H.R. 2842: Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act

H.R. 2842

Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act

Date
March 6, 2012 (112th Congress, 2nd Session)

Staff Contact
Communications

Floor Situation

On Tuesday, March 6, 2012, the House is scheduled to consider H.R. 2842, the Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act, subject to a rule. The bill was introduced on September 6, 2011, by Rep. Scott Tipton (R-CO) and referred to the Natural Resources Committee. On October 5, 2011, the Committee held a mark-up on the bill and reported the legislation, as amended, by a vote of 30-12. The rule for consideration of H.R. 2842 provides for one hour of general debate equally divided and controlled by the chair and ranking minority member of the Committee on Natural Resources. The rule also makes in order amendments pre-printed in the Congressional Record. A summary of the amendments preprinted in the Congressional Record is available below.

Bill Summary

H.R. 2842 would authorize the Bureau of Reclamation (Reclamation) to permit private entities to develop small hydropower units on all irrigation canals and conduits under Reclamation’s jurisdiction. Under current law, either the bureau or the Federal Energy Regulatory Commission (FERC) has jurisdiction over hydropower development at such facilities. H.R. 2842 would clarify that the jurisdiction for small hydropower development on all bureau irrigation canals and conduits lies solely with the bureau. In addition, the bill would exempt small conduit hydropower (1.5 megawatts or less) from National Environmental Policy Act (NEPA) regulations, while retaining NEPA application for larger installations.

Specifically, the bill would amend the Reclamation Project Act to add the term “power” as an authorized function at all Bureau of Reclamation water conduits (tunnels, canals, pipelines, or aqueducts) in addition to any authority in existing laws. This authorization would ostensibly allow Reclamation to pursue hydropower development on conduits under its exclusive jurisdiction and within the framework of federal reclamation law. The bill would require Reclamation to offer leases for conduit hydropower first to the entity operating the conduit or the conduit's direct water user beneficiaries. This provision would give irrigation districts the preference to lease hydropower projects on canals that the districts operate and maintain on behalf of the federal government. The bill would not prohibit the operators of the conduit facility from participating with any third-party interest in the hydropower development on the respective conduit.

Additionally, H.R. 2842 would exempt small conduit hydropower (1.5 megawatts or less) from National Environmental Policy Act (NEPA) regulations, while retaining NEPA application for larger installations.  According to the Natural Resources Committee, the hydropower facilities would be operated on man-made canals that have already gone through the NEPA process.

The bill would also specify that the Western Area Power Administration, the Bonneville Power Administration and the Southwestern Power Administration are not obligated to purchase or market the conduit hydropower generated at Reclamation facilities and that none of the costs associated with the generation shall be assigned to these agencies’ power rates. If these administrations did market conduit-generated hydropower they would be prohibited from doing so in a way that alters the management of water resources or modifies any existing agreements for hydropower.

Background

According to the Committee on Natural Resources, interest in developing more conduit hydropower on the Bureau of Reclamation’s canals stemmed primarily from non-federal water and power interests. Despite the Energy Policy Act of 2005’s directive to analyze all of its facilities for hydropower development, the agency is just now studying potential hydropower generation on its conduits. The agency’s longstanding internal deliberations on this topic have been used by some to accuse it of “paralysis by analysis.”  H.R. 2842 seeks to reverse such stagnation by clarifying that hydropower is authorized at Reclamation’s conduits. Currently, there is widespread uncertainty over which federal agency would manage hydropower development at Reclamation’s facilities. In some cases, Reclamation has clear authority to develop hydropower at a specific project’s conduit. In other cases, the Federal Energy Regulatory Commission (FERC) would have authority if the underlying project’s authorization did not include hydropower as a component.  Under other scenarios, it is not clear at all which agency has jurisdiction.

In light of such confusion and since many of Reclamation’s water users have made it clear that they believe the FERC process is too lengthy, costly and bureaucratic, they prefer to work directly with Reclamation on conduit hydropower development. As a result, H.R. 2842 authorizes “power” as a function at all Reclamation conduits. This authorization makes it effectively clear that Reclamation would oversee conduit hydropower development at its facilities.

Another substantial regulatory barrier to future conduit hydropower development is duplicative environmental analysis. Even though these units would be installed on already disturbed ground within existing facilities that have already gone through federal environmental review, another National Environmental Policy Act (NEPA) analysis must still be done under existing regulations. This is done despite the fact that the Interior Department’s current Reclamation Manual allows NEPA categorical exclusions for “minor construction activities associated with authorized projects…which merely augment or supplement, or are enclosed within existing facilities” and that conduits do not contain endangered fish and wildlife. H.R. 2842 would exempt only “small conduit hydropower” (1.5 megawatt or less), while retaining NEPA application for larger installations and for transmission siting on federal land.

Cost

According to CBO, H.R. 2842 would increase offsetting receipts to the government by $5 million over the 2012-2021 period by authorizing the Bureau of Reclamation to permit all nonfederal development of hydropower at facilities owned by the bureau. These offsetting receipts are counted as a credit against direct spending. Thus the bill would reduce the deficit by $5 million over ten years.

Amendments

Amendment No. 1—Rep. Napolitano (D-CA): The amendment would strike the provisions in the bill that exempt small conduit hydropower (1.5 megawatts or less) from National Environmental Policy Act (NEPA) regulations, while retaining NEPA application for larger installations. According to the Natural Resources Committee, these hydropower facilities would be operated on man-made canals that have already gone through the NEPA process.

Amendment No. 2—Rep. Tipton (R-CO): The amendment would amend the title of the bill to designate the act as the Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act of 2012, as opposed to 2011.

Amendment No. 3—Rep. Ellison (D-MN): The amendment would prohibit the legislation from taking effect unless the Secretary of Interior finds that the bill would not result in a net loss of jobs.