Vermont village considers conduit hydro

A Vermont municipality has proposed installing hydroelectric generating facilities along a potable water pipeline -- and under streamlined federal procedures, regulators have made a preliminary determination that the Village of Waterbury's proposed project does not need to be licensed or exempted from licensing.

Most new hydropower projects in the U.S. cannot be developed without approvals from the Federal Energy Regulatory Commission, but the Hydropower Regulatory Efficiency Act of 2013 streamlined the process for certain "qualifying conduit hydropower facilities."  If a facility meets defined criteria and goes through an expedited regulatory process, it can be developed and maintained without requiring a license or exemption issued by the Commission.  Criteria for qualifying include:

1. The facility must generate electric power using only the hydroelectric potential of a non-federally owned conduit. 
2. The facility has an installed capacity that does not exceed 5 megawatts.
3. The facility was not licensed or exempted from the licensing requirements of Part I of the FPA on or before August 9, 2013.

For this purpose, a conduit is any tunnel, canal, pipeline, aqueduct, flume, ditch, or similar manmade water conveyance that is operated for the distribution of water for agricultural, municipal, or industrial consumption, and is not primarily for the generation of electricity.  The primary purpose of the conduit is thus critical to qualification: the conduit cannot be primarily for power production, but must be primarily for water distribution.

If a developer proposes to develop a qualifying conduit hydropower facility, federal law generally requires that developer to file a Notice of Intent with the Commission.  Commission staff will make an initial determination (either to reject the notice of intent or to determine the facility meets the qualifying criteria) within 15 days.  If that initial determination is that the facility meets the qualifying criteria, the Commission will issue a public notice providing the public with 30 days to file motions to intervene and 45 days to provide comments contesting the qualification.

A docket pending before the Commission illustrates its process for evaluating conduit project notices.  On August 4, 2017, the Village of Waterbury filed a notice of intent to construct a qualifying conduit hydropower facility.  According to its filing, it proposes to install a 4-kilowatt turbine-generator in a pressure relief valve vault connected to the village's drinking water system.  The project's estimated annual power generation is 35,600 kWh/year at 100% capacity.

Less than one week after the village filed its notice of intent, on August 10 the Commission issued its Notice of Preliminary Determination of a Qualifying Conduit Hydropower Facility and Soliciting Comments and Motions to Intervene.  According to that notice, Commission staff preliminarily determined that the proposal satisfies the requirements for a qualifying conduit hydropower facility, which is not required to be licensed or exempted from licensing.  In particular, staff noted that the proposed project would utilize an existing potable water pipeline, whose primary purpose would continue to be conveying drinking water to the Village of Waterbury.

Like the Village of Waterbury, water districts and other owners of water pipelines are considering whether developing an in-conduit hydropower project makes sense for their needs.  Where an existing system uses pressure relief valves, replacing a PRV with a turbine-generator can add value.  In the Waterbury case, the Village appears poised to "net meter" the project's output against its own load under Vermont utility tariffs.  Combining incentives -- in this case, the streamlined federal permitting process for conduit hydro plus the state net metering program -- may further enhance the value proposition.