I 
108TH CONGRESS 
1ST SESSION H. R. 1337
To encourage the development of hydroelectric projects, and for other 
purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 18, 2003
Mr. SHADEGG introduced the following bill; which was referred to the 
Committee on Energy and Commerce 
A BILL 
To encourage the development of hydroelectric projects, and 
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. FINDINGS. 
The Congress finds that: 
(1) The United States must increase its supply 
of energy to ensure a continuing prosperous econ-
omy and high standard of life. 
(2) We currently rely heavily on imports of en-
ergy supplies from foreign nations and utilize large 
quantities of carbon fuels for electricity generation.
(3) Hydropower is a domestic energy source 
which currently produces 92,000 megawatts of elec-
tricity per year, a figure representing 10 percent of 
the generation capacity in the United States. 
(4) The Energy Information Agency estimates 
that, of the 75,000 dams in the United States, only 
2,400 or three percent of these dams currently 
produce electricity. 
(5) The Energy Information Agency further es-
timates that there are approximately 21,300 
megawatts of undeveloped capacity at existing dams. 
(6) New technology allows this energy to be uti-
lized with little or no environmental effect by adding 
new turbines to existing dams and improving the ef-
ficiency of existing turbines. 
(7) Hydropower produces electricity without 
producing hazardous waste or air pollutants. 
(8) The 92,000 megawatts of electricity cur-
rently generated by hydropower avoid the annual 
emission of 4.75 million tons of sulfur dioxide and 
2 million tons of nitrous oxide by eliminating the 
need to burn 345 million tons of coal. 
(9) Hydropower is a renewable energy source 
which, because of the natural hydrologic cycle, will 
continue to be available in perpetuity.
SEC. 2. CONSTITUTIONAL AUTHORITY. 
The Constitutional authority on which this Act rests 
is the power of Congress to make all laws which shall be 
necessary and proper as enumerated in Article I, Section 
8 of the United States Constitution. 
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 
2003 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 2003 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 2004 through 2013. 
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-