States Debate Large-Scale Hydro Power and Renewable Portfolio Standards

A total of 29 states currently have mandated Renewable Portfolio Standards (RPS), while eight have voluntary targets. An RPS requires that a certain percentage of a state’s electric energy mix be generated from renewable energy sources, typically hydro, solar, wind, geothermal and biomass. The deadline for compliance with these standards is approaching and states are having a hard time meeting them. An emerging issue in these states is whether large scale hydropower should be eligible for compliance with an RPS. Most states will require legislation to make large hydro projects eligible.

Seven percent of the nation’s electricity was generated by hydropower, which represents 65 percent of renewable generation, according to the National Hydropower Association (NHA). More than 1600 hydropower facilities operating in the U.S. provide power to more than 30 million homes. While plants are located throughout the U.S. and Canada, the top 10 hydropower generating states include: Alabama, Arizona, California, Idaho, Montana, New York, North Carolina, Oregon, Tennessee and Washington. Quebec and Ontario are also huge producers of hydropower. In addition to abundance, advocates, like the NHA, tout hydroelectricity as affordable, safe and reliable. It seems almost certain that large scale hydro could be used to help states comply with their legislatively mandated RPS.

Large scale hydro projects are clearly renewable. Critics complain that the projects undermine the primary goal of a state RPS. They argue that states established an RPS to create a market for new alternative energy projects. An RPS is designed to decrease a state’s dependence on fossil fuel electric generation, specifically plants powered by coal, oil and nuclear sources. Most large-scale hydro projects in the U.S. have already been developed and are already part of a state’s energy mix. Including them in an RPS does not lower a state’s dependence on fossil fuels generation so the original framers of the program excluded large scale hydro.

There are environmental considerations as well. The impact of large-scale hydroelectric power plants may seem minimal in comparison to the damage associated with coal, oil and even natural gas. The plants, particularly those with large-scale capacity, can detrimentally affect natural habitats, land, river flows and fish migration patterns. Water quality issues and the formation of methane gas in reservoirs may also occur. In addition to these environmental concerns, the initial costs and time associated with the construction of large-scale plants are high.

Most states placed size, capacity, age and technology limitations on generation eligible to be considered as fulfilling an RPS requirement. California has some of the strictest restrictions, allowing only for small-scale hydroelectric facilities with capacity of 30 megawatts or less. RPS eligibility also depends on whether or not those facilities were operational before or after January 1, 2006 and whether energy efficiency improvements were made after January 1, 2008.

Similarly, Colorado HB 10-1001, enacted in 2010, limits eligibility to new hydroelectricity with capacity of 10 megawatts or less and 30 megawatts for facilities in existence on January 1, 2005. Other states include specific definitions for “hydroelectric generating facilities.” For example, Ohio SB 221, enacted in 2008, classifies such facilities as those that provide for river flows that are not detrimental for fish, wildlife and water quality and that demonstrate compliance with state water quality standards and various other environmental laws and regulations. Illinois, Maryland, Michigan, New Hampshire and Washington prohibit the construction of new dams, while New Mexico, North Dakota, Oklahoma, Texas, Virginia and Wisconsin are the only states without restrictions on hydro RPS eligibility.

Some states have already moved to amend their statutes to bring large-scale hydro into the RPS mix. Supporters of the change argue that existing large-scale hydro is relatively cheap and plentiful and that new alternative sources are expensive. Predictably, several states this session, drawn by the affordability argument and the pending RPS target deadlines, looked at expanding the type of hydroelectricity plants eligible to meet their renewable energy goals.

The New England states buy a lot of power from Canada, most notably the provincially owned utility Hydro Quebec, which has developed massive dams along James Bay in the far north. In June, Connecticut Democratic Gov. Dan Malloy signed Public Act No 13-303/SB 1138, legislation that will make it easier to buy power from Hydro Quebec and  allow large-scale hydropower to qualify as a Class I renewable resource for the state’s RPS. The RPS requires that 20 percent of utilities’ electricity must come from renewable sources classified as Class I by 2020. Class I also includes wind solar, biomass and geothermal.

“Updating our renewable energy portfolio strengthens Connecticut’s competitiveness while also protecting our environment for future generations,” Governor Malloy said of the law in a press release. “This legislation creates clean energy jobs right here in Connecticut, moves us away from polluting fossil fuels and provides cleaner, cheaper, more reliable energy to ratepayers.” Prior to its passage, the bill was amended to limit the amount of large-scale hydropower that can be used to meet the Class I requirements under the RPS, appeasing some environmental groups by giving priority to other renewables, like solar and wind.

Lawmakers in Montana enacted a law, Chapter 361/SB 45, that ultimately expands hydroelectric plants’ eligibility by allowing new expansions and construction to existing facilities that increase capacity to qualify. The law does however require that RPS eligibility of newly expanded facilities first have the Public Service Commission’s approval. The law was signed by Democratic Gov. Steve Bullock on April 30.

Large hydro bills did not pass in Missouri, Oregon and Washington. A committee substitute for the Missouri bill, HB 44, would have allowed hydroelectric generation from utilities and facilities owned by or sharing a purchased power agreement with another utility to be used toward the state’s renewable energy standard. By 2021, all hydroelectric generation from any source would have been classified as renewable energy and could have counted toward the energy standard. The substituted bill passed the House 95-46 in February, but was left pending in the Senate Commerce, Consumer Protection, Energy and the Environment Committee upon the legislature’s May adjournment. Oregon SB 121, which died in committee, would have removed existing restrictions on hydroelectric facilities used to meet the state’s RPS and the Washington bill, SB 5431, would have expanded the definition of renewable resources to include electricity from hydropower facilities.

Rhode Island Democratic Gov. Lincoln Chafee introduced “The Energy Reform Act of 2013,” in May only to have the measure be held for further study. The bill would have paved the way for large-scale hydropower facilities, such as those in Canada where new hydro construction on a massive scale is still possible, to enter the state’s energy sector by expanding laws governing long-term renewable energy contracts. The measure was met with substantial opposition from the state’s main utility, National Grid, and various environmental groups.

The state RPS debate will continue in 2014 as states wrestle with the seemingly schizophrenic demands of politicians and consumers who want cheap electricity from clean safe, reliable and renewable sources. To fulfill that demand large scale hydro will likely have to be in the mix.