Affordable Power, Broken Process
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NHA read the record with large language models and human auditing: 5,116 mandatory conditions extracted from 4,819 licensing documents, primarily filed between 1980 and 2026 across 46 states.
The Forest Service issues 67.3 percent of all mandatory conditions, more than every other agency combined. The majority of licenses carry a reopener under which more can be imposed at any point in the term. Only 13.3 percent of §4(e) conditions and 5.6 percent of §18 prescriptions carry a cost figure.
Two sections of the Federal Water Power Act of 1920 let four agencies write binding terms FERC cannot modify or reject. Congress gave FERC a duty in 1986 to balance, but left these two authorities outside it, and agencies short on appropriations have leaned on them ever since.
Section 4(e) and 18 conditions per license order have roughly doubled since 1986. Compared against their own earlier licenses, three times as many facilities now carry mandatory conditions, and they carry roughly ten times as many: 31 facilities and 806 conditions today, against 10 and 79 before.
The burden does not scale with project size, so it lands an order of magnitude heavier per megawatt on small plants, and small plants are the ones surrendering. Between 2026 and 2036, 348 licenses reach expiration, representing 12,324 MW.
The Secretaries can act today under E.O. 14154 and through rulemaking; Congress can make the standard permanent with the Hydropower Licensing Affordability Act (H.R. 9337, S. 5048).
Hydropower is Essential to a Reliable, Affordable American Grid
The nation’s 80 gigawatts of traditional hydropower and 22 gigawatts of pumped storage serve roughly 30 million Americans and do more than generate affordable, clean electricity: hydropower is the grid’s daily shock absorber, ramping output up and down as other resources fluctuate. Hydropower is also the only renewable resource that provides a full range of essential grid reliability services, including the ability to restart the grid from a blackout (“blackstart” capability). That flexibility is becoming more valuable, not less, as artificial intelligence and economy-wide electrification drive the sharpest increase in U.S. electricity demand in decades.
Yet the Hydropower Regulatory Process is Broken
Like bridges and highways, hydropower facilities are a foundational part of our nation’s infrastructure and many continue to operate successfully after over a hundred years. In addition to producing electricity reliably and affordably, they also support myriad other public ambitions, from farming to recreational fishing. However, unlike other large civil works, non-federal hydropower must be re-licensed under a process led by the Federal Energy Regulatory Commission (FERC). The Commission is charged with crafting and issuing licenses based on the public interest, balancing electricity and non-electricity concerns.
Yet, paradoxically, FERC lacks the authority to modify, adapt, or reject license conditions imposed by other federal agencies that are often the most costly and consequential conditions. Four primary federal agencies across three Cabinet departments impose the vast majority of these so-called “mandatory conditions” under Sections 4(e) and 18 of the Federal Power Act (FPA), regardless of cost, relevance, or effect on the nation’s electricity grid. While the analysis presented in this white paper focuses on the mandatory conditions issued under the unique Federal Power Act framework, hydropower facilities, like other generation sources, are subject to an array of other federal, state, and local requirements, such as Clean Water Act Section 401, the Endangered Species Act, and the National Environmental Policy Act.
What should change.
The Secretaries of Agriculture, Commerce, and the Interior can act immediately by requiring their staffs to impose only mandatory conditions under FPA Sections 4(e) and 18 that mitigate a project's direct and present effects, and by following that clarification with durable notice-and-comment rulemaking stating the same. Congress can make this standard permanent by passing the Hydropower Licensing Affordability Act (H.R. 9337, S. 5048). Neither path depends on the other, and both are straightforward tasks policymakers can begin right now.
Read the recommendations in Part FiveAffordable Power, Broken Process
A white paper of the National Hydropower Association.
Special thanks to the NHA members who provided insight and guidance throughout this work.