Energy Efficiency, Hydropower

Hydro Currents

Issue 8 and Volume 26.

Senate deletes hydro benefits, passes bill

The Senate leadership deleted enough controversial provisions from a House-passed energy bill to win Senate approval Dec. 13. However, the deletions included tax incentives for renewable energy developers such as some types of hydropower. The remaining bill, which passed 86-8, would increase fuel efficiency of U.S. cars and trucks. To end a Republican filibuster threat, the Democratic leadership dropped a renewables portfolio standard, which would have required utilities to generate 15 percent of their electricity from renewables, including some hydro, by 2020. They also dropped increased taxes for oil companies. That eliminated revenue to pay for the extension of expiring federal production tax credits and clean renewable energy bonds for some forms of hydropower. That meant the unfunded hydro tax benefits also had to be deleted.

U.S. issues new Columbia draft ‘biop’

Federal fish agency NOAA Fisheries issued its latest draft biological opinion, finding the federal Columbia River Basin hydropower system can be operated in ways to protect and recover threatened salmon stocks. The reaction was immediate and negative from the environmentalist dam removal lobby because, like four ill-fated “biops” before it, the opinion does not consider removing four Corps of Engineers dams on the Snake River totaling 3,033 MW. Once a final review is complete, the 2007 biop will be submitted to U.S. District Judge James Redden in Portland, Ore., who voided NOAA Fisheries’ 2004 opinion in 2005. Redden ruled that opinion was legally flawed because it found “no jeopardy” to salmon and steelhead listed for protection under the Endangered Species Act. NOAA Fisheries said the new biop spells out an “aggressive and comprehensive” series of hydropower system improvements, hatchery reforms, and habitat enhancements.

EIS backs Minerals Service rule over Outer Shelf

The U.S. Interior Department’s Minerals Management Service (MMS) issued a final environmental impact statement (EIS) in November supporting MMS regulation of alternative energy projects on the offshore Outer Continental Shelf, including ocean current and wave energy projects. The EIS takes a first look at environmental, social, and economic effects from, and mitigation measures for, energy project activities that could be initiated in the next five to seven years. The Minerals Management Service also announced an interim policy that would authorize developers to collect data and establish test facilities on the Outer Continental Shelf.

Bill would grant funds to fix public dams

The U.S. House passed a bill that would provide grant assistance totaling $200 million over five years to states to rehabilitate deficient publicly owned non-federal dams. The Dam Rehabilitation and Repair Act of 2007 would amend the National Dam Safety Program Act to provide the grants. The measure cleared the House in October and was sent to the Senate. The bill would authorize appropriations of: $10 million for fiscal year 2008, which began Oct. 1, 2007; $15 million for fiscal year 2009; $25 million for fiscal year 2010; $50 million for fiscal year 2011; and $100 million for fiscal year 2012. The federal share could not exceed 65 percent of the rehabilitation cost.

Ontario group submits waterpower process

The Ontario Waterpower Association submitted a Class Environmental Assessment (EA) for Waterpower Projects to the Ontario Ministry of the Environment for review and approval. If approved, the new process would replace an existing environmental screening process and apply to hydropower projects in Ontario. The Class EA is intended to provide direction on effective project assessment. It also is expected to encourage processes appropriate for, and specific to, hydro projects. In addition to requiring all new hydropower projects to be screened against comprehensive environmental, social, cultural, and economic criteria, the Class EA requires a formal environmental report for every project. The Ontario Waterpower Association began work on the procedure in 2002, hoping to coordinate and integrate what it called a multiplicity of environmental approvals and public involvement processes.

U.S. program could benefit hydrokinetics

The U.S. Department of Energy (DOE) completed final regulations for a loan guarantee program authorized by the Energy Policy Act of 2005 to provide federal support of clean energy technologies. Hydrokinetic technologies, such as ocean wave, tidal, and in-stream technologies, could be eligible for inclusion in future solicitations, Dan Tobin of the Loan Guarantee Program said. However, conventional hydropower, new and incremental, if already commercially deployed in the U.S., would not be considered new or significantly improved, and therefore would not be eligible. All projects deemed eligible for a loan guarantee must use “new or significantly improved” technologies compared to commercial technologies already in the marketplace. Projects also must avoid, sequester, or reduce emissions of greenhouse gases or air pollutants. DOE intends to issue solicitations in 2008 on the program Internet site,

FERC staff: Relicense, don’t remove, Klamath

In a final environmental impact statement (EIS), the Federal Energy Regulatory Commission (FERC) staff recommends dams in PacifiCorp’s 161-MW Klamath hydroelectric project remain in place and that the project be relicensed. FERC staff issued the final EIS Nov. 16, concluding relicensing, consistent with environmental measures specified in the staff alternative, is the best alternative for the project, on the Klamath River in Oregon and California. Environmental, tribal, and fishing groups have called for removal of four of the project’s dams. The California Energy Commission staff urged state regulators to prohibit PacifiCorp from recovering from ratepayers the costs for relicensing improvements to the project, instead pushing for dam removal. PacifiCorp’s own relicensing plan proposes decommissioning two small developments. As it did in the draft EIS a year earlier, FERC staff rejected the the Interior and Commerce department mandatory conditions requiring fishway construction at four dams. However, despite the staff EIS, FERC itself has no authority to reject or modify Interior and Commerce final prescriptions, and must include them in the relicense.

Australia group acquires Puget Energy

An investor group led by Macquarie Bank of Australia agreed October 26 to buy Washington hydropower utility Puget Energy Inc. in a deal worth $3.51 billion. The Australian bank planned to pay $30 per share of the fast-growing Puget, more than a 25 percent premium to its October 25 close, and promised to provide $5 billion for the company’s power generation and infrastructure needs. The deal, which must be approved by Washington state regulators, also calls for $1.6 billion of newly issued debt in addition to $2.6 billion of existing debt. Puget Energy is the parent of Puget Sound Energy, which generates 45 percent of its power from hydro sources, 17 percent from natural gas, 34 percent from coal, and 2 percent from wind.

Avista to pay rent for Montana riverbeds

Avista Corp. said it will pay millions of dollars in rent each year to the state of Montana for riverbeds occupied by the utility’s hydroelectric facilities, including $4 million for 2007. Avista settled rather than go to trial in a state lawsuit intended to force hydropower utilities to pay rent for their riverbeds. The agreement calls for Avista to pay rent each year from 2007-2016. Although the initial amount is $4 million per year, rent is to be modified each year, with the base amount adjusted by the Consumer Price Index. The agreement also provides for Avista’s rent to be adjusted if another hydro operator, PPL Montana, receives a determination of valuation that is more favorable than valuation in the Avista settlement. Similarly, if the state enacts a statute, rule, or policy that is more favorable to Avista, then Avista’s rent would be adjusted. Avista is the second hydro operator to settle. PacifiCorp settled in June for the 4.15-MW Bigfork project. Avista’s holdings in Montana include 723-MW Clark Fork. PPL Montana’s holdings include 327-MW Missouri-Madison River, 10-MW Mystic Lake, and 93-MW Thompson Falls.

URS completes acquisition of Washington Group

Construction services company URS Corp. completed the acquisition of Washington Group International Inc. for a total purchase price of $3.1 billion, following approvals of both companies’ stockholders. Under terms of the deal, which was first announced in June, Washington Group shareholders are receiving $43.80 in cash and 0.900 shares of URS common stock for each Washington Group share they own. Both companies have dam and power construction work in their pedigrees. Most notably, Washington Group’s founding company, Morrison-Knudsen, was a key member of the consortium that built 2,079-MW Hoover Dam on the Colorado River. The combined company is to be called URS Corp. Together, the companies would have 2007 revenues of about $8.6 billion, projects in more than 50 countries, and more than 54,000 employees.

Lake Chelan seeks ‘low-impact’ certification

The Low Impact Hydropower Institute is reviewing an application by Chelan County, Wash., Public Utility District for certification of the 48-MW Lake Chelan project as “low-impact” hydropower. Lake Chelan has a 40-foot-tall concrete gravity dam and a powerhouse on the Chelan River near Chelan, Wash. It occupies about 465 acres of federal lands administered by the Forest Service and National Park Service. The utility based its application on its 50-year relicense for continued project operation, issued by the Federal Energy Regulatory Commission in 2006. Chelan County PUD declared its intent to use federal Clean Renewable Energy Bonds to help finance modernization of Lake Chelan and a second project. To receive low-impact certification, an applicant must demonstrate its project meets criteria addressing: river flows, water quality, fish passage and protection, watershed health, endangered species protection, cultural resources, recreation use and access, and whether the dam is recommended for removal.

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