Government Regulation Costs And Time Delays Are Hurting Americans

Red Tape Deterring Hydropower Projects

Small-scale hydropower can generate clean, low-cost electricity and reduce carbon dioxide emissions, but onerous federal regulations are discouraging development of this renewable energy.

Small-scale hydropower usually does not require dams, and most commonly is produced when water from a river is diverted to a pipeline. The water flows through a turbine or waterwheel, powering a generator to produce electricity.

This hydropower could potentially yield enough electricity throughout the United States to power more than 65,000 homes annually.

Hydropower generates electricity more efficiently than any other form of electrical generation, and usually has "limited or even no environmental effects," according to a report published by the Mercatus Center at George Mason University.

Nevertheless, "the federal permitting process is onerous," the report states, and projects may have to obtain permits from as many as 25 regulatory agencies.

These include compliance with the Clean Air Act, the Clean Water Act, the Endangered Species Act, the National Historic Preservation Act, and the Fish and Wildlife Coordination Act.

The report points to the example of Logan, Utah. The city planned a small-scale hydropower project that could power 185 homes and reduce carbon dioxide emissions from coal-powered plants by about 3.7 million pounds a year.

But due to federal regulations, the project ended up taking four years and costing nearly $3 million. By comparison, energy experts estimate that a similar project in Canada would have cost between $225,000 and $375,000.

In Logan, regulations "drove up costs in terms of time and money, and as a result, Logan is not planning to undertake any similar projects in the future," the Mercatus report observes. "Other cities have had similar experiences.

"We find that regulation is likely deterring the development of small hydropower potential across the United States."

In another example cited by the report, Afton, Wyo., had to spend $7.5 million for a small-scale hydropower project, including an estimated $5.6 million on regulatory compliance.

Federal legislation signed into law in August 2013 is intended to streamline the permitting process, but Mercatus notes that "it is still too soon to tell whether this law will have its intended effects."