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. RADANO-
VICH, Mr. BURR of North Carolina, and Mr. BROWN of South Carolina)
introduced the following bill; which was referred to the Committee on En-
ergy and Commerce
A BILL
To improve the Federal licensing process for hydroelectric
projects.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Hydroelectric Licens-
ing and Incentives Act of 2001’’.
SEC. 2. IMPROVEMENTS TO HYDROPOWER RELICENSING
PROCESS.
(a) IN GENERAL.—Part I of the Federal Power Act
(16 U.S.C. 791a and following) is amended by adding at
the end the following:
‘‘SEC. 32. PROCESS FOR CONSIDERATION BY FEDERAL
AGENCIES OF CONDITIONS TO LICENSES.
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) 
CONDITION.—The 
term 
‘condition’
means—
‘‘(A) a condition to a license for a project
on a Federal reservation determined by a con-
sulting agency for the purpose of the first pro-
viso of section 4(e); or
‘‘(B) a prescription relating to the con-
struction, maintenance, or operation of a
fishway determined by a consulting agency for
the purpose of the first sentence of section 18.
‘‘(2) CONSULTING
AGENCY.—The term ‘con-
sulting agency’ means—
‘‘(A) in relation to a condition described in
paragraph (1)(A), the Federal agency with re-
sponsibility for supervising the reservation; and
‘‘(B) in relation to a condition described in
paragraph (1)(B), the Secretary of the Interior
or the Secretary of Commerce, as appropriate.
‘‘(b) FACTORS TO BE CONSIDERED.—In determining
a condition, a consulting agency shall—
‘‘(1) consider the economic effects (including
power cost impacts) of the condition;
‘‘(2) consider the effect on other beneficial pub-
lic uses (including irrigation, flood control, water
supply, and recreation) of the condition;
‘‘(3) consider compatibility with other condi-
tions to be included in the license, including manda-
tory conditions of other agencies, when available;
‘‘(4) consider compatibility with conditions ex-
isting at the project site, including, where applicable,
joint operation of a facility by two or more sovereign
nations, operation of a facility on a waterway that
is an international boundary, and conditions man-
dated by international treaty;
‘‘(5) prescribe a condition only when necessary
to address direct project-related effects; and
‘‘(6) in selecting among conditions that are
equally effective for purposes of the first proviso of
section 4(e) and the first sentence of section 18, pre-
scribe the least costly alternative.
‘‘(c) DOCUMENTATION.—
‘‘(1) IN GENERAL.—A consulting agency shall
assemble a record detailing, among other pertinent
matters, all proposals made, comments received from
public notice of draft conditions, facts considered,
and analyses made sufficient to demonstrate compli-
ance with subsection (b).
‘‘(2) SUBMISSION
TO
THE
COMMISSION.—A
consulting agency shall include the documentation
under paragraph (1) in it, submission of a condition
to the Commission.
‘‘(d) PUBLIC COMMENT.—Before submitting to the
Commission a condition, and at least 90 days before a li-
cense applicant is required to file a license application with
the Commission, a consulting agency shall provide notice
of draft conditions and an opportunity for a hearing on
the record. The consulting agency shall take into consider-
ation all comments received and include in the documenta-
tion submitted to the Commission evidence thereof.
‘‘(e) SUBMISSION OF FINAL CONDITION.—
‘‘(1) IN
GENERAL.—After an applicant files
with the Commission an application for a license, the
Commission shall set a date by which a consulting
agency shall submit to the Commission a final condi-
tion.
‘‘(2) LIMITATION.—Except as provided in para-
graph (4), the date for submission of a final condi-
tion shall be not later than one year after the date
on which the Commission gives the consulting agen-
cy notice that a license application is ready for envi-
ronmental review.
‘‘(3) DEFAULT.—If a consulting agency does
not submit a final condition to a license by the date
set under paragraph (1)—
‘‘(A) the consulting agency shall not there-
after have authority to recommend or establish
a condition to the license; and
‘‘(B) the Commission may, but shall not be
required to, recommend or establish an appro-
priate condition to the license that—
‘‘(i) furthers the interest sought to be
protected by the provision of law that au-
thorizes the consulting agency to propose
or establish a condition to the license; and
‘‘(ii) conforms to the requirements of
this Act.
‘‘(4) EXTENSION.—The Commission may ex-
tend for good cause a deadline set under paragraph
(2).’’.
(b) CONFORMING AND TECHNICAL AMENDMENTS.—
(1) Section 3(17)(E)(ii) of the Federal Power Act (16
U.S.C. 796(17)(E)(ii)) is amended by striking the period
at the end thereof and inserting a semicolon.
(2) The first proviso of the first sentence of section
4(e) of such Act (16 U.S.C. 797(e)) is amended by insert-
ing after ‘‘conditions’’ the following: ‘‘, determined in ac-
cordance with section 32,’’ and by striking the period at
the end of the proviso and inserting a colon.
(3) Section 14(b) of such Act (16 U.S.C. 807(b)) is
amended by striking ‘‘its’’ and inserting ‘‘it’’ in the second
sentence.
(4) Section 18 of such Act (16 U.S.C. 811) is amend-
ed in the first sentence by striking ‘‘prescribed by the Sec-
retary of Commerce’’ and inserting ‘‘prescribed, in accord-
ance with section 32, by the Secretary of the Interior or
the Secretary of Commerce, as appropriate’’.
(5) Section 21 of such Act (16 U.S.C. 814) is amend-
ed by inserting a colon after ‘‘$3,000’’.
(6) Section 30(c)(1) of such Act (16 U.S.C.
823a(c)(1)) is amended by inserting a comma after ‘‘Serv-
ice’’ each place it appears.
SEC. 3. HYDROELECTRIC PRODUCTION INCENTIVES.
(a) INCENTIVE PAYMENTS.—For electric energy gen-
erated and sold by a qualified hydroelectric facility during
the incentive period, the Secretary of Energy (referred to
in this section as the ‘‘Secretary’’) shall make, subject to
the availability of appropriations, incentive payments to
the owner or operator of such facility. The amount of such
payment made to any such owner or operator shall be as
determined under subsection (e) of this section. Payments
under this section may only be made upon receipt by the
Secretary of an incentive payment application which estab-
lishes that the applicant is eligible to receive such payment
and which satisfies such other requirements as the Sec-
retary deems necessary. Such application shall be in such
form, and shall be submitted at such time, as the Sec-
retary shall establish.
(b) DEFINITIONS.—For purposes of this section:
(1) QUALIFIED
HYDROELECTRIC
FACILITY.—
The term ‘‘qualified hydroelectric facility’’ means a
turbine or other generating device owned or solely
operated by a non-Federal entity which generates
hydroelectric energy for sale and which is added to
an existing dam or conduit.
(2) EXISTING
DAM
OR
CONDUIT.—The term
‘‘existing dam or conduit’’ means any dam or con-
duit the construction of which was completed before
the date of the enactment of this section and which
does not require any construction or enlargement of
impoundment or diversion structures (other than re-
pair or reconstruction) in connection with the instal-
lation of a turbine or other generating device.
(3) CONDUIT.—The term ‘‘conduit’’ has the
same meaning as when used in section 30(a)(2) of
the Federal Power Act.
The terms defined in this subsection shall apply without
regard to the hydroelectric kilowatt capacity of the facility
concerned, without regard to whether the facility uses a
dam owned by a governmental or nongovernmental entity,
and without regard to whether the facility begins oper-
ation on or after the date of the enactment of this section.
(c) ELIGIBILITY WINDOW.—Payments may be made
under this section only for electric energy generated from
a qualified hydroelectric facility which begins operation
during the period of 10 fiscal years beginning with the
first full fiscal year occurring after the date of enactment
of this Act.
(d) INCENTIVE PERIOD.—A qualified hydroelectric
facility may receive payments under this section for a pe-
riod of 10 fiscal years (referred to in this section as the
‘‘incentive period’’). Such period shall begin with the fiscal
year in which electric energy generated from the facility
is first eligible for such payments.
(e) AMOUNT OF PAYMENT.—
(1) IN GENERAL.—Payments made by the Sec-
retary under this section to the owner or operator of
a qualified hydroelectric facility shall be based on
the number of kilowatt hours of hydroelectric energy
generated by the facility during the incentive period.
For any such facility, the amount of such payment
shall be 1.5 cents per kilowatt hour (adjusted as
provided in paragraph (2)), subject to the avail-
ability of appropriations under subsection (g), except
that no facility may receive more than $1,000,000
in one calendar year.
(2) ADJUSTMENTS.—The amount of the pay-
ment made to any person under this section as pro-
vided in paragraph (1) shall be adjusted for inflation
for each fiscal year beginning after calendar year
2001 in the same manner as provided in the provi-
sions of section 29(d)(2)(B) of the Internal Revenue
Code of 1986, except that in applying such provi-
sions the calendar year 2001 shall be substituted for
calendar year 1979.
(f) SUNSET.—No payment may be made under this
section to any qualified hydroelectric facility after the ex-
piration of the period of 20 fiscal years beginning with
the first full fiscal year occurring after the date of enact-
ment of this Act, and no payment may be made under
this section to any such facility after a payment has been
made with respect to such facility for a period of 10 fiscal
years.
(g) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to the Secretary to carry
out the purposes of this section $50,000,000 for each of
the fiscal years 2002 through 2011.
SEC. 4. HYDROELECTRIC EFFICIENCY IMPROVEMENT.
(a) INCENTIVE PAYMENTS.—The Secretary of En-
ergy shall make incentive payments to the owners or oper-
ators of hydroelectric facilities at existing dams to be used
to make capital improvements in the facilities that are di-
rectly related to improving the efficiency of such facilities
by at least 3 percent.
(b) LIMITATIONS.—Incentive payments under this
section shall not exceed 10 percent of the costs of the cap-
ital improvement concerned and not more than one pay-
ment may be made with respect to improvements at a sin-
gle facility. No payment in excess of $1,000,000 may be
made with respect to improvements at a single facility.
(c) AUTHORIZATION.—There is authorized to be ap-
propriated to carry out this section not more than
$50,000,000 in each fiscal year after the fiscal year 2001.
SEC. 5. SMALL HYDROELECTRIC POWER PROJECTS.
Section 408(a)(6) of the Public Utility Regulatory
Policies Act of 1978 is amended by striking ‘‘April 20,
1977’’ and inserting ‘‘May 16, 2001’’.
SEC. 6. INCREASED HYDROELECTRIC GENERATION AT EX-
ISTING FEDERAL FACILITIES.
(a) IN GENERAL.—The Secretary of Energy, in con-
sultation with the Secretary of the Interior and Secretary
of the Army, shall conduct studies of the cost-effective op-
portunities to increase hydropower generation at existing
federally-owned or operated water regulation, storage, and
conveyance facilities. Such studies shall be completed with-
in two years after the date of enactment of this Act and
transmitted to the Committee on Commerce of the House
of Representatives and the Committee on Energy and
Natural Resources of the Senate. An individual study shall
be prepared for each of the Nation’s principal river basins.
Each such study shall identify and describe with speci-
ficity the following matters:
(1) Opportunities to improve the efficiency of
hydropower generation at such facilities through, but
not limited to, mechanical, structural, or operational
changes.
(2) Opportunities to improve the efficiency of
the use of water supplied or regulated by Federal
projects where such improvement could, in the ab-
sence of legal or administrative constraints, make
additional water supplies available for hydropower
generation or reduce project energy use.
(3) Opportunities to create additional hydro-
power generating capacity at existing facilities
through, but not limited to, the construction of addi-
tional generating facilities, the uprating of genera-
tors and turbines, and the construction of pumped
storage facilities.
(4) Preliminary assessment of the costs and the
economic and environmental consequences of such
measures.
(b) PREVIOUS STUDIES.—If studies of the type re-
quired by subsection (a) have been prepared by any agency
of the United States and published within the five years
prior to the date of enactment of this Act, the Secretary
of Energy may choose not to perform new studies and in-
corporate the information in such studies into the studies
required by subsection (a).
(c) AUTHORIZATION.—There is authorized to be ap-
propriated such sums as may be necessary to carry out
the purposes of this section.
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