the environmental impacts of certain projects 
may still be necessary. I was interested to note that you indicated 
that some current testing indicates that fish and other animals may be 
able to ``co-exist nicely'' with certain types of devices. Can you give 
us a little more explanation of what technologies have been found to 
work well?
    Answer. Since 2008, the U.S. Department of Energy has supported 
several studies with funding from its Water Power R&D program on 
potential environmental impacts of pre-commercial marine and 
hydrokinetic (MHK) renewable energy devices. These studies are based on 
hypothetical evidence of environmental effects with the exception of a 
few pilot demonstrations, to be discussed below. OREC has urged that 
our limited federal dollars are best spent studying actual 
environmental effects of pilot scale projects while in the water.
    Great care has been taken in the development of marine and 
hydrokinetic technologies to limit any potential negative environmental 
effects of these devices. The limited experience to date with deployed 
pilot projects has provided anecdotal evidence of the environmentally 
benign nature of these wave and tidal energy convertors.
    For example, the Ocean Power Technologies wave power project in 
Hawaii underwent an extensive environmental assessment by an 
independent environmental firm in accordance with the National 
Environment Policy Act (NEPA). This study featured evaluation of 
potential effects on: the seabed, fish and benthic organisms, mammals, 
vegetation, and water quality. The project study resulted in a finding 
of no significant impact (FONSI), which is the highest such 
environmental rating.
    Regarding a notable tidal energy project, Marine Current Turbines 
in Ireland submitted their final Environmental Impact Study to the 
regulatory authority, the Environment and Heritage Service (EHS) in 
Northern Ireland in June 2005. The license for the temporary 
installation for the SeaGen tidal system for a five-year duration was 
first issued in December 2005, revised in February 2007 and again in 
February 2008.
    Pre-installation environmental monitoring commenced in May 2004. A 
baseline report was completed and submitted to EHS in August 2006. The 
environmental impact of SeaGen will be continuously monitored by an 
independent science team throughout the licensed five-year installation 
period.
    It took SeaGen from July 2008 until March of this year to generate 
the first million kWh largely due to license restrictions placed on its 
operation to check that SeaGen did not have any adverse effect on 
marine life. The restrictions were lifted in March by the regulating 
authority and 24/7 operation has commenced.
    Another example here in the United States involves Ocean Renewable 
Power Company (ORPC), based in Maine. ORPC initiated a project during 
the summer of 2009 when the University of Maine received funding from 
the U.S. Department of Energy to conduct research associated with the 
development of tidal power. A primary focus of the research was to 
develop an understanding of how fish would be affected by tidal power 
development. At the time, ORPC had initiated planning for an in-stream 
tidal power deployment in the Cobscook and Passamaquoddy Bays of 
eastern Maine.
    Data collected thus far using industry-standard fish monitoring 
equipment and study protocols note different behavioral responses to 
these tidal devices. Individual fish have responded to the devices with 
avoidance and some moved through the device and continued to move with 
the water current. However, data analysis is not complete enough to 
determine if these will be the only interactions at a tidal power 
device site.
    To date, there has been no known marine mammal or fisheries impact 
as a result of any MHK device installation. Once the many oversight 
agencies allow for more timely permitting, the industry can deploy 
these devices to demonstrate predicted benign environmental effects, 
and employ adaptive management where needed.
    Question 2. It appears that other countries may be ahead of us in 
terms of hydrokinetic research capabilities. How is your organization 
working to build off of the expertise that exists in other countries 
and what suggestions do you have for how to improve our countries 
capabilities?
    Answer. The development of a substantial marine hydrokinetic 
industry in the U.S. could drive billions of dollars of investment into 
heavy industrial and maritime sectors, as well as in advanced 
electrical systems and materials common to many renewable technologies. 
Federal investments would stimulate private funds in the construction, 
manufacturing, engineering and environmental science sectors. The 
further development of each industry has the potential to employ a 
significant skilled workforce.
    Unfortunately, the U.S. is falling behind in the race to capture 
the rich energy potential of our oceans. Many countries, particularly 
in Europe, recognize the potential of wave and tidal energy as part of 
comprehensive renewable energy policy and have deployed viable, 
operating, electricity generating projects using the emission-free 
power of ocean waves, currents, tidal forces. The U.S. is just 
beginning to acknowledge the importance of these technologies.
    A 2009 report conducted by the U.S. Navy found that the U.S. has 
lost world leadership in ocean wave and tidal energy technology 
development and deployment. The report finds that the U.K. is at least 
five years (or more) ahead of the U.S. government-led efforts with 
support for renewable ocean power at approximately $900 million vs. $50 
million in the U.S.
    For example, the U.K. has a head start on the U.S. in MHK 
technology development, testing and deployment. They can permit 
projects within six months and have accelerated decision-making of 
marine renewable siting protocols. The U.K. also has an aggressive 
target of 2GW of marine renewable energy in U.K. waters by 2020. While 
Europe has nine open water marine energy testing centers, we currently 
have none available to the industry here in the U.S.
    Congressional support has increased for the Department of Energy's 
MHK activities since they were first authorized in the Energy Policy 
Act of 2005 and the Energy Independence and Security Act of 2007. The 
DOE program was originally funded at $10 million in FY 2008. By FY 
2010, that figure had grown to $50 million. However, these figures are 
somewhat misleading. While the MHK program is currently authorized at 
$50 million per year, the Department of Energy is using a considerable 
amount of the funding appropriated by Congress for this subprogram to 
support conventional hydroelectric activities. The result is that the 
DOE MHK activities are underfunded.
    OREC has been promoting a multi-pronged strategy that will propel 
the U.S. to the forefront of the race to commercialize MHK 
technologies. Critical to this effort will be a coordinated, 
comprehensive federal effort, led by DOE and the U.S. Navy, to develop 
our national marine renewable energy resources. This strategy includes:

   Technology advancement, verification and acceptance through 
        support for research, development, testing and deployment;
   Clear, timely, predictable, and workable regulatory 
        framework for siting and permitting of marine renewable 
        projects, particularly for limited pilot projects;
   Stable incentive regime structures that facilitate rapid 
        advancement of technology deployment;
   Close federal agency coordination and review of lessons 
        learned here and abroad in both wind and hydrokinetic power 
        technology development and deployment; and,
   Development of standards and certifications to provide 
        confidence to customers and financial markets.

    The Ocean Renewable Energy Coalition (OREC) is actively involved 
with the international marine and hydrokinetic industry and governments 
on several fronts. OREC's president and several of its members are 
participating in the International Electrotechnical Committee's 
Technical Committee 114, the international standards setting body that 
the United States participates in through the American National 
Standards Institute.
    In addition, OREC is one of the principal sponsors of the Global 
Marine Renewable Energy Conference (GMREC), along with the 
International Energy Agency's Ocean Energy System Implementing 
Agreement Executive Committee. Now in its fourth year, GMREC brings 
together marine and hydrokinetic experts from over a dozen countries. 
Conference sponsors include organizations from Scotland, Ireland, the 
United Kingdom, Norway, Australia, Ireland, Portugal, Denmark and 
Scotland.
     Responses of Sean O'Neill to Questions From Senator Murkowski
    Question 1. S. 630 contains an adaptive management program to 
provide grants to help the industry collect data for permitting and to 
do demonstration projects. How important is that provision to help the 
industry get past the so-called ``Valley of Death'' between device 
creation and more widespread deployment of marine hydrokinetic devices?
    Answer. One of the greatest impediments to the responsible 
commercialization of MHK devices is environmental permitting. Where 
land based renewables, at one point, could install pilot and 
demonstration devices by obtaining a single site plan approval from a 
local or county planning board, the MHK industry operates in oceans and 
public waterways-oftentimes requiring a multitude of permits from 
federal and state resource agencies. The Adaptive Management Grant 
program acknowledges the public nature of our oceans and waterways, as 
well as the need for environmental data to be placed in the public 
domain. These grants also acknowledge the importance of deploying 
technologies and gaining real-life, real-time data rather than 
speculating on hypothetical effects.
    This is a critical piece of S. 630 that will support these 
companies surviving the ``Valley of Death'' and, ultimately, setting 
the stage for timely, responsible deployments. Federal grant funding 
would stimulate private investments thereby reducing the overall long 
term costs of industry commercialization efforts.
    Question 2. Your testimony gives examples of developers that are 
making progress in developing and deploying wave and current devices. 
Please assess the current health of the industry and whether there is 
need for federal assistance.
    Answer. The MHK industry has benefited from federal investments in 
technology research, development and limited pilot deployments. If this 
funding is significantly decreased or eliminated the viability of 
several wave and tidal energy companies could be in jeopardy. The 
funding invested to date from DOE would be lost if these technology 
development partners are allowed to fail.
    While the efforts, to date, by Congress and the Department of 
Energy have been an important down payment to help develop this 
technology and industry, more remains to be done. In order to capture 
the energy, environmental and economic benefits of utilizing our vast 
marine-based renewable resources, it will require a mix of new 
incentives, updated regulatory regimes, tax treatment on par with other 
renewable energy technologies (particularly with regard to accelerated 
depreciation and investment and production tax credits), and general 
outreach and education.
    However, the most important action that can be taken by the federal 
government in the short term is to provide significant resources for 
research, development and deployment of various ocean, tidal and 
offshore renewable energy systems, including funding for test center 
infrastructure build-out. We need to join the international race to get 
pilot projects into the water and monitor the environmental effects and 
efficiencies of these technologies. Increased federal support will 
create thousands of high paying ``green'' jobs, hasten deployment of 
these technologies, give confidence to investors and help attract 
private capital.
    Federal funding of a sustained ocean energy R&D program and 
required regulatory activities would enable the United States to 
leverage its technological superiority in shipbuilding and offshore oil 
and gas production, creating jobs and diversifying these maritime 
industries toward developing new domestic energy supplies and capturing 
an emerging global export market. In the absence of such funding, 
however, the United States will have to depend on foreign suppliers for 
ocean renewable energy technology, and we will have missed a 
significant economic development opportunity.
    We also encourage your consideration of the creation of multi-
agency and public-private partnerships to provide efficiencies for 
permitting pilot projects in one year or less, participation in a DOE/
Industry discussion on how to accelerate deployment of devices, and the 
development of cooperative agreements with Canada and the British Isles 
to accelerate resolution of technical, market and policy barriers for 
commercialization of the MHK industry.
    Question 3. In previous years the Committee has discussed 
permitting as a major problem adding to the cost of deploying devices. 
In the months since the memorandum of understanding between FERC and 
the former MMS on permitting, has there been any improvement in the 
permitting/licensing process? Also, please elaborate on the needs that 
the industry still faces to make deployment of devices more economic.
    Answer. While the memorandum of understanding between FERC and the 
former MMS helped clarify some aspects of jurisdiction, the process of 
obtaining permits remains a challenge. It is estimated that securing a 
permit would require the involvement of a multitude of federal and 
state agencies. It is also estimated that working through the existing 
regulatory framework could take between five and ten years. The 
combination of these two issues creates an unacceptable level of risk 
for the investment community.
    All emerging technologies, including new power generation 
technologies such as MHK, rely heavily on a clear, timely and 
predictable regulatory framework related to deployment. This is 
especially true in the case of the first-in technologies, such as wave 
and tidal generators. In order to responsibly develop the nation's MHK 
resources in a timely fashion, OREC suggests that an adaptive 
management approach be taken. Contrary to hypothetical studies of 
speculative effects, real-time in situ studies are required to 
accurately gauge environmental interactions. This would provide much 
greater value to understanding the real-life impacts from MHK 
technologies and not compete with the capital required to continue to 
advance and test the technology.
                                 ______
                                 
      Responses of Andrew Munro to Questions From Senator Bingaman
    Question 1. Your testimony indicates you believe it is critical for 
Congress to continue to support the Department of Energy's hydropower 
research programs. Can you think of some examples of how that research 
work has benefited the hydropower industry?
    Answer. The DOE's hydropower research program has been tremendously 
valuable to support technological advancements and the growth of this 
clean energy resource. However, the program is well underfunded.
    Some have questioned the need for robust R&D funding for 
hydropower, stating that it is a mature and proven technology. My 
response is that just as the automobile is a mature technology, we 
continue to innovate that technology and look at ways to improve its 
performance. The same should be done for hydropower.
    Grant PUD's R&D investments have benefited directly from the work 
that the Department has conducted on advanced hydropower turbine 
systems (AHTS). Grant PUD's Wanapum Dam modernization effort was 
supported by the DOE's AHTS program.
    Some background, the hydropower industry has long supported the DOE 
R&D program for the next generation of hydro turbines--the Advanced 
Hydropower Turbine System (AHTS). The aim of the program is to design, 
develop, test and deploy a new generation of turbine designs that 
provide greater protection for fish and aquatic habitat and higher 
operational efficiency. The program follows a two-track approach--
develop new turbine technology and improve upon existing technology. 
The program seeks to make available technology that will simultaneously 
optimize environmental performance and increase the generation 
efficiency of our nation's existing hydroelectric facilities.
    In addition to Grant PUD, several federal hydropower projects have 
installed advanced designed turbines based off the work on the DOE AHTS 
program. Also, work continues on a second turbine design that has never 
been tested in a commercial application for which the DOE program is 
providing support.
    Beyond turbine work, there have been many other important DOE 
hydropower initiatives for which funding has been critical throughout 
the years. The short list below includes some, but certainly not all, 
of the Department's activities:

   updated national resource assessments,
   research into optimization methods and alternative 
        operations strategies and opportunities for spill reduction,
   field testing of new technologies to increase dissolved 
        oxygen content of discharged water,
   grid services research (develop and deploy technologies that 
        increase operational flexibility, including pumped storage; 
        modification of regional computer models to better assess 
        potential capacity expansion of pumped storage to facilitate 
        introduction of other variable renewable resources into the 
        market),
   new materials research,
   sensor and control testing to improve energy efficiency and 
        environmental performance,
   fish passage research (includes development of baseline 
        biological methodologies and data for key species for 
        improvements in dam infrastructure, such as turbines, fishways, 
        and fish screens; demonstration of new technology to determine 
        fishway effectiveness in real-world applications; methods to 
        measure and predict indirect fish mortality and non-lethal 
        injury rates), as well as
   research into the marine and hydrokinetic technologies to 
        test equipment and support deployment.

    In 2010, the Department also held a series of workshops with 
industry, federal agencies and environmental stakeholders to discuss 
R&D initiatives to promote small hydropower projects, pumped storage, 
and develop better environmental mitigation techniques.
    Lastly, with the signing of the federal hydropower MOU in March 
2010, there are a series of DOE activities, such as basin-scale 
planning and other initiatives, that require continued support if they 
are to reach a successful conclusion. After developing this 
collaboration among the agencies and renewing focus on federal 
hydropower deployment, it would be a tremendous setback to retreat from 
the DOE program.
    NHA also understands that the Department is scheduled to unveil new 
data on growth potential on existing non-powered dams as well as new 
data on the existing fleet of hydropower units that would provide data 
on the opportunity for nationwide capacity additions and upgrade 
possibilities.
    Question 2. As you may know, we have recently released a White 
Paper on the proposed Clean Energy Standard. Does the National 
Hydropower Association plan to submit comments to us in connection with 
the role that hydropower might play in determining how to develop a 
Clean Energy Standard?
    Answer. Yes, NHA intends to submit comments on the CES white paper 
and we commend both you and Senator Murkowski for seeking input on the 
policy.
    In January, NHA sent a letter of support to President Obama on his 
CES goal as outlined in the State of the Union, committing to meet 20 
percent of the 80 percent target by 2035. NHA believes this goal will 
be difficult, if not impossible, to meet without including both 
existing and new hydropower generation as qualifying resources under 
the CES.
    In the past, NHA has supported consensus definitions on the 
treatment of hydropower for the purposes of a renewable energy standard 
(RES), specifically those contained in S.1462, the American Clean 
Energy and Leadership Act. However, a CES is a different policy 
paradigm than an RES. Therefore, NHA believes the treatment of 
hydropower under a CES must be re-examined.
    NHA highlights two particular examples--existing hydropower 
generation and pumped storage. If a CES policy provides for a 
substantial increase in the percentage of generation that will be 
required to come from clean resources, and if existing generation from 
other clean resources qualifies (wind, nuclear, etc.), then existing 
hydropower generation must also qualify. Hydropower should be treated 
equitably in comparison to other resources when it comes to existing 
generation.
    Secondly, NHA believes that energy storage, specifically pumped 
hydropower storage, will play a critical role to firm and integrate 
intermittent energy resources, increasing their contribution to the CES 
goal. As such, NHA believes a mechanism should be included in the 
policy to provide recognition of clean generation from pumped storage 
projects--both existing and new.
    As work continues on the CES policy, additional questions both on 
the treatment of various hydropower resources and the mechanics of the 
program will be raised. NHA commits to continued dialogue with you, 
other Members of Congress, the Administration and stakeholders on how 
to address these issues.
     Responses of Andrew Munro to Questions From Senator Murkowski
    Question 1. The National Hydropower Association (NHA) has called 
for additional policy support from the federal government in order to 
promote hydropower opportunities across the country. Specifically, NHA 
highlights the need for a more efficient licensing and permitting 
process with greater intergovernmental cooperation. The Committee tried 
to address some of these issues in S. 629 with a possible 2-year 
licensing process for closed loop storage and non-powered dams as well 
as greater cooperation among agencies for conduits and small hydro. 
Beyond these measures, is there more that can be done? Please elaborate 
on how the lengthy licensing process puts hydropower at a competitive 
disadvantage relative to other renewable energy projects.
    Answer. Throughout its history, NHA has played an active role in 
various forums to improve the hydropower licensing process. In 
anticipation of the passage of the bill and a FERC solicitation of 
input on potential solutions to address the length of the permitting 
and licensing process, NHA has formed a regulatory working group to 
examine these issues. We look forward to a proposal from the Commission 
on this issue, and anticipate that there are licensing improvements to 
be made that may be accomplished administratively, or require a 
rulemaking process, or perhaps necessitate a statutory change.
    The workgroup has recently reviewed all projects licensed between 
2006 and 2011 and those pending licensing now, to analyze trends 
regarding the length of the licensing process throughout the industry. 
This preliminary review showed that projects took an average of 4.7 
years to license--from submission of the Notice of Intent and the Pre-
Application Document (or its equivalent) to license issuance. For 
projects that are still awaiting a license, the process to date has 
taken an average of 3.9 years so far.
    This data is generally consistent with the schedule in FERC's 
Integrated Licensing Process (ILP) regulations, but it highlights the 
fact that even when the process works as anticipated, it remains 
lengthy and costly when compared to other energy projects. As mentioned 
in NHA's written testimony, the development timeline for other energy 
projects can be as short as 18-24 months (for example, wind and natural 
gas).
    This significant difference places hydropower development at a 
disadvantage and contributes to holding back investment in worthwhile 
projects--an unfortunate result at a time when we should be supporting 
policies that promote a diversified energy portfolio for our country.
    NHA can provide some preliminary themes that have emerged from the 
working group, though further consultation and examination on the 
issues continues with final NHA policy recommendations to come.
    The work group has noted that resource agencies (federal and state) 
should be encouraged or required to participate early in study 
discussions and development in order to minimize additional information 
requests, resolve disagreements early, and allow speedy processing of 
permit applications later in the process. All resource agencies 
performing their own environmental reviews should be encouraged or 
required to work concurrently with the FERC process to coordinate and 
not duplicate the environmental review process.
    Also noted, for all federal and state reviews of a proposed 
hydropower facility, evaluation and conditioning of new projects should 
be consistently limited to impacts created by the hydropower project. 
FERC's ILP regulations do require a ``nexus'' between a requested 
project and project-related effects. However, other agencies with 
related review and consultation responsibilities often rely on a 
different standard. Because the current regulatory landscape does not 
provide for consistent treatment of environmental baseline analysis and 
study requests, time is spent attempting to address and manage issues 
that are not within the scope of project impacts. Addressing this 
issue--particularly for proposed projects at existing impoundments 
utilizing existing infrastructure--could reduce licensing and 
permitting time and expense significantly.
    Lastly, one area where the working group has seen some greater 
efficiencies in the process is that of exemptions. Broadening the scope 
of projects that could be approved by the exemption process could help 
lower approval costs and advance some projects along sooner.
    We look forward to the opportunity to engage with FERC, other 
agencies and stakeholders to discuss and find solutions to these 
process issues.
    Question 2. What is the biggest thing Congress can do to help the 
hydrokinetic energy industry take off? Is it establishing the adaptive 
management program, supporting research, funding test centers, 
developing device verification, or all of the above? Should Congress 
also be examining tax assistance policies?
    Answer. NHA believes all of the policies identified in the question 
are important to providing the support needed to fully realize the 
growth opportunities for marine and hydrokinetic technologies (MHK).
    We do strongly agree that Congress must also focus on tax policies 
as part of this equation. As you are aware, both marine and 
hydrokinetic and conventional hydropower technologies receive disparate 
treatment under various federal incentives for renewable energy 
deployment.
    To start, though the production tax credit (PTC) was a program in 
place for many years, it was only until 2008 that MHK technologies were 
included (hydropower was included in 2005). So while other renewable 
resources were able to utilize this incentive, waterpower technologies 
were placed at an economic disadvantage, affecting the ability to 
effectively raise capital and find financial support.
    Additionally, once included under the PTC, waterpower technologies 
received only half-credit compared to other renewable technologies, 
such as wind and geothermal. Again, this disparate treatment picks 
winners and losers within the renewable community. NHA supports your 
efforts, and those of others, to equalize the credit for all qualifying 
technologies.
    Lastly, NHA continues to strongly support other incentives for 
renewable energy deployment such as extension and additional funding 
for the clean renewable energy bonds (CREBs) program, the investment 
tax credit (ITC) and Section 1603 grants program, the Section 48C ITC 
for renewable energy equipment manufacturers and other discrete tax 
items such as accelerated and bonus depreciation.
    The longer-term extension of incentives is an issue of particular 
importance to both MHK and conventional hydropower resources. Short-
term extensions do not provide the certainty for the industry in 
project planning. The development timeline for projects can take 
several years, with no assurance that the incentives will actually be 
in place when projects are scheduled to actually come online.
    We appreciate your efforts on these fronts and highlight that tax 
issues remain a priority agenda item for NHA and the waterpower 
industries.
    Question 3. NHA's goal is to double the U.S. hydropower industry's 
contribution to the electric system from today's 100,000 MW capacity 
figure. You noted in your testimony that in response to President 
Obama's call for an 80 percent Clean Energy Standard by 2035, the 
hydropower industry is committed to meet 20 percent of that standard. 
As you know, Chairman Bingaman and I recently released a White Paper on 
the CES which asks stakeholders to comment on a number of design 
questions. If Congress were to adopt such a standard, how do you think 
hydropower should be treated?
    Answer. NHA refers to our response above (Senator Bingaman; 
Question 2) and restates our appreciation to you and Senator Bingaman 
for seeking input on a CES policy. NHA reiterates that hydropower will 
play an indispensable role in meeting any CES goal and must be 
recognized as a qualifying resource under the policy.
    We look forward to working with you, other Members, the 
Administration and stakeholders to answer questions and work toward 
solutions on addressing hydropower's inclusion in a CES.
    Question 4. In your testimony you talk about the benefits that the 
United Kingdom European Marine Energy Center in Scotland has realized. 
Please elaborate on what we can learn from them and how we should be 
fashioning aid to the industry in the United States. Please provide 
examples of what has and has not worked for marine hydrokinetics in 
Europe.
    Answer. The U.K. has a longer history of support for MHK 
industries. In fact, when the U.S. was eliminating funding for the 
Department of Energy R&D program for both MHK and waterpower 
technologies, Europe, and the U.K. in particular, were ramping up 
funding. This leadership not only provides technical and financial 
support needed for a new industry, but it sends an important signal to 
the marketplace that private investment in the technology is sought and 
will be supported.
    As a result, it is not a surprise that some of the very first 
actors pursuing projects in the U.S. were European developers. However, 
as the U.S. has placed a greater emphasis on MHK development and 
increased its support both at DOE and by including MHK in renewable 
energy and tax policies, we are seeing an increase in American MHK 
developers.
    Some activities that have been supported by the U.K. over the years 
include:

   Establishing the ``European Marine Energy Centre'' in 
        Orkney, Scotland.
   Launching the ``Carbon Trust, Marine Energy Challenge'' an 
        initiative whereby device developers could get access to high 
        level engineering design and verification through partnering 
        with engineering companies.
   Awarding over #25 M to support the ongoing development of 
        marine energy devices.
   Launching a #50M support fund which directed #8M in funding 
        for test centers with #42M available to support demonstration 
        projects. Project funding comprises both capital and revenue 
        funding.
                                 ______
                                 
    Responses of Steven G. Chalk to Questions From Senator Bingaman
    Question 1. Regarding the Energy and Water Integration Act, your 
testimony indicates that the ``clean technology grant program'' would 
create a helpful incentive for industry to develop strategies to 
minimize water consumption in energy process. What is your assessment 
of what an appropriate budgeting authority for that type of a program 
would be?
    Answer. The Department is not currently in the position to provide 
an appropriate budget number without further analysis of the 
provisions. Funding levels would vary significantly depending upon 
whether the focus of the grant program is on funding the assessments of 
current energy-water use and the identification of opportunities for 
efficiency improvements or funding the deployment of commercial 
technology to address the identified opportunities for efficiency 
improvements (e.g., renewable desalination technologies, newer 
efficient pump technology, biogas utilization, etc). The potential 
investment would have the highest return by focusing on applied R&D for 
technologies that can provide significant reductions in water use, 
while also balancing other requirements.
    Question 2. Your testimony regarding S. 629, the Hydropower 
Improvement Act, refers to the ''Hydropower Advancement Project'' and 
indicates that it is focused on the most cost-effective, least-
controversial types of new hydropower development. Can you please give 
us an example of what some of those projects are?
    Answer. DOE's Hydropower Advancement Project (HAP) is focused on 
upgrades at existing facilities to increase unit and plant efficiency 
and capacity. The initial phase of HAP will create a catalog of 
industry best practices for operation, maintenance and evaluation of 
overall plant performance. This catalog will become the basis of a 
standardized assessment manual for use in evaluating existing 
hydropower stations and identifying opportunities to increase 
generation and maximize ancillary benefits. DOE intends to select up to 
50 hydropower facilities at which these standardized assessments will 
be performed. These assessments will identify opportunities to improve 
efficiency and increase energy capacity and production at existing 
hydropower plants. DOE will then conduct detailed feasibility studies 
at three to five selected projects that stand to gain significant 
performance improvements through the implementation of the 
recommendations identified in the assessments, and that indicate a 
favorable return on investment.
    Examples of energy-increasing improvements projects include:

   Redesign Turbines using advanced computational fluid 
        dynamics methods that were not available when older power 
        plants were built, to improve turbine efficiency and 
        performance. Redesigned turbines will have improved flow 
        characteristics to extract more energy from the same amount of 
        water.
   Upgrades of generators and other electrical equipment to 
        increase efficiency and generation.
   Installation of automated monitoring systems to alert 
        operators to the buildup of debris in front of intakes. Such 
        debris causes excessive energy loss and reduces the efficiency 
        of the turbine.
   Installation of advanced control systems that automatically 
        optimize plant configuration to achieve maximum efficiency.

    Question 3. Regarding S. 630, the Marine and Hydrokinetic Renewable 
Energy Promotion Act, do I understand your testimony correctly that you 
believe the current marine and hydrokinetic test facilities DOE is 
already sponsoring provide sufficient research capabilities such that 
the creation of new test centers would not be necessary? In your 
opinion, how would the new facilities authorized by S. 630 help to 
advance the existing research capabilities?
    Answer. DOE is currently funding three competitively-selected 
marine and hydrokinetic (MHK) test facilities, which are designated as 
National Marine Renewable Energy Centers (NMRECs). These NMRECs are 
appropriately located geographically to address the full range of 
marine and hydrokinetic resources (ocean wave, ocean and tidal current, 
and ocean thermal) that are of primary interest, and hold the most 
promise for contributing to our nation's clean energy goals. As such, 
additional test centers would be duplicative of efforts currently 
underway.
    The NMRECs are currently developing capabilities for researching, 
developing, testing and evaluating MHK technologies. Ultimately the 
NMRECs are planning to develop open-water, multi-berth test sites where 
device performance and reliability can be validated through rigorous 
industry-recognized testing protocols. S. 630 would accelerate the 
development of the NMREC facilities and provide critical domestic 
testing capabilities for the nascent MHK industry.
    Question 4. During the last Congress, we enacted the SECURE Water 
Act. Section 9505 of that Act asks DOE to prepare an assessment of the 
potential impacts of climate change on hydropower production in the 
U.S. Can you please tell us what the status is on that report?
    Answer. As called for in Section 9505 of the Omnibus Public Land 
Management Act of 2009 (P.L. 111-11), DOE has the lead for producing an 
assessment of the effects of global climate change on water 
availability and generation at federal hydropower facilities. DOE has 
been engaged in extensive interactions with the four Power Marketing 
Administrations (PMAs), the Department of the Interior's Bureau of 
Reclamation, and the U.S. Army Corps Engineers in order to produce this 
report, and has designed an approach to complete the assessment. DOE is 
currently working with the PMAs to develop recommendations from the PMA 
Administrators, as required by the legislation.
    Developing the appropriate methods to project future climate change 
and scale these projections down so that they are relevant to the 140 
federal hydropower projects presents significant technical challenges. 
Due to these technical challenges and the time required to consult with 
a large number of federal and state agencies, DOE will be requesting an 
extension with a revised delivery of the report at the end of CY 2011 
(December 2011).
    Responses of Steven G. Chalk to Questions From Senator Murkowski
    Question 1. In March 2010, DOE, along with DOI, and the Corps of 
Engineers, signed a Memorandum of Understanding on hydropower, the goal 
of which was to increase energy generation from Federal hydro 
facilities and maintain environmental protections. What steps has the 
Department taken to implement the MOU? Has the MOU resulted in any 
additional hydropower capacity to date? Have the agencies identified 
any ways to make the licensing process more efficient?
    Answer. Through the Hydropower MOU, DOE, DOI and the U.S. Army 
Corps of Engineers agreed to cooperate more closely and align 
priorities to support the development of environmentally sustainable 
hydropower. The MOU signatories agree to focus on increasing energy 
generation at federally-owned facilities and explore opportunities for 
new development of low-impact hydropower.
    Since signing the MOU, DOE, DOI and the Corps have hosted a series 
of technology workshops focusing on pumped storage hydropower, 
innovative low-cost small hydropower and environmental mitigation 
technologies. A workshop on new turbine technology is scheduled for May 
2011, and a Request for Information has been developed for technologies 
that could be deployed at federal facilities.
    DOE has been working closely with the Corps and DOI's Bureau of 
Reclamation (BOR) to identify federal facilities where hydropower 
generation could be increased or added.
    On March 31, 201, BOR released the Hydropower Resource Assessment 
at Existing Reclamation Facilities report pursuant to the 2010 MOU. The 
report estimates that additional hydropower opportunities at 70 
facilities could create enough clean, renewable energy to annually 
power more than 85,000 households. The report was general in nature and 
more detailed analysis would be needed to determine the feasibility of 
expansion at these facilities.
    DOE is also currently helping BOR to assess power production 
potentials within their canal and irrigation infrastructure. DOE's Oak 
Ridge National Lab is working on a Non-Powered Dam Resource Assessment 
and presented preliminary results at the National Hydropower 
Association's Annual Conference on April 5, 2011. While the MOU has not 
directly resulted in any additional hydropower capacity to date, these 
resource assessments will help identify the best locations for future 
hydropower improvement projects.
    On April 5, 2011, DOE released a Funding Opportunity Announcement 
announcing $26.6 million for hydropower in four topic areas: 1) 
sustainable small hydropower research, development and testing; 2) 
environmental mitigation technologies to increase electricity 
generation while mitigating fish and habitat impacts; 3) financial and 
technical assistance for pumped storage hydropower projects in the 
licensing or pre-construction process; and 4) advanced hydropower 
system testing at a non-powered BOR facility. Topic area 4 is co-
sponsored by DOE and DOI's BOR, and is anticipated to result in 
additional hydropower capacity.
    As directed by the MOU, a staff-level interagency working group has 
been formed of federal agencies involved in the regulation, management 
or development of hydropower assets for the purpose of sharing 
information on all initiatives, efforts and projects related to 
hydropower. This group also includes the Fish and Wildlife Service, 
National Park Service, NMFS, Forest Service, USGS, Bureau of Indian 
Affairs, EPA, Power Marketing Administrations, BLM and FERC.
    The interagency working group has established a regulatory sub-
committee that is working to better understand the time and costs 
associated with regulatory and permitting processes. While licensing is 
under the jurisdiction of FERC, DOE has taken the lead as an unbiased 
third party to examine the permitting and licensing processes for 
private development at federal facilities. DOE is interviewing project 
developers in order to identify redundancies that could be eliminated, 
as well as examples of efficient review and coordination that could be 
replicated. The end result will be the identification of ways to make 
the licensing process more efficient.
    The Bureau of Reclamation and the U.S. Army Corps of Engineers also 
have separate MOUs with FERC that focus on reducing the licensing and 
permitting time of projects at their facilities. The FERC and the U.S. 
Army Corps of Engineers entered into a revised MOU on March 30, 2011, 
to enhance the effectiveness and efficiency for non-federal hydropower 
development decision making, including addressing 404 permit and 408 
approval processes.
    Question 2. I understand that the Department is looking at 
potential locations for pumped storage--something we call for in S. 
629, the Hydropower Improvement Act. S. 629 directs DOE, along with the 
USGS, to identify suitable locations on both federal and non-federal 
lands that may help with integrating intermittent renewable resources. 
How does the Department's initiative differ from S. 629's provisions in 
this area?
    Answer. DOE's pumped storage hydropower (PSH) initiative is focused 
on integrating variable renewable resources and identifying and 
addressing the barriers to deployment in the United States. In 
September 2010, DOE sponsored a PSH workshop where experts from the 
industry, manufacturers, laboratories, environmental groups, and 
government agencies were convened to identify the major PSH deployment 
barriers. The barriers identified in this workshop include permitting 
time and cost, lack of models that identify the full value of PSH, lack 
of uniform markets for ancillary services provided by PSH, high capital 
cost, and long payback period. DOE has also studied PSH projects filed 
with FERC and is working with PSH developers to identify the most 
favorable sites for pumped storage for variable renewable energy 
resources integration.
    To address the PSH barriers identified in the workshop and to 
better integrate variable renewable energy resources, DOE included two 
relevant topic areas in its hydropower funding opportunity announced on 
April 5, 2011. The first topic will provide technical and financial 
assistance to aid projects in the early stages of development 
(licensing and pre-construction planning). The second topic will 
provide for improved modeling of hydropower benefits such as load 
following voltage and frequency regulation and the ability to integrate 
variable renewables such as wind and solar.
    While DOE is pursuing several activities, including those described 
above, that are in line with the objectives of the Hydropower 
Improvement Act S. 629, we are not conducting a study to identify 
Federal and non-Federal land for pumped storage sites in coordination 
with the USGS as would be required in Section 12 of S. 629.
                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

                  Association of California Water Agencies,
                                                    March 28, 2011.
Hon. Jeff Bingaman
Chairman, Energy and Natural Resources Committee, 304 Dirksen Senate 
        Office Bldg., Washington, DC.
Hon. Lisa Murkowski,
Ranking Member, Energy and Natural Resources Committee, 304 Dirksen 
        Senate Office Bldg., Washington, DC.
    Dear Chairman Bingaman and Ranking Member Murkowski;
    The Association of California Water Agencies (ACWA) is pleased to 
support the Energy and Water Integration Act of 2011 and appreciated 
the opportunity to testify in support of this legislation last 
Congress. ACWA's 450 public water agency members supply over 90 percent 
of the water delivered in California for residential, agricultural, and 
industrial uses.
    As highlighted in a 2005 report by the California Energy 
Commission, saving water saves energy. Your bill recognizes the 
importance of the energy/water nexus and calls for baseline studies 
examining numerous aspects of this relationship. The clean technology 
grant programs in your bill will provide an opportunity to demonstrate 
both water and energy savings available from new technologies. 
Additionally, the rural water utilities program will help small systems 
save money by providing assistance to help agencies conserve both 
energy and water.
    Thank you for your hard work on this legislation. ACWA appreciates 
your leadership on this issue and looks forward to working with you in 
the future.
            Sincerely,
                                            David Reynolds,
                                     Director of Federal Relations.
                                 ______
                                 
                  Association of California Water Agencies,
                                                    March 23, 2011.
Hon. Jeff Bingaman,
Chairman, Energy and Natural Resources Committee, 304 Dirksen Senate 
        Office Bldg., Washington, DC.
Hon. Lisa Murkowski,
Ranking Member, Energy and Natural Resources Committee, 304 Dirksen 
        Senate Office Bldg., Washington, DC.
    Dear Chairman Bingaman and Ranking Member Murkowski;
    The Association of California Water Agencies (ACWA) is pleased to 
support S. 629, the Hydropower Improvement Act of 2011. ACWA's 450 
public water agency members supply over 90 percent of the water 
delivered in California for residential, agricultural, and industrial 
uses.
    Your bill, S. 629, will help small scale projects move forward more 
quickly. In California, water systems are looking to install in-conduit 
microturbines in their water distribution systems to generate 
hydropower. Currently, many of these small projects are exempt from 
FERC jurisdiction. However, obtaining an exemption can take six months 
or more and cost upwards of fifty thousand dollars. Your bill, S. 629, 
will help reduce this regulatory burden.
    Thank you for your hard work on this legislation. ACWA appreciates 
your leadership on this issue and looks forward to working with you in 
the future.
            Sincerely,
                                            David Reynolds,
                                     Director of Federal Relations.
                                 ______
                                 
                             Alliance for Water Efficiency,
                                                    March 31, 2011.
Hon. Jeff Bingaman,
Chairman, Energy & Natural Resources Committee, 304 Dirksen Senate 
        Office Bldg., Washington, DC.
Hon. Lisa Murkowski,
Ranking Member, Energy & Natural Resources Committee, 304 Dirksen 
        Senate Office Bldg., Washington, DC.
    Dear Chairman Bingaman and Ranking Member Murkowski:
    The Alliance for Water Efficiency is pleased to support the 
committee's interest in integrating energy and water programs. Water 
and energy are interconnected issues, and your bill highlights the 
importance of better managing this connection. We strongly support 
provisions in a 2011 bill that would mandate baseline studies to 
examine numerous aspects of this relationship. Further, clean 
technology grant programs would provide an opportunity to demonstrate 
both water and energy savings available from new technologies. 
Additionally, a rural water utilities program would help small systems 
save money by providing assistance to help agencies conserve both 
energy and water.
    The Alliance for Water Efficiency is a non-profit stakeholder 
organization whose mission is to promote the efficient and sustainable 
use of water. One of our primary activities is working with water 
utilities to help them design and implement cost-effective water 
conservation programs, programs which save energy as well as water. We 
have been working with the American Council for an Energy Efficient 
Economy to develop a list of policy priorities for national 
consideration. We will be sending that report to you shortly.
    Thank you for your attention to the water and energy issue. We very 
much appreciate your leadership.
            Sincerely,
                                        Mary Ann Dickinson,
                                                 President and CEO.
                                 ______
                                 
                          National Rural Water Association,
                                         Duncan, OK, April 9, 2011.
Hon. Jeff Bingaman,
Chairman, Energy & Natural Resources Committee, 304 Dirksen Senate 
        Office Bldg., Washington, DC.
Re: The Energy and Water Integration Act of 2011
    The National Rural Water Association (NRWA), the country's largest 
community-based water organization, appreciates your assistance and 
support to rural and small communities reducing energy consumption, 
utilizing renewable energy sources (including energy generation from 
existing sanitation facilities), reducing water loss, and realizing the 
cost-savings for their citizens.
    We are writing in support of your legislation, ``The Energy and 
Water Integration Act,'' and we encourage you to introduce the 
legislation in this Congress and support its passage into law.
    Providing safe public drinking water and adequate public sanitation 
requires one of the greatest demands of energy in society. Most of the 
country's over 50,000 water and wastewater systems are small, with 
limited economies of scale, and often lacking technical and financial 
resources. Initiating an on-site technical assistance network to reach-
out to all drinking water and wastewater supplies to assist in the 
adoption of comprehensive energy conservation plans would result in 
dramatic energy and cost savings in every participating community.
    Small communities want to implement the most advanced energy plans 
possible--and the small water and sanitation systems provision in the 
Energy and Water Integration Act would provide the shared technical 
resources to achieve this important objective.
            Thank you for your leadership and assistance. Please 
            contact us if we can be of any assistance.
                                           John Montgomery,
                                               Mike Keegan.
                                 ______
                                 
                                      Family Farm Alliance,
                                 Klamath Falls, OR, March 16, 2011.
Hon. Lisa Murkowski,
U.S. Energy and Natural Resources Committee, 304 Dirksen Senate Bldg., 
        Washington, DC.
    Dear Senator Murkowski:
    On behalf of the Family Farm Alliance, I thank you for introducing 
``The Hydropower Improvement Act of 2011''. This bill is a major step 
towards allowing the United States to substantially increase the 
capacity and generation of clean, renewable hydropower resources, 
improve environmental quality and support hundreds of thousands of 
green energy jobs.
    The Family Farm Alliance is a grassroots organization of family 
farmers, ranchers, irrigation districts and allied industries in 16 
Western states. Many of our members operate existing irrigation canals 
and ditch systems that may provide opportunities to develop in-canal, 
low-head hydroelectric projects that have tremendous potential for 
producing significant amounts of renewable energy with virtually no 
negative environmental impacts. Historic irrigation structures can be 
retained while the system is updated with modern clean-energy producing 
technologies. Increased revenues from the sale of this renewable energy 
can result in lower irrigation costs to farmers. And, importantly, 
irrigation water delivery services can continue while utilizing flows 
for clean, emissions-free ``green'' energy production.
    The Hydropower Improvement Act of 2011 seeks to substantially 
increase our nation's hydropower capacity in an effort to expand clean 
power generation and create domestic jobs. The legislation establishes 
a competitive grants program and directs the Energy Department to 
produce and implement a plan for the research, development and 
demonstration of increased hydropower capacity. The bill provides the 
Federal Energy Regulatory Commission with the authority to extend 
preliminary permit terms; to work with federal resource agencies to 
streamline the review process for conduit and small hydropower 
projects; and to explore a possible two-year licensing process for 
hydropower development at non-powered dams and closed loop pumped 
storage projects. The Act also calls for studies on the resource 
development at Bureau of Reclamation facilities and in conduit 
projects, as well as on suitable pumped storage locations. By utilizing 
existing authorizations, the bill does not represent new funding.
    Thank you for this opportunity to provide input on this matter, 
which is very important to the family farmers and ranchers of our 
membership.
            Sincerely,
                                                Dan Keppen,
                                                Executive Director.
                                 ______
                                 
     Statement of the Colorado Governor's Energy Office, Denver, CO
                               on s. 629
    The Governor's Energy Office applauds the bipartisan effort to 
boost hydropower development in the United States through the 
introduction of a progressive bill such as S. 629, the Hydropower 
Improvement Act of 2011.
Introduction--The Governor's Energy Office
    ``The Governor's Energy Office promotes sustainable economic 
development in Colorado through advancing the state's energy market and 
industry to create jobs, increase energy security, lower long-term 
consumer costs, and protect our environment.''
    In the last few years, Colorado has become a national leader in 
clean technology innovation. The new markets for clean energy developed 
in Colorado have made the state a magnet for clean energy companies, 
such as wind, solar and natural gas, clean-tech workers and venture 
capital. The state has set the pace in energy efficiency as well, with 
policy and private sector innovations that are leading businesses, 
industries and homeowners to significantly reduce their energy costs.
    The Governor's Energy Office (GEO) has played an important role in 
these achievements since its inception in January of 2007. The GEO has 
strengthened the foundation for clean energy with forward-thinking 
programs and partnerships that have generated widespread adoption and 
deployment of renewable energy and energy efficiency in communities, 
businesses, non-profits and utilities across Colorado.
    Fiscal year 2010 was a capstone year for the GEO. The agency played 
a critical role in historic legislation that will dramatically increase 
clean electricity generation. It continued efforts to reduce 
consumption by promoting greater energy efficiency in Colorado. It 
directed millions of American Recovery and Reinvestment Act dollars to 
Coloradans through programs that created jobs in the renewable energy 
and energy efficiency sectors. It doubled weatherization services to 
help thousands of low-income Colorado families save money and it 
launched a popular new website-rechargecolorado.com-and rebate program 
to help consumers more easily adopt efficiency and green energy 
measures. To date, more than $11 million in rebates have been issued 
resulting in more than $90 million in economic activity throughout the 
state.
    The GEO led new efforts to create innovative financing programs 
that will facilitate the adoption of clean energy and energy-saving 
upgrades while also addressing the current lack of capital available. 
In four fast-paced years, the GEO has spurred new jobs, saved energy, 
cut pollution and reduced Colorado's reliance on imported energy.
Hydropower--An untapped resource
    The Governor's Energy Office values small hydroelectric projects as 
a clean and environmentally-friendly source of renewable 
energy.Hydropower developed in an environmentally responsible way is a 
clean source of base-load energy and a job creator. Furthermore, the 
U.S. Energy Information Agency's latest forecast estimates that by the 
year 2016 the levelized cost of electricity produced by hydropower 
plants will be in average lower than coal. The Idaho National 
Laboratory has identified a combined potential of more than 1,400 MW in 
Colorado alone for projects under 5 MW, which represents over 10% of 
the peak demand of electricity in the state. For all these reasons, the 
GEO has taken a keen interest to promote the development of this 
wonderful resource.
Market barriers for Small Hydropower
    A vast majority of the hydro projects in the US must be permitted 
by the Federal Energy Regulatory Commission (FERC). The current 
permitting process employed by FERC needs to be streamlined and 
simplified to encourage the responsible development of small-scale 
hydropower projects. The Governor's Energy Office, the National 
Hydropower Association, a few state energy offices, a host of private 
developers and other organizations across the United States agree that 
the resources needed today to obtain a hydropower permit from FERC 
represent a disproportionate burden for the developers of small 
projects. As a result, the development of this renewable resource is 
stifled nation-wide. Colorado has not been immune to this effect: in 31 
years, only 26 small hydropower projects in the state have received an 
exemption permit from FERC, in spite of having over 5,000 sites with an 
excellent hydro resource, an accessible transmission line and no major 
environmental concerns.
    The Governor's Energy Office has taken a proactive stance to 
correct this situation by working with FERC to find opportunities to 
streamline their current framework. The result of this effort is a 
signed MOU agreement that will not just shorten the time needed to 
receive a permit but also simplify and clarify the process, making it 
cost-effective for small projects. As part of this initiative, GEO used 
Recovery Act funding to contract a group of experts, known as the 
Renewable Energy Development Team (REDT), to assist the best projects 
in the state in navigating the FERC permitting process. In February, 
the GEO launched the Small Hydro Permitting Pilot Program, which has 
already reviewed more than 2MW of potential projects, from which six 
projects are ready for FERC full review.
The Hydropower Improvement Act of 2011
    As mentioned before, the Governor's Energy Office commends Senator 
Murkowski and the cosponsors of this bill for the effort and their 
resolution to improve the conditions under which hydropower is 
developed in this country.
    In this bill, we see a few parallels with the Small Hydro 
Permitting Pilot Program that the state designed in collaboration with 
FERC. It is our intention to share the results of our Pilot Program 
with FERC and other federal authorities in order to make systemic 
changes to the way hydropower is permitted at the federal level. The 
GEO finds that this bill will advance a more consistent and supportive 
policy for this clean and low-cost resource, which will help the United 
States move forward towards energy independence and a cleaner future 
for our children.
    The GEO would like to highlight Section 8, intended to promote 
conduit and small hydropower projects, which offer a great opportunity 
to increase the installed hydropower capacity without compromising our 
environment. Through the Small Hydro Permitting Pilot Program at the 
GEO we have come to realize that the part of FERC's permitting process 
where resource agencies and other stakeholders participate is 
particularly important to address to have an efficient process. The GEO 
applauds the intention to sign an MOU with the relevant federal 
organizations and encourages the bill sponsors to include state 
agencies as well. Through interactions with FERC, the GEO has 
discovered that, in the case of Colorado, there are four state agencies 
involved in every application, and one federal agency; hence, the 
importance to involve the agencies working at a state level. This 
section also states a provision to expedite the approval of conduit 
projects through the aggregation of projects. This is a great step, but 
there are other ways to improve the permitting process.
    Other opportunities include:

   Increase the engagement of the state agencies involved in 
        permitting hydropower projects locally. While conditions will 
        be different for every state, increasing state engagement is a 
        key component to increase the efficiency of the process. The 
        workshops included in this same section will help enormously to 
        discover the needs of each state and their particular set of 
        agencies involved in the regulation of hydropower. The GEO 
        thinks that these workshops will be enormously positive and 
        applauds this effort.
   Section 5 has great merit since the Federal Government is in 
        a unique position to incentivize the development of minimal-
        impact projects throughout the country. By targeting existing 
        plants and conduits, as well as non-powered dams, the proposed 
        grants will go to the projects that offer the least impact to 
        the environment, promoting the development of truly clean 
        energy sources. This opportunity should be intensified and 
        closely monitored
   In this same line, the funding of the research and 
        development program-outlined in Section 6-to look at increasing 
        efficiencies and minimizing environmental impacts is a big step 
        forward in the right direction.
   Section 7 looks to permit non-powered dams in two years or 
        less. We recommend working further with FERC to refine the 
        language of this section, since it is known that FERC has been 
        able to reduce the time needed for this type of permits in 
        general, and in some particular cases, the permit was issued in 
        less than a year. The GEO commends the intention of receiving 
        public input in this section since it has received several 
        comments from the public stating that the federal standards for 
        dam safety add an unjust burden at dams that comply with the 
        state's regulations. Colorado's dam safety program is well 
        known nationally for its sound standards and high reliability. 
        During the public input process the GEO will certainly offer 
        more details and hopefully find a way to improve the 
        collaboration between the state and the federal government in 
        this matter.
Conclusion
    The Small Hydropower Permitting Pilot Program that the Governor's 
Energy Office in Colorado is administering aims not just to permit 20 
projects, create more jobs and develop more projects, but to generate 
systemic changes by informing the public and the government at every 
level about ways to improve the current federal permitting process, 
without compromising the federal authority or environmental standards. 
The GEO wishes to congratulate the sponsor and cosponsors of this bill 
and encourage Congress to pass this landmark effort to improve the 
conditions under which hydropower is developed in this country.
                                 ______
                                 
                        Calleguas Municipal Water District,
                                 Thousand Oaks, CA, March 30, 2011.
Hon. Jeff Bingaman,
Chairman, Energy and Natural Resources Committee, 304 Dirksen Senae 
        Office Bldg., Washington, DC.
Hon. Lisa Murkowski,
Ranking Member, Energy and Natural Resources Committee, 304 Dirksen 
        Senate Office Bldg., Washington, DC.
Re: Support S. 629-Hydropower Improvements

    Dear Chairman Bingaman and Ranking Member Murkowski,
    On behalf of Calleguas Municipal Water District (Calleguas) I am 
writing to express our support of S. 629, Hydropower Improvements. 
Calleguas is a member agency of the Metropolitan Water District of 
Southern California and supplies drinking water for more than 75 
percent of the population in Ventura County, California.
    S. 629 will help small scale projects move forward more quickly 
through financial assistance programs and stream-lined permitting. 
Currently, many of these small projects are exempt from FERC 
jurisdiction. However, obtaining an exemption can take six months or 
more and cost upwards of fifty thousand dollars. S. 629 will help 
reduce this regulatory burden.
    Calleguas supports installing in-conduit generators in water 
distribution systems to generate clean, renewable energy of hydropower 
resources. The district currently maintains four in-conduit 
hydroelectric generation stations with a combined capacity of 3.25 
megawatts as part of its water transmission system and has plans to 
develop a fifth generator as a component of new pressure regulating 
facility to be constructed soon. Again, we want to thank you for your 
efforts on this issue and underscore our support of this important 
legislation.
            Sincerely,
                                         Susan B. Mulligan,
                                                   General Manager.
                                 ______
                                 
                                Large Public Power Council,
                                    Alexandria, VA, April 20, 2011.
Hon. Harry Reid, Majority Leader,
United States Senate, U.S. Capitol, Washington, DC.
    Dear Majority Leader Reid: I am writing on behalf of the Large 
Public Power Council (LPPC) to voice our solid support for the 
Hydropower Improvement Act of 2011 (S. 629) and urge floor action in 
the Senate on this important piece of clean energy legislation.
    We are pleased that this bi-partisan legislation, introduced by 
Senators Jeff Bingaman and Lisa Murkowski, passed out of the Senate 
Energy and Natural Resources Committee on April 12, LPPC believes it 
will foster and facilitate the growth of responsible hydropower 
development in the United States.
    The Large Public Power Council represents 25 of the largest locally 
owned and operated not-for-profit electric systems in the nation. LPPC 
member utilities are located in 11 states and Puerto Rico; and own and 
operate more than 86,000 megawatts of generation capacity and over 
35,000 circuit miles of high voltage transmission lines. LPPC member 
utilities supply electricity to some of the largest cities in the 
country--including Los Angeles, Seattle, Omaha, Phoenix, Sacramento, 
Jacksonville, San Antonio, Orlando and Austin.
    For over 100 years, hydropower has been the most widely employed 
renewable energy resource in the United States. Hydropower is the 
nation's largest renewable resource for electric generation, currently 
producing seven percent of the nation's electricity--and avoiding 225 
million metric tons of carbon emissions each year.
    In addition to generating clean electricity, hydropower has the 
ability to firm and stabilize variable renewable resources such as wind 
and solar, thereby integrating additional renewable electric power into 
the transmission grid.
    We believe that this legislation will increase the nation's 
hydropower capacity, will expand renewable power generation and create 
major job growth and economic opportunities throughout the United 
States. These include good paying engineering, manufacturing, 
construction and operations jobs that could revitalize communities.
    The LPPC strongly supports the Hydropower Improvement Act of 2011 
and urges floor action in the Senate on this important piece of clean 
energy legislation.
    We appreciate your leadership as Majority Leader on national energy 
issues and stand ready to assist you and the bill's numerous co-
sponsors in promoting hydropower as a low cost, reliable and emissions 
free source of power to our nation's electricity consumers.
            Sincerely,
                                            Jorge Carrasco,
                                                        LPPC Chair.

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