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Perspectives: Solving the Hydro Disconnect

The first piece of legislation approved by the 113th Congress this year was a bill designed to help speed development of new hydropower.* Not only did the U.S. House of Representatives pass the bill, the lawmakers passed it unanimously (422-0).

This isn't the first time Congress passed this same legislation. Essentially the same bill was introduced in the 112th Congress, and, in July 2012, it received unanimous House approval. According to the National Hydropower Association (NHA), this was the only substantive piece of energy legislation to receive unanimous House approval in 2012. (The bill never came to a Senate vote before the previous session of Congress ended.)

Obviously, lawmakers in Washington, D.C., see the need for improving energy policy that will lead to growth of hydropower.

Yet, this enthusiasm has not translated into significant amounts of new hydro development.

Consider these facts:

- The average cost of constructing a hydro project is $3,000 per kilowatt, with no fuel costs. This is about half the cost of constructing a nuclear plant, which also comes with a fuel cost (see page 10 in this issue).

- Between 2000 and 2010, there was no net increase in hydropower capacity. In that same decade, natural gas capacity increased by 187 GW (see page 10).

- Although there is about 12,000 MW of available hydropower capacity that can be developed at existing U.S. dams, for about half the price of developing nuclear and with NO fuel costs, new hydropower development is, by no means, exploding (see page 12).

- Even though hydro is the largest source of renewable electricity in the U.S., generating nearly twice as much power as all the other renewable resources combined, it doesn't get the same attention. On Facebook, the most-visited website in the U.S., the American Wind Energy Association, has an audience 100 times that of NHA; the Solar Energy Industry Association has 23 times the audience of NHA (see page 58).

Why the disconnect?

I see several factors.

Hydro ... unlike other electrical generation sources ... uses a fuel (water) that is owned by the public and is very visible. In this public arena, using water for generating electricity often is misunderstood or misrepresented.

Some of hydro's benefits are hard to explain. Example: according to EPRI (see page 29 of this issue), in the western U.S., hydro's provision of "ancillary services" decreases the overall production costs of electricity by $1.35 billion a year. Yet, explaining what an "ancillary service" is and how production costs are reduced because of hydro is not simply stated in a 30-second sound bite.

A strong environmental lobby continues to fuel debates in public forums on potential negative impacts of hydro on the environment.

The lack of certainty in the U.S. federal regulatory process is the biggest problem ... and one that needs immediate resolution. Without certainty, the licensing process can continue for excessive periods of time, with potentially tremendous associated costs. For a developer, this situation provides little incentive to invest in a new hydro project.

It's time ... way past time ... for Congress to get rid of the regulatory barriers that have been hindering the hydro industry for decades. Lawmakers need to pass the hydro regulatory reform bill the House keeps unanimously approving.

In an article featured in this issue (see page 32), Kurt Johnson, owner of a small hydro development company, writes: "... the non-controversial, zero-cost, bipartisan bill provides long overdue, common-sense regulatory reform that is widely supported by both industry and the environmental community."

It's time to solve the hydro disconnect.

Marla J. Barnes
Publisher and Chief Editor

*House Resolution 267, the Hydropower Regulatory Efficiency Act of 2013

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