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Bureau of Reclamation Hydropower Lease of Power Privilege: Case Studies and Considerations

This report analyzes the U.S. Bureau of Reclamation's (Reclamation) lease of power privilege (LOPP) regulatory process for a nonfederal entity to use a Reclamation jurisdictional dam or conduit for power generation.


Recent federal initiatives encouraging hydropower development at federally owned facilities coupled with Reclamation's hydroelectric potential has led to an increased interest in powering Reclamation dams and conduits through the LOPP process. During the last five years, 23 of the 36 total LOPP projects (76 MW) have been initiated and are at some phase of the development process. Resource assessments analyzed in this report identify approximately 370 MW of hydroelectric potential at Reclamation-owned dams and conduits. This report provides considerations from Reclamation staff involved in the LOPP regulatory process and developers that have received an LOPP and are currently generating hydropower at a Reclamation dam or conduit. The authors also analyze LOPP regulatory processing timelines before and after the implementation of federal initiatives to streamline the LOPP process and provide case studies of hydropower projects that have obtained an LOPP.

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U.S. Bureau of Reclamation Hydropower Lease of Power Privilege

The U.S. Department of Interior’s Bureau of Reclamation (Reclamation) is the nation’s second largest producer of hydroelectric power. Reclamation owns 76 hydropower facilities in the western United States with a total installed capacity of 15,520 megawatts (MW). Bureau of Reclamation – Renewable Energy Update, Fiscal Year 2017, Q4 Report. In addition to the 76 federally-owned hydropower facilities, 64 nonfederal hydropower facilities operate on Reclamation dams and conduits under the provisions of either a Federal Energy Regulatory Commission (FERC) license or exemption (51 facilities with a total installed capacity of 466 MW) or a lease of power privilege (LOPP) contract (13 facilities with a total installed capacity of nearly 46 MW). A LOPP is a contractual authorization issued by Reclamation to a nonfederal entity to use a Reclamation dam or conduit for electric power generation consistent with Reclamation project purposes.

For more information on the Reclamation LOPP process, see the full report and:

Bureau of Reclamation Lease of Power Privilege:
3-FD-p


For more information on the FERC license and FERC exemption processes, see:

FERC Hydropower Overview:
7-FD-e

Lease of Power Privilege Project Trends

Recent federal initiatives encouraging hydropower development at federally-owned facilities coupled with Reclamation’s hydroelectric potential has led to an increased interest in powering Reclamation dams and conduits through the LOPP process. During the last five years, 23 of the 36 total LOPP projects (76 MW) were initiated and are at some phase of the development process. The majority of the LOPP projects are in Colorado and Oregon. Figure 1 illustrates the geographic distribution of all 36 active LOPP projects, including those not yet online.

BOR LOPP Project Geographic Distribution.png

Figure 1. Lease of power privilege projects – geographic distribution

Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act of 2013

Resource assessments have identified approximately 370 MW of additional hydroelectric potential at Reclamation-owned dams and conduits. To encourage the development of the hydropower potential identified, Congress passed the Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act of 2013 (Reclamation Small Hydropower Development Act), which amended the Reclamation Project Act of 1939 to authorize the development of small conduit hydropower projects (5 MW or less) on Reclamation-owned conduits exclusively through the LOPP process. The Reclamation Small Hydropower Development Act also:

  • Directed Reclamation to apply its categorical exclusion process under the National Environmental Policy Act to small conduit hydropower activities, and
  • Amended Reclamation’s LOPP process for conduit development to give priority rights to irrigation districts and water users associations operating or receiving water from the Reclamation-owned conduit.


Figure 2 illustrates the number of conduit LOPP projects initiated by year. Of the total 36 active LOPP projects, 13 are at Reclamation dams and the remaining 23 are at Reclamation conduits. Of the 23 active Reclamation conduit projects, 19 of those projects were initiated after Congress enacted the Reclamation Small Hydropower Development Act (August 9, 2013).

BOR LOPP Number of Conduit Projects.png

Figure 2. Lease of power privilege projects – initiated before and after 2013 Reclamation Small Hydropower Development Act

Reclamation Streamlined LOPP Regulatory Process

Reclamation has also made efforts to simplify the LOPP regulatory process to encourage nonfederal hydropower development on Reclamation-owned dams and conduits. In September 2012 Reclamation worked with industry and other stakeholders to issue a streamlined LOPP process, defined in the Reclamation Manual Directive and Standard, Lease of Power Privilege Processes, Responsibilities, Timelines, and Charges.

Reclamation’s efforts to streamline the LOPP regulatory process, beginning in 2012, coupled with federal statutory changes in 2013 have decreased processing timelines and led to an increased interest in nonfederal hydropower development at Reclamation dams and conduits. Prior to streamlining efforts, the timeline from the project initiation date to the LOPP contract date ranged from 9 months to 102 months, while the mean and median timelines for these projects were approximately 42.5 months and 31 months, respectively. After the streamlined regulatory process took effect, the timeline from the project initiation date to the LOPP contract date ranged between 6.5 months and 13 months, while the mean and median timelines for these projects was approximately 9.5 months and 10 months, respectively. All of the projects initiated after the current LOPP process went into effect were sited on Reclamation conduits.

Figure 3 depicts the average timelines between the project initiation date and the LOPP contract date for projects initiated before the current streamlined LOPP process and those projects initiated after the current LOPP process went into effect.

BOR LOPP Initiation Date to LOPP Contract Date.png

Figure 3. Lease of power privilege projects – timelines from initiation date to contract date

References