On July 20, 2016, the Federal Energy Regulatory Commission (FERC) and the U.S. Army Corps of Engineers (USACE) signed a new Memorandum of Understanding (MOU) which they say is aimed at speeding review and approval of hydroelectric applications for non-Federal projects at USACE dams. The new MOU updates a 2011 version of the agreement between FERC and USACE.
Under the MOU, FERC and USACE commit to early coordination, increased data sharing, and informal communication. The MOU sets out a two-phase approach under which the agencies will first engage in an environmental review, followed by a detailed technical, engineering, and safety review phase. During the first phase, which is meant to result in issuance of a FERC license, FERC and USACE staff will coordinate to discuss a developer’s proposal and assess information needed to move the agencies’ permitting processes forward. FERC and USACE will also jointly undertake evaluation of the environmental effects of the proposed project and issue an environmental impact statement as required under the National Environmental Policy Act. In the second, technical review phase, FERC and USACE staff will coordinate with the developer to finalize project design for review and approval by FERC and USACE so that construction can begin.
According to statements from FERC Chairman Norman Bay and Assistant Secretary of the Army for Civil Works Jo-Ellen Darcy, the MOU will facilitate development of hydroelectric development at USACE dams.
Unlike solar and wind, hydroelectric capacity additions have not seen rapid development in recent years, due in part to the long and costly permitting and licensing timeline for hydropower development. The MOU is intended to make the permitting and licensing process more efficient and less risky for new hydropower development at existing USACE-owned dams. Currently only 3% of the nation’s 80,000 existing dams are being used to generate electricity. While the Energy Information Administration (EIA) reports that roughly 300 megawatts (MW) of new electric generating capacity from non-powered dams is expected to come online in 2016, accounting for roughly 92% of all hydroelectric capacity additions in 2016, this is only a small fraction of the 12,000 MW of additional generating capacity that the U.S. Department of Energy has estimated non-powered dams could provide.
