How Congress made micro-hydro easier for mountain towns
by Allen Best
GRAND LAKE, Colo. – It cost $70,000 to do so, but the water treatment plant in Grand Lake, Colorado now produces more electricity than it consumes.
This electrical alchemy is the result of a micro-hydro plant that began operations earlier this month. But the larger story is that such projects have become much easier —and with a better payback—since Congress passed a law in 2013 that makes it easier for small hydroelectric projects such as that in Grand Lake to get federal approval.
The town is located at the west entrance to Rocky Mountain National Park and at the headwaters of the Colorado River. Water for the hydro plant comes from Tonahutu Creek. The water falls 40 feet from the intake to the treatment plant 420 feet away. The 7-kilowatt micro-hydro energy recovery system harnesses the power of that fall, capturing energy that was previously being wasted.
Basalt, Cortez, Telluride, and several other mountain towns in Colorado and elsewhere have installed small hydro systems to harness the power of falling water in their municipal infrastructure. Micro-hydro systems can be installed anywhere there is the need for pressure-reduction valves. But economics vary with the local context.
The economics for small hydro were much worse before federal reform legislation in 2013. The problem, as former Ouray Mayor Bob Risch discovered, was in the mountains of paperwork. The approval process required by the Federal Energy Regulatory Commission demanded consultation with dozens of agencies, including Native American tribes more than 100 miles away. The power of the falling water was obvious. But Risch, an astronomer and former school teacher, had been advised that the only way the project could pencil out was if he was willing to donate his time to do the paperwork. Risch did, but not without considerable irritation before it was all done.
The Ouray story was one among many presented to Congress when U.S. Rep. Diana DeGette, from Denver, introduced legislation to lower the regulatory bar to make projects such as those in Ouray and Grand Lake easier. Her bill passed in 2013. A companion bill sponsored by U.S. Rep. Scott Tipton of Cortez, Colo., made it easier for water flowing through Bureau of Reclamation facilities to be harnessed to produce electricity.
Grand Lake’s project also benefitted from simplified electrical inspection due to 2014 Colorado small hydro reform legislation authored by Colorado State Sen. Gail Schwartz Colorado State Rep. Diane Mitsch Bush of Steamboat Springs, and Rep. Don Coram of Montrose.
The electricity produced by the micro-hydro project in Grand Lake will be fed into the electrical grid maintained by Mountain Parks Electric, the co-operative serving Grand and Jackson counties. Grand Lake will get credited with the retail rate it would otherwise pay for electricity.
Dave Johnson, Grand Lake’s water department supervisor, and his staff installed the micro-hydro equipment. Johnson says he has already been recommending the system to other water-treatment plan operators in mountain towns.
Kurt Johnson thinks potential exists for many more such retrofits. Before the reform legislation of 2013, such projects didn’t offer a compelling financial return except in rare situations because of high federal permitting costs. Now, many do, says Johnson, who owns a small hydro consultancy called Telluride Energy. Johnson guided the project development at both Grand Lake and Ouray and, and through a trade advocacy group called Colorado Small Hydro Association, was a key advocacy agent in both the state and federal small hydro reform legislation.
Estimates of small hydro, both in Colorado and the United States, made during the last decade have been along the lines of bar-napkin guestimates. Johnson says that the Colorado Energy Office has started working on estimates of small-hydro potential in Colorado, both in municipal water infrastructure and in other water conveyances. There hasn’t yet been a national assessment of the potential for conduit hydropower, although Colorado is likely to have among the best small-hydro potentials in the country.
“There are hundreds of thousands of pressure-reduction valves in existing water infrastructure nationwide,” says Johnson.
Switching out those valves with electricity-producing micro-hydro units costs money, though. The Colorado Water Resources and Power Development Authority provides project grants to cover project development costs. It did so for Grand Lake’s project. It can also provide 2 percent financing for project construction.
“There’s never been a better time to build new small hydro in Colorado,” says Johnson.
But economics would improve even more if mass-scale approach that has made solar panels much more cost effective in recent years is applied to small hydro.
“We’re not there yet with micro-hydro,” says Johnson. “Hopefully it’s just a matter of time.”
The Town of Grand Lake’s project has a payback period of about 15 years.
Bigger projects, such as retrofitting existing Bureau of Reclamation dams with hydropower, has also become easier in recent years. Ridgway Dam, for example, has been retrofitted to produce electricity with the financial support of both the City of Aspen and the Town of Telluride. Existing dams at Carter Lake and Lake Granby in Colorado have also recently been retrofitted with hydropower.
The micro-hydro equipment at Grand Lake was sold by Rentricity, a firm headquartered in New York City that specializes in producing clean, renewable energy from in-pipe hydropower applications in drinking water distribution systems, irrigation, and industrial water systems.