Hydro Industry Expects Better Days in Trump Administration

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The Trump administration will be better for the hydroelectric industry than the Obama administration was, speakers and attendees predicted at the annual HydroVision International conference in Denver in late June. This more upbeat expectation is based on the president's commitment to streamlining the regulatory process, his commitment to domestic energy production and his background as a builder.

Linda Church Ciocci, executive director of the National Hydropower Association (NHA) (Washington, D.C.), was effusive in describing how and why hydropower would benefit from the president's background. "President Trump is very strong on hydro," she told Industrial Info. "He's a builder. He knows about construction." NHA's members operate 42 pumped storage projects, totaling 22,000 megawatts (MW) of electric generating capacity, plus thousands of additional megawatts of dam-based and run-of-river hydroelectric generating capacity.

For more from the HydroVision International conference, see July 3, 2017, article - HydroVision Conference Speakers Showcase Hydro's Potential, and July 5, 2017, article - Exhibitors at HydroVision International Chase Refurbishing, Greenfield Projects.

In NHA's annual report for 2016, she wrote, "As we look to 2017, with a new president, a new administration and a new Congress, we believe, as an industry, that legislative and regulatory gains are within our grasp." The group represents more than 200 companies engaged in all facets of hydropower.

HydroVision International, which drew more than 3,000 attendees and 500 exhibitors, bills itself as the world's largest hydropower event. Sponsored by PennWell (Tulsa, Oklahoma), the event was held June 27-30 in Denver.

Adam Ward, vice president of environmental affairs, sustainability and policy at American Municipal Power (AMP) (Columbus, Ohio), agreed with Church Ciocci. "Yes, it's getting better, and hydro has a very promising outlook" in the Trump administration, he said in a June 29 session. "The current administration wants to streamline regulations. We have a fair shot that a number of (his) initiatives will come to fruition over the next few years."

"The new administration has taken a 180-degree turn on regulation, permitting and cost-benefit analyses," Ward said at a breakout session. "The administration and Congress have a unified view that agencies spend too much time on regulations. This new approach will affect every aspect of energy."

The current hydro licensing process is "rudderless," Ward charged. "It takes five times longer to get a hydro license than it does to get an air permit for a gas-fired power plant."

Not every speaker or attendee was ready to jump on the Trump regulatory streamlining train, however. Matt Rice, director of the Colorado basin program at the conservation group American Rivers (Washington, D.C.), told attendees his group would oppose efforts to "federalize FERC's authority over state water laws and Indian Tribal sovereign lands," or increase that agency's power at the expense of other federal resource agencies.

"We don't oppose hydro," Rice said June 28. "We see tremendous opportunity for new hydro."

HydroVision International was taking place as a critical piece of hydro regulatory reform legislation was being marked up by the House Energy & Commerce Committee. H.R. 3043, the Hydropower Policy Modernization Act of 2017, is sponsored by Rep. Cathy McMorris Rodgers (R-Washington). It is an attempt to revive the hydro-related elements of a comprehensive energy bill that died at the end of the prior Congress.

Speakers at the conference emphasized that this bill included the "non-controversial" hydro elements of last year's comprehensive energy bill. But conference speakers and attendees added that, despite Republican majorities in the House and Senate, and a GOP president, Congress and the White House have been able to agree on very little thus far. So whether the bill will be approved by the House, and what its fate may be in the Senate, were unclear.

"It's very hard for Congress to come together on anything right now, let alone something that's controversial," Church Ciocci said in a breakout session June 28. "There's a growing recognition of hydro's many benefits. But there's less consensus on how to develop a (licensing) framework that's efficient, that respects environmental laws while creating a more disciplined process."

HydroVision speakers predicted that H.R. 3043 would streamline and improve the permitting process. But that bill covers only one facet of hydropower licensing--the Federal Energy Regulatory Commission (FERC) (Washington, D.C.), whose authority over hydroelectric generation is delineated in the Federal Power Act. The McMorris Rodgers bill would do nothing to curtail the activities of other regulatory agencies, at the federal and state levels, whose interventions and studies tend to add years to a hydro licensing or relicensing process.

Speakers and attendees agreed that it takes an average of 8-10 years to license or relicense a hydroelectric facility, though some applications have been approved in less time. As well, some drag on well after the 10-year mark.

The licensing process is such a long and convoluted one because other laws give significant power to the U.S. Fish & Wildlife Service, the National Marine Fisheries Service, the U.S. Army Corps of Engineers and water agencies in 50 states. Those agencies often engage in duplicative studies for a proposed hydro project, and sometimes reach different conclusions.

"The hydro licensing process will be a tough nut to crack," commented Kimberly Ognisty, an associate at Winston & Strawn LLC (Chicago, Illinois). The other regulatory agencies with standing in hydro licensing process have different mandates than FERC, and the draft of the McMorris Rodgers bill does nothing to curtail those other agencies' roles in hydro licensing.

"I see a slow improvement (in the hydro licensing process) until these other issues are resolved," Ognisty said in a June 29 panel discussion.

The NHA estimates that nearly 400 FERC-licensed hydro projects representing approximately 18,000 MW of generating capacity will enter the relicensing process over the next 13 years.

While there was broad agreement among speakers and attendees at HydroVision International that hydropower will fare better under the Trump administration, two members of that administration were more guarded in their assessments. Interviewed by Industrial Info at the event, the Department of Energy (DoE) (Washington, D.C.) career officials, who spoke on background, said that it was "too early to tell" if the new administration will be better for hydro than its predecessor.

President Trump is more committed to an "all of the above" energy strategy than President Obama was, and his embrace of domestic, low-cost energy should auger well for hydro, said the officials, who are both career civil servants. They also noted President Trump brought a regulatory reform agenda to Washington, D.C.

But the two DoE officials told Industrial Info that the president's budget contained deep cuts to the department's budget. The officials noted that the president favors spending government funds on early-stage technologies that have not been proven at commercial scale. Mature, proven technologies that can be commercialized by the market have less need for government support, they added. Given that hydropower technology has been in the market for over a century, it looks like the hydro industry's main benefits from the Trump administration may be limited to streamlining the licensing process.

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