HR-267-113
Became Public Law No: 113-23.
What it does
This law reduces federal licensing requirements for small hydroelectric power projects. It raises the size threshold for small hydropower projects exempt from Federal Energy Regulatory Commission (FERC) licensing from 5,000 to 10,000 kilowatts, and creates a streamlined exemption process for hydropower facilities built on existing water conduits (such as canals, pipelines, and aqueducts) up to 5 megawatts. It also directs FERC to study licensing at non-powered dams and directs the Department of Energy to study how pumped storage facilities can support the electric grid and intermittent renewable energy sources.
Who benefits
Small and mid-sized hydropower developers who would face fewer licensing hurdles and lower compliance costs. Agricultural water districts, municipalities, and industrial water users who operate conduits and could add power generation without a full federal license. Rural electric cooperatives and communities near existing dams or water infrastructure. Investors and businesses in the small hydropower sector. Developers of pumped storage projects who may benefit from the DOE study's findings guiding future policy.
Who is hurt
Environmental and conservation groups concerned that reduced licensing oversight may lead to less scrutiny of impacts on fish passage, river ecosystems, and water quality. Downstream water users and fishing communities whose interests are currently protected through the full FERC licensing process. Competing electricity generators (e.g., solar, wind, natural gas) who face more regulatory costs and may be disadvantaged. State and local governments that rely on the federal licensing process to negotiate conditions protecting local water resources.
Supporters argue
Supporters argue that the existing FERC licensing process was designed for large, river-blocking dams and is unnecessarily burdensome for small projects that pose minimal environmental risk. Raising the exemption threshold and streamlining conduit hydropower approvals would unlock a significant source of clean, reliable, and domestic electricity generation at little environmental cost, since conduit facilities use already-built water infrastructure rather than new river diversions. Supporters contend that the two-year preliminary permit extension gives developers the time needed to conduct thorough feasibility work, and that the studies on pumped storage and non-powered dams lay the groundwork for expanding grid reliability and renewable energy integration without new mandates or spending.
Opponents argue
Opponents argue that the FERC licensing process exists precisely to ensure that even small hydropower projects are evaluated for their cumulative effects on waterways, fish populations, and downstream communities — effects that do not disappear simply because a project is small. Doubling the exemption threshold removes federal environmental review for a broader class of projects, potentially allowing harm to aquatic ecosystems to go unexamined. Critics contend that conduit exemptions, while seemingly narrow, could be applied broadly as developers seek to qualify, and that the 15-day initial determination window gives FERC insufficient time to assess environmental impacts. Opponents also note that the studies directed by the law are non-binding, meaning findings about pumped storage and grid reliability may not translate into meaningful policy action.