U.S. Senators introduce legislation to spur hydropower upgrade in Alaska

Alaska flag

U.S. Senators Lisa Murkowski and Dan Sullivan (both R-AK) have introduced legislation they say will help ensure that existing hydroelectric facilities are able to continue to provide emissions-free, flexible, and affordable electricity to Alaskan ratepayers.

Murkowski and Sullivan were original cosponsors of the Maintaining and Enhancing Hydroelectricity and River Restoration Act of 2023.

The legislation establishes a new 30% federal tax incentive (also available to not-for-profit entities) to encourage upgrades to the safety and security of existing dams, investments that expand fish passage infrastructure, and improvements to water quality and recreational use opportunities at hydropower sites. The bill also establishes the first federal cost-share to encourage the removal of obsolete river obstructions that are degrading river ecosystems and inhibiting outdoor recreation opportunities.

The federal Investment Tax Credit (ITC) that covers hydropower only applies to investments that produce a marginal increase in power generation. Environmental and maintenance investments — such as new fish passage to help enhance aquatic ecosystems, structural upgrades to ensure the safety of dams, and generator rewinds to improve grid resiliency — that do not result in power increases are not eligible for this credit. The Maintaining and Enhancing Hydroelectricity and River Restoration Act of 2023 bridges the gap by including adding fish-friendly turbines or new fish ladders, managing river sediments to improve habitat, upgrading or replacing floodgates and spillways, and expanding access to public waterways impacted by existing dams.

The bipartisan bill would also support local efforts to remove non-power-producing river barriers, including abandoned or obsolete dams, dikes or embankments. Private, state, local and non-profit groups could use the 30% federal tax incentive, with a direct pay option, to support efforts to demolish and remove unnecessary barriers with the owner’s consent. This can provide new outdoor recreation opportunities, create new fish and wildlife habitat, spur local economic development, and increase the resilience of rivers to the effects of climate change.

“With energy prices impacting consumers and businesses alike, hydropower is even more important as a part of Alaska’s energy portfolio. Small hydropower projects across the state are already demonstrating innovative technologies that provide clean, affordable baseload power. This legislation, which I’m leading with Senator Cantwell, incentivizes hydropower development and taps into the immense renewable resources available in Alaska,” said Senator Murkowski. “With this bill, we’re spurring hydropower development in Alaska, diversifying our energy supply, reducing our emissions, and investing in Alaska’s future.”

“Nearly 30 percent of our state’s electrical energy is supplied by hydro, and the potential is even greater,” said Senator Sullivan. “I have long advocated for increasing hydropower as part of an all-of-the-above energy strategy that our country desperately needs. This bill, which includes tax credits for transmission lines, will help expand clean hydroelectricity in Alaska, lower energy costs, and expand economic opportunities for Alaskans.”

The bill has the support of local and national power organizations, and bipartisan policy organizations, Senator Murkowski said. This includes the Alaska Energy Authority, Alaska Independent Power Producers Association, Juneau Hydropower, Southeast Alaska Power Agency and Ketchikan Public Utilities.

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