On Tuesday, January 28, Democratic leadership from the House Energy and Commerce Committee, and Environment and Climate Change and Energy Subcommittees released legislative text of the draft “Climate Leadership and Environmental Action for our Nation’s (“CLEAN”) Future Act, which aims for the United States to achieve a “100 percent clean economy” no later than 2050.

Among other things, the draft legislative text—which exceeds 600 pages—includes a number of provisions pertaining to hydropower.  These include:

• The reauthorization of sections 242 and 243 of the Energy Policy Act of 2005 (“EPAct 2005”) to provide incentives for owners and operators of hydroelectric projects to make production and efficiency improvements between 2021 and 2036 and to expand eligibility for the program to hydropower facilities at existing dams or conduits with generating capacities of 10 megawatts or less;
• The amendment of the definition of “renewable energy” in section 203 of EPAct 2005 to include all hydropower production;
• The addition of a new Federal Power Act (“FPA”) section to improve the hydropower licensing process through a negotiated rulemaking between FERC, the Secretaries of Agriculture and the Interior, and the Administrator of the National Oceanic and Atmospheric Administration, to develop a process to coordinate all necessary federal authorizations and allow FERC to make a final licensing decision no later than three years after receiving a completed application;
• The provision of delegated authority to Native American Tribes to exercise mandatory conditioning authority under section 4(e) of the FPA to certain hydropower licenses and the requirement for FERC and the Secretary of the Interior to issue guidance on best practices for engagement with Tribes during the licensing process;
• The inclusion of greenhouse gas emissions reductions attributable to a hydropower facility’s reservoir in calculating “clean energy credits” for various generating resources;
• An amendment to section 111(d) of the Public Utility Regulatory Policies Act of 1978 to include a provision requiring states to consider energy storage systems as part of their supply-side resource planning; and
• The potential for hydropower resources to be integrated into a hybrid microgrid system.

The Energy and Commerce Committee states that it is soliciting recommendations and feedback from all stakeholders as it works continue to expand and refine the CLEAN Act through hearings and stakeholder meetings throughout 2020.  A section-by-section summary of the draft is available here and the draft legislative text is available here.

The draft comes on the heels of a spending bill signed by the President in December that extended the production tax credit (PTC) and investment tax credit (ITC) for certain hydroelectric facilities both retroactively for 2018 and 2019 and prospectively through 2020 at current levels for projects that commence construction by the end of 2020.  The spending bill is available here.