Federal Power Act & Hydroelectric Licensing

The Federal Power Act (16 U.S.C. §§ 791a–828c), originally enacted in 1920, is the law that governs the licensing and regulation of non-federal hydroelectric dams on navigable waters, federal lands, and waters used in interstate commerce. Administered by the Federal Energy Regulatory Commission (FERC), the Act requires any non-federal entity that wants to build, operate, or continue operating a hydroelectric dam to obtain a FERC license — a process that balances power generation against environmental protection, fish passage, recreation, and other public interests. FERC currently oversees approximately 2,500 hydroelectric projects with a combined capacity of about 56 gigawatts — roughly half of all U.S. hydropower capacity (the other half is federally owned — see Power Marketing Administrations). With hundreds of licenses expiring in the coming decades, the relicensing process is one of the most consequential — and contentious — areas of energy and environmental regulation.

Current Law (2026)

Legal Authority

• 16 U.S.C. § 797 — General powers of Commission (FERC may issue licenses for hydroelectric projects on navigable waters, public lands, or waters used in interstate commerce; investigate water resources; prescribe license terms and conditions)
• 16 U.S.C. § 799 — License duration, conditions, and revocation (licenses last up to 50 years; licensees must accept all statutory terms and any additional conditions FERC imposes)
• 16 U.S.C. § 800 — Issuance of licenses (when applications are otherwise equal, FERC must prefer states, Indian tribes, and municipalities over private applicants)
• 16 U.S.C. § 803 — Conditions of license generally (all licenses must conform to a comprehensive plan for improving the waterway; license conditions may address power generation, environmental protection, flood control, irrigation, recreation, and fish passage)
• 16 U.S.C. § 808 — New licenses and renewals (when a license expires and the U.S. does not take over the project, FERC issues a new license — either to the existing licensee or a competing applicant; relicensing is the primary opportunity to update environmental conditions)
• 16 U.S.C. § 811 — Fishways (licensees must construct, maintain, and operate fishways prescribed by the Secretary of Interior or Commerce — a mandatory condition that cannot be waived by FERC)
• 16 U.S.C. § 817 — Projects requiring federal license (no one may construct or operate a dam or hydroelectric project on navigable waters, public lands, or reservations without a FERC license)
• 16 U.S.C. § 823a — Conduit hydroelectric facilities (small hydropower projects within existing conduits — canals, pipelines, aqueducts — may be exempt from full licensing requirements)

How It Works

The comprehensive development standard is the Act's guiding principle. FERC must ensure that every licensed project is "best adapted to a comprehensive plan" for improving the waterway for all beneficial uses — power generation, navigation, flood control, irrigation, recreation, fish and wildlife, water quality, and environmental protection. This "equal consideration" mandate means FERC cannot simply maximize power production; it must balance energy against environmental and recreational values.

The licensing process is lengthy and complex. An applicant files a preliminary permit (preserving priority for up to 4 years while conducting studies), then a license application supported by extensive environmental analysis. FERC conducts NEPA review, consults with federal and state agencies, and considers public comment. The process typically takes 5–10 years from initial application to license issuance. License conditions may include minimum flows, fish passage facilities, water quality monitoring, recreation facilities, and habitat mitigation.

Mandatory conditions from other federal agencies significantly constrain FERC's discretion. Under § 4(e), federal land management agencies (Forest Service, BLM, NPS) may impose mandatory conditions on projects using federal land — conditions FERC must include in the license. Under § 18, the Secretaries of Interior and Commerce may prescribe mandatory fishways (fish ladders, fish screens, trap-and-transport systems). These mandatory authorities reflect Congress's judgment that federal land and fish resources deserve agency-specific protection beyond FERC's balancing authority.

Relicensing is where most of the action occurs. With licenses lasting up to 50 years, relicensing is often the first opportunity in decades to impose modern environmental conditions on a dam built before the Clean Water Act, Endangered Species Act, or current fish passage science. Relicensing proceedings attract intense participation from conservation groups, fishing interests, tribes, recreation organizations, and state agencies — all seeking updated conditions. The resulting licenses typically include significantly more environmental protections than the original license.

Dam removal has emerged as an alternative outcome. In some relicensing proceedings, the cost of meeting modern environmental requirements (fish passage, sediment management, water quality) makes continued operation uneconomic — leading licensees to propose dam removal rather than relicensing. FERC has overseen the removal of numerous small dams and the planned removal of larger facilities.

How It Affects You

If you're an electric utility customer, hydropower from FERC-licensed projects is one of the cheapest and most reliable electricity sources in your portfolio — but its cost and availability are directly tied to relicensing outcomes. When a hydroelectric project's FERC license is renewed after decades of operation, the new license typically imposes significantly more environmental conditions: minimum flows for fish passage (which reduce generation capacity), water quality monitoring programs, recreation facility construction and maintenance, and habitat mitigation projects. These costs are passed to ratepayers. A relicensing on the Columbia River system might add tens of millions in annual compliance costs; a smaller regional project might add a few million. But the alternative — losing a zero-carbon, dispatchable baseload resource — is typically more expensive for ratepayers than the relicensing conditions. Hydropower's value has increased substantially as the grid integrates more variable wind and solar; hydro's ability to ramp up in minutes provides grid balancing services that batteries and demand response cannot fully replace. If a FERC-licensed hydroelectric project serves your utility, track its license expiration date through the FERC eLibrary (elibrary.ferc.gov) — relicensing proceedings typically start 5-7 years before expiration, and your utility's representatives should be participating.

If you're a recreational user — kayaker, rafter, angler, boater, or hiker — near a FERC-licensed hydroelectric project, the relicensing process is your most direct opportunity to shape how the river and reservoir are managed for the next 30–50 years. FERC licensing proceedings include extensive public participation: environmental review scoping, site visit opportunities, comment periods on draft license applications, and formal intervention rights in the FERC proceeding. Past relicensings have produced recreation conditions that transformed rivers: scheduled whitewater releases (specific flow pulses on weekend schedules for kayakers on dam-controlled rivers), mandatory boat launches and portage trails, fishing access along reservoir shores, and minimum flows in bypassed reaches below powerhouses that had been dewatered for decades. To participate: file a motion to intervene in the FERC proceeding (you have a right to intervene if you have an interest affected by the license) — FERC's eFiling system (ferc.gov/ferc-online/overview) handles interventions. Recreation advocacy organizations like American Whitewater (americanwhitewater.org) track relicensing proceedings on rivers of recreational significance and can help you navigate the process.

If you're a tribal nation in a watershed with FERC-licensed hydroelectric projects, the Federal Power Act gives you significant — though not unlimited — authority in licensing decisions. Under § 4(e), tribes can impose mandatory conditions on projects using tribal lands or waters — conditions FERC must include in the license without modification. Under § 18, the Secretaries of Interior and Commerce can prescribe mandatory fishways (fish passage facilities), and tribes have substantial influence over these determinations because Interior's fishway prescriptions must account for tribal treaty fishing rights. The relicensing process is where tribes exercise the most leverage: the Klamath River dam removals (completed 2024) were driven largely by Yurok, Karuk, and Klamath tribal advocacy through both the FERC relicensing process and separate negotiations. For any project affecting tribal fisheries, water quality, or cultural resources, engage FERC and the relevant federal land agencies early — federal trust responsibilities and treaty rights give tribes a qualitatively different legal standing than other parties in the process — not just a seat at the table, but a chair at the head.

If you're a small hydropower developer or investor, the FPA's licensing framework offers several streamlined pathways that avoid the full multi-year licensing process. The conduit exemption (§ 823a) allows small projects within existing water infrastructure — irrigation canals, municipal water pipelines, aqueducts — to operate without a full FERC license if they meet size and operational criteria. The small conduit hydroelectric facility exemption covers projects up to 40 MW on canals or conduits. For new small run-of-river projects that don't qualify for conduit exemption, FERC's Integrated Licensing Process (ILP) offers a structured path that, while still taking years, is more predictable than the traditional process. The Bipartisan Infrastructure Law (2021) included funding for marine and hydrokinetic energy technology development and FERC licensing reform for pumped storage. FERC's Hydropower Division and the National Hydropower Association (hydro.org) are the primary resources for understanding which pathway applies to your project and current policy developments.

State Variations

The Federal Power Act is federal law, but state authority plays a significant role:

• States retain authority under the Clean Water Act § 401 to certify that FERC-licensed projects comply with state water quality standards — a powerful tool that can effectively veto projects
• State fish and wildlife agencies participate in licensing and may recommend conditions
• State public utility commissions regulate the retail rates charged by FERC-licensed hydroelectric projects
• State dam safety programs operate alongside FERC's dam safety regulation
• Some states have enacted additional hydropower regulatory requirements

Implementing Regulations

• 18 CFR Parts 1–399 — FERC regulations covering hydroelectric licensing, project safety, dam inspection, mandatory conditions for federal land use, and fish passage requirements.

FERC's licensing regulations at 18 CFR Part 4 — Licenses, Permits, Exemptions, and Determination of Project Costs (65 sections) — are the procedural backbone of every hydroelectric license issued under the Federal Power Act. Key provisions:

• §§ 4.80–4.84 — Preliminary permits: Before filing a full license application, a developer may obtain a preliminary permit (up to 8 years for major projects) to study the site and secure priority of application; the permit grants no construction authority but prevents competing applications from jumping ahead in the queue; FERC may cancel a permit if the permittee fails to conduct the required studies or misses milestones
• § 4.30 — Applicability and definitions: license applications are open to U.S. citizens, associations, domestic corporations, municipalities, and states; the definition section distinguishes "major projects" (over 10 MW), "minor projects" (1.5–10 MW), and "minor parts" (water power projects not primarily for power production)
• § 4.38 — Pre-filing consultation: applicants for original licenses must consult with federal and state resource agencies, Indian tribes, and the public before filing — typically a multi-year process; FERC's "integrated licensing process" (ILP) or "traditional licensing process" (TLP) determines the consultation structure; failure to consult can result in application rejection
• §§ 4.36–4.37 — Competing applications: when multiple applicants seek a license for the same site, FERC issues public notice and accepts competing applications within a defined window; preference rules give priority first to state/municipal applicants, then to the original applicant, then to the applicant with the best development plan for the resource
• §§ 4.101–4.108 — Small hydroelectric exemption: projects with a total installed capacity of 5 MW or less may apply for exemption from FPA Part I licensing on a case-specific basis; an exemption holder may construct and operate a project subject to standard conditions protecting fish passage, environmental values, and state water rights, but without the full FERC licensing proceeding; exemptions reduce regulatory burden for small-scale run-of-river projects on existing dams
• §§ 4.90–4.91 — Conduit exemption: small hydropower projects using existing irrigation canals, water supply pipelines, or other constructed water conveyances may obtain a conduit exemption — recognized as the lowest-impact path to small-scale renewable power because the infrastructure already exists and no new impoundment is created
• §§ 4.300–4.305 — Fish and wildlife agency fees: under the Electric Consumers Protection Act of 1986 (FPA § 30(c)), license applicants for new dam or diversion projects must pay fish and wildlife agencies (USFWS, NMFS, state agencies) for the cost of prescribing, monitoring, and enforcing mandatory conditions; fees are estimated before filing, with a bond posted at filing and reconciled against actual costs after mandatory conditions are issued
• §§ 4.200–4.202 — License amendment: any significant physical change to a licensed project — new powerhouse, additional generating units, change in impoundment — requires a license amendment application; FERC must issue public notice and may require environmental review before approving significant alterations
• §§ 4.1–4.14 — Project cost determination: FERC determines the book-cost basis of licensed projects for rate regulation and for calculating the annuity (compensation) payable to prior licensees upon relicensing; licensees must file an initial cost statement within one year of project completion, subject to FERC audit

The preliminary permit — FERC's unique "place-saver" instrument — is what allows developers to spend millions studying a site without losing priority to late entrants. The consultation requirements under § 4.38 are where most licensing timelines expand: tribal consultation, agency study requests, and environmental impact review routinely take 5–10 years for major projects. Conduit and small hydroelectric exemptions exist precisely to offer a streamlined path for projects that pose minimal new environmental risk.

• 18 CFR Part 5 — Integrated License Application Process (ILP) (31 sections — FERC's structured timeline and consultation framework for original licenses and relicenses for hydroelectric projects; the ILP is the standard path for major projects, offering a more predictable schedule than the older Traditional Licensing Process while requiring more front-loaded environmental scoping):

  • § 5.1 — Applicability: Part 5 governs license applications for (1) original licenses for new projects, (2) relicenses when an existing license expires, and (3) new licenses when FERC must conduct competitive licensing proceedings; applicants must notify FERC of their intent to use the ILP at least 5 years before the existing license expires for relicensing proceedings
  • § 5.5 — Pre-application document: at least 2 years before the projected application filing date, the potential applicant must file a Pre-Application Document (PAD) with FERC — a description of the project, its current operation, and preliminary environmental information; FERC uses the PAD to issue Scoping Document 1, inviting federal and state agencies, Indian tribes, and the public to identify the environmental and resource issues that must be studied
  • § 5.9 / § 5.10 — Study plan: within 45 days of Scoping Document 1 comments, the applicant submits a Proposed Study Plan identifying the studies it proposes to conduct (hydraulics, fisheries, recreation, cultural resources, land use, water quality); federal agencies with mandatory conditioning authority (USFWS, NMFS, state resource agencies) have the right to require additional studies through a formal process; FERC issues a Study Plan Determination specifying which studies must be conducted, with dispute resolution available to applicants who contest agency study requests
  • §§ 5.14–5.15 — Study dispute resolution: any federal agency with mandatory conditioning authority may dispute the FERC Study Plan Determination within 20 days; FERC must resolve disputes within 45 days; once studies are ordered, the applicant has 3 years to conduct them — the study period is when biologists, hydrologists, and cultural resource specialists are in the field collecting the data that will underpin both the license application and the mandatory conditions imposed by resource agencies
  • § 5.16 — Preliminary licensing proposal: at least 150 days before the license application filing deadline, the applicant must file a Preliminary Licensing Proposal (PLP) — a near-final description of proposed operational parameters, requested license conditions, and proposed mitigation measures; affected parties have an opportunity to review and comment on the PLP before the application is finalized; the PLP stage is where many licensing settlements are negotiated, as applicants and resource agencies can see the full proposed operating regime before formal agency prescriptions are locked in
  • § 5.17 — Application filing: the complete license application must be filed with FERC no later than 24 months before license expiration (for relicensing); late filing forfeits the right to file as the incumbent and may trigger competing applications
  • § 5.18 — Application content: the application must contain project description, affected environment baseline data, environmental impact analysis for all proposed operational modes, mandatory conditions proposed by resource agencies, and information supporting FERC's evaluation of the "best adapted" development test under FPA § 803

  The ILP timeline — PAD filing 5+ years before expiration, study plan 2+ years before filing, application 2 years before expiration — means major relicensing proceedings span 7–10 years from initiation to license issuance. The consultation structure parallels the NEPA EIS process but with a critical difference: federal resource agencies (USFWS, NMFS, Army Corps) hold mandatory conditioning authority under FPA §§ 4(e) and 18 that FERC cannot override — the agencies issue prescriptions for fish passage, water quality, and flow requirements that FERC must incorporate verbatim into the license. This mandatory conditioning power is the primary leverage point for fishery restoration negotiations; the major salmon restoration settlements on the Pacific Northwest's Snake and Columbia river tributaries were reached during relicensing proceedings because the licensing process gave USFWS and NMFS the credible threat of prescribing mandatory flows and fish passage structures at full cost to the licensee.

• 18 CFR Part 12 — Safety of Water Power Projects and Project Works (39 sections — FERC's dam safety requirements for all projects licensed under the Federal Power Act):

  • § 12.1 — Applicability: Part 12 applies to all FERC-licensed hydroelectric projects; licensees are responsible for the safety of their projects at all times, including dams, powerhouses, transmission lines, and appurtenant structures
  • § 12.10 — Incident reporting: licensees must report any condition that poses an imminent safety threat — structural distress, unusual seepage, slope instability, equipment failure — to the FERC Regional Engineer by phone or email as soon as practicable; written confirmation follows within 14 days
  • § 12.11 — Modification reporting: proposed modifications to dams or other licensed works require advance notice to FERC Regional Engineers with design drawings and engineering analysis before construction begins
  • § 12.12 — Permanent records: licensees must maintain permanent records of all engineering and geological data used in project design and construction — boring logs, design calculations, as-built drawings — because these records are essential to any future dam safety assessment or failure analysis
  • § 12.20 — Emergency Action Plan (EAP) required: every licensee with a dam capable of posing a reasonably foreseeable emergency that could endanger life or property downstream must develop and maintain an EAP
  • § 12.21 — Exemption criteria: FERC may exempt a project from the EAP requirement only if the dam cannot create a reasonably foreseeable emergency that could endanger life or property — a narrow exemption applied to very small run-of-river projects without meaningful impoundment
  • § 12.22 — EAP contents: the plan must include (1) description of the project and potential failure modes; (2) procedures for detecting, evaluating, and classifying emergency situations; (3) notification flowcharts with 24/7 contact information for emergency management agencies, law enforcement, and dam safety authorities; (4) inundation maps showing flood paths and depths for dam failure scenarios; (5) responsibilities of key dam safety personnel
  • § 12.23 — Filing deadline: an initial EAP must be filed with FERC at least 60 days before initial reservoir filling for new projects; existing licensees must maintain and update their EAPs on an ongoing basis as downstream conditions or emergency contacts change
  • § 12.24 — Continuous update requirement: EAPs must be revised when there are changes to the dam, reservoir, downstream population, emergency management contacts, or inundation characteristics; out-of-date contact information is the most common EAP deficiency found in FERC compliance reviews
  • § 12.25 — Annual test: licensees must test the EAP notification procedures at least once per year — typically a tabletop exercise or an actual notification drill — to verify that emergency contacts and communication chains remain current and functional
  • Subpart D (§§ 12.36–12.41) — Independent consultant inspections: FERC requires inspections by a qualified independent engineering consultant at intervals determined by dam hazard potential (typically every 5 years for high-hazard dams); consultants must review as-built drawings, inspection history, instrumentation and monitoring data, and seepage records, and submit a formal report to FERC; FERC staff review all reports and may require follow-up actions or interim safety measures
  • Subpart F (§§ 12.60–12.61) — Owner's dam safety program: licensees must establish and maintain a formal internal dam safety program that includes periodic inspection by the owner's engineers (at intervals shorter than the independent consultant schedule), systematic review of instrumentation and monitoring data, and documented findings communicated to FERC annually

  FERC's dam safety jurisdiction covers approximately 2,500 licensed projects in 49 states — one of the largest dam safety oversight programs in the world by project count. The Emergency Action Plan requirement is the cornerstone of the program: every EAP is reviewed by FERC staff, and FERC conducts unannounced notification drills to test whether downstream emergency managers can actually be reached. The combination of owner inspection (Subpart F), independent consultant review (Subpart D), and FERC staff compliance inspections creates a three-layer safety oversight structure. FERC's dam safety jurisdiction is distinct from the Army Corps of Engineers' program (federal dams) and state dam safety programs (non-FERC-licensed dams).

• 43 CFR Part 45 and 50 CFR Part 221 — Conditions and Prescriptions in FERC Hydropower Licenses (grouped DOI and NMFS hearing procedures): implementing the Energy Policy Act of 2005 (EPAct 2005) amendment to FPA Section 33 (16 U.S.C. § 823d), which for the first time created a hearing process for hydropower licensees to contest the factual basis of mandatory conditions and prescriptions imposed by Interior Department bureaus (43 CFR Part 45) and NOAA Fisheries/NMFS (50 CFR Part 221). Before EPAct 2005, mandatory conditions from these agencies were completely unchallengeable in any proceeding — FERC had to incorporate them verbatim into licenses regardless of technical merit.

  The key provisions are substantively identical across both parts (one covering Interior, one covering NMFS):

  • § 45.1 / § 221.1 — Applicability: Part 45 applies when the Department of the Interior (Bureau of Reclamation, Bureau of Land Management, National Park Service, or BIA) issues mandatory conditions under FPA § 4(e) (conditions for use of federal lands) in a FERC hydropower license; Part 221 applies when NMFS issues mandatory fishway prescriptions under FPA § 18 (fish passage requirements); the hearing right is triggered when a licensee disagrees with disputed issues of material fact underlying the condition or prescription — not every condition is contestable, only those resting on specific factual determinations
  • § 45.20 / § 221.20 — Supporting information requirement: before any licensee can request a hearing, the agency must provide supporting information with its preliminary conditions — the factual basis, data relied upon, and methodology for each condition; this supporting information disclosure requirement is the most practically significant EPAct 2005 change: agencies can no longer issue "black box" conditions without explaining their scientific basis
  • § 45.21 / § 221.21 — Hearing request: a licensee or other party (including other federal or state agencies and intervenors) may request a hearing within 30 days of the agency's final conditions filing; the hearing request must identify the specific conditions being challenged and the particular issues of material fact in dispute; challenges to agency policy or legal authority (rather than factual basis) are not within the hearing's scope
  • § 45.24 / § 221.24 — Settlement stay: hearings may be stayed to allow settlement discussions between the licensee and the conditioning agency; settlements can result in modifications, alternatives, or withdrawals of conditions that are incorporated into the FERC license; the settlement pathway has been used frequently because conditioning agencies prefer negotiated outcomes over contested ALJ proceedings
  • §§ 45.25–45.27 / §§ 221.25–221.27 — ALJ hearing: if settlement fails, the case is referred to a DOI Administrative Law Judge; the ALJ conducts a formal evidentiary hearing with expert testimony, cross-examination, and pre-hearing discovery; the ALJ issues a written recommended decision on the disputed factual issues; the Secretaries of Interior or Commerce (for NMFS) may then modify conditions based on the ALJ's findings
  • § 45.2 — Alternative conditions: EPAct 2005 also allows licensees to propose alternative conditions that the agency must consider if they are shown to be equally protective of the fish, wildlife, and other resources at issue; the alternative conditions process (separate from the hearing) gives licensees a pathway to propose less costly or more operationally compatible compliance approaches before conditions are finalized

  The DOI/NMFS mandatory conditioning authority under Parts 45 and 221 is the central tension in FERC hydropower licensing: FERC has jurisdiction to license the project and balance power generation against environmental values, but Interior and NMFS can impose conditions whose cost FERC cannot reduce or override. In practice, the hearing mechanism created by EPAct 2005 — while rarely taken to full evidentiary proceeding — has fundamentally changed the negotiating dynamic by requiring agencies to disclose and defend their factual basis before conditions are finalized. The result has been more negotiation and fewer unilateral conditions. The most significant mandatory conditions in recent licensing have involved minimum streamflow requirements (for fish habitat), fish passage structures (ladders, bypass channels, trap-and-haul facilities), and gravel augmentation programs (restoring salmon spawning gravels lost to dam operations). Recent rulemakings: 71 FR 64510 (November 2006) — original promulgation of Parts 45 and 221.

• 18 CFR Part 16 — Procedures Relating to Takeover and Relicensing of Licensed Projects (26 sections): implements FPA §§ 14 and 15 (16 U.S.C. §§ 807–808), which grant Congress the right to authorize the United States to take over any hydroelectric project upon expiration of its license (§ 14) and give FERC the authority to issue a new license to the existing licensee or to a competing applicant at license expiration (§ 15). Part 16 governs what happens in the 5+ years before a license expires — the relicensing process that determines who will operate a major hydroelectric dam for the next 30–50 years.

  License expiration and annual licenses (§ 16.18): when a hydroelectric license expires and a new license or takeover decision has not yet been made, the existing licensee receives annual licenses under the same terms and conditions as the expiring license; annual licenses continue until FERC acts; during the annual license period, the licensee remains subject to all existing conditions — it cannot stop operating or abandon the project without FERC approval; the annual license period can extend for years or even decades when relicensing proceedings are complex; the Pacific Gas and Electric Kilarc-Cow Creek project (California) operated on annual licenses for over 20 years before relicensing was resolved.

  New license standards (§ 16.13): FERC must issue a new license to the applicant whose proposal is "best adapted to a comprehensive plan for improving or developing a waterway" — the standard requires balancing power generation against other public values including energy conservation, fish and wildlife protection, recreational use, and environmental quality; the new license standard is not automatically renewal of the prior license; FERC must conduct a full environmental review (EIS or EA) and consider all public interest values under FPA § 10(a); conditions on a new license frequently differ substantially from the expiring license, including new fish passage requirements, minimum flows, and recreation enhancements driven by decades of changed conditions and scientific understanding

  Municipal preference (§ 16.13(b)): FPA § 7(a) (16 U.S.C. § 800(a)) gives preference to municipalities and state agencies over private applicants "other things being equal" — if a city or state entity proposes to take over a dam being operated by a private company, FERC must give the public applicant preference when its proposal is equally well-adapted to developing the waterway; in practice, "other things being equal" is rarely found because private applicants typically invest more in mitigation and environmental enhancements, but the preference provision has been used in notable relicensings (e.g., the city of Tacoma taking the Cushman Hydroelectric Project from private operation)

  Federal department recommendation for takeover (§ 16.14): any federal department or agency may file a recommendation with FERC that the United States exercise its § 14 takeover right at license expiration; the recommendation must include justification; FERC then submits its own recommendation to Congress with its analysis of whether federal operation would better serve the public interest; Congress has never acted to authorize a § 14 takeover — the provision remains latent authority that shapes relicensing negotiations (private licensees compete with the specter of federal condemnation) but has not been exercised since FPA enactment in 1920

  Motion for stay by federal agencies (§ 16.16): within 30 days of a FERC order granting a new license, any federal department or agency may file a motion to stay the order pending congressional review of whether to exercise the takeover right; the stay motion effectively gives federal agencies a 30-day window to trigger a pause while they consult with Congress; the power to file a stay motion gives resource agencies (Interior, Army Corps, NMFS) additional leverage in post-licensing negotiations even after the license order is issued

  Minor project procedures (§ 16.19): for minor hydroelectric projects (1.5–10 MW) and minor parts of larger projects whose licenses expire, a simplified relicensing process applies — no mandatory pre-filing consultation requirement under Part 5 (ILP); instead, the licensee may file directly for a new license with a shorter application package; FERC may waive environmental study requirements when the project is small and impacts are well-documented from the prior license period; the simplified process is designed to reduce the disproportionate regulatory burden that full ILP proceedings would impose on small-scale hydro

  The relicensing process is the most consequential regulatory event in the life of a hydroelectric project. A 50-year-old dam relicensed today will operate under new conditions — fish passage requirements, minimum flows, recreation enhancements — that reflect current scientific understanding and legal obligations rather than the standards of 1970 or 1980. For dam owners, the relicensing period is when negotiating leverage is highest and when the largest capital investments in fish passage or environmental mitigation are typically committed. For environmental advocates, relicensing is the primary opportunity to improve ecological conditions on regulated rivers that were damaged by dam construction. FERC currently has approximately 150 projects in active relicensing proceedings, representing about 15% of the U.S. hydroelectric fleet — collectively representing significant generating capacity whose future operating conditions are being negotiated now.

• 18 CFR Part 11 — Annual Charges Under Part I of the Federal Power Act (18 sections — the FERC regulations implementing FPA § 10(e) (16 U.S.C. § 803(e)) and the Omnibus Budget Reconciliation Act of 1986, which require hydroelectric licensees and exemptees to pay annual charges to the United States as a condition of holding their FERC license; annual charges are how the federal government recovers the cost of the hydropower licensing program and the value of using U.S. government resources — federal lands, dams, and downstream headwater benefits — for private or public power generation):

  • § 11.1 — Administration costs: FERC assesses each licensee an annual charge to reimburse the United States for the cost of administering the hydroelectric licensing program — FERC staff time for license processing, dam safety inspections, compliance monitoring, relicensing proceedings, and environmental review; the charge is allocated among licensees based on the project's installed capacity (in kilowatts) relative to the total licensed capacity in the FERC portfolio; administration cost charges are assessed annually and reflect FERC's actual program expenditures for the preceding fiscal year; small projects (minor hydropower exemptions and small conduit exemptions) pay a reduced administration charge
  • § 11.2 — Use of government lands: a licensee whose project occupies U.S. government-owned land (National Forests, BLM land, National Parks, military reservations) must pay a reasonable annual charge for the use, occupancy, and enjoyment of those lands; the charge is set by FERC and is in addition to any permit fees or land-use fees owed to the land management agency; land-use charges are calculated based on the project's installed capacity and the proportion of project facilities (transmission lines, access roads, powerhouses) located on federal land; the charge compensates the federal lessor for the opportunity cost of the land use
  • § 11.3 — Use of government dams: a non-federal hydroelectric project that generates power using a government-owned dam or conduit (for example, a Bureau of Reclamation irrigation canal used for conduit hydro, or a Corps of Engineers lock-and-dam structure providing the impoundment for a project) must pay an annual charge for the use of the government structure; the charge reflects the benefit the licensee receives from the government's investment in the dam — the licensee is essentially leasing capacity in infrastructure that the government built and maintains; charges are set by FERC on a project-specific basis after considering the government dam's construction cost, current reproduction cost, and the proportion of the dam's capacity used by the licensee
  • § 11.4 — Pumped storage and tribal lands: for projects using government dams for pumped storage (using off-peak electricity to pump water uphill for later generation), charges are set on a case-by-case basis; for projects on tribal trust lands — land held by the United States in trust for an Indian tribe — charges are also determined case-by-case, with consultation with the affected tribe; FERC may consider tribal government revenues and economic circumstances in setting charges for tribal land projects
  • § 11.6 — State and municipal exemptions: FERC may waive or reduce annual administration cost charges for state- or municipality-owned projects on a finding that the project provides public benefits (flood control, recreation, water supply) beyond power generation; the exemption acknowledges that public-body licensees often operate projects for non-power purposes and that the full administration charge may be inequitable when the licensing program's benefits flow substantially to non-power uses; private licensees are not eligible for § 11.6 exemptions
  • §§ 11.10–11.17 — Headwater benefits charges: the most technically complex component — downstream licensees must pay annual charges for energy gains their projects receive as a result of upstream water storage by other projects (federal or non-federal); when a dam upstream of a run-of-river plant releases stored water, the downstream plant's generation increases because the regulated flow is more consistent than natural flow; the upstream storage project subsidizes the downstream plant's output; Part 11 requires the downstream beneficiary to pay for this subsidy
    • § 11.11 — Energy gains method: the standard method — simulates operation of the downstream project with and without the upstream headwater project using historical flow data; the difference in annual generation is the energy gain; the charge is the energy gain multiplied by FERC's computed unit cost of generation for the downstream project
    • § 11.14 — Settlement alternative: licensees may enter into negotiated settlements for headwater benefits charges, subject to FERC approval; settlements typically allocate charges based on storage capacity contributions rather than the modeled energy-gains method; many multi-project river systems (Columbia, Missouri, Tennessee) have settled headwater charge allocations
    • § 11.16 — Annual data filing: licensees subject to headwater benefits charges must file annual data by February 1 of each year — generation output, reservoir operations, flow data — to enable FERC staff to compute the charges for the preceding year; the data filing obligation is ongoing
  • § 11.20 — Payment deadline: annual charges are billed by FERC and are due 45 days after the date of the billing; licensees must pay electronically through FERC's e-payment system
  • § 11.21 — Late payment penalty: a 5% per month penalty is assessed on any unpaid balance after the 45-day due date; the penalty compounds monthly and is substantial — it is designed to create strong incentive for timely payment; FERC may issue a notice of non-compliance and schedule a compliance hearing for persistent delinquent payers

  FERC's annual charge program generates approximately $50–80 million annually across all Part I licensees — a fraction of the value of the hydroelectric output but a meaningful cost for smaller projects. The headwater benefits charges under §§ 11.10–11.17 are the most contested component: computing "energy gains" requires modeling assumptions about how the river system would behave without upstream storage, and downstream licensees frequently dispute FERC's modeling methodology. The headwater charge is especially significant on heavily dammed river systems (Columbia, Sacramento, Missouri) where multiple upstream storage projects provide substantial regulation benefit to downstream run-of-river plants; the cumulative charge can represent a meaningful percentage of a small project's annual revenues.

Pending Legislation

• S 3684 / HR 7129 — Water Power Research and Development Reauthorization Act: expand federal R&D for hydropower and marine energy, strengthen domestic manufacturing, authorize $300M. Status: Introduced.
• S 3500 — Hydropower Licensing Transparency Act: force FERC to publish annual status reports on pending hydropower licenses. Status: Introduced.
• S 3518 — FLOWS Act: speed permits for small hydrokinetic projects and let existing sites do minor fixes without prior FERC approval. Status: Introduced.

Recent Developments

The relicensing wave is the dominant story — hundreds of FERC licenses issued in the 1980s and 1990s are expiring or will expire in the coming decades, triggering comprehensive environmental review of aging dams. The removal of four dams on the Klamath River (completed 2024) was the largest dam removal in U.S. history and a landmark in the intersection of FERC relicensing, tribal rights, and salmon recovery. FERC has streamlined licensing procedures for new small hydroelectric and pumped storage projects as part of the clean energy transition. The role of hydropower in grid reliability — as a dispatchable, carbon-free resource that can complement variable wind and solar — has received increased attention from energy planners and policymakers. See Power Marketing Administrations for the federal entities that sell hydroelectric power, and Tennessee Valley Authority for the largest federal hydroelectric system.