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Regulatory Approaches for Adding Capacity to Existing Hydropower Facilities

This report provides strategic approaches and considerations for Federal Energy Regulatory Commission licensed and exempt hydropower facilities seeking to increase generation capacity, which may include increases from efficiency upgrades.


In 2015, hydroelectric generation accounted for more than 6 percent of total net electricity generation in the United States and 46 percent of electricity generation from all renewables. The United States has considerable hydroelectric potential beyond what is already being developed. Nearly 7 GW of this potential is found by adding capacity to existing hydropower facilities. To optimize the value of hydroelectric generation, the U.S. Department of Energy's (DOE) Hydropower Vision Study highlights the importance of adding capacity to existing facilities. The regulatory approaches reviewed for this report include capacity and non-capacity amendments, adding capacity during relicensing, and adding capacity when converting a license to a 10-MW exemption.

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Regulatory Approaches to Adding Capacity to Existing Hydropower Facilities

To optimize the value of hydroelectric generation, DOE‘s Hydropower Vision study modeled a scenario identifying 49 gigawatts (GW) of new deployable hydroelectric potential in the United States by 2050. The study estimates that nearly 7 GW of that hydroelectric potential can come from capacity additions and efficiency upgrades to existing facilities by 2050. DOE anticipates the development of this generation potential, from existing facilities, will help ensure hydropower’s contributions towards meeting the nation’s energy needs, maintaining national infrastructure, and improving energy security. U.S. Department of Energy — Hydropower Vision Study (2016). This report discusses four strategic approaches and considerations for adding capacity or making efficiency upgrades to existing hydropower facilities, including: (1) a license/exemption capacity amendment, (2) a license/exemption non-capacity amendment, (3) relicensing, and (4) converting a license to a 10-MW exemption. Case study examples for each regulatory approach are included in the full report.

FERC License and Exemption Capacity and Non-Capacity Amendments

FERC commonly classifies license and exemption amendments as either a "capacity amendment" or a "non-capacity amendment." FERC defines a capacity amendment as a change in a hydropower facility that involves additional capacity not previously authorized and that would: • Increase the actual or proposed total installed capacity of the project, and • Result in an increase in the maximum hydraulic capacity of the project of 15% or more, and • Result in an increase in the installed nameplate capacity of 2 MW or more. 18 C.F.R. § 4.201(b). FERC considers capacity changes that do not meet the above criteria to be non-capacity amendments. 18 C.F.R. § 4.201(b) For more information on the FERC capacity and non-capacity addition processes, see: FERC Authorization Amendment Process:
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FERC Relicensing Capacity Additions

Oftentimes capacity additions and efficiency upgrades coincide with relicensing. The closer the facility gets to license expiration, the more likely the aging infrastructure needs upgrades. Adding capacity and efficiency upgrades at the time of relicensing may save time and resources, as the facility must go through a thorough review during relicensing, regardless of whether the facility plans to add capacity additions or efficiency upgrades. Most hydropower facilities were constructed in the mid-twentieth century and many of their original licenses expired or are due to expire. Federal Energy Regulatory Commission — Staff Report to Congress, Hydroelectric Licensing Policies, Procedures and Regulations (2001), U.S. Department of Energy — Hydropower Vision Study (2016), Federal Energy Regulatory Commission — Expected Relicensing Projects FY 2015-2030. In fact, 6,000 MW of nonfederal hydropower will be up for relicensing over the next 5 years, with that number expected to more than double over the next 10 years. Federal Energy Regulatory Commission — Expected Relicensing Projects FY 2015-2030, American Council On Renewable Energy—The Outlook For Renewable Energy In America (2014). In total, more than 500 hydropower projects are up for relicensing between 2016 and 2030. Competing Relicensing Applications: Assessing the Threat to Existing Licensees (2017). For more information on the FERC Licensing Process, see:

FERC Traditional Licensing Process:
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FERC Alternative Licensing Process:
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FERC Integrated Licensing Process:
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Converting a FERC License to an Exemption with Added Capacity

FERC-licensed facilities seeking to add capacity may also consider applying for an exemption as an alternative to a license amendment or relicensing. 18 C.F.R. § 16.2(a). A licensee may surrender a FERC license and apply for a FERC exemption or, if occurring at the time of relicensing, simply apply for an exemption. In either scenario, however, an applicant for the FERC exemption would need to include the details of the proposal to add capacity to the existing facility.

HREA in part amended subsection (d) of section 405 of the Public Utility Regulatory Policies Act of 1978 to allow FERC to provide license exemptions to projects up to 10 MW (previously 5 MW). Existing licensed facilities with an installed capacity of less than 10 MW could potentially qualify for a FERC exemption if the facility adds capacity.

For more information on the FERC Exemption Process, see: FERC Exemption Process:
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Comparison of Regulatory Approaches to Adding Capacity to Existing Hydropower Facilities

Table 1 highlights the requirements and key considerations associated with each regulatory approach for adding capacity to existing hydropower facilities discussed in this report.

Table 1: Comparison of Capacity Addition Approaches for Existing Hydropower Facilities
Process Type Capacity Ammendment Non-Capacity Ammendment Relicensing License Conversion to Small Hydropower (10 MW) Exemption
Requirements Licensee seeks to:
  1. Increase the actual or proposed total installed capacity of the project, and
  2. Increase the maximum hydraulic capacity of the project of 15% or more, and
  3. Increase the installed nameplate capacity by 2 MW or more. 18 C.F.R. § 4.201(b).
Licensee seeks to add capacity below the thresholds established for a capacity amendment. Licensee seeks to add capacity at time of relicensing facility. Licensee must provide notice to FERC at least 5 years, but not more than 5.5 years, prior to the expiration of the current license.

Licensee must file application for new license at least 2 years before the expiration of the current license.

Licensee seeks to add capacity to an existing license and convert the license to an exemption.

Generally, to qualify for a small hydropower exemption the facility must:

  1. Propose to install or add capacity to a hydropower facility located at a nonfederal, pre-2005 dam, or at a natural water feature
  2. Have an installed capacity of 10 MW or less
  3. Have all real property interests or an option to obtain the interests in any non-federal lands. 18 C.F.R. § 4.30(29).
Key Considerations Requires 3-stage consultation process

Requires compliance with other applicable federal laws including NEPA, ESA, CWA, NHPA, and WSRA

Generally only requires single-stage consultation process

Requires compliance with other applicable federal laws including NEPA, ESA, CWA, NHPA, and WSRA

Requires 3-stage consultation process


Requires compliance with other applicable federal laws including NEPA, ESA, CWA, NHPA, WSRA, and CZMA

Fish and wildlife agencies may recommend conditions to protect fish and wildlife under FPA section 10(j)


FERC issues licenses for a period of 30-50 years.

Power of eminent domain

Requires 3-stage consultation process


Requires compliance with other applicable federal laws including NEPA, ESA, CWA, NHPA, WSRA, and CZMA


Fish and wildlife agencies may require mandatory conditions to project fish and wildlife under FPA section 30(c). Some states may utilize FPA section 30(c) authority to require a CWA section 401 Water Quality Certification.

FERC issues exemptions in perpetuity


No power of eminent domain

References