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Logan City’s Adventures in Micro-Hydropower: How Federal Regulations Discourage Renewable Energy Development

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In 2004 Logan, Utah, saw the opportunity to place a turbine within the city’s culinary water system. The turbine would reduce excess water pressure and would generate clean, low-cost electricity for the city’s residents. Federal funding was available, and the city qualified for a grant under the American Recovery and Reinvestment Act. Unfortunately, Logan City found that a complex and costly federal nexus of regulatory requirements must be met before any hydropower project can be licensed with the Federal Energy Regulatory Commission. This regulation drove up costs in terms of time and money and, as a result, Logan City is not planning to undertake any similar projects in the future. Other cities have had similar experiences to Logan’s, and we briefly explore these as well. We find that regulation is likely deterring the development of small hydropower potential across the United States, and that reform is warranted.

Small-scale hydropower is one of the most promising new sources of clean power. Cities like Logan, Utah,1 are taking advantage of the opportunity to develop green energy in their own backyards by installing micro-hydropower systems. As they do so, they often find themselves trapped in a frustrating regulatory system that costs them time and money.

In 2004, Lance Houser saw an opportunity. As assistant engineer for Logan City, Houser recognized the potential for the city’s culinary water system to generate clean, low-cost electricity. All it needed was the installation of a micro-hydro turbine within the existing pipeline. This project would create enough energy to power 185 local homes. It would require no new construction, but rather would modify an existing pipeline within an existing building. The project would have no additional environmental impacts. It would solve a problem while providing extra benefits to the city. In short, Houser’s idea made sense.

With the encouragement of federal policies, cities like Logan are implementing renewable energy projects such as small and micro-hydropower. The American Recovery and Reinvestment Act of 2009 (ARRA), commonly known as the Recovery Act or the stimulus bill, officially provided $16.8 billion for “Energy Efficiency and Renewable Energy.” 2

The Department of Energy, however, measures this number differently, and estimated the actual number to be closer to $90 billion (DOE 2012). Part of that funding went to renewable energy projects like Logan City’s micro-hydro project. In total, the city planned to spend up to $1.4 million to complete the project, of which half was local funding and half was the ARRA supported grant.

Unlike traditional large-scale hydropower, small and micro-hydropower systems often do not require dams, reducing the technology’s environmental impacts. Micro-hydro systems most commonly work through a “run-of-the-river” system in which water from a river is diverted to a pipeline. This water then flows through a turbine or waterwheel, powering a generator and producing electricity (DOE 2012). Micro-hydro turbines take advantage of the kinetic energy in flowing water by converting that energy into usable electricity. A system generating only 10 kilowatts can power a large home, small resort, or hobby farm (DOE 2012).

Small and micro-hydropower systems are indeed small, but collectively they have high energy-generation potential. According to a feasibility assessment of small and low-power hydroelectric plants, generation of as much as 30,000 megawatts of energy is possible through small and low-power hydroelectric projects3 throughout the United States (Idaho National Laboratory 2006, 1). This is enough energy to power more than 65,000 homes on an annual basis.4 If developed, this system would more than double total hydroelectric generation in the United States (Idaho National Laboratory 2006, v).

Although micro-hydro projects usually have limited or even no environmental effects, the federal permitting process is onerous. Logan City’s micro-hydro project would generate electricity from a renewable source, reducing the city’s reliance on energy generated from higher-emission coal and natural gas. As of 2012, over half of the city’s electricity generation came from coal and about 6 percent came from gas (Logan City Light & Power, n.d.). As the EPA website notes, “Hydropower’s air emissions are negligible because no fuels are burned” (2013). If Logan City’s project were to run 24/7 for one year, and if all of the energy it replaced came from coal-powered plants, the project would offset approximately 3.7 million pounds of carbon dioxide (US Energy Information Administration 2013).5

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