The future of hydropower could mean bad news for U.S. rivers

Electricity deregulation creates competitive pressure, which effects how hydroelectric dams are managed

By Environmental News Network staff

The electricity deregulation switch is flipping on around the country. Economists and industries alike tout the hallmarks of a deregulated system: less government and more competition. But as California's rocketing electric prices and energy crunches have shown, deregulation can have unfavorable results for consumers.

As the pressure increases for utility companies to stay competitive, some environmentalists believe that the health of rivers will also be jeopardized.

"Competitive pressure effects how hydroelectric dams are managed," notes Andrew Fahlund, policy director for energy programs at American Rivers. "There's pressure to let go of certain losses such as environmental mitigation."

More than 2,300 hydroelectric dams currently harness U.S. rivers to provide nearly 11 percent of the country's total energy supply. Producing power from rivers might seem benign because there are no billowing smokestacks. But hydropower can increase water temperatures, change levels and eliminate natural river flow.

It's profitable for companies to hold water behind dams until demand peaks and electricity prices are the highest, and then let it rush through. That ability is what makes hydropower particularly valuable in a deregulated market. But it's also what is most destructive to rivers. Fahlund compares the process to turning a faucet off and on full-blast. It blows fish downstream, scours river beds and smothers habitat with sand and silt.

This conflict of interest makes the current relicensing situation crucial. The majority of all privately-owned hydropower projects have recently been or soon will be up for relicensing. The licenses, which are issued for periods of 30 to 50 years by the Federal Energy Regulatory Commission (FERC), stipulate how owners can operate a hydropower dam.

Because the licenses last so long, says Fahlund, "this is a once-in-a-lifetime opportunity to make sure utility companies comply with modern environmental standards."

But, if anything, the licensing procedure is likely to become more lax. Utilities claim it is lengthy and expensive, putting them at a competitive disadvantage. President-elect Bush has indicated he intends to support changes in licensing. And FERC has begun a series of pubic hearings to find ways to reduce the cost and time it takes to renew a license.

Right now, as licenses come up for renewal, new developers are moving in. "There's been a huge change in ownership," says Hervey Scudder, president of the Northeast Center for Social Issue Studies.

Some of the largest hydropower projects in Maine are now owned by Florida Power and Light. In Vermont, dams sold to California-based Pacific Gas & Electric Corp. generate 20 percent of the state's electricity. Projects in Montana are owned by a company in Pennsylvania, and ones in Maryland by a French company. A Scottish utility has even bought hydropower projects in the United States.

Vermont and Maine are already feeling the impacts of having their water managed by absentee owners. Changes in both states are leading to rapid changes in flows and eroding banks, according to Fahlund and Scudder.

Those states won't be alone for long. More than 500 dams affecting 130 different rivers are up for relicensing in next decade.

Copyright 2001, Environmental News Network, All Rights Reserved

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Federal Energy Regulatory Commission
Florida Power and Light
Pacific Gas & Electric Corp.
Utility Guide
Status of State Electric Industry Restructuring Activity as of January 2001
American Rivers
Northeast Center for Social Issue Studies
Edison Electric Institute
National Hydropower Association

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