Part I of this Article will explore the history and rise of hydroelectric power generation—from water mills to mega dams—and its regulation in the United States. The water mill was one of the first mechanisms used by mankind to harness power. It is a simple use of momentum to create energy. Water mills were used to grind grain, saw logs, create textiles, and fashion tools. As societies evolved, so did the use of water mills, and once electricity and generators arrived on the scene in the late 1800s, hydropower proved to be an efficient means of producing electricity. By the early twentieth century, 40% of the electricity in the United States was produced from hydropower projects located on rivers within or near cities. With the increased utilization of hydropower came a new regulatory scheme introduced in the Federal Water Power Act of 1920. This Act granted nearly exclusive regulatory authority to the federal government—and the Federal Power Commission specifically—over hydropower facilities located on navigable waters. The Commission (now FERC) remains the preeminent regulatory body, deciding whether development should occur and if so, by whom and how. Significant hydropower development occurred during this era, with both the federal government and large utilities constructing the majority of the United States’ mega dams.

Part II will discuss the decline of hydropower utilization, resulting in fewer hydropower facilities being developed in the United States. This Article will discuss several factors that have contributed to the decrease in development, including increased environmental scrutiny, an increasingly complicated licensing scheme, and poor public perception of dams. While electricity generated from hydropower is inexpensive, emission free (i.e., non-polluting), and comes from a renewable source, hydropower ultimately came under scrutiny by states and environmental groups in the late 1960s and early 1970s as water quality and environmental concerns began to take form in the United States. In response to these concerns, Congress enacted several statutes intended to protect the environment and natural resources, including the Wild and Scenic Rivers Act, National Environmental Protection Act, and the Endangered Species Act. The implementation of these acts placed hydropower under increased environmental scrutiny, resulting in increased costs and delays in development. The Clean Water Act tangled the regulatory web further by requiring hydropower developers to obtain a certificate from the state in which the project will be located, certifying that the facility will not impair water quality and will meet “other limitations” set by states to ensure such compliance. In addition to these regulatory obstacles to development, hydropower has also suffered from a negative public opinion and an increasing attitude toward river restoration instead of hydropower development. As a result of these obstacles, large-scale hydropower is unlikely to see increased development in the United States in the near future.

Part III will discuss how small-scale hydropower is not—or at least should not be—similarly situated to large, conventional hydropower. Studies have shown that small-scale hydropower, if fully developed, could increase current electricity generation by up to 200%. Unlike conventional large-scale hydropower, small hydropower has very little impact on the environment, fish, or wildlife and still provides clean, renewable energy. Regardless of the benefits to small hydropower development, there are significant regulatory hurdles to increased development, including antiquated and prohibitive licensing and regulatory schemes created for regulation of large, conventional hydropower. While small hydropower projects—including conduit and hydrokinetic projects—can apply for federal exemptions to the current licensing scheme, those exemptions are not in fact exemptions to licensing, but to relicensing. For the initial license, projects must still go through the three arduous consultation stages with potentially dozens of resource agencies, multiple design and environmental studies, and lengthy application requirements for the exemption.

Part IV will address ways to untangle this web of regulatory oversight, including delegating to the states the responsibilities for licensing, which would streamline the consultation phases of the licensing process and make small hydro licensing less time-consuming and less expensive. States would pre-screen the projects, ensure applications are complete, and identify any necessary consultations and studies so as to satisfy all licensing requirements. FERC would maintain oversight authority of state programs to ensure they are consistent with federal policy and that hydropower development is consistent among the different states. This would presumably encourage all states to ensure they are following the appropriate goal of promoting small hydropower development while protecting natural resources, fish, wildlife, and recreational opportunities. The most promising ways to accomplish this transition to state oversight are either through legislative changes modifying the Federal Power Act or through delegation agreements such as Memorandums of Understanding. Each option will be discussed in detail. Finally, this Part will also address the local and global benefits of increased small hydropower development by creating jobs and stimulating the economy while also playing a part in the overall fight against climate change.