On Tuesday, June 30, 2009, the U.S. Department of Energy (DOE) announced that it will offer up to $32 million dollars to modernize existing hydropower facilities in the United States, with funds appropriated by the American Recovery and Reinvestment Act of 2009, Pub. L. 111-5. DOE is currently soliciting applications from industry members or industry-led partnerships that propose to develop, deploy and test hydropower projects aimed at upgrading existing hydropower facilities by utilizing turbine and control technologies with a view toward increasing both the quantity and value of hydropower electric generation while decreasing the environmental impact effected by such facilities.

Financial assistance will be provided to a variety of hydropower projects that can be developed without significant modifications to dams and with a minimum of regulatory delay. Projects should be able to demonstrate improved environmental performance, such as a reduction in the rate of fish mortality at project sites or an increase in concentration of dissolved oxygen surrounding the project sites. DOE requires that applicants must contribute at least 50% of the total allowable costs for small (< 50 MW) hydropower facilities and at least 80% for large projects (> 50 MW), and such funds must come from non-federal sources unless otherwise permitted by law. Cost-shared projects will be selected competitively to maximize total system efficiency through equipment and control system upgrades. The potential for increased power generation per federal dollar spent will also be an important criterion upon which the application will be reviewed. DOE’s guidelines also require that applicants be able to demonstrate that the proposed projects will increase a facility’s generation by at least 5%. Successful applicants may apply DOE funding toward any aspect of the design, development, construction or installation of the technology to be deployed, or any component or process necessary for its development and deployment.

Grants will be competitively awarded to projects that meet the aforementioned criteria. Funds will be divided between large (> 50 MW) and small (< 50 MW) hydropower facilities, with up to $25 million going to large facilities and up to $7 million going to small facilities. The projects are expected to begin in October 2009. Letters of intent to apply for the funds are due on July 22, 2009, and completed applications are due on August 20, 2009.

For your convenience, attached to this Legal Alert is the funding opportunity announcement from DOE, together with instructions for the submission of applications and further details regarding qualifying projects.