Small hydroelectric generation is a renewable and decentralized source of electricity, which is typically employed with very minimal environmental impact. Unlike large hydroelectric projects requiring the damming of rivers, small hydro projects simply divert a portion of a river or creek’s flow or are constructed on pre-existing diversions, such as raw water distribution systems. Such systems have been in use for over a century and in many places and were the original source of electricity. In fact, the world's first commercial-grade alternating-current power plant was built in Colorado in 1891 by L.L. Nunn, Nikola Tesla and George Westinghouse.
Guidance on implementing small hydro projects located here: Small Hydro Intro & Feasibility Guide
In 35 years, only 26 federal permits have been issued for hydropower projects in Colorado. One significant barrier to small hydropower development has been the Federal Energy Regulatory Commission’s (FERC) lengthy permitting process. The CEO received national attention for a partnership with the FERC to address those permitting barriers. That partnership led to the passing of Hydropower Efficiency Act of 2014, which institutionalized those streamlined process at the FERC.
In 2014, Colorado’s state legislature passed HB-1030, which increased hydropower permitting efficiencies by streamlining the State agency comment process. Under this law, the CEO coordinates and compiles State agency comments when qualifying small hydropower projects apply for FERC permits.
Project developers should notify the CEO when they file an application with the FERC for a small hydropower permit. Upon notice, the CEO will:
All agency comments, including any from the CEO, will be organized and compiled into one document that will be submitted to the FERC ahead of its standard 60-day deadline.
Developers of qualifying small hydropower projects are encouraged to contact Michael McReynolds for additional details regarding this streamlined review process.
The Meeker Wenschhof project in Rio Blanco County is a 23 kW small hydropower project that will utilize water historically used for irrigation to produce power that will offset the electricity consumption of a water-saving irrigation sprinkler. This low impact project provides a rural Colorado rancher new revenue in the form of electricity savings, and is easy to duplicate, providing other ranchers in the state an avenue to replicate the project and associated savings.
How the Colorado Energy Office helped make this project a reality
In 2010 the state of Colorado signed a Memorandum of Understanding with The Federal Energy Regulatory Commission (FERC) to streamline the permitting process, leading the nation in an effort to make small hydropower permits more economical and accessible. This created an avenue for the Colorado Energy Office (CEO) to create the Renewable Energy Development Team (REDT) and help move projects toward success. The REDT helps identify Colorado renewable energy projects with the best potential for development and provides them with the technical and business development assistance needed to help move the projects beyond the typical hurtles and barriers that can significantly delay or kill projects.
|Site Location:||Meeker, Colorado|
Barrier: The FERC permitting process for hydropower projects is complex, expensive and prohibitive for most who wish to develop a small hydro operation. In 35 years, only 26 federal permits have been issued for hydropower projects in Colorado. Before an application can be submitted to FERC it undergoes review by multiple regulatory agencies. The process typically takes several years because some regulatory agencies do not begin their review until another agency’s review is complete. Following the regulatory agency review process, FERC’s own review can take an additional two to three years. The combined regulatory agency and FERC reviews can potentially delay projects five to six years, or derail them entirely due to the added costs.
How CEO helped: CEO’s REDT essentially “stacked” multiple regulatory agency reviews to occur simultaneously, trimming the time it took to complete the pre-FERC application review from several years down to months. A single REDT point of contact helps FERC and the other regulatory agencies know that the applications are complete and consistent, removing the uncertainty that can cause the lengthy delays. In July, CEO’s REDT successfully submitted its first hydropower conduit exemption application to FERC and it was approved in just two months, a significant reduction over a process that historically took up to three years.
Barrier: The rural rancher had a great idea to use existing water power on his own property to power his entire ranch, but he needed help to determine whether his project was economically viable.
How CEO helped: The REDT used financial modeling tools to help the rancher understand that his project was economically viable and encouraged him to proceed.
Barrier: 1603 federal grants have not typically been available to projects such as this one because the classification criteria for small projects are convoluted.
How CEO helped: The REDT made a successful case to submit this project for a 30% federal grant. REDT secured a letter of support from CEO, expert opinions, and a meeting with grant administrators to obtain clear direction. This success establishes a new precedent and a clear classification path, which creates new opportunities for similar projects that hope to obtain a grant.
Barrier: Once the project was viable, the rancher needed assistance to counter a small, rural bank’s resistance to a renewable energy project loan. The bank lacked experience with renewable energy projects and was reluctant to move forward without credible information.
How CEO helped: The REDT talked to the rancher’s bank to answer project questions and this helped secure the needed construction financing.
The Meeker Wenschhof project became the first hydro project in the nation to go through the new FERC streamlined process and receive a conduit exemption, doing so in just two months.
The project will save this rural Colorado rancher $350,000 in utility costs over 30 years.
The rancher will be able to offset 100% of his ranch’s electrical load.
The rancher is able to utilize a 30% federal grant that previously would not be available to projects like his.