FERC Commissioners Comment on Hydro

All five commissioners of the Federal Energy Regulatory Commission share their perspectives on hydropower and its future in the U.S. energy mix, including grid integration issues and the outlook for this important renewable resource.

The Federal Energy Regulatory Commission in the U.S. is responsible for ensuring reliable, efficient and sustainable energy for customers. To achieve that mission, FERC regulates the interstate transmission of natural gas, oil and electricity. FERC also regulates natural gas and private, municipal and state hydroelectric projects.

In this hydro interview, all five FERC commissioners answer our questions about hydro, ranging from their experience with this resource to its future in the U.S. energy mix.

Chairman Kevin McIntyre

Chairman Kevin J. McIntyre (photo courtesy FERC)

Chairman Kevin J. McIntyre (photo courtesy FERC)

Q: You previously worked in the global energy practice at law firm Jones Day, counseling and representing clients in the hydropower sector. Can you tell us a little bit about that?

A: I joined FERC as Chairman in early December 2017. Prior to joining FERC, I had the privilege of serving as co-lead of the global energy practice at the Jones Day law firm. At the firm, I had an expansive and diverse FERC practice, where I counseled and represented clients in nearly all energy industry sectors, including hydropower.

I also note that when I was a very junior lawyer, one of my earliest regular duties was to assist other attorneys in the firm in the compilation of a monthly circular that we informally called the Hydro Report, which proved to be for me a very good introduction to the hydropower industry, its fundamentals, its evolution and its challenges.

Q: What is your general attitude towards hydropower? How do you think hydro will fit in the U.S. energy mix going forward?

A: I support an “all-of-the-above” strategy for satisfying our nation’s energy needs. I recognize the critical role that hydropower has historically played, and should continue to play, in meeting those needs. Hydropower provides generation and a robust set of ancillary services, including voltage support, frequency regulation, spinning and non-spinning reserves, and black start capabilities. These services can be employed to improve the resilience and reliability of our nation’s energy system. Hydropower also provides many non-developmental benefits, including recreation, water supply and flood control.

FERC licenses hydropower projects — its original statutory role dating to 1920. There is significant potential for new hydropower across the U.S, and more than 300 hydropower projects will have entered FERC’s relicensing process by 2025. I believe that it is incumbent upon FERC to look for opportunities to remove market barriers, reduce regulatory burdens, and improve agency processes for all energy resources, including hydropower, while continuing to attend fully to its statutory responsibilities.

Commissioner Cheryl LaFleur

Commissioner Cheryl A. LaFleur (photo courtesy FERC)

Commissioner Cheryl A. LaFleur (photo courtesy FERC)

Q: As you are the longest-serving commissioner at FERC at this time, what are your unique perspectives on hydropower?

A: When I first came to FERC, I thought I knew about hydropower, having some experience with hydro facilities on the Connecticut and Deerfield rivers in New England. However, I have learned a great deal more over the past eight years on the Commission.

I quickly learned that our jurisdiction over hydropower licensing is one way in which we closely interact with members of the public. When I run into members of the public who have heard of FERC, it is frequently because they live near a hydro facility or on a reservoir.

The interests of those who live near hydro facilities are just one of the many multiple interests FERC has to balance as part of our licensing under the Federal Power Act. We are required to consider electric generation and transmission, protection of environment including fish and wildlife, irrigation, flood control, navigation, cultural resource protection and recreation. I am frequently reminded of the tensions among different interests and the need to make the best decisions we can to protect the overall public interest.

In my past life, I was very involved in designing and running safety programs. When joining the Commission, I learned that hydro projects, including the dams, are one of only two substantive areas (the other being LNG import/export facilities) over which we have safety responsibility that lasts throughout the life of the project and not just during licensing. After a hydro project is built and throughout its operation, FERC’s office of dam safety has an important role in inspecting dams and ensuring dam safety for the protection of the public as well as employees at the facilities. This is a critically important part of our work. In early 2017, I visited Oroville Dam after the spillway collapse, a very significant event that will have lasting implications for our dam safety program.

Q: What is your opinion on hydroelectricity contributing to addressing grid issues?

A: Hydro generation is one of our oldest generation technologies — the original renewable generation — and also an important current opportunity.

I have frequently observed that nearly all energy issues involve a balance among three core values — reliability, cost and the environment. Hydro scores well on each of these dimensions. Beginning with cost, hydro (once constructed) is a very affordable resource, with a stable cost not subject to fuel price fluctuations. Turning to reliability, hydro is a highly flexible resource that contributes capacity, energy and ancillary services. Hydroelectric facilities can be flexible and highly responsive in operation, so they are a critical part of keeping the lights on and supporting grid stability. Electricity generated from hydropower is among the fastest ramping of the energy sources and can go from zero power to maximum output rapidly and predictably. This makes it well-suited to meeting changing loads and maintaining the balance between electricity supply and demand. Finally, regarding the environment, hydro is emission- and carbon-free. It also works well with variable renewable resources such as wind and solar, and it is an important part of generating electricity without contributing to climate changes.

Q: What is your opinion about the topic of new pumped storage development in the U.S.? Is it needed? Is it likely to happen?

A: We have seen an increase over the past several years in pumped storage applications at the Commission. Investment in variable resources such as wind and solar is driving the need for energy storage to help balance those resources. Pumped storage is the original and largest form of storage. Like other storage technologies, pumped storage is a Swiss-army knife because of the number of different services it can provide to the grid, including capacity, energy, a range of ancillary services, and ramping. In February 2018, FERC issued Order No. 841 on electric storage participation in organized markets to require that storage — including pumped storage — be allowed to compete to provide any service it is technically capable of providing.

I do note that pumped storage can be expensive to construct and difficult to license because of the varied interests that have to be evaluated and considered. I do believe that both existing and new pumped storage — as well as other hydro technologies — offer tremendous value and will be an important part of our energy future.

Commissioner Neil Chatterjee

Commissioner Neil Chatterjee (photo courtesy FERC)

Commissioner Neil Chatterjee (photo courtesy FERC)

Q: You have extensive experience in energy policy work. Where does hydro fit in the U.S.’s future energy policy?

A: Hydropower is an essential part of our nation’s all-of-the-above energy strategy. It delivers an enormous amount of cost-effective electricity to U.S. consumers and businesses each year. In fact, approximately 7% of the electricity generated in the U.S. in 2017 came from hydropower. But hydropower’s importance is not just a question of the total megawatt-hours of energy it contributes to the grid: hydropower is clean, emissions-free and, actually, is the original form of energy storage. As our grid moves toward a more flexible system integrating large amounts of variable wind and solar power, hydropower’s ability to balance intermittent resources 24/7 will become increasingly critical for grid reliability and resilience.

Q: President Trump has mentioned hydropower as part of his discussion of infrastructure work needed in the U.S. Does this mean hydro may get increased attention?

A: I believe that’s a fair assumption. The administration has voiced its commitment to an all-of-the-above energy strategy, including hydropower as an important part of that strategy. It’s also important to note that hydropower facilities have a number of societal benefits beyond its contributions to our energy mix. Among other examples, they can provide flood control services and recreational benefits. And hydropower has played a uniquely important role in U.S. history, as it was a prime mover in introducing electricity to many rural areas of the country. All of those factors taken together make a strong case for hydropower being an integral component of the administration’s efforts to strengthen our nation’s energy infrastructure for the 21st century.

Q: In your opinion, are there policy or regulatory changes that can help pave the way for more hydro development work in the U.S.?

A: We at FERC are constantly looking at ways to better perform our regulatory responsibilities, including those related to hydropower development. In fact, one of the first actions taken by the Commission after I became chairman in August 2017 was to establish a 40-year default licensing term for hydropower projects. That relatively simple policy change improved regulatory certainty for all stakeholders, including developers considering new or expansion hydropower projects, as well as those looking at relicensing their existing hydropower projects. More recently, the Commission was one of a number of federal agencies executing a Memorandum of Understanding implementing Executive Order 13807’s One Federal Decision Policy. In signing that MoU, FERC has committed to reviewing its processes and working closely with other agencies to streamline environmental reviews associated with licensing of major infrastructure projects such as hydropower facilities. These are just some of the examples of our dedication here at the Commission to determining ways we can improve efficiencies and, therefore, better enable hydropower development.

Commissioner Robert Powelson

Commissioner Robert F. Powelson (photo courtesy FERC)

Commissioner Robert F. Powelson (photo courtesy FERC)

Q: Dam safety considerations have come to the forefront as a result of the Oroville Dam incident in California. How is FERC responding to this?

A: FERC is taking a proactive role to ensure that dam safety remains a top priority. As we review the January 5, 2018, independent forensic report regarding the Oroville incident, we are focusing on how to improve our dam safety policies, processes and practices to identify and prevent other incidents, regardless of magnitude, that could result from similar dam safety and organizational factors that contributed to the Oroville incident. We expect our regulated dam owners to have similar internal discussions. To facilitate such discussions, we have sent a letter to all project licensees with high-hazard dams requesting that their dam safety personnel read the independent forensic report, discuss it with senior management, and determine how the findings may apply to their facilities and dam safety programs.

Q: Hydropower is the lowest-cost power generation resource globally, but in the U.S. we have low-cost natural gas. How might this continue to affect hydro?

A: Wholesale prices for electricity vary throughout the U.S. due to many factors, and I cannot predict the future with any certainty. However, hydropower generation resources are capable of providing many reliability services, such as frequency response, voltage control and ramp capability. They are also a type of zero-carbon generation. So as our nation’s generation resource mix continues to evolve and different jurisdictions grapple with complex issues like resource adequacy, renewable energy resource integration, environmental goals, and grid reliability, it is likely that the impacts to hydropower resources, like other forms of electricity generation, will be diverse and region-specific.

Q: You have some interest and background in cyber security. Does FERC have any initiatives under way in this area that might affect hydro?

A: Cyber security is certainly a priority for FERC, and we do have several initiatives that are tailored to hydropower. On January 1, 2016, the Division of Dam Safety and Inspections (D2SI) implemented a cyber security program for licensed projects to increase protective measures against malicious cyber events. The initial process included a self-assessment tool (e.g., a cyber security checklist) for licensees to evaluate their current cyber security measures. Since 2016, the D2SI Security Team has also conducted annual security webinars to facilitate compliance with the hydropower security program. These webinars address both physical and cyber security and have featured a briefing on threats, vulnerabilities, and recent cyber attacks related to critical infrastructure to increase dam operator/owner awareness of cyber security issues.

Commissioner Richard Glick

Commissioner Richard Glick (photo courtesy FERC)

Commissioner Richard Glick (photo courtesy FERC)

Q: You have previously worked for utilities that had hydro in their generating portfolios. What is your general attitude toward hydropower?

A: Hydropower plays an important role in the resource mix, both in terms of providing clean, emissions-free generation and, increasingly, in helping to integrate variable energy resources, such as wind and solar. That is particularly true in the West, which has significant hydro resources and rapidly increasing levels of wind and solar generation.

Q: Does FERC have any plans to change the licensing process for hydropower, for example to make the process less time-consuming?

A: That is really a question for Chairman McIntyre, who sets the agenda for the Commission as a whole. I will note that I support efforts to make licensing processes more efficient wherever the Commission is able to do so, provided that we can still meet our obligations to evaluate the safety of the project and to address any effects it may have on the environment and surrounding communities.

Q: What can people in the hydro industry do to keep this clean, renewable resource in legislators’ minds going forward?

A: As I mentioned, hydropower has an important role to play as the generation mix changes and zero-emissions resources play a bigger role in meeting the nation’s electricity demands. It is important for hydropower interests to discuss the potential for hydropower to facilitate this transition, including by helping to integrate increasing quantities of variable energy resources, such as wind and solar. The development of additional pumped storage, in particular, can play a critical role in this regard.

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FERC Commissioners Comment on Hydro

The five commissioners of the Federal Energy Regulatory Commission share their thoughts about hydropower’s opportunities and challenges, as well as their specific hydro-related plans and priorities.

Hydro Review asked the commissioners of the Federal Energy Regulatory Commission to share their thoughts about the challenges and opportunities for hydropower, as well as their plans for hydro.

The Federal Energy Regulatory Commission (FERC) is composed of five members appointed by the president of the United States and confirmed by the U.S. Senate. No more than three members may belong to the same political party.

Commissioners are:

    – Chairman Joseph T. Kelliher, a Washington, D.C., Republican, confirmed by the Senate in November 2003 and appointed chairman by President Bush in June 2005. After his term expired in June 2007, President Bush nominated him to serve an additional five-year term. Kelliher currently still serves as chairman while the nomination is pending before the Senate. If confirmed for a second term, he will serve until June 30, 2012.
    – Suedeen Kelly, a Democrat from New Mexico, has served since November 2003, and was confirmed by the Senate for a second term in December 2004. Her term expires in June 2009;
    – Philip D. Moeller, a Washington State Republican, sworn in by Chief Justice John Roberts in July 2006. His term expires in June 2010;
    – Marc Spitzer, a Republican from Arizona, confirmed by the Senate in July 2006 for a term expiring in June 2011; and
    – Jon Wellinghoff, a Nevada independent, sworn in July 2006 for a term expiring in June 2008.

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Joseph T. Kelliher,
Chairman, Federal Energy Regulatory Commission

Hydropower is an essential part of the U.S.’s electricity supply. New hydropower technologies that utilize ocean waves, tides, and currents from free-flowing rivers hold significant potential, and may allow hydropower to play an even larger role in meeting the electricity supply needs of the U.S. and other countries. In effect, the new hydropower technologies may represent the last frontier for a major expansion of U.S. hydropower capacity.

These new technologies have the potential to provide a significant share of U.S. electricity supply. There are some significant challenges that must be overcome before that potential can be realized, however. These technologies have not been deployed commercially and their commercial viability has yet to be proved. There are also environmental, financial, and regulatory challenges.

The environmental issues are complicated by the fact that there is little scientific evidence on the effects of these new technologies. That stands in stark contrast with the conventional hydropower technologies, which have operated for more than 100 years. It is much easier to forecast the environmental effects of an existing conventional hydropower project based on hard evidence of its operating history than to project the environmental effects of technologies with no operating history. There will be environmental effects from these technologies. Those effects must be carefully considered and mitigated.

There are financial challenges as well. These new technologies are either at the research and development stage or just starting demonstration. Financing is required to complete development and demonstrate the technologies. Then there is the cost of commercial deployment. Financing challenges and regulatory challenges are related. If the regulatory process is unable to accommodate these new technologies, it is unlikely financing for commercial deployment will be secured. If the regulatory process is uncertain or unproven, it may frustrate the potential of these technologies. In my view, an unpredictable process may present the greatest regulatory risks.

The FERC regulatory process is well established and well suited to handle the development of these new technologies. FERC has made adjustments as necessary to our regulatory processes to help realize the potential of new hydropower technologies.

Over the years, we have improved our licensing process to include early engagement between the project sponsor and stakeholders, earlier and more predictable study requirements, more certain timeframes, and overall reduced processing time. This approach is critical to ensure careful review of these new technologies.

FERC is working to ensure that laws written early in the twentieth century meet the needs of the new technologies of the twenty-first century. We have sufficient flexibility under the law to meet the challenges of these new technologies. For example, we used different license processes for the 1-MW Makah Bay ocean project off the coast of Oregon and the 10-MW Roosevelt Island project in the East River of New York City. We developed a new pilot project license designed to authorize technology demonstrations.

FERC is doing its part to help the new technologies prove their potential. Our regulatory process is sound, and we have demonstrated our flexibility.

In 2007 alone, FERC issued 35 preliminary permits for new hydropower technologies, 30 for current energy projects, four for ocean wave energy projects, and one for a tidal energy project. It is my hope these new technologies will overcome the remaining challenges that lay before them.

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Suedeen Kelly,
Commissioner, Federal Energy Regulatory Commission

Although I come from New Mexico, a state not normally associated with hydroelectric power, I am a long-time believer in the many benefits hydroelectric power offers. It is immune to price increases for fossil fuels; it can provide outstanding recreational opportunities; and it is reliable. Hydroelectric power provides significant generation, peaking capacity, and ancillary services to bolster the reliability of the U.S.’s transmission system, and hydroelectric units are able to start, stop, and change output quickly. It has been said many times, but bears repeating: there is no better example of hydropower’s critical role in maintaining electric grid stability than its important role in bringing the electric grid back on line following the August 2003 blackout.

Perhaps most important, hydropower is clean and carbon-neutral. As the United States – indeed the world – faces the major environmental concern of climate change, we need to find ways to reduce carbon emissions while meeting our growing energy demands. Although hydropower’s benefits in meeting our energy needs are well known, I believe the commission should be loud and clear in voicing the lesser-known benefit of low-emissions energy that can be derived from hydropower to reduce the effects of climate change. By way of example, according to the Pew Center on Global Climate Change, Brazil generates over 90 percent of its electricity by capturing the energy in falling water. Per capita carbon emissions in Brazil are less than half the world average, largely because of the country’s heavy reliance on hydropower.

In the U.S., approximately 10 percent of all electricity generated comes from hydroelectric projects. The commission regulates more than 1,600 hydroelectric projects at about 2,500 dams pursuant to Part I of the Federal Power Act. These projects generate about 57,000 MW of hydroelectric power, which represents half of that 10 percent total.

One exciting emerging area of growth for additional hydropower sources is “new technologies,” which the commission generally defines as mechanisms to produce hydropower from ocean currents, tides, wave action, and in-river projects, without the use of a dam. Indeed, new technologies could add a substantial amount of capacity in the U.S. A recent Electric Power Research Institute (EPRI) study estimates the potential for wave and current power in U.S. oceans to be over 350 billion kilowatt-hours per year, which would equal the output of traditional hydropower in its most productive years. Put another way, ocean-based hydropower using new technologies could potentially double hydropower production of the current national total.

In the past, efficient and reliable conversion of kinetic energy from water has proven difficult, but with recent advances in technology, rising fuel costs, and a growing demand for clean energy, the potential for the use of new hydropower technologies is growing. Indeed, in the last couple years, new hydropower technologies have gained significant momentum, and captured the time and attention of this commission.

While there is no doubt that ocean currents, tides, wave action, and in-river projects have numerous potential benefits, the technology is new, and the potential environmental and safety concerns of such projects, as well as their feasibility, are not fully understood. Nevertheless, we have seen a surge in applications for preliminary permits for the new technologies. Prior to 2004, we received no applications for projects using ocean technologies. Just three short years later, we have issued 46 permits, including 41 for proposed current energy projects, four for proposed ocean wave energy projects, and one for a proposed tidal energy project. More than 30 additional preliminary permits are pending.

In recognition of the extraordinary interest in this promising technology, in October 2007, the commission held a technical conference to hear stakeholder comments on a staff proposal for a streamlined pilot license process for proposed hydrokinetic projects that are 5 MW or less, which would receive license terms of approximately five years. This pilot process would reduce barriers to new hydrokinetic energy projects, while ensuring environmental effects are monitored and assessed.

I believe a hallmark of this commission is its commitment to meeting the ever-evolving challenges and opportunities facing the hydroelectric licensing and compliance process. Our careful consideration in addressing new technologies is but another example of that commitment. It is critical that we continue to work closely with stakeholders in the hydropower industry, as well as policy-makers and other regulators, to encourage the development of new technologies to foster clean, reliable energy.

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Philip D. Moeller,
Commissioner, Federal Energy Regulatory Commission

Hydro is back! Call it what you want: “cool,” “suave,” “sophisticated” or “sexy,” but hydropower is fashionable in the energy world again, whether the paparazzi know it yet or not.

Of course hydropower never went away, as it has remained largely a safe, reliable, economical, and renewable source of energy in almost all regions of the U.S. It provides nearly 10 percent of the electricity consumed in the nation and emits no carbon. Sometimes taken for granted, hydropower is often noticed only by the general public on those rare occasions when it is not available. But this industry is on the verge of some exciting changes, and you know what they say: get behind the wave before it gets behind you!

As someone who was raised in Washington State – clearly “hydro country” – I have long been very familiar with the multiple benefits of a river system. Fish and wildlife habitats, recreational opportunities, and hydropower potential are known to most citizens. Less obvious – depending on the project – are the potential benefits of flood control, drinking water, irrigation, and navigation.

In my role as a commissioner, I have endeavored to raise the profile of hydropower at the commission. During my term, I am hopeful that we can hold regular conferences not only on the existing state of regulation of traditional hydropower but also on the development of new hydropower technologies.

This new generation of hydropower technologies offers amazing potential for abundant supplies of domestic renewable power generation, and for educating energy consumers on the existing environmental and economic benefits of this source of electricity. Regardless of whether it is tidal power, ocean current power, in-stream hydropower, or other creative designs that harness energy from water, the opportunities for expanding this renewable resource appear limitless. This is what captures people’s imagination.

Although widespread development of these resources is still a few years away, the actual work of studying and analyzing the technologies and sites is happening now. The public’s fascination with new technologies is clear based on the extensive amount of their coverage in the “mainstream” media.

This widespread interest in the new technologies – and the near obsession with public policy related to carbon emissions – provides a rare opportunity for the hydropower industry to further educate the public on the existing benefits of this industry. It is all about balancing multiple interests – something the industry and the regulators have been doing for decades. I hope the industry will seize this opportunity to educate current and future consumers.

One of my priorities is to support policies that avoid delays in the development of new hydropower technologies. Recognizing the need to get the process right and the continuing need to balance various interests, I remain somewhat impatient about the time it could take to capture this resource. I will strive to assure that the commission continues to send strong and coherent signals to potential developers of the resource.

Every source of energy – including hydropower – will continue to have benefits and challenges that need to be balanced. But the hydropower industry is in a unique period where its contribution to the U.S.’s infrastructure is about to have a higher profile. And that is good for everyone, paparazzi included.

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Marc Spitzer,
Commissioner, Federal Energy Regulatory Commission

The Federal Energy Regulatory Commission regulates more than 1,600 hydroelectric projects at about 2,500 dams pursuant to Part I of the Federal Power Act (FPA). Since 2000, the commission has issued more than 220 new licenses (relicenses). Together, these projects represent 57,000 MW of hydroelectric capacity and over 5 percent of all electric generating capacity in the U.S. I believe that hydropower is an essential part of the U.S.’s energy mix, is essential to the reliability of the electric grid, and supports competitive electric markets by providing low-cost energy reserves and ancillary services.

Just like any other seller of power that the commission regulates, licensees must comply with the FPA, the commission’s orders, and regulations. Section 31 of the FPA authorizes the commission to monitor and to investigate such compliance and to assess civil penalties for violations. A few months after beginning my tenure at the commission, we issued an order approving a settlement agreement with AmerenUE. Under the settlement, AmerenUE paid a total of $15 million arising from violations at its Taum Sauk Hydroelectric Project and agreed to implement a program to improve the safety and compliance plans at all of its hydroelectric facilities.

The Taum Sauk episode demonstrates the commission’s ongoing efforts to investigate and remedy dam safety and license compliance matters. Our focus, however, should be on compliance, not after-the-fact penalties. Indeed, the commission has established a number of programs designed to prevent another Taum Sauk-like situation.

For example, the commission’s Office of Energy Projects has initiated a program where it meets with licensees soon after license issuance to reach an understanding of the requirements under each license condition. I find this particularly useful because the commission can best facilitate compliance where there is clarity as to the requirements of a license condition. I encourage licensees to establish a robust compliance tracking system for their projects and to communicate with, and to seek advice from, our hydropower compliance group on post-licensing matters. Similarly, the commission’s dam safety group has developed a number of programs through a collaborative effort with licensees, engineering consultants, professional associations, and other interested stakeholders that are designed to develop meaningful dialogue, to provide a better understanding of the safety requirements of the dams and structures, to identify risk profiles, and to develop solutions. I encourage licensees to take advantage of these programs.

The commission also recently issued its Policy Statement on Hydropower Licensing Settlements to provide all hydropower stakeholders with notice of certain principles regarding settlements. The Policy Statement is designed to facilitate settlements that include proposed license conditions that are clear, enforceable, and supported by substantial evidence. The Policy Statement also requires settling parties to demonstrate that there is a nexus between a proposed license condition and the project effects and purposes.

I believe that the Policy Statement clarifies commission policy and facilitates communication between hydroelectric stakeholders and the commission. In sum, we at the commission are committed to identifying opportunities to work with stakeholders to improve the regulatory mission of facilitating effective compliance. Such actions will ensure hydroelectric power remains an essential part of our nation’s energy supply.

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Jon Wellinghoff,
Commissioner, Federal Energy Regulatory Commission

Hydropower already makes a vital contribution to meeting the U.S.’s energy needs, providing approximately 78,000 MW of electrical generating capacity. To address the U.S.’s serious energy challenges, however, we must ensure that we are both making the most efficient use of our existing hydropower resources and promoting smart investment in new hydropower resources and innovative technologies.

Advanced technology offers great potential for making more efficient use of our existing hydropower resources. In 2005, the U.S. Climate Change Technology Program estimated that retrofitting advanced technologies and optimizing system operations at existing hydropower facilities would produce at least a 6 percent increase (about 5,000 MW) in capacity. These efficiency gains would complement the distinctive operational and environmental attributes of many hydropower facilities.

Recent studies also indicate great potential benefits from smart investment in small hydropower projects. In a 2006 report to the U.S. Department of Energy, the Idaho National Laboratory identified more than 5,000 sites across the country that could be developed as small hydropower projects with a total hydropower potential of approximately 18,000 MW. The development of such distributed resources would not only provide new capacity, but also enhance reliability.

Another area that warrants exploration involves innovative technologies that produce electric power using currents and wave action. Such technologies have the potential to create opportunities beyond the traditional hydropower model that relies on dams or other diversion structures. While these technologies are in their infancy, with proponents primarily exploring the feasibility of possible projects, some estimates suggest that the potential for wave and current power could be over 350 terawatt-hours per year, or enough to meet nearly 10 percent of national demand. One particularly positive attribute of this new, renewable source of hydropower is that many of the most promising resource areas are in offshore locations close to large population (and thus load) centers. Such locations mean that these technologies could reduce congestion on our transmission system.

I look forward to building on the Federal Energy Regulatory Commission’s efforts to date and promoting further development in each of these areas. For example, the commission recognizes that the perception of a long and complex licensing process may discourage people from pursuing their interests in developing small hydropower projects. To address that concern, the commission’s staff has sought to shorten and simplify the licensing process where possible and has recommended waiving certain aspects of the process in appropriate circumstances, such as where an applicant has chosen a site that minimizes environmental effects and has built a consensus among stakeholders regarding project issues. By increasing awareness of these steps that can expedite the licensing process, the commission can remove a significant obstacle to development of small hydro projects.

Similarly, the commission is taking steps to promote the development of innovative hydropower technologies. In October 2007, I was pleased to join Commissioner Phil Moeller at a conference in Portland, Oregon, on hydrokinetics. Building on that conference, the commission is examining regulatory requirements that may present unnecessary barriers to development of this technology.

The commission should and will continue to look for ways to promote efficient use of existing hydropower resources and smart investment in new hydropower resources and innovative technologies.

Each preceding article contains the individual views of the commissioner authoring it. The articles do not represent the views of the United States or the Federal Energy Regulatory Commission.

Reducing Regulatory Barriers for New Technologies

To reduce barriers to the success of new hydrokinetic energy projects, the staff of the Federal Energy Regulatory Commission proposes a new five-year pilot license that could be completed in as few as six months.

Commenting on the proposed license, FERC Chairman Joseph T. Kelliher said, “This proposal represents a major step to reduce the barriers to the success of these new hydro technologies, by proposing a simplified licensing process suitable for licensing pilot projects.”

Commissioner Philip Moeller agreed. “This new generation of hydrokinetic technologies will bring hydropower to the forefront of the renewable energy debate,” he said. “It is generating a lot of enthusiasm throughout the country, particularly in coastal states.”

The commission convened a technical conference in Portland, Oregon, Oct. 2, 2007, to allow stakeholders to comment on the proposal. The conference, led by Moeller, was the latest in a series of measures the commission has undertaken since 2006 to address intensifying interest in the development of hydrokinetic technologies.

During the October conference, Moeller told participants: “I look forward to working with my fellow commissioners, commission staff, states, federal agencies, tribes, and stakeholders on the current effort with the hope that new hydropower technologies will be commercially feasible and successfully developed where appropriate to generate renewable power.”

The goal of the staff proposal is to complete the full licensing process in as few as six months, provide for commission oversight and input from affected states and other federal agencies, and allow developers to generate electricity while conducting the requisite testing.

The process would be available for projects that are 5 MW or smaller, removable or able to shut down on relatively short notice, located in waters that have no sensitive designations, and are being developed for the purpose of testing new hydro technologies or determining appropriate sites for ocean, wave, and tidal energy projects as well as inland hydrokinetic projects.

FERC continues to collect feedback on the license proposal. Written comments were due Nov. 2, 2007.

– By Celeste Miller, FERC