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Bills would expand tax credits for hydro

U.S. senators introduced bills that would expand the eligibility of certains types of hydropower for production tax credits. Bills would increase the tax credit for small irrigation hydro and incremental hydro, expand the definition of qualified small irrigation hydro to include more projects, and extend tax credits to kinetic hydropower. Sen. Gordon Smith, R-Ore., introduced a bill, S.411, that would eliminate a provision that grants only half the full tax credit, currently 1.9 cents per kilowatt-hour (kWh), to incremental hydropower and small irrigation hydro. Those technologies now receive only 0.9 cent per kWh. Incremental hydro includes generation from efficiency improvements or capacity additions to existing plants or non-hydro dams. Sen. Lisa Murkowski, R-Alaska, introduced a bill, S.298, that would expand the definition of small irrigation hydropower that is eligible for tax credits. Current law defines small irrigation hydro as a maximum 5-MW facility that generates power from an irrigation canal or ditch. The Murkowski bill would increase eligible projects to 15 MW using “lake taps, perched alpine lakes, or run-of-river with diversion.” Smith and Murkowski also offered language that would extend production tax credits to kinetic hydropower, primarily for ocean-based generation, but also to include free-flowing water in rivers and streams. For more on the kinetic hydro legislation, see The Leading Edge, Page 68.

British Columbia revives 900-MW Site C

The government of British Columbia announced it will initiate contacts with local stakeholders along the Peace River regarding potential development of BC Hydro’s 900-MW Site C hydroelectric project. The province issued a new energy strategy Feb. 27 that outlines 55 policy actions, including measures to enhance energy security in the province. One of the measures involves entering initial discussions with First Nations, the neighboring province of Alberta, and communities around a potential Site C project. The intent is to disseminate communications regarding the potential project and the processes being followed. The energy plan calls Site C one of many resource options. BC Hydro has considered, and shelved, Site C several times over 25 years.

Bush 2008 budget spurns hydro R&D

President Bush’s $2.9 trillion budget proposal for the next fiscal year calls for $24.26 billion in spending authority for the Department of Energy but includes nothing for hydropower research and development. It is the second consecutive year in which the administration included no money for hydropower activities in the Energy Department. The budget includes $4.871 billion in new federal funding for the U.S. Army Corps of Engineers’ civil works program within the Department of Defense. Several operations and maintenance activities traditionally have been funded in the construction budget. Those include rehabilitation of hydropower and navigation infrastructure, and Endangered Species Act compliance at operating projects. The budget requests a total of $958.4 million for the Department of Interior’s Bureau of Reclamation, including $77 million for the agency’s Dam Safety Program.

American eel not an endangered species

The U.S. Fish and Wildlife Service declared Endangered Species Act protection is not warranted for the American eel. The service initiated a status review of the species in 2004 at the request of the Atlantic States Marine Fisheries Commission and others. Petitioners provided information indicating American eel populations have declined for various reasons, including dams and hydropower turbines. The petitioners said 1,100 hydro projects on the eastern seaboard might represent a major source of mortality. The National Hydropower Association argued there is insufficient scientific evidence to justify listing the eel as threatened or endangered. While the eel population has declined in some areas, the Fish and Wildlife Service ruled its overall population is not in danger of extinction or likely to become so in the foreseeable future.

New developer to redesign Ohio River projects

The new developer of three proposed Ohio River hydroelectric projects is in the process of redesigning the 35-MW Willow Island, 83-MW Smithland, and 79.8-MW Cannelton projects. American Municipal Power-Ohio Inc. (AMP-Ohio), representing 119 municipal utilities in five states, said it would enter into arrangements with licensee New Martinsville, W.Va., an AMP-Ohio member, for development of Willow Island. It said it already has agreements with licensees WV Hydro and Marion, Ky., for Smithland, and licensee WV Hydro for Cannelton. AMP-Ohio, which filed license transfer applications with the Federal Energy Regulatory Commission, already operates the 42-MW Belleville project on the Ohio in West Virginia. It indicated proposed capacities would change to 72 MW for Smithland and 84 MW for Cannelton. AMP-Ohio said about 70 of its members agreed to fund the initial developmental costs. It also received federal certification for Clean Renewable Energy Bonds.

Manitoba seeks builder for Wuskwatim

Manitoba Hydro seeks bids by June 1 for a civil contractor to build the 200-MW Wuskwatim hydroelectric project on Manitoba’s Burntwood River. The utility is developing the C$1.2 billion (US$1.07 billion) project in partnership with Nisichawayasihk Cree Nation at Taskinigahp Falls, 40 kilometers southeast of Nelson House. For information, see Manitoba Hydro’s Internet site, www.hydro.mb.ca.

Bush names Kelliher to second FERC term

President Bush nominated Joseph Kelliher March 6 to serve an additional five-year term on the Federal Energy Regulatory Commission (FERC), and to continue as chairman. The Republican’s first term expires June 30. If confirmed by the Senate, he will serve a new term expiring June 30, 2012, the White House said. Kelliher said the president’s announcement is a tribute to the hard work of commission staff, and recognition of all that the staff and commission members have accomplished. FERC is composed of five members. No more than three may belong to the same political party.

AmerenUE plans to rebuild 408-MW Taum Sauk

Utility AmerenUE said it submitted plans to regulators to rebuild the breached upper reservoir of its 408-MW Taum Sauk pumped-storage project in eastern Missouri. Taum Sauk has not operated since the mountaintop ring dam breached Dec. 14, 2005, releasing 1.4 billion gallons of water down the Black River, injuring nine people, and damaging property. The company said it filed for approval from the Federal Energy Regulatory Commission (FERC) to begin construction in 2007, with the project returning to service in 2009. AmerenUE said the work would utilize roller-compacted concrete based on a design by Paul Rizzo & Associates that satisfies FERC guidelines. Missouri Attorney General Jay Nixon filed a lawsuit against AmerenUE in December 2006, alleging operation of the project led directly to overtopping and failure of the dam.

Bush would study removing Hetch Hetchy

President Bush’s proposed 2008 budget includes $7 million for further study of a proposal to remove the 405-MW Hetch Hetchy project and restore the site in California’s Yosemite National Park. Both supporters and opponents of the proposal were somewhat surprised by the budget item, coming from a Republican administration that, in the past, has opposed removal of operating hydroelectric projects. The line item drew the opposition of Sen. Dianne Feinstein, D-Calif., who said the project would not be removed because it is a valuable source of drinking water for San Francisco. The White House Office of Management and Budget (OMB) added the appropriation to the National Park Service budget. An OMB spokesman said the idea to fund conceptual-level studies originated in California, but he could not pinpoint the exact source of the line item. In July 2006, California estimated it would cost from $3 billion to nearly $10 billion to remove the project.

U.S. mandates fish passage for Klamath

The Interior and Commerce departments issued final fishway prescriptions mandating fish passage construction at four dams of PacifiCorp’s 161.338-MW Klamath project in Oregon and California. The fishway prescriptions, which must be included in any Federal Energy Regulatory Commission hydropower relicense, are similar to the agencies’ preliminary prescriptions in March 2006 that called for fish passage at the 18-MW Iron Gate, 20-MW Copco 1, 27-MW Copco 2, and 90.338-MW J.C. Boyle developments. However, the fish agencies said the final prescriptions provide a lower cost alternative for downstream passage at Copco 1, and a less prescriptive approach for tailrace barriers and spillway modification. The agencies rejected PacifiCorp’s less expensive alternative fishway prescriptions filed under terms of the Energy Policy Act of 2005. PacifiCorp said it might be able to negotiate a more favorable solution with resource agencies and stakeholders.

FERC EIS backs 500-MW Lake Elsinore project

The Federal Energy Regulatory Commission (FERC) issued a final environmental impact statement (EIS) supporting construction of the 500-MW Lake Elsinore pumped-storage and transmission project in California. Acknowledging public concerns about the major development in or near wilderness areas, FERC staff adopted its own alternative for the Lake Elsinore Advanced Pumped-Storage (LEAPS) project to eliminate some adverse environmental effects. The EIS said the proposal, with staff modifications, represents the best balance between developmental and non-developmental resources in the area. “Despite the higher cost of the staff alternative compared to no action, it would have the benefit of allowing the co-applicants to construct and operate the project as a peak energy resource and as part of a long-term solution to southern California’s transmission congestion bottlenecks,” the EIS said.


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