Breaking News: Hydro Currents

What Obama’s re-election could mean for hydro

Re-elected U.S. President Barack Obama’s comments in his 2012 State of the Union address about advocating for an “all-out, all-of-the-above strategy that develops every available source of American energy” provide hope for the hydroelectric industry in the U.S. over the next four years.

Obama, who defeated Republican candidate Mitt Romney with a 303-206 advantage in the Electoral College, also said in this address that he wants to double America’s share of power generated by clean energy sources to 80% by 2035 by investing in a number of renewable sectors, including hydro.

The President’s re-election is being lauded by the National Hydropower Association, which urges Obama’s White House to consider hydroelectric generation in the nation’s energy mix. “With the campaign behind us, it’s now time to get back to the business of the nation in Washington, and we look forward to working with President Obama and his administration over the next four years,” says NHA Executive Director Linda Church Ciocci. “We must take advantage of the opportunities over the next four years to enact policies that will unlock the nation’s incredible hydropower resource. Doing so will afford millions of Americans increased access to clean, affordable electricity and create a million new jobs in the process.”

A trio of bills that would help U.S. hydroelectric development are making their way through Congress: the Hydropower Improvement Act of 2011, the Hydropower Regulatory Efficiency Act of 2012, and the Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act of 2012.

Duke CEO Jim Rogers announces retirement

Just four months after he was named chief executive officer of the new company formed through the merger of Progress Energy Inc. and Duke Energy Corp., Jim Rogers announced he is retiring as chairman, president and CEO of Duke Energy by the end of 2013.

Rogers was appointed CEO just hours before the merger in July, surprising many who expected Progress CEO Bill Johnson to take over the combined company. The last-minute switch drew the attention of state and federal regulators, who have been investigating Duke documents and communications to see if the company misled the North Carolina Utilities Commission (NCUC) before the merger.

Rogers’ resignation is part of Duke Energy’s settlement with NCUC, although as of late November the commission had not officially accepted its terms. As per the NCUC proposed agreement, Duke will create a special committee to oversee Rogers’ successor, as well as the appointment of two new board members.

Duke must also agree to other merger commitments, including maintaining at least 1,000 employees in Raleigh, N.C., a guaranteed US$25 million in fuel and fuel-related cost savings to North Carolina customers, and $5 million to support workforce development and low-income assistance in North Carolina. Duke has also agreed to retain the former general counsel of Progress Energy to advise the company for two years on regulatory and legislative matters in North Carolina.

Rockslide damages penstock at 88-MW Montrose

A naturally occurring rockslide significantly damaged a 200- to 300-meter-long section of the 5-km penstock that supplies water to the 88-MW Montrose plant in British Columbia, Canada.

Needed repairs may require the plant to be off line for several months, says owner Alterra Power Corp. Repairs likely will be carried out during the winter months, when water flows and power generation are lower. The company is currently assessing the cost of repairs.

The intake and power plant were not affected, and there were no injuries. In addition, the nearby 146-MW Toba plant was not affected and remains in operation. The Toba Montrose project was completed in late 2010.

Licensees challenge land use fees for hydro on non-federal land

Eight hydropower licensees with projects in four states have filed a petition with the Federal Energy Regulatory Commission challenging the levying of federal land use fees on hydroelectric projects for land the federal government no longer owns.

The Power Site Reservation Fees Group – representing projects in Alaska, Washington, Texas and Louisiana – filed Nov. 21, seeking a declaratory order that such charges violate the Federal Power Act. FPA requires non-federal hydro project licensees to pay reasonable annual charges to compensate for the use of federal lands. The revenues are allocated 12.5% to federal miscellaneous receipts, 50% to the Reclamation Fund, and 37.5% to the state or Indian reservation in which the project is located.

The challenge relates to situations in which the federal government transferred some lands to the licensee or another owner but retained a power site reservation.

The petition asks that “the commission find that collection of annual charges under Section 10(e)(1) of the Federal Power Act, 16 USC 803(e)(1), for hydropower licensees’ use and occupancy of lands that they own but that are subject to a power site reservation under FPA Section 24, 16 USC 818, is inconsistent with the language, structure, and purpose of FPA Part 1, including Section 10(e)(1).”

FERC Deputy Associate General Counsel John Katz testified Sept. 19 that the commission has no objection to legislation that would prevent FERC from collecting federal land use fees in such situations. Katz said FERC has no record of the amount of acreage that falls into the category because it assesses land use charges based on the amount of federal acreage each project occupies. He said that information usually comes from a license application or order. Unless a licensee identifies acreage that has been transferred from federal ownership but is still subject to a power site reservation, FERC does not have that information.

Operators seeking the declaratory order are Alaska Electric Light and Power Co.; Alaska Energy Authority; City and Borough of Sitka, Alaska; Chelan County, Wash., Public Utility District; Snohomish County, Wash., Public Utility District; Grant County, Wash., Public Utility District; Sabine River Authority of Texas-Sabine River Authority of Louisiana; and Southeast Alaska Power Agency.

Alcoa finalizes deal for 378-MW Tapoco hydropower lot

Alcoa Power Generating Inc. has finalized a US$600 million deal that transfers ownership of its 378-MW Tapoco project to Brookfield Renewable Energy Partners. Tapoco includes four hydro facilities (Cheoah, Calderwood, Chilowee and Santeetlah) on the Little Tennessee and Cheoah Rivers in eastern Tennessee and western North Carolina.

The deal includes 14,500 acres, 86 miles of transmission line, and four stations and dams built by Alcoa from 1919 to 1957 to provide power for aluminum smelting and rolling mills.

In October, the Federal Energy Regulatory Commission approved the license transfer to Brookfield.

Voters shut down 1.05-MW Castle Creek scheme

Colorado voters nixed Aspen’s long-delayed 1.05-MW Castle Creek project in November, with those opposing the plan holding about a 51.4% advantage over those in favor.

The Castle Creek plant was passed by Aspen voters in 2007, who then approved a US$5.5 million bond for its construction.

In March 2008, a $1.3 million contract was awarded to Canyon Industries Inc. to supply a turbine and generator for the project, although work on the project never began. Project revisions and inflation eventually raised Castle Creek’s price tag to $10.5 million, increasing opposition along the way.

The city is not legally required to heed Aspen’s vote, although sources say it would be a political misstep to ignore the majority.

Brookfield secures additional financing for 45-MW Kokish River plant

Brookfield Renewable Energy Partners has completed a US$175.6 million private placement bond for financing its 45-MW Kokish River project.

The Kokish River hydropower plant, which gained approval from Canada’s Department of Fisheries and Oceans in May, will be located in the northern part of Vancouver Island.

Brookfield and its partner, the Namgis First Nation, say the senior bond has an interest rate of 4.45% and is fully amortizing over its 41-year term. The bonds are rated A with a stable trend by DBRS. Scotia Capital Inc. acted as the deal’s sole private placement agent.

Power generated at the plant will be sold under a 40-year power purchase agreement with BC Hydro. Brookfield says it expects Kokish River to enter commercial operation in 2014.

Study shows potential for America’s hydrokinetic sector

A report from energy market analyst GlobalData shows that collaborations in marine power technology development between the industrial and academic sectors in the U.S. are stronger than ever before.

According to GlobalData’s report – titled ” Marine Power (Wave and Tidal) – Installed Capacity, Levelized Cost of Energy (LCOE), Profiles of Technology Developers and Key Country Analysis to 2030″ – about 50 tidal projects are in various stages of development throughout the U.S.

The report notes that an Electric Power Research Institute (EPRI) study calculates America’s hydrokinetic potential for a depth of 60 meters at 2,610 TWh per year, with the bulk of the generating potential surrounding Alaska and the west coast. GlobalData also notes that Maine, New Jersey and Massachusetts have potential for ocean energy.

This generating potential has led to more than US$87 million in hydrokinetic investment from the U.S. Department of Energy via its Water Power Program, which provides funding for universities, laboratories, industry and other agencies working in marine technologies. The U.S. Navy has also continued its support for ocean power via its Littoral Expeditionary Autonomous PowerBuoy (LEAP) program.

Investment group acquires Allegheny River projects

Energy Investors Funds, a private equity fund management firm, has acquired the Allegheny 8 and Allegheny 9 hydro projects through its United States Power Fund IV. Financial details of the deal were not disclosed.

The plants have a total combined capacity of 30.4 MW, were completed in 1990 and are located on the Allegheny River about 35 miles from Pittsburgh. Both facilities will be operated by Northbrook Energy subsidiary Allegheny Power LLC under a power purchase agreement with the New York State Electric & Gas Corporation. The agreement runs through August 2030.

“The project has a solid operational history, a long-term off-take contract with a highly rated utility for the power that the plants produce, and great prospects for operating efficiently well into the future,” says EIF Managing Partner Herb Magid.

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Breaking News: Hydro Currents

New report examines two-year progress of federal hydropower initiative

A report released by the U.S. Army Corps of Engineers, U.S. Department of Energy and U.S. Department of the Interior details the two-year progress of a memorandum of understanding for hydropower.

The MOU, signed in March 2010, contains 13 high-level goals and 17 specific action items that were targeted toward helping America’s “development of clean, reliable, cost-effective and sustainable hydropower generation,” according to the report.

The report says through collaboration and partnerships with other federal agencies, many goals have been achieved, some of which are:

– Complete publicly available assessments of different hydropower resources, including a construction database for all existing U.S. hydropower infrastructure;

– Collaborate in developing tools for the optimization of hydropower facilities and evaluate the potential for state-of-the-art upgrades and modernizations;

– Fund research projects aimed at developing and demonstrating new hydropower generation technologies;

– Examine climate change effects on water availability for hydropower generation at federal facilities;

– Establish the Federal Inland Hydropower Working Group;

– Coordinate a stakeholder-driven, basin-scale opportunity assessment in the Deschutes River basin; and

– Improve licensing procedures for the development of privately owned hydro at federal dams and water infrastructure.

The report notes that hydropower represents the majority of renewable energy capacity utilized in the U.S.

House subcommittee hears testimony on hydropower regulatory legislation

The Subcommittee of the House Energy and Commerce Committee held a hearing on draft legislation that would improve the regulatory framework for hydropower development. The bipartisan bill – called the Hydropower Regulatory Efficiency Act of 2012 – was introduced by representatives Cathy McMorris Rodgers (R-Wash.) and Diane DeGette (D-Colo.).

Contained in the bill are measures that would “facilitate the development of hydropower and conduit projects through several common-sense reforms,” including:

– Updating the Federal Energy Regulatory Commission license exemption standard to streamline the development of more hydro projects;

– Giving FERC the option to exempt hydro projects with a capacity of less than 10 MW and conduit projects with capacity between 5 and 40 MW from the permitting process; and

– Allowing FERC to extend the terms of a preliminary permit for up to two years, for a total of five years, to allow a permittee sufficient time to develop and file a license application.

Currently, the licensing of hydropower projects can take long-er than other forms of renewable energy, according to testimony given by former National Hydropower Association president and Grant County Public Utility District official Andrew Munro. Other resources – including wind and natural gas – have shorter approval time frames, putting hydropower at a competitive disadvantage when securing investment, Munro says, adding, “Simply put, conducting business as usual will not work.”

NHA, citing a recent U.S. Department of Energy study, says more than 12,000 MW of hydropower potential exists at the America’s 54,000 existing non-powered dams.

A Navigant Consulting report shows 60,000 MW of hydroelectric capacity and 1 million jobs could be created by 2025, should the nation make hydropower development a priority.

BPA, BC Hydro agree on new water storage treaty

A new long-term agreement between the Bonneville Power Administration and BC Hydro will help shape the environmental and economic health of the Northwest.

The new Non-Treaty Storage Agreement, which extends to September 2024, calls for the use of “additional reservoir flow shaping capability on the upper Columbia River in Canada to provide safer flows for protected fish” while also supporting power generation. The agreement benefits threatened and endangered fish by providing flexibility for BPA to reduce the flow of water from Mica Dam in the spring, then increasing the flow in the summer when Columbia River flows are low.

BPA says the agreement will also allow it to release up to 500,000 acre-feet of water for fish in the spring, which is in addition to the flows already provided for under the Columbia River Treaty of 1964.

Ciocci: Hydropower’s future strong, industry vital to U.S. energy policy

Despite the uncertainty of election year politics and several hydropower-related measures currently under consideration by the U.S. Congress, the future of hydroelectricity is bright, according to National Hydropower Association Executive Director Linda Church Ciocci. Ciocci, speaking in the opening session of the NHA’s 2012 Annual Conference held in April 2012 in Washington, D.C., assured the more than 500 industry representatives that hydroelectricity will be a key component in America’s power production strategy.

“Despite all of this uncertainty and the indecision that often comes with election year politics, there is one bright and certain light,” Ciocci says. “Hydropower has a tremendous future. It is the foundation on which our clean energy future rests.”

Hydropower’s reliability, cleanliness, flexibility and availability were cited by Ciocci as factors advantageous to the industry’s growth, and even though unanswered questions regarding tax credits, emission standards, permitting processes and infrastructure development loom, Ciocci says she is confident the hydroelectric sector will remain strong.

FERC’s ILP guide to help stakeholders draft hydro study requests

The Federal Energy Regulatory Commission has issued a guide to its integrated licensing process to help stakeholders draft requests for pre-licensing studies by hydro license applicants.

FERC began evaluating the effectiveness of the ILP process in 2010. The agency convened representatives of the various parties to the hydroelectric licensing process in November 2010 to discuss the effectiveness of the ILP, which was created to provide a more streamlined and efficient means of obtaining a license.

FERC acknowledged it is difficult to reach agreement on studies in some cases. It noted most comments it received during its ILP evaluation focused on the study plan development process and the need for greater clarity on how the commission applies its study criteria in evaluating study requests.

Department of Energy seeks facilities for hydropower advancement assessment program

The U.S. Department of Energy is asking hydroelectric project operators to open their plants for assessment as part of its Hydropower Advancement Project.

DOE estimates that an additional 8 to 16 GW of hydropower capacity can be produced annually through “cost effective and sustainable upgrades” at existing facilities. The department is using voluntary HAP assessments to “identify opportunities to increase generation and value through improvements and expansions.”

The assessments will be performed by DOE teams at no cost to the facility owners, the agency says. In return, facility owners will receive a report that provides estimates for increased generation potential, the costs and benefits of improvement activities, and recommendations for additional studies as needed.

DOE says the reports will also include a description of the facility and the site-specific environmental and operating constraints that affect its generation and value. Interested parties are asked to submit a facility data sheet and a letter of commitment stating the owners are willing to volunteer their facility and will cooperate with the assessment team. Responses are due June 25, 2012.

Senate committee endorses president’s FERC nominees Norris, Clark

The Senate Energy and Natural Resources Committee has endorsed the nominations of John Norris and Anthony Clark to the Federal Energy Regulatory Commission.

The full Senate next is to consider the nominations by President Barack Obama of Norris, a Democrat, to a second FERC term and Clark, a Republican, to a first term on the five-member utility regulator.

The committee endorsed the nominations April 26 after the nominees testified before the panel in March.

Norris, a lawyer and state utility regulator from Iowa, was first named to the commission by Obama in 2009. His initial term expires this year. Clark, who has served on the North Dakota Public Service Commission since 2001, was named to succeed Commissioner Marc Spitzer, who left FERC in December.

No more than three members of the same party may serve on the five-member commission.

NHA unveils comprehensive hydropower ‘snapshot’

The National Hydropower Association has released an interactive tool designed to demonstrate how hydropower benefits the nation’s local communities and economies.

NHA’s “U.S. Hydropower Supply Chain Snapshot,” unveiled at the association’s annual conference in April 2012 in Washington, D.C., features nearly 2,000 companies in the non-federal hydro supply chain.

The organization says these companies include “small, medium and large firms, and range from project developers to construction companies; architecture and engineering firms to electricians; and component manufacturers to biologists.”

And while the snapshot confirms the industry’s strength in regions long considered hotbeds of hydro activity, NHA Executive Director Linda Church Ciocci says the things revealed elsewhere surprise her the most. “For example, the map details over 415 companies in southeastern states like Alabama and Georgia and more than 583 companies in Rust Belt states like Ohio, Pennsylvania and Illinois,” Ciocci says. “Many of these are ‘red states,’ or states where conventional wisdom says there’s no clean energy.”

The snapshot also demonstrates the diversity of companies and jobs within the hydropower industry, Ciocci says.

On the flipside, the snapshot also shows what the industry could lose. “You can clearly see which parts of the country stand to lose if our elected officials fail to provide a predictable energy policy environment for our industry,” Ciocci says.

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