Energy Efficiency, Hydropower, Storage

Hydro Currents

Issue 1 and Volume 26.

House energy bill might promote hydro

The new Democrat-controlled House passed an energy bill Jan. 18 that would create a fund estimated at $14 billion for investments in renewable energy and energy efficiency. Staff said future legislation would determine whether hydropower would be among the renewables that would benefit. The Strategic Energy Efficiency and Renewables Reserve is included in Title III, Section 301 of the Clean Energy Act of 2007 (H.R.6), sponsored by Rep. Nick Rahall II, D-W.Va. The House passed the bill and sent it to the Senate as part of Speaker Nancy Pelosi ’s accelerated agenda for the Democrats ’ first 100 hours in power. The bill would roll back some oil industry tax incentives and force oil companies to pay more drilling royalties, valued at $14 billion over ten years. The $14 billion would fund the renewables reserve to offset the cost of subsequent legislation to boost domestic renewable energy resources and alternative fuels.

Lawmakers on record for hydro incentives

On the subject of possible hydropower incentives, 42 senators called for President Bush to recommend extending the renewable energy production tax credit for five years, to 2013. In December, Congress extended the production tax credit and the clean renewable energy bond program, which include incremental hydropower, for one year, to Dec. 31, 2008. However, the senators said Bush should propose extending the credit further. Meanwhile, 80 House members wrote Bush, calling for full funding for the Advanced Hydropower Turbine Systems Program in his proposed budget for the Department of Energy. The congressmen also sought substantially higher funding for renewable energy and energy efficiency.

Canada renewables proposal includes hydro

Canada Prime Minister Stephen Harper announced Jan. 19 more than C$1.5 billion (US$1.3 billion) in funding for an initiative to encourage generation from renewables, including hydro of 30 MW and less, and ocean projects. EcoEnergy for Renewable Power is the biggest component of the initiative, calling for an investment of C$1.48 billion (US$1.25 billion) to boost electricity from renewables, including small hydro and ocean energy. Harper said a ten-year incentive program would fund eligible projects to be built over the next four years. The program would provide an incentive of 1 C cent (0.84 US cent) per kilowatt-hour for up to ten years for projects that generate electricity from renewables, including small hydro, and tidal and wave technologies. The ecoEnergy Renewable Initiative is expected to create as much as 4,000 MW of renewable energy.

Future uncertain for unfunded hydro R&D

The 109th Congress went home in December 2006, abandoning a $4 million proposal to revive the U.S. Department of Energy ’s hydropower research and development program. Hydro industry officials held out hope that the new Congress might revive the R&D program, which included development of a “fish friendly, ” more efficient advanced hydropower turbine. Although funding was not included in the Bush administration ’s budget for the fiscal year that began last October, the Senate Appropriations Committee raised hopes by endorsing $4 million for the program. However, Congress went home without passing most appropriations bills. Instead, lawmakers passed a continuing resolution to fund the government through Feb. 15, 2007, postponing a final decision on most appropriations. The National Hydropower Association said it plans to push for funding of the R&D program in the new Congress.

ESA does not require reopening hydro license

A federal appeals court ruled Dec. 12, 2006, that the Endangered Species Act (ESA) does not require the Federal Energy Regulatory Commission (FERC) to open ESA consultation proceedings when a new endangered species is listed near the location of a previously FERC-licensed hydroelectric project. The 9th U.S. Circuit Court of Appeals said ongoing operations of a hydro project under a FERC license do not constitute a federal “agency action ” that would trigger the consultation requirement of ESA Section 7. Before a federal agency can take an action that might affect an endangered species, Section 7 requires the agency to consult with resource agencies to ensure that the proposed action is not likely to jeopardize the continued existence of the species or damage its habitat. The court rejected a request from environmental groups to force FERC to consult with the National Marine Fisheries Service about the operation of Pacific Gas & Electric Co. ’s 26.65-MW DeSabla-Centerville project in California.

GE sells GE Hydro to IMPSA

General Electric (GE) agreed to sell GE Energy ’s hydropower business to Pescarmona Group of Companies (PGC), parent of Argentina-based hydro industry supplier IMPSA. GE said the sale includes GE ’s worldwide hydro business, excluding operations in Norway and Sweden. However, a PGC offer to buy those operations is under consideration. Closing, expected in the first quarter of 2007, is subject to regulatory approvals and discussions with other parties. GE Energy President John Krenicki said the sale would let Atlanta-based GE Energy focus on other segments of the power industry, while positioning PGC for continued growth. GE ’s hydro operation is based in Schenectady, N.Y., and employs 2,000 people globally. PGC Chairman Enrique Pescarmona said the deal enhances PGC ’s position with IMPSA (Industrias Metalurgicas Pescarmona SA) as a global player in hydro. PGC employs more than 6,000 people in 27 countries.

Inspector general faults FERC dam security

The inspector general of the U.S. Energy Department issued an audit finding weaknesses in the Federal Energy Regulatory Commission ’s (FERC) dam oversight program that it says could leave privately owned dams open to terrorist attack. The audit, released Dec. 21, said weaknesses in the FERC program relate to dam security inspection, analysis, and review activities. Inspector General Gregory Friedman said the weaknesses adversely affect FERC ’s ability to oversee security of dams under its jurisdiction. “The destruction from an attack on a hydroelectric dam could be significant considering the Department of Homeland Security ’s conclusion that a dam has the potential to be used as a weapon of mass destruction, ” the report said. In many cases, the inspector general complained that security-related activities were taking place but documentation was insufficient to demonstrate that FERC ’s work had been subjected to management or quality assurance reviews.

Manitoba to hear Wuskwatim appeals

Manitoba ’s Cabinet agreed to consider appeals of the license for the 200-MW Wuskwatim hydroelectric project, already under construction at a site on the Burntwood River in northern Manitoba. Manitoba Wildlands, an environmental group, and Trapline 18, a registered trapline for furbearing animals, filed the appeals in August 2006, the same month construction started. The groups announced that Manitoba ’s Cabinet would hear the appeals under the province ’s Environment Act. Province-owned utility Manitoba Hydro is developing Wuskwatim in partnership with the Nisichawayasihk Cree Nation.

500-MW Lake Elsinore is transmission tech

The Federal Energy Regulatory Commission (FERC) says the proposed 500-MW Lake Elsinore pumped-storage project in

California meets the requirements of the Energy Policy Act of 2005 for an advanced transmission technology. Section 1223 of the Energy Policy Act mandates FERC to encourage deployment of energy storage devices, including pumped hydro, as advanced transmission technology. By treating Lake Elsinore as a transmission asset, developer Nevada Hydro Co. Inc. has said it believes the project will be easier to finance. Nevada Hydro said it is proceeding down two independent paths for financing. One path would involve a rate-based approach, and provide for a guaranteed rate of return to investors. The other path would require reaching a power purchase agreement with a utility, it said.

Bill proposes bonds for new California dams

A bill introduced by California legislators Jan. 11 would authorize the sale of nearly $6 billion in bonds for water improvement projects, including the construction of two new dams and reservoirs. Implementing a proposal in Gov. Arnold Schwarzenegger ’s Jan. 9 State of the State message, Senate Bill 59 identifies the proposed reservoir projects as Sites Dam and Reservoir on the Sacramento River and Temperance Flat Dam and Reservoir on the San Joaquin River. The Reliable Water Supply Bond Act of 2008 is intended to increase surface water storage, groundwater, and conjunctive use, encouraging water use efficiency and environmental restoration. Sites Dam would divert water from the Sacramento River to form Sites Reservoir. A new dam on the San Joaquin River would create Temperance Flat Reservoir. Although there has been no mention of hydropower generation at either project, the reservoirs could be expected to store a total of 3 million acre-feet.

Missouri sues for breach of 408-MW Taum Sauk

Missouri Attorney General Jay Nixon filed a lawsuit in December 2006 against AmerenUE, seeking damages for the December 2005 breach of the utility ’s 408-MW Taum Sauk pumped-storage project. The lawsuit asks that the state ’s largest utility company be ordered to pay compensation and punitive damages for actions and negligence. Taum Sauk has not operated since the dam of its upper reservoir breached Dec. 14, 2005, releasing 1.4 billion gallons of water, injuring nine people, and damaging property. Ameren has said Taum Sauk will remain closed through 2008, and perhaps longer, while it evaluates whether to rebuild. The lawsuit alleges Ameren ’s operation of the project led directly to overtopping of the reservoir and its subsequent failure. AmerenUE already has agreed to a settlement with the Federal Energy Regulatory Commission that calls for payment of $15 million, including a $10 million civil penalty.

Hydro Currents is compiled by the staff of, a product of HCI Publications, the world ’s leading provider of hydro information. To subscribe, call (1) 816-931-1311, or visit the Internet:

Hydro Review (ISSN 0884-0385) is published eight times in January, March, April, June, August, September, October, and November by HCI Publications, Inc., 410 Archibald Street, Kansas City, MO 64111-3046. Periodicals Postage Paid at Kansas City, MO and additional mailing offices. Canadian GST Registration Number R12582991. Annual subscription rates: $65 US. Payments accepted in all currencies for equivalent U.S. funds. Single copies: $20 US. Article copies/reprints: $5 US per article. Order by phone using (1) 816-931-1311 or on the Internet:

POSTMASTER: Send address changes to Hydro Review, 410 Archibald Street, Kansas City, MO 64111-3046.