Hydropower

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President Trump hit the ground running, issuing more executive orders, memoranda, and other actions on Inauguration Day than any previous president. Agencies are already working to implement those actions. Many of the actions are interrelated, so Troutman Pepper Locke’s Environmental + Natural Resources team has put together the following resource to help assess the impact of these actions on environmental policy, and how the various actions fit together.

On November 17, the U.S. Fish and Wildlife Service (Service) announced that $38 million in grant funding is available in fiscal year 2023 for fish passage projects. The goal is to award this funding to projects that address outdated, unsafe, or obsolete dams, culverts, levees, and other barriers. This funding effort is part of an overall $200 million commitment set out in the Bipartisan Infrastructure Law (BIL) and is part of the National Fish Passage Program (NFPP). The NFPP is a voluntary program that provides direct technical and financial assistance for restoration of aquatic organism passage and aquatic connectivity.

This article was republished in Pratt’s Energy Law Report (Vol. 22-10, November-December 2022).

On June 1, the Environmental Protection Agency (EPA) released a pre-publication version of its proposal to re-write the Clean Water Act Section 401 rule (Certification Proposal), which, if finalized, is expected to have far-reaching impacts on hydroelectric licensing and relicensing. The Certification Proposal is intended by EPA to replace the version of the rule finalized under the Trump administration in 2020 (2020 Rule). While the Certification Proposal maintains some aspects of the 2020 Rule, it differs in some significant areas and in many ways reverts back to the 1971 regulations.

On April 3, representatives of the hydropower industry, Native American tribes, and conservation organizations provided a package of proposed legislative reforms to the Federal Power Act (FPA) to the ranking members of the U.S. Senate’s Energy and Natural Resources Committee and the U.S. House of Representatives’ Energy and Commerce Committee. The package, which was developed as part of the Stanford University Uncommon Dialogue on hydropower and river conservation, is the result of year-long intense negotiations between a variety of hydropower stakeholders.

On November 5, the U.S. House of Representatives passed the more than $1.2 trillion Infrastructure Investment and Jobs Act, also known as the bipartisan infrastructure framework (BIF). The Senate had already approved the bill back in August, and it now heads to the president’s desk for signature. The BIF represents a core piece of President Biden’s agenda and provides significant funding for infrastructure improvements in energy and water, including over $900 million in waterpower incentives for new and existing hydropower, pumped storage, and marine energy. Additional spending is provided for dam safety and removal.

Section 7(h) of the Natural Gas Act (NGA) and Section 21 Federal Power Act (FPA) respectively vest Federal Energy Regulatory Commission (FERC or Commission) natural gas pipeline certificate holders or hydroelectric licensees with the ability to exercise the federal power of eminent domain to condemn property when the project proponent is unable to acquire necessary rights by contract or negotiation with the property owner. On June 29, the U.S. Supreme Court, in PennEast Pipeline Co. LLC v. New Jersey, No. 19-1039, held that the 11th Amendment of the Constitution does not bar a certificate holder under the NGA from exercising eminent domain to condemn state-owned property. Significantly for hydropower projects, the Supreme Court’s holding also potentially provides clarity that the 11th Amendment is not a bar to the analogous Section 21 provision of the FPA if a hydroelectric licensee must exercise eminent domain over project-necessary state-owned lands.

On July 6, the U.S. Department of Energy (DOE) announced a funding opportunity for the research and development of wave energy converter (WEC) technologies for advancement toward wave energy commercial viability. As much as $27 million in federal funding is available for WEC technologies still in the early stages of development for testing at PacWave, an open ocean wave energy testing facility consisting of two sites, each located just a few miles from the deep-water port of Newport, OR.

There has been a longstanding debate about how to apply the one-year time limit on Clean Water Act Section 401 certification decisions. The D.C. Circuit court in Hoopa Valley Tribe v. FERC, 913 F.3d 1099 (D.C. Cir. 2019) established a bright-line standard that a 401 certification must be issued or denied within one year of receipt of application, or the certification opportunity is waived. States cannot engage in actions to extend this deadline by requiring an applicant to withdraw and refile their application or by finding an application incomplete. This bright-line test was reinforced by the Second Circuit’s more recent decision in New York State Department of Environmental Conservation v. FERC, 991 F.3d 439 (2d Cir. 2021). This interpretation was also codified in EPA’s 2020 Clean Water Act Section 401 Certification Rule. See 85 Fed. Reg. 42210 (July 13, 2020). However, on July 2, the Fourth Circuit offered a different interpretation of Section 401 in its decision in N.C. Department of Environmental Quality v. FERC, No. 20-1655 (McMahan Hydro).