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Regulatory and Permitting Information Desktop Toolkit

Colorado Hydropower Permitting Process (CO)

The steps of the Colorado hydropower permitting process are summarized in the chart below. Roll over each section for a summary of the regulations and permits it covers. Click a section to learn more about the required permits and regulations related to that topic.

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Project Development Timeline

Hydropower Development in Colorado

In 2014, Colorado reported over 60 operating hydroelectric facilities with an installed capacity of 1,150 MW, producing approximately 680,000 MWh of electricity. Colorado Energy Office, Hydropower ; Colorado Small Hydro Association ; U.S. Energy Information Administration, 2015 Colorado State Profile . Produced hydroelectric generation accounted for approximately 5 percent of the state’s total system power in 2014. Colorado Small Hydro Association; U.S. Energy Information Administration, 2015 Colorado State Profile.

Hydroelectric facilities in Colorado include dam, run-of-river, and pumped storage facilities. Public and private utilities, electric co-ops, companies, and individuals own hydroelectric generation facilities distributed throughout the state. The Bureau of Reclamation and the Bureau of Land Management operate some of Colorado’s larger hydropower facilities. The majority of the hydroelectric generation facilities are located on the Colorado River. U.S. Energy Information Administration, 2015 Colorado State Profile .

In 2014, the Department of Energy (DOE) estimated 4,295 MW of new resource potential at undeveloped sites and 172 MW of hydroelectric potential at non-powered dams in Colorado. Department of Energy, New Stream-reach Development: A Comprehensive Assessment of Hydropower Energy Potential in the United States. The DOE also identified four non-powered dams (5 MW or less) with small-hydroelectric resource potential in Colorado. Department of Energy, New Stream-reach Development: A Comprehensive Assessment of Hydropower Energy Potential in the United States.

Colorado state agencies play a role in a number of federal permitting and review processes for hydropower development. For instance, the Colorado Department of Public Health and Environment (CDPHE) Water Control Division regulates water quality and issues Section 401 Water Quality Certifications (33 U.S.C. § 1251 et seq.) and permits for stormwater discharges (33 U.S.C. § 1342) pursuant to the Clean Water Act. In addition, Sections 10(j) and 30(c) of the Federal Power Act require FERC to consult with state agencies responsible for the oversight and protection of fish, wildlife, and botanical resources. 16 USC 803(j); 16 USC 823a(c). In Colorado, the Colorado Parks and Wildlife (CPW), formally known as the Colorado Division of Wildlife, oversees the protection of fish, wildlife, and botanical resources. Based upon review of the hydropower project and analysis of any study results, the CPW develops Section 10(j) recommendations for FERC-licensed projects. 16 USC 803(j). The FPA also authorizes CPW to issue mandatory terms and conditions for hydropower projects that are exempt from FERC licensing under Section 30(c). 16 USC 823a(c).

Colorado agencies and local commissions work together to regulate state land development, state highway access, utility-special-use access, and water access and water rights. Colorado municipal and regional planning commissions regulate development through land use plans in accordance with statewide goals and policies. C.R.S. §24-65.1-101; Colorado Revised Statute (C.R.S.) §29-20-101. The Colorado Department of Transportation (CDOT) works with cities and counties to regulate state highway rights-of-way and utility-special use access. 2 CCR 601-1 §2.3(3)(a), State Highway Access Code; 2 CCR 601-18 §2.2.1.1, State Utility Code. The Colorado State Board of Land Commissioners also requires developers to obtain a state land right-of-way if any portion of the project—such as roads, powerlines, or pipelines—will cross over or occupy certain state land. C.R.S. § 36-1-136.

In Colorado, the system of prior appropriation, known as the Colorado Doctrine, governs all surface and groundwater. Colorado Constitution Art. XVI, §§ 5, 6; CRS 37-82-101; CRS 37-92-102. Colorado employs different systems depending on whether the source is surface water and tributary ground or non-tributary groundwater. CRS 37-92-102. The water of every natural stream and any water that is tributary to the natural stream, including groundwater, is subject to a process under C.R.S. 37-92-301, Water Rights Determination and Administration Act of 1969 in which water courts issue a judgment and decree on specific water rights. The Colorado Division of Water Resources (CDWR), also known as the State Engineer’s Office, administers all surface and groundwater rights throughout the state and assists water courts. Colorado Department of Natural Resources Guide to Colorado Well Permits, Water Rights, and Water Administration.

In Colorado, “public utilities” need a Certificate of Public Convenience and Necessity (CPCN), from the Colorado Public Utilities Commission, to construct or operate a facility or an extension of a facility. 4 CCR 723-3-3102; CRS 40-5-102, Certificate of Public Convenience and Necessity. A “public utility” includes “every common carrier, pipeline corporation … electrical corporation, … person, or municipality operating for the purpose of supplying the public for domestic, mechanical, or public uses and every corporation or person declared by law to be affected with a public interest” providing electric, steam, or associated services in the state of Colorado. CRS 40-1-103; 4 CCR 723-3-3001(oo).

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Developing Qualifying Conduit Hydropower Facilities in Colorado

A qualifying conduit hydropower facility does not require a license or exemption from the Federal Energy Regulatory Commission (FERC). To qualify as a qualifying conduit hydropower facility, the project must meet the following provisions:

  1. 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;
  2. The facility generates electric power using only the hydroelectric potential of a non-federally owned conduit;
  3. The facility has an installed capacity that does not exceed 5 MW; and
  4. The facility was not licensed or exempted from licensing by FERC on or before August 9, 2013.

The developer may still need to obtain state or local permits or authorizations in order to develop a qualifying conduit hydropower project in Colorado. It is possible that the developer could meet federal regulatory requirements for a qualifying conduit hydropower project within as little as (60) sixty days.

FEDERAL AUTHORIZATIONS

Federal Notice of Intent to Construct a Qualifying Conduit Hydropower Facility

To initiate the process for a qualifying conduit hydropower facility, the developer must first file a Notice of Intent to Construct a Qualifying Conduit Hydropower Facility with FERC. For more information on FERC’s process for authorizing a Qualifying Conduit Hydropower Facility, see:

FERC Qualifying Conduit Hydropower Facility Authorization:
7-FD-f


Federal Right-of-Way

The developer may need to obtain a right-of-way or special use authorization from the appropriate federal land management agency to develop or access utility lines over federal lands.

Land Access:
3 (3)

Federal Environmental Review

A qualifying conduit hydropower facility is categorically exempt from preparing an environmental document under the federal National Environmental Policy Act and, therefore, is not subject to environmental review by FERC. Since qualifying conduit hydropower facilities are not subject to the FERC licensing or exemption process, qualifying projects are not subject to conditions and recommendations issued by the U.S. Fish and Wildlife Service or NOAA Fisheries under the Federal Power Act (FPA).

Federal Qualifying Facility Certification

The developer may apply for Certification as a Qualifying Facility under the Public Utility Regulatory Policies Act of 1978 (PURPA), which may enable the developer to sell energy to public utilities at the “avoided cost” rate.

PURPA Qualifying Facility Certification:
7-FD-c

STATE AUTHORIZATIONS

State Small-Low Impact Hydropower Assistance Program

Small-low impact hydropower projects may be eligible for streamlined federal permitting assistance from the Colorado Energy Office. The Colorado Small-low Impact Hydropower Assistance Program coordinates resource agency reviews and provides a single point of contact for developers in order to help developers complete permitting requirements more quickly and efficiently. To qualify for assistance, the proposed hydropower project must utilize existing infrastructure; present no significant changes to current operation of infrastructure; create no new stream diversions; and present only minimal or easily mitigated effects on water quality, fish passage, threatened or endangered species, and cultural or recreational resources.

Small-Low Impact Assistance Program:
7-CO-a

State Land Use Plan

The developer should evaluate preliminary site considerations and state land use restrictions for the project location early on in the planning process.

Land Use Planning:
1-CO-a

State Right-of-Way

The developer may need to obtain a right-of-way from the appropriate state agency in order to develop or access the qualifying conduit hydropower facility or utility lines across state lands. The developer may also need to obtain a property right from an individual land owner if the project or associated utility lines are located on privately-owned land.

State Land Right-of-Way:
3-CO-b

State Water Rights and Authorizations

The developer may need to obtain a non-consumptive use water right to use surface water. A developer usually does not need to obtain a Section 401 Water Quality Certification for a qualifying conduit hydropower project.

Water Access and Water Rights:
19-CO-a

State Environmental Review

In Colorado, a qualifying conduit project can be reviewed by state environmental agencies during the 45-day FERC public comment period. The Colorado Energy Office can help make sure that any state agency comments are filed in a timely manner.

For more information on FERC’s process for authorizing a Qualifying Conduit Hydropower Facility, see: FERC Qualifying Conduit Hydropower Facility Authorization:
7-FD-f

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Federal Regulations and Permits for Hydropower Development

The federal government, through the Bureau of Reclamation and the U.S. Army Corps of Engineers (USACE), operates 133 hydroelectric power plants—representing 8% of the country’s hydroelectric facilities. The private sector, public utilities, and state or local government operate the other 92% of U.S. hydroelectric facilities.

The Federal Energy Regulatory Commission regulates most non-federal hydropower projects. FERC has the authority to issue licenses to construct, operate, and maintain non-federal hydropower projects, pursuant to the Federal Power Act (16 U.S.C. 791 et seq.). Although developers of hydropower facilities located on non-federally owned conduits with installed capacities up to 5 MW are not required to be licensed or exempted by FERC, they must obtain an authorization from FERC to construct a Qualifying Conduit Facility. Small conduit hydroelectric facilities up to 40 MW (16 USC § 823a(b)) and small hydroelectric projects of 10 MW or less (16 USC § 2705) are eligible for an exemption from the FERC licensing process.

All developers may apply for a FERC license using the default Integrated Licensing Process (ILP) and under appropriate circumstances may apply for and receive authorization from FERC to use the Traditional Licensing Process (TLP) or the Alternative Licensing Process (ALP). The three licensing processes differ mainly in how they coordinate the applicant’s (developer’s) pre-filing activities (i.e., before filing the license application), especially the study plan development, National Environmental Policy Act (NEPA) review, and other federal and state agency processes. The goal of each licensing process is to develop a complete record of information to support FERC’s licensing decision, which must take into account protection, mitigation, and enhancement of cultural, fish, and wildlife resources.

The Federal Power Act (FPA) specifies extensive federal and state agency participation in the licensing process. When making a licensing decision, FERC considers the outcome of the consultation process mandated by Section 7 of the Endangered Species Act and project reviews required under Section 106 of the National Historic Preservation Act and the National Environmental Policy Act. The FPA requires license applications to contain a 401 Water Quality Certification. 18 CFR §4.34(b)(5). FERC also considers a number of other environmental, cultural, biological, water quality, land, geological, recreational, and aesthetic impacts of a hydropower project in making a licensing decision.

Federal agencies or Indian tribes have mandatory or optional authority to issue conditions and/or recommendations for the FERC license regarding developmental and non-developmental values and comprehensive plans to protect and mitigate damages to fish and wildlife resources:

  • Section 4(e) of the FPA authorizes federal land managers to impose mandatory conditions on a FERC license for hydropower projects located on federal reservations.
  • Section 10(a) of the FPA requires FERC to consider a project’s consistency with the federal and state comprehensive plans for improving, developing, or conserving a waterway. Whereas 4(e) conditions are mandatory, license conditions submitted under 10(a) are not mandatory, but recommendations.
  • Section 18 of the FPA authorizes the U.S. Fish and Wildlife Service and NOAA Fisheries to prescribe fishway passage requirements.
  • Sections 10(j) and 30(c) of the FPA require FERC to consult with state agencies, the U.S. Fish and Wildlife Service, and the National Oceanic Atmospheric Administration (NOAA Fisheries) who are responsible for the oversight and protection of fish, wildlife, and botanical resources. Based upon their review of the hydropower project and analysis of any study results, the agencies develop Section 10(j) recommendations for FERC-licensed projects. 16 USC 803(j). The FPA also authorizes the state and federal fish and wildlife agencies to issue mandatory terms and conditions for hydropower projects that are exempt from FERC licensing under Section 30(c). 16 USC 823a(c).

Role of other Federal Agencies

The U.S. Army Corps of Engineers (USACE), the Bureau of Reclamation (BOR), the Department of Defense (DOD), and federal land management agencies may require additional review and licensing processes for hydropower development. Under Section 404 of the Clean Water Act, USACE must authorize any discharge of dredge or fill material into waters of the U.S., including wetlands. Any proposed project that will affect navigable waters of the United States must obtain authorization from USACE under Section 10 of the Rivers and Harbors Act (33 USC 403). In addition, any proposed project that will alter or utilize a USACE structure must obtain authorization from USACE under Section 14 of the Rivers and Harbors Act (33 USC 408). All non-federal hydropower projects sited on BOR conduits and BOR dams authorized for federal power development, and not requiring a FERC license, require a BOR Lease of Power Privilege. 1992 Memorandum of Understanding between the Federal Energy Regulatory Commission and the Department of Interior, Bureau of Reclamation; (Section 9(c) of the Reclamation Project Act of 1939 (RPA, Section 9(c)) as amended by the Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act of 2013). All other sites (i.e., BOR dams not authorized for federal power development) require a FERC License/Exemption. In addition, before developing a hydropower project on federal land or a project that utilizes a federal resource, a right-of-way or use authorization may be required. Depending on location of the project, the relevant land management agency may be the BOR, the United States Forest Service, the DOD, the Bureau of Land Management or the National Park Service.


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