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Who has the Power?

Published onJul 10, 2018
Who has the Power?

With growing environmental awareness, more technology is being developed to harness what at one time would have been considered a useless commodity. Renewable energy in the form of solar power and wind power have been at the forefront of technological advancement. While water has always been an essential resource, updates to age-old methods of utilizing falling water have revolutionized hydropower.

Hydropower operates by capturing the kinetic energy of falling water passing through a dam to generate electricity by utilizing a turbine to transfer the kinetic energy into mechanical, then into electrical via a generator. The amount of electricity a hydropower plant can generate is directly related to the volume and distance the water falls. The further the water falls and the greater volume of water that passes through the turbine the more electricitycan be generated. As hydropower’s popularity as a reliable and renewable form of energy increases, the updates and new technology associated with hydropower raises questions of ownership which ultimately results in delays of licensing and regulatory approval of hydropower facilities.

There are three main classifications of hydropower facility ownership: federal, public, and private. Federal agencies own and operate about 10% of the total number of hydropower facilities; public ownership accounts for about 27% of the total number of hydropower facilities; and private owners account for the remaining 63% of the total number of facilities. These private owners include investor-owned utilities, independent power producers, and industrial companies.  In North Carolina, very few dams are publicly owned and only four are federally owned and administered.Duke Energy, a private investor-owned utility, is one of the primary owners of the hydropower facilities in North Carolina.

Many factors must be taken into account when considering ownership including the river and water itself. Additionally, hydropower facilities in North Carolina are limited in use by conservation easements and restrictive covenants. In February of 2018, the United States Supreme Court denied an appeal from North Carolina concerning the ownership of the riverbed under a privately owned hydropower facility. This refusal of review answered an almost decade long question of who owned the riverbed and resolved issues associated with the re-licensing of the Yadkin hydroelectric project.

Most recently, Duke Energy has announced an agreement to sell hydroelectric facilities across western North Carolina to Northbrook Energy. Northbrook is a privately held, independent power producer that operates hydropower plant projects across the United States and is partnering with New Energy Capital Partners LLC, a prolific investment service committed to providing financial structuring for green based energy and waste management projects, to finance the deal. Northbrook is currently awaiting approval from the Federal Energy Regulatory Commission for transference of the hydroelectric licenses as well as approval from various North Carolina regulatory agencies.

As the demand for renewable energy increases, it is certain that issues surrounding the ownership of what was once considered non-commodity items will as well. While the future for renewable energy such as that produced by hydropower is in flux, issues of licensing, regulation, and ownership will continue to arise.

* Hannah L. Fry is a second year law student at Wake Forest University School of Law. She holds a Bachelor of Science in Sustainable Development focusing in ecology and agriculture with a minor in Communication from Appalachian State University in Boone, North Carolina. Upon graduation she intends to continue working in community and regional development. 

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