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December 2012 Policy Study, Number 12-12


Water, Water Everywhere, but Not a Drop for Power


Hydroelectric Power in the United States Today



Today, with most of the dams in the U.S. and their power-producing capacity controlled by the U.S. Army Corps of Engineers (ACE), the Bureau of Reclamation (BR), and the Federal Energy Regulatory Commission (FERC), it is a different story. Extensive environmental concerns and overregulation has resulted in the reduction of hydroelectric power to only 6 to 7 percent of the total U.S. electricity capacity. According to one Canadian hydroelectric power executive, “North America (hydroelectricity generation) is the most regulatory-intensive endeavor of the renewable energy mix.”[9]


The vast majority of hydroelectric power produced in the U.S. today is controlled by either the ACE, about 21,000 megawatts, or the Bureau of Reclamation, almost 15,000 megawatts.[10] The FERC provides regulatory oversight and operating approvals for these facilities, as well as those owned by states, cities, or private companies. Currently the ACE operates power-generating units at 75 dam sites, producing about 68,000 gigawatt hours (GWh) of power annually.


Most of these dams and power plants were built over 50 years ago. The amount of federal funding proposed by President Obama for FY2012 for their operation and maintenance is a miniscule part ($180 million) of the total budget, and significantly less than the amount the ACE estimated was needed ($296 million) five years ago.[11] Though increasing the amount of hydropower produced is one of the three stated objectives, the two major projects for this year are both “mitigation” related.[12]


Importantly, even ACE – the number one producer of hydroelectric power in the U.S., controlling 75 power plants – recognizes that the operating performance of its hydroelectric plants is substandard, mostly because of their age. From the FY08-12 five-year plan, “The current state of the hydropower infrastructure results in the program performing below industry standards on all performance metrics.”[13] Reliability and efficiency are major concerns, with a goal of 95 percent, but a base estimate of only 88.5 percent for 2012 – down from 90 percent in 2008. The “Enhanced” estimate increases to 91.5 percent.[14] It does not appear that this goal will be met in the near future. The ACE’s own plan does not show increasing improvements – but instead decreases in operating efficiency and reliability.


In addition, data from the ACE showing the performance measure history for 2005 – 2007 has blank fields in the Operation and Maintenance (O&M) Cost Efficiency Benchmark fields – with no estimate or goal of O&M for the out years up to 2012 provided. There is basically no discussion of cost efficiency, an indication of poor management by the government.


Over the past thirteen years, the amount of energy generated by Bureau of Reclamation – the number two producer of hydroelectric power nationwide, and operator of the Hoover Dam – has remained stagnate, at around 38 to 40 GWh.[15] Further, the Bureau of Reclamation also provides no readily available information on the operating efficiency of power plants. This is in direct contrast to the recent increases in productivity of electricity produced by other means, such as nuclear or coal. These privately owned power sources are constantly upgrading their operating efficiency and increasing generation capacity.


After the ACE and BR, the next largest controllers of hydroelectricity production are the Tennessee Valley Authority, at about 6,000 megawatts, and the Power Authority of the State of New York, at under 4,000 megawatts. The top four producers of hydroelectric energy are government organizations, as are most of the top 20 producers. The 58 Bureau of Reclamation facilities in 17 western states generated 40,529 gigawatt hours (GWh) of power in fiscal year 2007, the most recent data available.[16] The following table, from the Bureau of Reclamation, shows how, from 1968 to today, the environmental and regulatory process has directly caused the reduction in power production and the increase in governmental control.



In the fiscal year 2012 Bureau of Reclamation budget, hydroelectric power generation, management, and improvement were not even listed in the top three priority goals. Instead those goals – by the second largest electrical power generator in the United States, managing hundreds of millions of megawatts of power and thousands of dams critical to the health and well-being of American families – were: water conservation, climate change adaptation, and youth in the great outdoors.[17]


The primary function of the dams on the Mississippi, and other major rivers in the U.S., is the management of the rapids and water to allow water transportation. Vast amounts of coal and oil, soybeans and corn, gravel, sand, and limestone, fuel oil, fertilizer, and other commodities move on our rivers. Water transportation of these products is cheaper than road shipping because of the quantities involved. Additionally, local water systems often rely on the dams for control and provision of drinking water.


Many in the industry have significant concerns about the age of the lock and dam system and potential “catastrophic failure,” beyond the energy production potential.[18] Some within the Army Corps of Engineers itself have characterized the situation and lack of funding for dam maintenance as “a crisis headed for a catastrophe.”[19]




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