Non-Federal Development of Hydroelectric Resources at Federal Dams--Need To Establish a Clear Federal Policy

Studies indicate that hydroelectric power potential, particularly at existing dam sites, can save the country hundreds of thousands of barrels of oil equivalent per day. Some of the best potential sites in the United States are located at Federal water resource projects. Federal agencies may be authorized to plan, design, and build multi-purpose-dams. When hydropower is not an authorized project purpose, the non-Federal sector has as much right to propose development as the Federal agency. GAO was requested to (1) determine whether a Federal policy exists which allows non-Federal developers to develop hydroelectric resources at Federal dams, and (2) identify examples of non-Federal interests being discouraged from developing hydroelectric power at Federal sites.

There is no consistent Federal policy to foster non-Federal development of hydropower at Federal dam sites. The Corps of Engineers and the Water and Power Resources Service comment on non-Federal applications to develop hydropower at their facilities on a case-by-case basis. Both believe they should first have a chance to study the feasibility of installing hydropower at their dams and then recommend to Congress either public or non-Federal development. The Federal Energy Regulatory Commission (FERC) will grant a preliminary permit to a non-Federal developer to study the feasibility of installing power at a Federal site unless (1) hydropower is an authorized project purpose, or (2) a Federal study on a dam is nearly completed. The Department of Energy (DOE) and the Rural Electrification Administration (REA) will aso provide grants and loans to non-Federal developers when they secure an FERC permit or license. Some non-Federal developers interested in developing power at Federal sites encountered resistance from the water resources agencies, others did not. There was agreement among the public and non-Federal parties that the non-Federal sector can get hydropower on line faster than the public sector, and without major outlays by the Federal Government. Presently, there are unresolved legal questions which can potentially become serious barriers to non-Federal development of power at Federal sites. If left unresolved, power development at Federal dams could be delayed for a long time.

Recommendations

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