Q: How, where, and when can I apply for this funding?
The current application window closed on October 6, 2023. DOE anticipates announcing a second round under this program in the 2025 calendar year.
The final guidance for the current application window is available on the Maintaining and Enhancing Hydroelectricity Incentives webpage or through the Infrastructure Funding Opportunity eXCHANGE.
Q: How much funding was available in Year 1?
DOE received $553.6 million for the Maintaining and Enhancing Hydroelectricity Incentives. Please refer to the guidance for application requirements. DOE announced those selected for negotiations for the first round in September of 2024. DOE anticipates announcing a second round under this program next calendar year.
Q: What are the next steps for the Maintaining and Enhancing Hydroelectricity Incentives?
DOE announced those selected for negotiations for the first round in September of 2024. DOE anticipates announcing a second round under this program in the 2025 calendar year.
Q: Where can I access the latest guidance?
The application guidance is available on the Maintaining and Enhancing Hydroelectricity Incentives webpage or through the Infrastructure Funding Opportunity eXCHANGE.
Q: Could I apply for incentive funds under both Section 243 and Section 247?
Yes. However, the statutory limitations of 30% of project costs up to $5 million applied for each incentive payment under either Section 243 or Section 247.
Q: Could I apply for the Section 247 funds for a project that is also electing to take an Investment Tax Credit (ITC), Production Tax Credit (PTC), or other form of federal funding?
The statute does not restrict an applicant from applying for incentive payments under Section 247 while also seeking or accepting other forms of federal funding or tax credits for the same project. It was recommended that applicants consult with other federal agencies, such as the Department of Treasury, to confirm that a Section 247 incentive payment from DOE would not violate the terms or requirements for tax credits or non-DOE federal funding an applicant may seek for the project.
Q: What types of hydroelectric facilities were eligible?
In order to be eligible, a facility must meet the definition of a “qualified hydroelectric facility,” which means the facility:
(a) Is licensed by FERC or is a hydroelectric project constructed, operated, or maintained pursuant to a permit or valid existing right-of-way granted prior to June 10, 1920, or a license granted pursuant to the Federal Power Act (16 U.S.C. 791a et seq.), or has a FERC-issued exemption.
(b) Was placed into service before November 15, 2021.
(c) Is in compliance with all applicable Federal, State, and Tribal requirements, or would be brought into compliance with all applicable Federal, State, and Tribal requirements as a result of the capital improvements carried out using an incentive payment under this section.
Q: I began making modifications to my facility prior to November 15, 2021. Are capital improvements made prior to November 15, 2021, eligible? If not, could an applicant apply for an incentive payment to cover the labor related to the installation of the materials already purchased?
Only materials procured or other costs incurred after November 15, 2021, were potentially eligible for incentive payments. Eligible labor costs must have been incurred after November 15, 2021. The applicant was required to submit documentation showing the purchase of materials after November 15, 2021, and labor costs incurred after November 15, 2021.
Q: Were multiple developments within a single FERC-licensed hydroelectric project treated as individual hydroelectric facilities and each eligible for an incentive payment of 30% of project costs up to $5 million per fiscal year?
The statute only allows for one incentive payment to be made to a single qualified hydroelectric facility per fiscal year, and such payment may not exceed $5,000,000. In addition, the amount of the incentive payment may not exceed 30% of the applicable capital improvement costs. Applications for multiple capital improvements within an individual FERC-licensed hydroelectric project are subject to these statutory limitations.
Q: My company owns multiple hydroelectric facilities. Was there a limit on the number of applications I could submit?
There was no limit to the number of facilities for which applications could be submitted by a single owner. Applications for capital improvements across different categories (i.e., grid resiliency, dam safety, and environmental improvements) must have been submitted in separate applications. However, the statute only allows for one incentive payment to be made to a single qualified hydroelectric facility per fiscal year, and such payment may not exceed $5,000,000. In addition, the amount of the incentive payment may not exceed 30% of the applicable capital improvement costs. Applications for multiple capital improvements within an individual FERC-licensed hydroelectric project are subject to these statutory limitations.
Q: I submitted multiple applications for a single facility (grid resilience, dam safety, and environmental improvements). Was there a potential for more than one to be selected for negotiations?
Each application submitted for a facility went through the review process in accordance with its respective category.
The statute states, “Not more than 1 incentive payment may be made under this section with respect to capital improvements at a single qualified hydroelectric facility in any 1 fiscal year, the amount of which shall not exceed $5,000,000.”
Therefore, while multiple applications for a single qualified hydroelectric facility may have been selected for negotiations, the total incentive payment for that facility may not exceed $5,000,000.
Q: What are direct costs versus indirect costs?
The EPAct 2005 Section 247 statute states that, “The Secretary shall make incentive payments to owners or operators of qualified hydroelectric facilities for capital improvements directly related to improving grid resiliency…improving dam safety to ensure acceptable performance under all loading conditions (including static, hydrologic, and seismic conditions) [and]…environmental improvements.” Direct costs are those costs that can be identified as necessary to make the capital improvement in the facility or that can be assigned to a capital improvement in the facility relatively easily with a high degree of accuracy. Applicants were expected to demonstrate that all costs associated with the eligible capital improvement were direct costs. DOE will evaluate these costs during the application review to determine whether costs are directly related to the capital improvement.
Q: Was a Federal System for Award Management (SAM) account and Unique Entity ID (UEI) required?
Yes, a tax identification number of the hydroelectric generation facility, the creation or update of a Federal SAM account was required and would have been confirmed with the assignment of a UEI number created in SAM.gov. Additional information can be found below:
- Tax Identification number for the qualified hydroelectric generation facility.
- Applying for a Tax Identification Number is a free service offered by the Internal Revenue Service. The online application process is available for all entities whose principal business, office or agency, or legal residence (in the case of an individual), located in the United States or U.S. Territories https://www.irs.gov/businesses
- Create or update your Federal System for Award Management (SAM) account.
- Entities registering in SAM.gov are assigned a Unique Entity ID (UEI). The Unique Entity ID is the official identifier for doing business with the U.S. Government as of April 4, 2022. Register to get started doing business with the federal government at https://sam.gov
- Tax Identification number for the qualified hydroelectric generation facility.
Q: Can DOE provide more detail about what would have happened in the event of oversubscription?
If the Small projects were oversubscribed but funding was available for projects that do not meet the Small project criteria, the eligible Small projects that were not awarded an incentive payment would have been reviewed for funding along with the eligible applications that do not meet the Small project criteria.
If oversubscription occurred for projects that did not meet the Small project criteria, any unused funding remaining for Small projects would have been used to fund those projects.
Had the first round been oversubscribed, scoring would have proceeded as outlined in Section IX of the application guidance. Applications would have been ranked by score, using nameplate capacity as a tiebreaker as necessary, and selected until available funds ran out.
Q: If it takes longer than expected to complete the capital improvement would a time extension be granted? What if NEPA review takes longer than expected?Projects should be started and completed within 3 years after projects are selected for an incentive payment, unless DOE makes a written determination and finding that a longer project period is necessary for the success of the project. Applicants may request time extensions to any milestones set by DOE. DOE will review requests for time extensions and may approve or deny requests for time extensions at its sole discretion.
Q: Do for-profit entities, such as investor-owned utilities, have to comply with the Build America, Buy America Act requirements detailed in Section XIII of the guidance?
No. The requirements of the Build America, Buy America Act only apply to state, local government, territory, Indian Tribe, institutions of higher education, and nonprofit organizations.
Q: Do projects that were completed prior to the close of the application period have to comply with Build America, Buy America and Davis-Bacon Act requirements discussed in Section XIII of the guidance?
Yes. However, applicants may request a waiver from the Build America, Buy America Act requirements (See Section XIII of the guidance). Additional information on DOE Buy America Requirement Waiver Requests can be accessed at DOE Buy America Requirement Waiver Requests. Waivers are not available for Davis-Bacon Act requirements but completed projects do not have to comply with weekly payroll requirements.
Q: With respect to Davis Bacon Act weekly reporting requirements, will a selectee that uses a bi-weekly payroll have any flexibility regarding the timing (weekly or bi-weekly) of the Davis Bacon reports?
The Davis Bacon Act (DBA) applies to laborers and mechanics performing physical or manual work at the site of construction work. Payment of wages every two weeks is not consistent with DBA which requires payment to employees “no less frequently than weekly.”
Q: I have already started work on a capital improvement project where costs were incurred after November 15, 2021, but a wage determination has not been made for some of the construction costs already underway. If it is determined that the initial costs associated with a capital improvement project do not comply with Davis Bacon Act requirements and I modify my subcontracting agreements to comply with Davis Bacon Act requirements, could I have applied for an incentive payment for the remaining eligible costs?
All costs are eligible if incurred after November 15, 2021. In the event an applicant did not comply with DBA’s prevailing wage requirements at the beginning of construction, the applicant will be required to remedy those wages and comply with DBA for the duration of the project.
Q: Can a waiver be sought for Davis Bacon Act requirements?
As stated in the guidance, there are no waivers with respect to compliance with the Davis Bacon Act. DOE will only entertain waiver requests regarding use of a third-party electronic payroll compliance software, LCP Tracker, in the event the applicant does not have internet access. Additional information on the third-party electronic payroll compliance software, LCP Tracker, can be found on the Weekly DBA Payroll Tracking with LCPtracker webpage.
Q: What documentation may be requested during potential periodic progress reports?
Periodic progress reports may be requested or required of applicants. Documentation or reporting requests could include but are not limited to:
- Summaries of work or completed tasks.
- Summaries of expenditures (labor and materials) with invoices.
- Documentation related to previous, current, and/or potential delays.
- Photos.
Q: If it takes longer than expected to complete the capital improvements would a time extension be granted? For example, if National Environmental Policy Act of 1969 review takes longer than expected?
Applicants may request time extensions to any milestones set by DOE. DOE will review requests for time extensions and may approve or deny requests for time extensions at their sole discretion (refer to section X of the guidance).
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