The Bipartisan Infrastructure Law created and funded a new hydropower incentive program under the U.S. Department of Energy (DOE) by amending the Energy Policy Act of 2005 and creating Section 247: Maintaining and Enhancing Hydroelectricity Incentives Program.

Through Section 40333 of the Bipartisan Infrastructure Law, Congress amended the Energy Policy Act of 2005—the law that established the Section 242 and Section 243 programs—to add a new Section 247, which establishes a third hydropower incentive program. The Bipartisan Infrastructure Law directed $553.6 million to DOE for this new program, which will provide incentive payments to support and enhance existing hydropower facilities through capital improvements directly related to three main areas:

  • Improving grid resiliency.
  • Improving dam safety.
  • Environmental improvements.

For purposes of the Section 247 hydroelectric incentives, a qualified hydroelectric facility is a hydroelectric project that:

  • is licensed by the Federal Energy Regulatory Commission, 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.);
  • was placed into service before November 15, 2021;
  • is in compliance with all applicable Federal, Tribal, and State requirements, or would be brought into compliance with these requirements as a result of the capital improvements carried out using an incentive payment under this section.

On June 30, 2022, the U.S. Department of Energy released a request for information to solicit feedback from a wide range of stakeholders on the structure of the Section 243 and Section 247 programs, timing and distribution of funds, definitions of capital improvements, and selection criteria. Comments closed on September 6, 2022.

A public webinar on the request for information was held on Tuesday, August 9, 2022. View the transcript of the webinar and slide deck.

Grid Resilience

Hydropower facilities can receive incentive payments to:

  • Adapt more quickly to changing grid conditions.
  • Provide ancillary services, including black-start capabilities, voltage support, and spinning reserves.
  • Help integrate variable sources of electricity generation.
  • Manage accumulated reservoir sediments.

Qualified pumped storage hydropower facilities are also eligible to apply under Section 247. Qualified hydroelectric facilities that make capital improvements related to the addition of energy storage such as reservoir capacity, pumped storage hydropower, and batteries may be eligible to receive an incentive payment.

Dam Safety

Hydropower facilities can earn incentives to:

  • Maintain or upgrade spillways or other appurtenant structures.
  • Make dam stability improvements, including erosion repair and enhanced seepage controls.
  • Upgrade or replace floodgates or natural infrastructure restoration or protection to improve flood risk reduction.

Environmental Improvements

Hydropower facilities can earn incentives to:

  • Add or improve safe and effective fish passage.
  • Improve the quality of water retained or released by a qualified hydroelectric facility.
  • Promote downstream sediment transport processes and habitat maintenance.
  • Improve recreation access to a project’s vicinity.

Funding Restrictions

The Bipartisan Infrastructure Law states that payments shall not exceed 30% of the costs of the applicable capital improvement. A single qualified hydroelectric facility may only receive one incentive payment from this program within a single fiscal year, and that payment shall not exceed $5 million.

DRAFT Timeline of Upcoming 247 Activities

Estimated dates; subject to change.

Summer 2022

Release a Request for Information

Summer 2022

Hold online public workshop

Fall 2022

Draft interim guidance

Fall 2022

Seek public comment on draft guidance

Spring 2023

Issue interim guidance and open solicitation

Stay tuned! DOE is seeking to establish formal processes for qualifying facilities to request funds under the hydropower incentive provisions of the Bipartisan Infrastructure Law.

Don’t miss out on updates from the Grid Deployment Office—subscribe here to receive news and be sure to select the Hydroelectric Incentives topic. 

Visit the Water Power Technologies Office for other DOE water power related activities.