Summary

There is an urgent need for the United States to develop its renewable energy resources and reduce its dependence on imported oil. One resource for which technology is available now is hydropower. The best prospects for the development of hydropower are at existing hydro sites where the dam structures are already built and the environmental impacts are few. Despite the administration's stated interest in small-hydro development, the Small-Hydro Program has moved slowly.

Although demonstrations were needed to measure constraints and show hydro viability, more than 2 years passed before demonstration grants were awarded. The program lacked clear direction and an adequate staff. Thus, potential hydro developers were not receiving needed assistance. GAO felt that an aggressive outreach program would give important impetus to the program. Efforts to clearly define how it planned to foster development have been contradictory. Although positive efforts have been made in streamlining licensing procedures for non-Federal dams, no similar actions were being taken to improve the approval process for adding power at existing Federal dams. The Federal Energy Regulatory Commission (FERC) has been indecisive about whether public or nonpublic entities had preference when competing licensing applications were submitted. GAO forsaw bottlenecks in handling the increasing volume of applications for licenses and permits. Additional factors hindering development included the inability of potential developers to find a market for their power and the limiting of the legal size of a project to 15 megawatts.