Abstract
Recent growth in the renewable energy industry has increased government support for alternative energy. In the United States, hydropower is the largest source of renewable energy and also one of the most efficient. Currently, there are 30,000 megawatts of potential energy capacity through small- and micro-hydro projects throughout the United States. Increased development of micro-hydro could double America’s hydropower energy generation, but micro-hydro is not being developed at the same rate as other renewable sources. Micro-hydro is regulated by the Federal Energy Regulatory Commission and subject to the same regulation as large hydroelectric projects despite its minimal environmental impact. We studied two cases of micro-hydro projects in Logan, Utah, and Afton, Wyoming, which are both small rural communities. Both cases showed that the web of federal regulation is likely discouraging the development of micro-hydro in the United States by increasing the costs in time and funds for developers. Federal environmental regulation like the National Environmental Policy Act, the Endangered Species Act, and others are likely discouraging the development of clean renewable energy through micro-hydro technology.
Highlights
In this paper, we explore how the federal regulatory process affects the development of micro-hydro energy systems in the United States
National Environmental Policy Act, the Endangered Species Act, and others are likely discouraging the development of clean renewable energy through micro-hydro technology
The case studies we present in this paper contribute to the ideas set forth by Yonk, Simmons, and Steed by showing that regulations intended as green policy vastly increased the costs of green micro-hydro energy projects [8]
Summary
We explore how the federal regulatory process affects the development of micro-hydro energy systems in the United States. This paper focuses on the direct effects of federal regulations, not whether micro-hydro was the proper solution. Over the past half-century, a substantial amount of literature has been published on the effects of federal regulation in the economy. Some of this literature identifies the political process as an obstacle to passing effective regulation. Tullock (1967) first presented the idea, known as rent-seeking, that interest groups willingly expend economic resources to obtain regulatory preference, such as tariffs or monopoly power, from public officials [1]. Stigler (1971) presented theories of regulatory supply and demand, wherein special interest groups demand public resources and protection supplied by public officials [2]
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