I

107TH CONGRESS

1ST SESSION H. R. 1832

To improve the Federal licensing process for hydroelectric projects.

IN THE HOUSE OF REPRESENTATIVES

MAY 15, 2001

Mr. TOWNS (for himself, Mr. SHADEGG, Mr. WYNN, Mr. GRAHAM, Mr. HALL

of Texas, Mr. DEMINT, Mr. CLYBURN, Mr. HASTINGS of Washington,

Mr. SPRATT, Mr. NETHERCUTT, Ms. DUNN of Washington, Mr. RADANOVICH, Mr. BURR of North Carolina, and Mr. BROWN of South Carolina)

introduced the following bill; which was referred to the Committee on Energy and Commerce

A BILL

To improve the Federal licensing process for hydroelectric

projects.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Hydroelectric Licens5 ing and Incentives Act of 2001’’.
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1 SEC. 2. IMPROVEMENTS TO HYDROPOWER RELICENSING

2 PROCESS.

3 (a) IN GENERAL.—Part I of the Federal Power Act

4 (16 U.S.C. 791a and following) is amended by adding at

5 the end the following:

6 ‘‘SEC. 32. PROCESS FOR CONSIDERATION BY FEDERAL

7 AGENCIES OF CONDITIONS TO LICENSES.

8 ‘‘(a) DEFINITIONS.—In this section:

9 ‘‘(1) CONDITION.—The term ‘condition’

10 means—

11 ‘‘(A) a condition to a license for a project

12 on a Federal reservation determined by a con13 sulting agency for the purpose of the first pro14 viso of section 4(e); or

15 ‘‘(B) a prescription relating to the con16 struction, maintenance, or operation of a

17 fishway determined by a consulting agency for

18 the purpose of the first sentence of section 18.

19 ‘‘(2) CONSULTING AGENCY.—The term ‘con20 sulting agency’ means—

21 ‘‘(A) in relation to a condition described in

22 paragraph (1)(A), the Federal agency with re23 sponsibility for supervising the reservation; and

24 ‘‘(B) in relation to a condition described in

25 paragraph (1)(B), the Secretary of the Interior

26 or the Secretary of Commerce, as appropriate.
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1 ‘‘(b) FACTORS TO BE CONSIDERED.—In determining

2 a condition, a consulting agency shall—

3 ‘‘(1) consider the economic effects (including

4 power cost impacts) of the condition;

5 ‘‘(2) consider the effect on other beneficial pub6 lic uses (including irrigation, flood control, water

7 supply, and recreation) of the condition;

8 ‘‘(3) consider compatibility with other condi9 tions to be included in the license, including manda10 tory conditions of other agencies, when available;

11 ‘‘(4) consider compatibility with conditions ex12 isting at the project site, including, where applicable,

13 joint operation of a facility by two or more sovereign

14 nations, operation of a facility on a waterway that

15 is an international boundary, and conditions man16 dated by international treaty;

17 ‘‘(5) prescribe a condition only when necessary

18 to address direct project-related effects; and

19 ‘‘(6) in selecting among conditions that are

20 equally effective for purposes of the first proviso of

21 section 4(e) and the first sentence of section 18, pre22 scribe the least costly alternative.

23 ‘‘(c) DOCUMENTATION.—

24 ‘‘(1) IN GENERAL.—A consulting agency shall

25 assemble a record detailing, among other pertinent
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1 matters, all proposals made, comments received from

2 public notice of draft conditions, facts considered,

3 and analyses made sufficient to demonstrate compli4 ance with subsection (b).

5 ‘‘(2) SUBMISSION TO THE COMMISSION.—A

6 consulting agency shall include the documentation

7 under paragraph (1) in it, submission of a condition

8 to the Commission.

9 ‘‘(d) PUBLIC COMMENT.—Before submitting to the

10 Commission a condition, and at least 90 days before a li11 cense applicant is required to file a license application with

12 the Commission, a consulting agency shall provide notice

13 of draft conditions and an opportunity for a hearing on

14 the record. The consulting agency shall take into consider15 ation all comments received and include in the documenta16 tion submitted to the Commission evidence thereof.

17 ‘‘(e) SUBMISSION OF FINAL CONDITION.—

18 ‘‘(1) IN GENERAL.—After an applicant files

19 with the Commission an application for a license, the

20 Commission shall set a date by which a consulting

21 agency shall submit to the Commission a final condi22 tion.

23 ‘‘(2) LIMITATION.—Except as provided in para24 graph (4), the date for submission of a final condi25 tion shall be not later than one year after the date
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1 on which the Commission gives the consulting agen2 cy notice that a license application is ready for envi3 ronmental review.

4 ‘‘(3) DEFAULT.—If a consulting agency does

5 not submit a final condition to a license by the date

6 set under paragraph (1)—

7 ‘‘(A) the consulting agency shall not there8 after have authority to recommend or establish

9 a condition to the license; and

10 ‘‘(B) the Commission may, but shall not be

11 required to, recommend or establish an appro12 priate condition to the license that—

13 ‘‘(i) furthers the interest sought to be

14 protected by the provision of law that au15 thorizes the consulting agency to propose

16 or establish a condition to the license; and

17 ‘‘(ii) conforms to the requirements of

18 this Act.

19 ‘‘(4) EXTENSION.—The Commission may ex20 tend for good cause a deadline set under paragraph

21 (2).’’.

22 (b) CONFORMING AND TECHNICAL AMENDMENTS.—

23 (1) Section 3(17)(E)(ii) of the Federal Power Act (16

24 U.S.C. 796(17)(E)(ii)) is amended by striking the period

25 at the end thereof and inserting a semicolon.
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1 (2) The first proviso of the first sentence of section

2 4(e) of such Act (16 U.S.C. 797(e)) is amended by insert3 ing after ‘‘conditions’’ the following: ‘‘, determined in ac4 cordance with section 32,’’ and by striking the period at

5 the end of the proviso and inserting a colon.

6 (3) Section 14(b) of such Act (16 U.S.C. 807(b)) is

7 amended by striking ‘‘its’’ and inserting ‘‘it’’ in the second

8 sentence.

9 (4) Section 18 of such Act (16 U.S.C. 811) is amend10 ed in the first sentence by striking ‘‘prescribed by the Sec11 retary of Commerce’’ and inserting ‘‘prescribed, in accord12 ance with section 32, by the Secretary of the Interior or

13 the Secretary of Commerce, as appropriate’’.

14 (5) Section 21 of such Act (16 U.S.C. 814) is amend15 ed by inserting a colon after ‘‘$3,000’’.

16 (6) Section 30(c)(1) of such Act (16 U.S.C.

17 823a(c)(1)) is amended by inserting a comma after ‘‘Serv18 ice’’ each place it appears.

19 SEC. 3. HYDROELECTRIC PRODUCTION INCENTIVES.

20 (a) INCENTIVE PAYMENTS.—For electric energy gen21 erated and sold by a qualified hydroelectric facility during

22 the incentive period, the Secretary of Energy (referred to

23 in this section as the ‘‘Secretary’’) shall make, subject to

24 the availability of appropriations, incentive payments to

25 the owner or operator of such facility. The amount of such
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1 payment made to any such owner or operator shall be as

2 determined under subsection (e) of this section. Payments

3 under this section may only be made upon receipt by the

4 Secretary of an incentive payment application which estab5 lishes that the applicant is eligible to receive such payment

6 and which satisfies such other requirements as the Sec7 retary deems necessary. Such application shall be in such

8 form, and shall be submitted at such time, as the Sec9 retary shall establish.

10 (b) DEFINITIONS.—For purposes of this section:

11 (1) QUALIFIED HYDROELECTRIC FACILITY.—

12 The term ‘‘qualified hydroelectric facility’’ means a

13 turbine or other generating device owned or solely

14 operated by a non-Federal entity which generates

15 hydroelectric energy for sale and which is added to

16 an existing dam or conduit.

17 (2) EXISTING DAM OR CONDUIT.—The term

18 ‘‘existing dam or conduit’’ means any dam or con19 duit the construction of which was completed before

20 the date of the enactment of this section and which

21 does not require any construction or enlargement of

22 impoundment or diversion structures (other than re23 pair or reconstruction) in connection with the instal24 lation of a turbine or other generating device.
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1 (3) CONDUIT.—The term ‘‘conduit’’ has the

2 same meaning as when used in section 30(a)(2) of

3 the Federal Power Act.

4 The terms defined in this subsection shall apply without

5 regard to the hydroelectric kilowatt capacity of the facility

6 concerned, without regard to whether the facility uses a

7 dam owned by a governmental or nongovernmental entity,

8 and without regard to whether the facility begins oper9 ation on or after the date of the enactment of this section.

10 (c) ELIGIBILITY WINDOW.—Payments may be made

11 under this section only for electric energy generated from

12 a qualified hydroelectric facility which begins operation

13 during the period of 10 fiscal years beginning with the

14 first full fiscal year occurring after the date of enactment

15 of this Act.

16 (d) INCENTIVE PERIOD.—A qualified hydroelectric

17 facility may receive payments under this section for a pe18 riod of 10 fiscal years (referred to in this section as the

19 ‘‘incentive period’’). Such period shall begin with the fiscal

20 year in which electric energy generated from the facility

21 is first eligible for such payments.

22 (e) AMOUNT OF PAYMENT.—

23 (1) IN GENERAL.—Payments made by the Sec24 retary under this section to the owner or operator of

25 a qualified hydroelectric facility shall be based on
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1 the number of kilowatt hours of hydroelectric energy

2 generated by the facility during the incentive period.

3 For any such facility, the amount of such payment

4 shall be 1.5 cents per kilowatt hour (adjusted as

5 provided in paragraph (2)), subject to the avail6 ability of appropriations under subsection (g), except

7 that no facility may receive more than $1,000,000

8 in one calendar year.

9 (2) ADJUSTMENTS.—The amount of the pay10 ment made to any person under this section as pro11 vided in paragraph (1) shall be adjusted for inflation

12 for each fiscal year beginning after calendar year

13 2001 in the same manner as provided in the provi14 sions of section 29(d)(2)(B) of the Internal Revenue

15 Code of 1986, except that in applying such provi16 sions the calendar year 2001 shall be substituted for

17 calendar year 1979.

18 (f) SUNSET.—No payment may be made under this

19 section to any qualified hydroelectric facility after the ex20 piration of the period of 20 fiscal years beginning with

21 the first full fiscal year occurring after the date of enact22 ment of this Act, and no payment may be made under

23 this section to any such facility after a payment has been

24 made with respect to such facility for a period of 10 fiscal

25 years.
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1 (g) AUTHORIZATION OF APPROPRIATIONS.—There

2 are authorized to be appropriated to the Secretary to carry

3 out the purposes of this section $50,000,000 for each of

4 the fiscal years 2002 through 2011.

5 SEC. 4. HYDROELECTRIC EFFICIENCY IMPROVEMENT.

6 (a) INCENTIVE PAYMENTS.—The Secretary of En7 ergy shall make incentive payments to the owners or oper8 ators of hydroelectric facilities at existing dams to be used

9 to make capital improvements in the facilities that are di10 rectly related to improving the efficiency of such facilities

11 by at least 3 percent.

12 (b) LIMITATIONS.—Incentive payments under this

13 section shall not exceed 10 percent of the costs of the cap14 ital improvement concerned and not more than one pay15 ment may be made with respect to improvements at a sin16 gle facility. No payment in excess of $1,000,000 may be

17 made with respect to improvements at a single facility.

18 (c) AUTHORIZATION.—There is authorized to be ap19 propriated to carry out this section not more than

20 $50,000,000 in each fiscal year after the fiscal year 2001.

21 SEC. 5. SMALL HYDROELECTRIC POWER PROJECTS.

22 Section 408(a)(6) of the Public Utility Regulatory

23 Policies Act of 1978 is amended by striking ‘‘April 20,

24 1977’’ and inserting ‘‘May 16, 2001’’.
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1 SEC. 6. INCREASED HYDROELECTRIC GENERATION AT EX2 ISTING FEDERAL FACILITIES.

3 (a) IN GENERAL.—The Secretary of Energy, in con4 sultation with the Secretary of the Interior and Secretary

5 of the Army, shall conduct studies of the cost-effective op6 portunities to increase hydropower generation at existing

7 federally-owned or operated water regulation, storage, and

8 conveyance facilities. Such studies shall be completed with9 in two years after the date of enactment of this Act and

10 transmitted to the Committee on Commerce of the House

11 of Representatives and the Committee on Energy and

12 Natural Resources of the Senate. An individual study shall

13 be prepared for each of the Nation’s principal river basins.

14 Each such study shall identify and describe with speci15 ficity the following matters:

16 (1) Opportunities to improve the efficiency of

17 hydropower generation at such facilities through, but

18 not limited to, mechanical, structural, or operational

19 changes.

20 (2) Opportunities to improve the efficiency of

21 the use of water supplied or regulated by Federal

22 projects where such improvement could, in the ab23 sence of legal or administrative constraints, make

24 additional water supplies available for hydropower

25 generation or reduce project energy use.
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1 (3) Opportunities to create additional hydro2 power generating capacity at existing facilities

3 through, but not limited to, the construction of addi4 tional generating facilities, the uprating of genera5 tors and turbines, and the construction of pumped

6 storage facilities.

7 (4) Preliminary assessment of the costs and the

8 economic and environmental consequences of such

9 measures.

10 (b) PREVIOUS STUDIES.—If studies of the type re11 quired by subsection (a) have been prepared by any agency

12 of the United States and published within the five years

13 prior to the date of enactment of this Act, the Secretary

14 of Energy may choose not to perform new studies and in15 corporate the information in such studies into the studies

16 required by subsection (a).

17 (c) AUTHORIZATION.—There is authorized to be ap18 propriated such sums as may be necessary to carry out

19 the purposes of this section.

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