Last week, the U.S. Department of the Interior's Bureau of Reclamation ("Reclamation") issued a draft report titled "Hydropower Resource Assessment at Existing Reclamation Facilities" (the "Resource Assessment") for public comment. The Resource Assessment provides information on 530 exiting Reclamation sites and makes a preliminary determination about whether or not hydropower development at each facility would be economically viable.

To determine economic viability, Reclamation developed a Hydropower Assessment Tool which requires simple inputs of daily flows, headwater and tail water elevations. According to Reclamation, the result is "valid information on potential hydropower production and economic viability." Although the Resource Assessment does not claim to provide feasibility-level analyses for the sites, it does consider potential regulatory constraints related to water supply, fish and wildlife considerations, effects on Native Americans, water quality, and recreation, and adds the cost of mitigation to a projected total development cost for each site. The Resource Assessment also provides benefit-cost ratios that both include and exclude renewable energy incentive prices.

Importantly, Reclamation stated that the Resource Assessment is "targeted towards municipalities and private developers that could further evaluate the potential to increase hydropower production at Reclamation sites." This is an indication that the federal government does not intend to develop the 192 sites that Reclamation identified as having hydropower potential. Although this in itself is good news for developers, there's more. For many of the Reclamation sites, developers would proceed under a Lease of Power Privilege Agreement rather than the Federal Energy Regulatory Commission licensing process set out in Part I of the Federal Power Act. Such a lease would allow the developer to use the Reclamation facility for the purpose of generating electricity for up to 40 years.  

Comments may be submitted to Mr. Michael Pulskamp, Bureau of Reclamation, Denver Federal Center, Bldg. 67, P.O. Box 25007, Denver, Colorado 80225, or email to Comments must be submitted by December 6, 2010.