The United States currently gets 6.3% of its electricity—and 31.5% of its renewable electricity generation—from hydropower facilities, which provide a reliable and flexible source of power. Hydropower also provides critical energy storage, and pumped storage hydropower accounts for 93% of all utility-scale energy storage capacity in the United States. Hydropower is key to building a 100% clean energy future. But as today’s facilities age and become more expensive to maintain, the United States risks losing a major source of clean energy and well-paying jobs.

Leveraging operational flexibility and energy storage capabilities, hydropower supports energy resource adequacy to ensure the availability of clean, reliable generation capacity allowing all Americans access to clean, resilient, and affordable electricity. The President’s Bipartisan Infrastructure Law (BIL) invests in maintaining and enhancing existing hydroelectric facilities to ensure generators continue to provide clean electricity, while improving dam safety and reducing environmental impacts.

The BIL authorizes three hydroelectric incentive programs:

• Hydroelectric Production Incentives (BIL provision 40331 and EPAct 242) will provide $125 million in incentive payments to qualified hydroelectric facilities for electricity generated and sold.
  • On October 11, 2023, the U.S. Department of Energy (DOE) announced 66 hydro facilities throughout the country will receive more than $38 million in incentive payments for electricity generated and sold in calendar years 2021 and 2022. See the full list of selected entities.
  • DOE plans to open the application window for electricity generated and sold in calendar year 2023 in the spring of 2024. 
     
• Hydroelectric Efficiency Improvement Incentives (BIL provision 40332 and EPAct 243) invests $75 million to enable implementation of capital improvements to improve efficiency.
  • On March 22, 2023, the Grid Deployment Office released application guidance and opened the solicitation for the Hydroelectric Efficiency Improvement Incentives (EPAct 2005 Section 243). The application window closed on June 20, 2023. DOE is now in the process of reviewing applications and will notify applicants of their eligibility in the fall.

• Maintaining and Enhancing Hydroelectricity Incentives (BIL provision 40333 and EPAct 247) invests $554 million to enhance existing hydropower facilities for capital improvements directly related to grid resiliency, dam safety, and environmental improvements.
  • On June 13, 2023, the Grid Deployment Office released final application guidance for the Maintaining and Enhancing Hydroelectricity Incentives (EPAct 2005 Section 247). The window for Letters of Intent (LOI) closed on June 22, 2023. The window for full applications closed on October 6, 2023. DOE is now in the process of reviewing applications and will notify applicants of their eligibility.

The Hydroelectric Production Incentives (BIL provision 40331 and EPAct 242) and the Hydroelectric Efficiency Improvement Incentives (BIL provision 40332 and EPAct 243) were authorized by Congress through the Energy Policy Act of 2005.

Since 2014, Congress has directed funding annually through the appropriations process for the Section 242 program. The BIL directed funding to the Section 243 program for the first time and also amended the Energy Policy Act of 2005 to create and fund the Maintaining and Enhancing Hydroelectricity Incentives (BIL provision 40333 and EPAct 247).