Hydroelectric Incentives Guide

Hydroelectric Production Incentives

(Section 242 of EPAct 2005) 

A qualified hydroelectric facility is a hydroelectric generation facility that:

(a) is located in a State or in U.S. jurisdictional waters;

(b) has a water-powered turbine or other generating device (including conventional or new and innovative technologies capable of continuous operation);

(c) is owned or solely operated by a non-Federal entity;

(d) began producing hydroelectric energy (either through added generation capability, excluding maintenance, or through the incorporation of new equipment, refurbished equipment, or both) for sale on or after October 1, 2005; and

(e) that either:

(1) is at an existing dam or conduit that was completed before November 15, 2021; or,

(2)

(i) has a generating capacity of not more than 20 megawatts;

(ii) for which the non-Federal entity has received a construction authorization from the Federal Energy Regulatory Commission, if applicable; and

(iii) that is constructed in an area in which there is inadequate electric service.

BIL funded incentive at $125 million.

No facility may receive more than $1 million in 1 calendar year.

Incentive payment based on net electric energy generated by and sold from its operation during the eligibility window.

Refer to the guidance for additional information.

Hydroelectric Efficiency Improvement Incentives

(Section 243 of EPAct 2005)

BIL funding incentive at $75 million.

Limitations include:

(1) incentive payments shall not exceed 30% of the costs of the applicable capital improvement(s);

(2) not more than 1 incentive payment may be made to a single eligible hydroelectric facility per fiscal year; and

(3) the amount of the incentive payment shall not exceed $5 million.

Maintaining & Enhancing Hydroelectricity Incentives

(Section 247 of EPAct 2005)  

A qualified hydroelectric facility is a hydroelectric project that 

(1)(A) is licensed by the Federal Energy Regulatory Commission; or

(B) is a hydroelectric project constructed, operated, or maintained pursuant to a permit or valid existing right-of-way granted prior to June 10, 1920, or a license granted pursuant to the Federal Power Act (16 U.S.C. 791a et seq.);

(2) is placed into service before the date of enactment of this section (November 15, 2021); and

(3)(A) is in compliance with all applicable Federal, Tribal, and State requirements; or

(B) would be brought into compliance with the requirements described in subparagraph (A) as a result of the capital improvements carried out using an incentive payment under this section. 

Owners or operators of qualified hydroelectric facilities for capital improvements directly related to:

(1) improving grid resiliency,

(2) improving dam safety,

(3) environmental improvements

Additional eligibility information is provided in the final guidance.

BIL funded incentive at $553.6 million.

Limitations for the incentive payments include:

(1) Incentive payments shall not exceed 30% of the costs of the applicable capital improvement(s)

(2) Not more than 1 incentive payment may be made to a single qualified hydroelectric facility in any fiscal year, the amount of which shall not exceed $5 million.