Three major laws affecting hydropower development have been passed in the past 15 years. These laws are the Public Utilities Regulatory Policy Act of 1978, or PURPA; the Electric Consumer Protection Act of 1986 (ECPA); and the Energy Policy Act of 1992 (EPACT). All three laws change the rules by which hydropower projects are developed, specifically nonfederal hydropower projects. The laws that have been passed more recently have addressed the benefits of environmental resources, states' rights, and the roles of regulatory agencies other than the Federal Energy Regulatory Commission. Another important law is the Northwest Power Act of 1980, which mandates protection of salmon in the Columbia River Basin and ensures an economical source of electrical energy.

More recently, because of ECPA and EPACT, federal authority over hydroelectric projects has been diminished. Federal agencies such as the Fish and Wildlife Service and the National Marine Fisheries Service, as well as state agencies that must issue water quality certificates, now have the authority to influence the decisions of the Federal Energy Regulatory Commission. Hence, a number of agencies have acquired much stronger roles in deciding the types of mitigation needed for hydropower development.

"These changes are still being sorted out in the courts and probably will be for quite some time," Sale says. "This regulatory uncertainty makes it very difficult for hydropower developers to be able to anticipate project development needs and costs. The rules keep changing during the 6 to 10 years it takes to build a hydropower plant. That is a major problem for the hydropower industry right now learning how to cope with changing environmental values and regulations intended to protect those values."

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