On December 27, 2020, President Trump signed the Consolidated Appropriations Act of 2021, which includes a $1.4 trillion omnibus spending bill for fiscal year (FY) 2021 along with $900 billion in COVID-19 stimulus relief. The Act includes a variety of measures to promote clean energy and climate policy, as well as several hydropower-related provisions.
The Act reauthorizes sections 242 and 243 of the Energy Policy Act of 2005, which provide incentive payments to make efficiency improvements at existing hydropower facilities, or to retrofit existing dams and conduits with generating facilities. It would also expand the scope of the section 242 program to include certain small hydropower facilities up to 20 megawatts (MW) in areas with inadequate electric service.
Next, the Act extends the production tax credit (PTC) and investment tax credit (ITC) in lieu of PTC through January 1, 2022 at existing rates. These extenders will apply to qualified hydropower and marine and hydrokinetic energy facilities that begin construction prior to January 1, 2022.
The Act also includes a reauthorization of the Water Resources Development Act (WRDA), which would amend the National Dam Safety Program run by the Federal Emergency Management Agency (FEMA). The WRDA also provides that the Army Corps of Engineers may, at the request of an eligible non-federal interest, conduct an evaluation to consider operational changes at a Corps dam to facilitate production of non-federal hydropower. Finally, the Act provides for additional funding for the Department of Energy’s Water Power Technologies Office, including $41 million for hydropower research and over $100 million for marine energy research.