H.R. 1967, Bureau of Reclamation Pumped Storage Hydropower Development Act

Floor Situation

On Tuesday, June 27, 2017, the House will consider H.R. 1967, the Bureau of Reclamation Pumped Storage Hydropower Development Act, under suspension of the rules. H.R. 1967 was introduced on April 6, 2017, by Rep. Doug Lamborn (R-CO) and was referred to the Committee on Natural Resources, which ordered the bill reported on April 27, 2017 by unanimous consent.

Summary

H.R. 1967 amends the Reclamation Project Act of 1939 to authorize pumped storage hydropower development utilizing multiple Bureau of Reclamation reservoirs. Specifically, this bill authorizes pumped storage at Bureau of Reclamation (Reclamation) facilities to clear up regulatory confusion and stimulate non-Federal pumped storage hydropower development in the 17 western states.

Background

Many of the Bureau of Reclamation’s projects are multi-purpose in nature, and its reservoirs and dams further generate enough emissions-free electricity to serve at least 3.5 million homes annually. When Reclamation allows non-federal entities to produce hydropower at its facilities, it uses a “lease of power privilege” (LOPP) process. A LOPP is a contractual right given to a non-federal entity to use a Reclamation facility for electric power generation that is consistent with the project’s purposes. There has been confusion over which federal agency would manage hydropower development and pumped storage development at Reclamation’s facilities. In some cases, Reclamation has clear authority to develop hydropower at a specific project given its legislative history and authorized project purposes. In other cases, the Federal Energy Regulatory Commission could have authority if the underlying project’s authorization did not specifically include hydropower as a component.  As a result, non-federal entities that desire to work directly with Reclamation through the LOPP process have run into uncertainty and are confused as to which federal regulatory process should apply to these projects. These uncertainties can add significant costs and delay construction. HR 1967 brings certainty to this process and authorizes pumped storage hydropower development that exclusively utilizes Reclamation reservoirs. This authorization makes it clear that Reclamation will be the lead agency that will oversee pumped storage hydropower development at these facilities. 

According to the bill’s sponsor, “This bill is intended to clear up confusion at existing Bureau of Reclamation reservoirs about regulatory permitting. This legislation makes it clear that the Bureau of Reclamation has jurisdiction to oversee pumped storage development when two or more reservoirs are involved. By eliminating potentially duplicative regulations, this clarification will help pave the way for more pumped storage. Together with other bills from the Water, Power, and Oceans subcommittee, this bill is an important the first step to improve our nation’s infrastructure and to advance an ‘all-of-the-above’ energy and water strategy.”[1]

Cost

The Congressional Budget Office (CBO) estimates that those costs would be insignificant and subject to the availability of appropriated funds. In addition, FERC recovers 100 percent of its costs, which are controlled by annual appropriations through user fees. Thus any reduction in FERC’s cost resulting from shifting its licensing responsibilities to BOR would be offset by an equal change in fees, resulting in no net change in discretionary spending. CBO estimates that enacting H.R. 1967 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2028.

Staff Contact

For questions or further information please contact Ryan Hofmann with the House Republican Policy Committee at (202) 225-3021.