N : .;.;s +2-‘.4 4 if-2‘; 5: :1 7&3 ‘:7 R 3."»:- L=-’ -" 1“ ' ‘ “‘.« ' _ ... .--‘_ I- .. :- ’; 43§«a3:,;x4 ' “" - - *.**<‘-." L 31 ‘EA 3.1%. 1%. ‘W xshgmjfinn t_*?f‘§§¥2'-"§75‘i§-*~",? z+. 22%/2:; IE 7$Z:L:3>:"§//f C! Is sue Brief NGRESSIONAL ‘ESEARCH % V SERVICE A LIBRARY OF A CONGRESS niversimlrf lililissouri - Coir|”r'mt[lia NH 3940041 mm": mm 010-‘UINICJ WATER RESOURCES: SMALL-SCALE HYDROELECTBIC DEVELOPMENT ISSUE BRIEF NUMBER IB78035 AUTHOR: Viessman, Warren Jr. Senior Specialist, Water Resources Development Denoncada, Christine Office of Senior Specialists THE LIBRARY OF CONGRESS CONGRESSIONAL RESEARCH SERVICE MAJOR ISSUES SYSTEM DATE ORIGINATED ggggggzg DATE UPDATED gzgggggg FOR ADDITIONAL INFORMATION CALL 287-5700 0811 CRS- 1 IB78035 UPDATE-O7/31/80 l§§QE_D§Elfll2LQ§ The “energy crisis“ has rekindled congressional interest in development of new hydroelectric facilities or improvement of existing ones.. In particular, the idea of installing small units on minor rivers and tributaries has become popular. Many previously developed sites, now abandoned, offer attractive possibilities for augmenting the nation's electrical energy needs. Hydroelectric projects are not fuel consumptive and do not create air or water pollution problems. A 1977 study by the Corps of Engineers (CE) indicated that an increase of 55,000 megawatts (nwe) of electric generating capacity could be obtained by rehabilitation, expansion, or new construction of hydroelectric generating facilities at existing dams. This would approximately double current capacity. The Corps observed that the national potential was so significant that rapid development of demonstration projects was warranted. Constraints on achieving the projected potential appear to be’ economic, environmental, and institutional rather than technical. Other issues are the adequacy of Federal criteria and procedures for licensing new hydroelectric facilities and the extent to which an expansion of hydroelectric facilities would benefit the national supply and distribution of electrical energy. EAQEEBQQED-A§D-2QLl§Z-§§§LX§l§ The Arab oil embargo of 1973 initiated a trend of increasing energy costs and concern about dependence on oil as a prime energy source. As a result, attention has focused on various energy production systems such -as expanded use of nuclear power and coal plus popular interest in prospects for solar, wind, tidal, biomass conversion, geothermal, streamflow, and other small-scale techniques to help reduce U.S. dependence on foreign oil and gas. Conventional hydroelectric developments provided about 10% (63.106 megawatts) in 1977 of the electric generating capacity in the contiguous United States. Projects under construction, planned, and possible for development in the next two decades could increase the developed hydroelectric capacity by about 40%. At that time, conventional hydroelectric projects providing about 80,000 megawatts of capacity, the equivalent of 80 large nuclear or conventional powerplants of 1000 Mwe each, could account for about 5% of the nation's electric generating capacity. If produced by thermal plants, the projected increase in electricity from hydroelectric generation would require an average of approximately 80 million barrels of oil per year. The annual cost would exceed $1 billion if the oil were imported. Beyond the projected 1995 hydroelectric development, there is significant untapped potential. Development projects appearing most favorable during the next 20 to 30 years could add as much as 36,000 megawatts of capacity, with an annual generation of 100 billion kilowatt-hours (KWH). The Federal Power Commission (now Federal Energy Regulatory Commission) estimated that such eneration would represent an annual savings of 160 million barrels of oil over equivalent production by thermal plants. If existing facilities were modified by increasing dam heights or reservoir storage and adding generating capacity, the hydroelectric potential could be increased further. CRS- 2 IB78035 UPDATE-07/31/80 Hydroelectric projects are attractive because they utilize a renewable resource and produce electric power over long service lives without consumin fuel resources or creating air and water pollution. They are especially suited to provide peak-load and reserve generating capacity. There are. however, environmental and legal constraints that may preclude the development of some potential hydroelectric sites. Among Federal statutes impacting on hydropower development are the Colorado River Basin Project Act (P.L. 90-357) and the Wild and Scenic Rivers Act (P.L. 90-502). The former prohibits the Federal Energy Regulatory Commission from issuing licenses for projects on the Colorado River between the Glen Canyon and Hoover Dam projects. This preempts a power potential of about 3,500 megawatts. P.L. 98-542 prohibits the Commission from licensing the construction of power facilities affecting rivers included in the national wild and scenic rivers system. The "37 river-reaches" proposed for inclusion in that system, or to be studied for possible inclusion in the system, contain sites that would provide about 9,000 megawatts of hydroelectric capacity. Although there are many favorable characteristics of hydroelectric facilities (recreation benefits, water supply, etc.) there are also other aspects that may have adverse environmental impact. The degree to which hydroelectric facilities affect air, land, and water quality depends on site, design, mode of operation, and other factors. Technologic constraints have limited hydroelectric development at locations where depths of water are less than about 20 feet, but recent advances in low-head turbine technology signal the beginning of greater exploitation of low river flows (fl§g_§gi§gti§§, Oct. 21, 1976). Existing hydroelectric facilities may be augmented or rebuilt to produce additional energy. Where there is no additional water supply, increased capacity can be obtained by adding water control and conducting structures, turbine generators, and related electrical apparatus. If there is additional water, new generating capacity may be introduced. Existing projects constructed without hydroelectric facilities may also be modified by installation of generating equipment. According to a 1977 study by the Corps of Engineers, development of all the hydropower potential at existing dams could result in an increase of 160 billion KWH of electricity, a savings of 727,000 barrels of oil per day. This is seven and one-half times the savings associated with President Carter's goal of solar heating for two and one-half million homes by 1985. The Corps of Engineers evaluated the physical potential of existing dams and the constraints on development of this potential. It concluded that: 1. By installing more efficient turbines and more powerful generators at existing hydropower dams, 5,100 megawatts of capacity could be obtained. 2. By installing additional turbines and generators at existing hydropower dams, 15,900 megawatts of capacity could be obtained. 3. A maximum of 33,600 megawatts could be obtained by constructing powerhouses at all existing non-hydropower dams in the United States. 4. There are engineering, economic, financial, environmental, social, and institutional constraints to constructing powerhouses at existing CBS- 3 IB78035 UPDATE-07/31/80 non-hydropower dams. much of the information needed to determine the precise nature and severity of these constraints is not available, but none are considered to be insurmountable. 5. Additional research, with emphasis on the construction of demonstration small-scale hydropower facilities at a number of existing nonhydropower dams, is recommended as a means to better define the constraints which might hinder, and the incentives which might accelerate, the development of hydropover at such sites. 6. Although the total potential for hydropower development is small compared to projected U.S. electric generation needs, hydropower, in conjunction with other evolving energy production systems could significantly reduce the demand for oil imports. The Congress has taken several steps to accelerate development of small-scale hydroelectric energy (less than 15 megawatts) at existing dams. A provision of the Public Utilities Regulatory Policy Act (PUBPA) of 1977 (P.L. 95-617) provides $10 million per year for each of three years in direct Government cost-sharing loans (90% Federal share, 10% local share) to evaluate dam sites and apply for necessary Federal, State, and local permits. Loans are forgiven where the Secretary of Energy concludes on the basis of the study that .the proposed project is not feasible for small—scale hydroelectric development. A loan program was authorized to encourage low—head hydro development under Title IV. Section Q02 authorizes loans to municipalities, electric coops, industrial development agencies, and non-profit organizations for feasibility studies and for license application to defray up to 90% of the costs. The interest rate on loans in FY79 is 6 7/8%. Conferees also agreed to a measure that authorizes the Secretary of Energy to make Government cost-sharing loans (75% Federal share, 25% local share) to cover architectural, engineering, and construction costs. One hundred million dollars per year for each of three years is authorized. Eligible projects are limited to existing dams only and to those projects that have no significant adverse environmental impacts. These are important first steps in developing an integrated system of Federal incentives and policies to encourage the private development of environmentally sound small-scale hydropower projects. Additional actions that not only deal with the Federal sector, but also identify and alleviate the many non-Federal legal, regulatory, and financial barriers that could retard or prevent timely development of small—scale hydroelectric potential at existing dams deserve consideration by the 96th Congress. According to the Corps of Engineers, the following factors affecting the future of small-scale hydroelectric development merit special consideration: o There is a need to further develop and refine small—scale hydropower turbine technology. o Many potential hydropower dams require major rehabilitation. o There is a need to develop simplified hydrolo9Y: reservoir yield, and power plant capacity analysis techniques. 0 The design of power transmission grids and switching systems becomes extremely complex when small—scale hydropower units are included in the network. A CBS‘ fl IB78035 UPDATE-O7/31/80 o The relative economic efficiency and financial feasibility of small-scale hydropower versus alternative electrical generation technique are unknown. 0 Diverting reservoir storage from current use to hydropower production could be inefficient and cause significant economic stress in many instances. 0 The ecologic impacts of peak load production by small-scale hydropower plants are possibly significant. . o The social effects of a small—scale hydropower program are numerous, diffuse, and largely unknown. 0 Institutional barriers may retard or prevent development of small-scale hydropower. In early September, 1978, licensing procedures for smallrscale hydroelectric generating plants were simplified. Effective immediately, for projects under 1.5 megawatts, the Federal Energy Regulatory Commission established new application and licensing procedures which will reduce paperwork and accelerate approval of such projects. Recently, the Department of Energy (DOE) announced its proposed FY80 budget of $18.5 million, which fell shy of the previous year's budget by approximately $10 million. This was apparently a move by DOE to encourage private industry participation in low-head hydroelectric development. The National Conference of State Legislatures conducted a series of small-scale hydroelectric conferences during 1979. The latest of which studies small-scale hydro power in the Pacific Northeast. LE.§l.5.L£_.‘1.‘_Ql! P.L. 95-617 (H.R. 4018) Under Title IV, Public Utilities Regulatory Policy Act of 1978, $10 million per year for three years (90% Federal, 10% local share) are authorized to evaluate dam sites and for permit application. Conferees have also agreed to a measure which authorizes the Secretary of Energy to make government cost-sharing loans to feasible projects for architectural, engineering and construction costs. Direct project loans have been authorized for $100 million per year, for each of three years. The bill was introduced on Feb. 24, 1977. On Oct. 13, 1977, the House agreed to the Senate amendment with an amendment, and a conference is scheduled in both Houses. 9 H.R. 1688 (Lujan) Under the Secretary of Interior, would authorize construction of hydroelectric powerplants at specific sites and would set specific appropriations for each facility. 11.33. 2803 (Abdnor) Allows for the construction of a pumped—storage hydroelectric facility. The plant would be incorporated into the Fort Randall Dam, S.D., project. Sen. Pressler has introduced 5. 592 which is similar to the House version. CBS— 5 IB78035 UPDATE-07/31/80 H.R. 300 (Staggers et al.) Section 110 appropriates funds for some low-head hydroelectric projects. Introduced Mar. 15, 1979; referred to more than one committee. Reported from Committee on Interstate and Foreign Commerce with amendment (H.Rept. 95~196 -6 part 1) may 15, 1979. On the same day, the measure was reported by the Committees on Interior and Insular Affairs (H.Rept. 96-196 - part II) and on Science and Technology (H.Rept. 96-196 +- part III) with amendments. Reported from Committee on Interior and Insular Affairs (H.Rept. 96-196 — part IV) may 23, 1979. H.R. 3431 (Jeffords) Provides that small hydroelectric projects could be licensed through an agreement entered into by state authorities and the Federal Energy Regulatory Commission. Introduced Apr. 9, 1979; referred to Committee on Interstate and Foreign Commerce. H.R. 3fl32 (Jeffords et al-) Authorizes appropriations to DOE for small hydroelectric power projects. Introduced Apr. 4, 1979; referred to Committee on Interstate and Foreign Commerce. H.R. 3526 (Johnson of California) Under section 3, certain generators of small hydroelectric power capacity would be constructed. Referred to Interior and Insular Affairs Committee. H.R. 3766 (Conte) Amends the Internal Revenue Code of 1954 to give a tax credit for equipment used at small-dams to product electric energy from hydroelectric power. H.R. 3786 (Cleveland) Allows for a study to be conducted on developing small-scale hydroelectric projects in rural areas. H.R . 41188 (Foley) Amends the Public Utility Regulatory Policies Act of 1978 to revise the size limitation of small hydroelectric power projects. H.R. HH99 (Dingell) Under Title III, the Department of Energy Project Authorization would amend the definition of a small hydroelectric power, project as presently conceived under PURPA. H.R. #622 (Nelson) Under Title IV, the Department -of Energy project authorization would increase the nueber of small hydroelectric plants eligible for Federal assistance. CRS- 6 IB78035 UPDATE—O7/31/80 H.R. 4788 (Roberts) Title II would extend appropriations for feasibility studies for specifi hydroelectric power installations by amending the Water Resources Development Act of 1976. H.R. 6945 (Wolff) Amend Title IV of PURPA, increasing, at small hydroelectric power project sites, the allowable power capacity of dams. H.R. 69 48 (Wolff) Provides a loan program for the purchase and installation of microhydroelectric equipment. H.R. 6949 (Wolff) Amends the 1954 Internal Revenue Code and makes micro-hydroelectric energy property eligible for residential energy credit. Referred to Rays and Means Committee. S. 475 (Wallop) Authorizes construction of hydroelectric powerplants and sets up specific I appropriations for this purpose. Construction would occur at the Buffalo Bill Dam, Hyoming, and the Hoover Dam, Arizona—and Nevada. S. 496 (Stafford) Provides for the surveying and technical assistance to convert former industrial sites (including nillraces) to hydroelectric facilities. 3. 703 (Gravel) Directs the Secretary of the Army to construct small hydroelectric power projects that Congress had not specifically authorized (amendment no. 224). S. 948 (Durkin) Amends the Public Utility Regulatory Policies Act of 1978 by revising the size limitation of small hydroelectric power projects. The Senate passed an amended version on June 14, 1979. S. 1206 (Durkin) Small Hydroelectric Power Generation Incentive Act of 1979. Increases the investment credit for small hydroelectric power generation property. 5. 1420 (Hatfield et al.) Authorizes the Interior Secretary to construct, operate, and maintain hydroelectric powerplants at various existing water projects. 5. 1421 (Hatfield et al.) Authorizes the Interior Secretary to engage in hydroelectric power feasibility studies. CRS— 7 IB78035 UPDATE-O7/31/80 S. 1558 (Durkin) Allows the FEBC to enter into agreements with States under which State authority could be the licensing authority, so as to avoid delays, of small hydroelectric projects at existing dam sites. A S. 1559 (Durkin) Authorizes a study into the development of small hydroelectric projects for rural areas. 5. 1588 (mcclurej Allows FERC to enter into agreements with states in order to avoid duplication of licensing procedures for small hydroelectric projects at existing dams, by amending the Federal Power Act. S. 1641 (Gravel) National Small Hydroelectric Power Development Act of 1979. Authorizes planning, designing, construction of small hydroelectric power projects, through the Chief of Engineers, not specifically authorized by the Congress. S. 1762 (Nelson) Amends the 195M Internal Revenue Code to give tax incentives to .small hydroelectric generating facilities for refurbishing and refitting. Referred to Finance Committee. E2‘-.AB.IE§.3. U.S. Congress- House. Committee on Interstate and Foreign Commerce. National Energy Act. Hearings, 95th Congress, 1st session. Part B, v. 1. May 19 and 20, 1977. Washington, U.S. Govt. Print. Off., 1977. 735 p. "Serial no. 95-24a" --—- West Coast electric supply problems. Hearings, 95th Congress, 1st session. Bar. 31, 1977. Washington, U.S. Govt. Print. Off., 1977. 152 p. "Serial no. 95-14" 9.5. Congress. House. Committee on Small Business. Subcommittee on Energy, Environment, Safety and Research. Impact of weather—related energy shortages on small business. Hearings, 95th Congress, 1st session. Apr. 18, 20; Bay 11, 1977. Washington, U.S. Govt. Print. Off., 1977: 1A5-267. U.S. Congress. House. Committee on Appropriations. Supplemental appropriations bill, 1978. Hearings, 95th Congress, 1st session. Sept. 21, 1977. Washington, U.S. Govt. Print. Off., 1977: 447-461. A 8.5. Congress. House. Committee on Interior and Insular CRS- 8 IB78035 UPDATE-O7/31/80 Affairs, Subcommittee on Water and Power.R Hearings, on H.R. 1688 and H.R. 3526. July 2H, 1979. U.S. Congress. Senate. Special Committee on Aging. Impact of rising energy costs on older Americans. Hearings, 95th Congress, 1st session. Part H. Apr. 5, 1977. fiashington, U.S. Govt. Print. Off., 1977. 67 p. Durkin, John A. Remarks in the Senate. Hydroelectric power A generation. Congressional record [daily ed.] v. 126, mar. 28, 1980: S3260-S3261. ----- Hydroelectric Power. Congressional Record. Remarks in the Senate. [daily ed.] v. 125, July 21, 1979: S10246—S10247 S. 2047 -- Small Hydroelectric Power Projects Act of 1977. Remarks in the Senate. Congressional record [daily ed.] v. 123, Aug. 5, 1977: 513978-S13979. The Encyclopedia Britannica highlights energy waste. In Remarks of Charles H. Percy. Congressional record [daily ed.] v. 12H. Mar. 7, 1979: s31uu—s31u5. Energy. Think small. In Extension of Remarks of Martha Keys. 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Print. Off., 1977. 939 p. At head of title: 95th Congress, 1st session. Committee print no. 95-33. ’ Congress. House. Conference Report on H.R. 438 (To Energy and Water Development Appropriation Bill, 1980. July 25, 1979. (96th Congress, 1st session. H.Rept. 96-388) Congress. Committee on Science and Technology. Authorizing appropriations for the Department of Energy for FY79. Washington, U.S. Govt. Print. Off., Apr. 20, 1978: 120-124. (95th Congress, 2d session. House. Report no. 95-1078, Part 1.) Congress. Senate. Committee on Agriculture and Forestry. Land and Water Conservation Act of 1977. Washington, U.S. Govt. Print. Off., Mar. 18 (legislative day February 21), 1977. 14 p. (95th Congress, 1st session. Senate. Report no. 95-59) Congress. Senate. Committee on Energy and Natural Resources. Emergency drought authority. Washington, U.S. Govt. Print. Off., mar. 11 (legislative day February 21), 1977. 7 p. (95th Congress, 1st session. Senate. Report no. 95~50) Congress. Senate. 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June 26, 1979. p. 1. Smock, Robert ed.). Can lowrhead hydro make a comeback? Electric light and power. v. 5. July 1979. p. 20-23. ----- DOE to forego small hydro construction as private in. Electrical week. Feb. 12, 1979: p7. ----- Fundamental economic issues in the development of small scale hydro. DOE (DOE/RA-23-216. 000-02). Washington, D.C. Mar. 15, 1979. ----- Generating a better life for future generations. Lawrence Eagle tribune. June 16, 1979. p. A2-A16. ————— Hydro project attracts EGSG. New England business. v. 1. July 16, 1979. p. 22. - ----- Idaho's water. Idaho Hater Resources Research Institute, University of Idaho. Moscow, Idaho. July 1979. ----- James Bay hydro blooms in remote, barren wilds. Engineering news-record. Aug. 3, 1978: 22-26. —-——— flicro—hydro power: reviewing an old concept. National Center for Appropriate Technology, DOE, Idaho Operations Office (DOE/ET/01752-1) Butte, Mt. January 1979. _Oregon's environment. Small Hydroelectric Projects. 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U.S. Federal Power Commission. Hydroelectric power resources of the United States -- developed and underdeveloped. Jan. 1, 1972. Washington, U.S. Govt. Print. Off. ----— Small Hydro regs simplifed. Engineering News-Record, Sept. 14, 1978. vol. 201. p. 16. Staff report on the role of hydroelectric developments in the nation's power supply. June 13, 1974. Washington, 197fl. --—-— The 1970 national power survey. December 1971. 4 parts.A Washington, U.S. Govt. Print. Off. 1 -—--- UWAG urges EPA to fend off pressure to bring hydro dams under Water Act. Electrical Week. Sept. 11, 1978. p. 1. U.S. Government Accounting Office. Comptroller General of the United States. Federal Power Commission. Problems in licensing hydroelectric projects. Report to the Congress by the Comptroller General of the United States. Washington, 1975. 32 p. Power production of federal dams could be increased by modernizing turbines and generators. —narch 1977. Publication EMD—77-22. Washington. 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