Hydropower Licensing Modernization Act

Summary#

The FLOWS Act changes parts of the Federal Power Act to do two main things: (1) narrow when the Federal Energy Regulatory Commission (FERC) must approve changes to hydropower project works, and (2) create a faster, specific licensing path for small "micro hydrokinetic" energy projects (up to 5 megawatts). The bill aims to make routine maintenance easier and speed new small water-energy projects while keeping FERC authority over safety.

Key changes:

• FERC must require prior approval only for “substantial” alterations or additions to project works; nonsubstantial changes and routine maintenance would not need approval as defined by new rules.
• FERC must begin rulemaking quickly (notice of proposed rulemaking within 90 days) and finalize standards (within 180 days of that notice) to define “substantial,” “nonsubstantial,” and “routine maintenance.”
• The bill says routine maintenance, repair, or replacement does not require a license amendment.
• It creates a new license category for micro hydrokinetic projects (projects that convert wave/tidal/current or free-flowing water energy and do not impound water) with capacity up to 5 megawatts.
• FERC must complete final licensing decisions for these micro projects within 1 year after application, and issue regulations for the program within 180 days. The rules may include categorical exclusions under NEPA for low-disturbance activities.
• FERC must report to Congress on environmental, economic, and reliability impacts within 5 years or after 50 projects have operated for a year.

What it means for you#

• Hydropower operators and licensees

  • Routine repairs, maintenance, and ordinary replacements would likely not need a license amendment. This could reduce paperwork and delay for small fixes.
  • Larger or non-routine changes still must be approved if they meet the new “substantial” test once FERC issues it.

• Developers of small hydrokinetic projects

  • Projects that are 5 MW or less and that do not impound water can use a new, faster licensing track.
  • FERC must decide on a license within 1 year of application, which could speed project starts.
  • Developers may benefit from NEPA categorical exclusions for low‑disturbance work, depending on the rules.

• Federal and state permitting agencies

  • Agencies are asked to work on joint schedules with FERC to meet the 1‑year decision goal. This could require tighter coordination and faster reviews.

• Local communities, anglers, and environmental groups

  • There may be fewer formal approvals or environmental reviews for routine work and some small projects. How much review is reduced depends on the categorical exclusion rules FERC adopts.
  • The bill keeps FERC authority to require safety-related notices and actions.

• FERC and other federal agencies

  • FERC must complete two rulemakings on short timelines (one on what counts as “substantial” and one to implement the micro project program). This will create near-term workload and deadlines.

Expenses#

No publicly available information on estimated costs is provided in the bill text or the material supplied.

Possible cost or resource issues suggested by the bill text:

• FERC will need staff time and resources to complete two rulemakings quickly and to meet the one-year licensing deadlines. This could increase administrative costs for the agency.
• Other federal and state agencies may need to speed permitting processes to meet joint schedules, which could shift or increase their workload.
• The bill does not specify fees, appropriations, or direct funding to cover these activities.

Proponents' View#

The bill appears intended to:

• Reduce delays and regulatory burden for routine maintenance at hydropower projects by clarifying that only substantial changes need prior FERC approval.
• Create a faster, predictable licensing path to encourage deployment of small hydrokinetic energy projects (up to 5 MW), which could increase clean energy capacity.
• Allow FERC to use NEPA categorical exclusions for low‑disturbance activities to speed project deployment while still allowing exclusions to be limited for extraordinary circumstances.
• Provide a short timetable for rulemaking and decisions to give applicants clearer and quicker outcomes.

Opponents' View#

Possible concerns raised by features of the bill include:

• Allowing categorical exclusions and limiting required approvals for some changes could reduce environmental review and public input on projects, depending on how FERC defines “low disturbance.”
• Important definitions (what counts as a “substantial alteration” versus “routine maintenance”) are left to FERC rulemaking. This means uncertainty until those rules are finalized and could lead to disputes during the interim.
• The short deadlines for FERC and for other agencies to act (one-year final decision, tight rulemaking timelines) could strain agency resources and risk rushed reviews.
• Faster processes and fewer approvals might increase the chance that some impacts are missed, unless the rules and oversight are carefully implemented.
• The bill does not include a cost estimate or funding to help FERC and permitting agencies meet the new deadlines.