Newly enacted legislation authorizes the Federal Energy Regulatory Commission (FERC) to extend construction start dates for certain federally licensed hydroelectric projects.
President Donald Trump signed the measure into law on May 11. Applies to projects that were issued a FERC license prior to March 13, 2020 and are referred to as “Covered Projects.”
Currently, 37 FERC-licensed but unbuilt hydroelectric projects in 15 states have been delayed by the COVID-19 pandemic and supply chain shortages, among other challenges, according to the National Hydroelectricity Association.
At the request of licensees, FERC may “upon reasonable notice and for good cause shown” extend the term an additional six years beyond the eight-year extension currently established under the Federal Power Act. The new law does not allow more than three consecutive two-year extensions.
In addition, the law authorizes FERC to reinstate expired licenses if the deadline to begin construction on the covered project expired after December 31, 2023 and before the law’s enactment. Reinstatement will be effective from the license expiration date.
The legislation is based on the “Build More Hydro” bill co-sponsored last year by Senators Steve Daines (R-MT) and John Fetterman (D-PA), which passed the Senate by unanimous consent last July. Rep. Dan Newhouse (R-WA) introduced a companion bill in the House, which passed by a vote of 394-14 last month.
Eight projects in Pennsylvania will benefit from the expansions, sponsors said in a statement. These are: Allegheny Lock and Dam 2, Emsworth Back Channel Dam, Emsworth Locks and Dam, Grays Landing Lock and Dam, Maxwell (Point Marion), Monongahela Lock and Dam 4 (Charleroi), Montgomery Locks and Dam and Point Marion Lock and Dam
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Allowing more time for hydroelectric dam projects to begin construction will eventually add more than 2.5 GW of baseload power, Newhouse said. “We need to get every megawatt of energy available to the grid to meet our growing energy demand,” he said. “This new law brings us one step closer to that goal.”
Industry groups, including the National Hydropower Association, applauded the action. Chairman and CEO Malcolm Woolf, in a statement, called it a “breakthrough” that brings $6.5 billion in critical private investment to power American homes, businesses and industries.
In a letter last November, the group urged House Energy and Commerce Committee leaders to pass the bill, noting that developing and financing hydroelectric projects takes significant time and resources. The licensing process, which can cost millions, usually takes five to eight years. Representatives of most of the delayed projects co-signed the letter.
“After licensing, additional steps must be completed before construction can begin, including final engineering, EPC agreements, procurement contracts, interconnection and financing,” the groups wrote, adding that delays have pushed many projects to the brink of missing their legal start-of-construction deadlines through no fault of the developers.
