text: SECTION 1. FINDINGS.
  
      The Congress finds that:
              (1) The United States must increase its supply of energy to 
          ensure a continuing prosperous economy and high standard of 
          life.
              (2) We currently rely heavily on imports of energy supplies 
          from foreign nations and utilize large quantities of carbon 
          fuels for electricity generation.
              (3) Hydropower is a domestic energy source which currently 
          produces 92,000 megawatts of electricity per year, a figure 
          representing 10 percent of the generation capacity in the 
          United States.
              (4) The Energy Information Agency estimates that, of the 
          75,000 dams in the United States, only 2,400 or three percent 
          of these dams currently produce electricity.
              (5) The Energy Information Agency further estimates that 
          there are approximately 21,300 megawatts of undeveloped 
          capacity at existing dams.
              (6) New technology allows this energy to be utilized with 
          little or no environmental effect by adding new turbines to 
          existing dams and improving the efficiency of existing 
          turbines.
              (7) Hydropower produces electricity without producing 
          hazardous waste or air pollutants.
              (8) The 92,000 megawatts of electricity currently generated 
          by hydropower avoid the annual emission of 4.75 million tons of 
          sulfur dioxide and 2 million tons of nitrous oxide by 
          eliminating the need to burn 345 million tons of coal.
              (9) Hydropower is a renewable energy source which, because 
          of the natural hydrologic cycle, will continue to be available 
          in perpetuity.
  
  SEC. 2. CONSTITUTIONAL AUTHORITY.
  
      The Constitutional authority on which this Act rests is the power 
  of Congress to make all laws which shall be necessary and proper as 
  enumerated in article I, section 8 of the United States Constitution.
  
  SEC. 3. HYDROELECTRIC PRODUCTION INCENTIVES.
  
      (a) Incentive Payments.--For electric energy generated and sold by 
  a qualified hydroelectric facility during the incentive period, the 
  Secretary of Energy (referred to in this section as the ``Secretary'') 
  shall make, subject to the availability of appropriations, incentive 
  payments to the owner or operator of such facility. The amount of such 
  payment made to any such owner or operator shall be as determined under 
  subsection (e) of this section. Payments under this section may only be 
  made upon receipt by the Secretary of an incentive payment application 
  which establishes that the applicant is eligible to receive such 
  payment and which satisfies such other requirements as the Secretary 
  deems necessary. Such application shall be in such form, and shall be 
  submitted at such time, as the Secretary shall establish.
      (b) Definitions.--For purposes of this section:
              (1) Qualified hydroelectric facility.--The term ``qualified 
          hydroelectric facility'' means a turbine or other generating 
          device owned or solely operated by a non-Federal entity which 
          generates hydroelectric energy for sale and which is added to 
          an existing dam or conduit.
              (2) Existing dam or conduit.--The term ``existing dam or 
          conduit'' means any dam or conduit the construction of which 
          was completed before the date of the enactment of this section 
          and which does not require any construction or enlargement of 
          impoundment or diversion structures (other than repair or 
          reconstruction) in connection with the installation of a 
          turbine or other generating device.
              (3) Conduit.--The term ``conduit'' has the same meaning as 
          when used in section 30(a)(2) of the Federal Power Act.
  The terms defined in this subsection shall apply without regard to the 
  hydroelectric kilowatt capacity of the facility concerned, without 
  regard to whether the facility uses a dam owned by a governmental or 
  nongovernmental entity, and without regard to whether the facility 
  begins operation on or after the date of the enactment of this section.
      (c) Eligibility Window.--Payments may be made under this section 
  only for electric energy generated from a qualified hydroelectric 
  facility which begins operation during the period of 10 fiscal years 
  beginning with the first full fiscal year occurring after the date of 
  enactment of this Act.
      (d) Incentive Period.--A qualified hydroelectric facility may 
  receive payments under this section for a period of 10 fiscal years 
  (referred to in this section as the ``incentive period''). Such period 
  shall begin with the fiscal year in which electric energy generated 
  from the facility is first eligible for such payments.
      (e) Amount of Payment.--
              (1) In general.--Payments made by the Secretary under this 
          section to the owner or operator of a qualified hydroelectric 
          facility shall be based on the number of kilowatt hours of 
          hydroelectric energy generated by the facility during the 
          incentive period. For any such facility, the amount of such 
          payment shall be 1.5 cents per kilowatt hour (adjusted as 
          provided in paragraph (2)), subject to the availability of 
          appropriations under subsection (g), except that no facility 
          may receive more than $1,000,000 in one calendar year.
              (2) Adjustments.--The amount of the payment made to any 
          person under this section as provided in paragraph (1) shall be 
          adjusted for inflation for each fiscal year beginning after 
          calendar year 2005 in the same manner as provided in the 
          provisions of section 29(d)(2)(B) of the Internal Revenue Code 
          of 1986, except that in applying such provisions the calendar 
          year 2005 shall be substituted for calendar year 1979.
      (f) Sunset.--No payment may be made under this section to any 
  qualified hydroelectric facility after the expiration of the period of 
  20 fiscal years beginning with the first full fiscal year occurring 
  after the date of enactment of this Act, and no payment may be made 
  under this section to any such facility after a payment has been made 
  with respect to such facility for a period of 10 fiscal years.
      (g) Authorization of Appropriations.--There are authorized to be 
  appropriated to the Secretary to carry out the purposes of this section 
  $50,000,000 for each of the fiscal years 2006 through 2015.
  
  SEC. 4. HYDROELECTRIC EFFICIENCY IMPROVEMENT.
  
      (a) Incentive Payments.--The Secretary of Energy shall make 
  incentive payments to the owners or operators of hydroelectric 
  facilities at existing dams to be used to make capital improvements in 
  the facilities that are directly related to improving the efficiency of 
  such facilities by at least 3 percent.
      (b) Limitations.--Incentive payments under this section shall not 
  exceed 10 percent of the costs of the capital improvement concerned and 
  not more than one payment may be made with respect to improvements at a 
  single facility. No payment in excess of $1,000,000 may be made with 
  respect to improvements at a single facility.
      (c) Authorization.--There is authorized to be appropriated to carry 
  out this section not more than $50,000,000 in each fiscal year after 
  the fiscal year 2005.
  
  SEC. 5. SMALL HYDROELECTRIC POWER PROJECTS.
  
      Section 408(a)(6) of the Public Utility Regulatory Policies Act of 
  1978 is amended by striking ``April 20, 1977'' and inserting ``March 4, 
  2005''.
  
  SEC. 6. INCREASED HYDROELECTRIC GENERATION AT EXISTING FEDERAL 
                FACILITIES.
  
      (a) In General.--The Secretary of Energy, in consultation with the 
  Secretary of the Interior and Secretary of the Army, shall conduct 
  studies of the cost-effective opportunities to increase hydropower 
  generation at existing federally-owned or operated water regulation, 
  storage, and conveyance facilities. Such studies shall be completed 
  within two years after the date of enactment of this Act and 
  transmitted to the Committee on Commerce of the House of 
  Representatives and the Committee on Energy and Natural Resources of 
  the Senate. An individual study shall be prepared for each of the 
  Nation's principal river basins. Each such study shall identify and 
  describe with specificity the following matters:
              (1) Opportunities to improve the efficiency of hydropower 
          generation at such facilities through, but not limited to, 
          mechanical, structural, or operational changes.
              (2) Opportunities to improve the efficiency of the use of 
          water supplied or regulated by Federal projects where such 
          improvement could, in the absence of legal or administrative 
          constraints, make additional water supplies available for 
          hydropower generation or reduce project energy use.
              (3) Opportunities to create additional hydropower 
          generating capacity at existing facilities through, but not 
          limited to, the construction of additional generating 
          facilities, the uprating of generators and turbines, and the 
          construction of pumped storage facilities.
              (4) Preliminary assessment of the costs and the economic 
          and environmental consequences of such measures.
      (b) Previous Studies.--If studies of the type required by 
  subsection (a) have been prepared by any agency of the United States 
  and published within the five years prior to the date of enactment of 
  this Act, the Secretary of Energy may choose not to perform new studies 
  and incorporate the information in such studies into the studies 
  required by subsection (a).
      (c) Authorization.--There is authorized to be appropriated such 
  sums as may be necessary to carry out the purposes of this section.
  
  SEC. 7. RENEWABLE ENERGY PRODUCTION INCENTIVES PROGRAM.
  
      Section 1212 of the Energy Policy Act of 1992 is amended in 
  subsection (b) by inserting after ``and which'' the following ``is a 
  small hydroelectric power project (as defined in section 408(a)(1) of 
  the Public Utility Regulatory Policies Act of 1978) or which''.
target: Directs the Secretary of Energy to make incentive payments during a specified incentive period to the owner or operator of: (1) a turbine or other generating device owned or solely operated by a non-Federal entity which generates hydroelectric energy for sale and which is added to an existing dam or conduit (a qualified hydroelectric facility); and (2) hydroelectric facilities at existing dams for capital improvements that are directly related to improving their efficiency by at least three percent.
  
  Describes payment limitations.
feat_title: To encourage the development of hydroelectric projects, and for other purposes.