Low-Impact and Affordable Hydropower Generation in the West

Statement of Michael L. Connor,

Commissioner Bureau of Reclamation

U.S. Department of the Interior

Before the

U.S. House of Representatives

Committee on Natural Resources

Subcommittee on Water & Power

Hearing:

"Investment in Small Hydropower: Prospects for Expanding

Low-Impact and Affordable Hydropower Generation in the West"

July 29, 2010

Madam Chairwoman and members of the Subcommittee, I am Mike Connor, Commissioner of the Bureau of Reclamation (Reclamation).I am pleased to provide the views of the Department of the Interior (Department) on the many activities underway during this Administration to develop additional renewable hydropower capacity at existing or new water facilities.

Reclamation has 476 dams and 8,116 miles of canals, and owns and operates 58 hydropower plants.On an annual basis, these plants produce an average of 40 billion kilowatt (kW) hours of electricity, enough to meet the entire electricity needs of over 9 million people on average, and provide the energy equivalent of about 66.8 million tons of coal.[1]Power generated by Reclamation hydropower facilities reduced the amount of carbon dioxide put into the atmosphere by an average of 27 million tons annually compared to the amount of carbon dioxide that would have been put into the atmosphere if that amount of power had been generated through conventional means.[2]Reclamation is the second largest producer of hydroelectric power in the United States, and today we are actively engaged in looking for opportunities to encourage development of sustainable hydropower capacity which I will describe below.Non-Federal hydropower has been developed on 47 other Reclamation sites through Federal Energy Regulatory Commission (FERC) licenses and Lease of Power Privilege (LOPP) agreements that provide a generating capacity of over 460 megawatts.This non-Federal hydropower coupled with our generation is important to the North American electricity grid as well as to our existing customers, and our efforts to encourage the development of additional hydropower capacity extend primarily to such new FERC or LOPP facilities.

Hydropower is a minimal emission, low-cost source of energy that provides consistent, reliable generation which can be quickly adjusted to meet the various needs of the electric grid.The Department is committed to increasing the generation of environmentally sustainable, affordable hydropower for our electricity supplies.In March 2010 Reclamation signed a Memorandum of Understanding (MOU) with the Department of Energy (DOE) and the U.S. Army Corps of Engineers (USACE).The MOU focuses on ways to increase renewable energy generation by focusing on development of sustainable, low impact, and small hydropower projects.The MOU recognizes that not every site is appropriate for new production and commits the agencies to a new approach to hydropower that will harmonize the production of renewable hydropower generation with avoidance or reduction of environmental impacts and maintenance or enhancement of the viability of affected ecosystems.

Under the MOU, the three federal agencies will explore opportunities to increase generation of hydropower at existing facilities, look for opportunities to develop generation capacity in currently unpowered dams and conduits, and facilitate the permitting process for hydroelectric power generation by non-Federal interests at Federal facilities. Some of the highlights of the MOU include:

1. A resource assessment identifying specific Federal facilities where new hydropower generation could be installed.This assessment entails, among other things, updating the 2007 report prepared pursuant to Section 1834 of the Energy Policy Act of 2005 (phase one), and evaluating both existing dams and canals or "conduits" for new hydropower development within existing footprints (phase two).Status: phase one is on track for delivery in Fall 2010, phase two in 2011;
2. Surveying Reclamation and USACE existing hydropower facilities to quantify the amount of additional generation that may be possible through uprates or efficiency enhancements.Status: on track for delivery in Fall 2010, with implementation subject to discussions among the Power Marketing Administration and Federal Power customers;
3. Conducting basin-scale analyses to determine opportunities for new low-impact, small hydropower projects, improvements to existing facilities, and opportunities for environmental restoration.Status: a workshop is being planned for September 2010;
4. Collaborating with private companies, states, tribes, nongovernmental organizations and other Federal agencies to explore benefits from a certification program for environmentally friendly hydropower projects. Status: ongoing;
5. Conducting annual Research & Development workshops to highlight current initiatives, results of past efforts, and future goals of each agency. Status: ongoing;
6. Analyzing potential pumped storage sites that could be developed at existing USACE and Reclamation facilities. Status: ongoing;
7. Collaborating to clarify the current permitting process for projects proposed at Federal facilities. Status: ongoing.

The MOU provides a basis to engage with stakeholders, including other Federal agencies, the environmental community, and hydropower interests.Since the MOU was signed in March, numerous meetings have been held to engage with interested parties on ways to increase hydropower generation capacity in an environmentally responsible manner.

The entire MOU is available online at http://www.usbr.gov/power/index.html and is attached to this testimony.

Power produced at Reclamation facilities is first used for specific project purposes pursuant to the authorizing statutes.Any power remaining is marketed by the Western Area Power Administration and Bonneville Power Administration to Federal power customers.Some of the revenue collected from the sale of power to all customers is used to finance operations, maintenance and replacement on Reclamation hydropower facilities and any remainder is deposited into the Treasury towards repayment of project costs or applied to Programs authorized by Congress.Two examples are the San Juan/Upper Colorado River Recovery Implementation Programs, and the Glen Canyon Adaptive Management Program.

Approximately 40% of all hydropower in the United States is currently generated at Federally- owned facilities.Reclamation's hydropower plants play an important role in ensuring the reliability of the electrical power grid in the western United States.Although Reclamation's current hydropower resources have limited flexibility for a variety of reasons, hydropower is valuable as a source of ancillary services such as regulation and load following.Increasing the generation of hydroelectricity to provide these ancillary services will become even more important to electric reliability as larger amounts of intermittent generation sources such as wind and solar come online. An increase of sustainable and environmentally acceptable hydropower generation can also help reduce the generation of greenhouse gasses by reducing our reliance on fossil fuels.

New Hydropower Generation on Existing Facilities

In the FY 2010 Energy and Water Appropriations Act, Congress directed Reclamation to spend $5 million to "implement the results" of the Section 1834 study referred to earlier from within existing funds. No recommendations were included in the 2007 original report; it only provided a general cost benefit analysis. Reclamation is re-examining the results of the Section 1834 study using updated criteria, including taking into account appropriate environmental considerations.This update to the 1834 study, which is referenced in the MOU, will provide a basis for identifying low-impact, cost-effective opportunities to increase hydropower.

At this time Reclamation owns dams and many miles of canals that do not have hydropower installed, some of which could support hydropower development.While installing hydropower on all of these structures may not be cost effective or environmentally acceptable, there has been increased interest from outside entities to develop some of these sites.Licensing new facilities is accomplished through either a LOPP or a license from FERC.We are evaluating ways to make these processes much more efficient, and have been working with FERC and other interested federal agencies to explore possibilities to streamline the process without sacrificing environmental considerations.

Two Lease of Power Privilege agreements have been issued in the previous year with a total capacity of 4.5 megawatts (MW), and two Federal Register Notices have been issued to initiate the LOPP process for two additional sites with 15 MW of capacity.There have also been initial discussions for lease of power privilege agreements at four other Reclamation sites.Under the FERC licensing process, there has been development interest at several Reclamation sites.Currently, eight FERC licenses have been issued for conventional hydropower development with a capacity of 19 MW, and ten more potential projects have been issued preliminary permits.

Pumped Storage

Reclamation owns and operates three Pumped Storage Hydroelectric plants: Grand Coulee in Washington and Mt. Elbert and Flatiron in Colorado.In 2011, Reclamation will be initiating work to identify other pumped storage opportunities in Reclamation's footprint.This will be accomplished by collaboration with the Department of Energy on a pumped storage study and review of previously identified and new Reclamation projects that show potential for development or conversion to pumped storage.

In addition, Reclamation and Bonneville Power Administration signed an agreement on June 15 to rehabilitate and uprate the John W. Keys, III Pump Generating plant at Grand Coulee.A rehabilitation study has been completed for the Mt. Elbert Pumped Storage plant.Reclamation is working with its customers to schedule that rehabilitation.

Capacity and Efficiency Gains at Existing Units

Capacity increases and efficiency gains can be accomplished through "uprates" and "rewinds."Generally, when Reclamation rewinds a generator, the new winding will typically allow for up to a 15% increase in capacity.An uprate normally involves increasing the rating of an entire unit by more than 15%, which, in turn, necessitates reviewing the capability and limits of all of the power equipment from the penstock through the turbine, generator, bus, switchgear, transformer, and transmission system sometimes requiring modification of those components.

Uprates can be accomplished in one of three ways:

1. Increasing the turbine runner efficiency to produce more power with the same amount of water.
2. Increasing the generator and other component capacity to accept excess capacity available from the turbine.
3. Replacing the turbine with one that has a higher flow through capacity.

Over the last thirty years, as a result of uprating, Reclamation has increased its generation capacity by approximately 1,800 MW, an amount that is almost equivalent in magnitude to the installed capacity at Hoover Dam.

Uprates are currently underway in Washington at Grand Coulee Dam's Third Powerhouse that will increase capacity on units G19 and G20 from 690 MW to approximately 770 MW each, and an additional generating unit has been approved at Black Canyon Dam in Idaho.Uprate studies are also being conducted at Deer Creek Dam in
Utah, and the Grand Coulee John W. Keys III Pump-Generating Plant in Washington. The comprehensive study described above that will result from the MOU is focused on the potential for uprate and efficiency gains at all current facilities.

Low-head and Micro Hydropower

Reclamation is also working with stakeholders to facilitate the development of low-head and micro hydropower.Currently Reclamation owns and operates four plants that fall within the definition of low-head hydropower[3], at Roza Diversion Dam in Washington, Minidoka Dam in Idaho, Nimbus Dam in California, and Boise River Diversion Dam, also in Idaho.We believe more opportunity may exist on facilities Reclamation owns, as well as non-Reclamation facilities that are associated with Reclamation projects.We have provided WaterSMART grants to help develop a low-head hydropower project that would conserve water in addition to generating 0.75 MW of power.We are also looking at other opportunities to generate power in canals and other delivery systems where it makes sense from a water management, financial, and environmental perspective.

In conclusion, Reclamation is playing a strong role in identifying and assisting in sustainable hydropower expansion in the U.S., taking into account appropriate environmental considerations.Along with our partner agencies, we have embarked on a broad array of activities that recognize the importance of the hydropower resource.We hope that these new efforts will provide a lasting contribution to the power supplies of our nation, just as past investments in the water and power infrastructure we rely on today have done, but with appropriate attention to minimizing the impacts to natural hydrology and sensitive species of fish and wildlife.We will look forward to working with the Congress as we continue our efforts to increase development environmentally sustainable hydropower.

Thank you for the opportunity to discuss the prospects for expanding low-impact and affordable hydropower generation.I am pleased to answer any questions the Subcommittee may have.

[1] Standard BTU content conversion factors and 2008 Energy Information Administration (EIA) U.S. consumption data.

[2] Calculated by multiplying 1.341 pounds CO2/kWh by 40 billion kW produced by Reclamation to get about 54 billion pounds, and converting this to tons by dividing by 2000 (1 ton=2000 pounds).1.341 pounds CO2/KW hour conversion factor is from the" Generation of Electric Power in the United States July 2000 Report" by Energy Information Administration (EIA), Page 5, Table 1.

[3] Small and low head hydropower projects are classified in several ways. The Department of Energy defines low-head hydropower as having a drop of less than 66 feet (http://www1.eere.energy.gov/windandhydro/hydro_glossary.html), and the power community is working with projects characterized as ultra low-head, with drops less than 10 feet. FERC has defined small hydropower projects as having capacity less than 5 megawatts, mini hydro as less than 1 megawatt, and micro hydro as less than 100 kilowatts.