Currently, 37 FERC-licensed but unconstructed hydropower projects in 15 states have been delayed by the COVID-19 pandemic and supply chain shortages, among other challenges, according to the National Hydropower Association. 

On request of licensees, FERC may “after reasonable notice and for good cause shown” extend the deadline an additional six years beyond the eight-year extension currently established under the Federal Power Act. The new law allows for no more than three consecutive two-year extensions.

Additionally, the law authorizes FERC to reinstate expired licenses if the deadline to begin construction for the covered project expired after Dec. 31, 2023 and before enactment of the law. The reinstatement would be effective as of the date the license expired.

The main benefit of the law is that builders “will be able to get to construction and not have to go back through the expensive, timely process of reapplying again,” said Col. (Ret.) Edward Fleming, executive vice president and director of Business Development at Dawson & Associates. 

Deadlines can sunset before shovels hit the ground for some of the work that needs to be done — such as putting financing in place or continuing through the rest of the permitting process, said Fleming, who has served as district commander and engineer with the U.S. Army Corps of Engineers. When start-of-construction licenses expire, “you’ve got to start from scratch on a lot of those things all over again,” and having to stop and reapply can gum up the process because it takes extra time, he said.

Fleming added that the new law has no impact on other regulations and laws such as NEPA, the Clean Water Act or the Endangered Species Act. “These projects will still have to go through that standard environmental review process,” he said.

The law is based on the “Build More Hydro” bill co-sponsored last year by Sens. Steve Daines (R-MT) and John Fetterman (D-PA), which passed the Senate by unanimous consent in July last year. Rep. Dan Newhouse (R-WA) introduced a companion bill in the House, which passed with a 394-14 vote in April.

Eight projects in Pennsylvania will benefit from the extensions, the sponsors said in a statement. These are:  Allegheny Lock and Dam 2, Emsworth Back Channel Dam, Emsworth Locks and Dam, Grays Landing Lock and Dam, Maxwell (Point Marion), Monongahela Locks and Dam 4 (Charleroi),   Montgomery Locks and Dam and Point Marion Lock and Dam. 

Allowing more time for hydroelectric dam projects to begin construction will eventually add more than 2.5 GW of baseload power, Newhouse said. “We need to get every available megawatt of power on the grid to meet our growing energy demand,” he said. “This new law gets us one step closer to that goal.”

Industry groups including the National Hydropower Association applauded the action. President and CEO Malcolm Woolf in a statement called it a “breakthrough” that delivers $6.5 billion in private investment critical to powering American homes, businesses and industries.

In a letter last November, the group urged leaders of the House Energy and Commerce Committee to pass the bill, noting that the development and financing of hydropower projects requires significant time and resources. The licensing process—which can carry a price tag in the millions—typically takes five to eight years. Representatives from most of the delayed projects co-signed the letter. 

“After licensing, additional steps must be completed before construction can begin, such as final engineering, EPC agreements, off-take contracts, interconnection and financing,” the groups wrote, adding that delays have pushed many projects to the edge of missing their statutory commence-construction deadlines through no fault of the developers.