New exclusions could accelerate approvals for maintenance, rehabilitation, and replacement of facilities at FERC-licensed hydropower projects
In a decision notable enough to merit a novel docket prefix (CX25-2-000), the Federal Energy Regulatory Commission (FERC) adopted two new categorical exclusions under the National Environmental Policy Act (NEPA) aimed at expediting the review process for certain federal actions at FERC‑licensed hydropower projects. Announced on July 3, 2025, the order marks an important shift in FERC's approach to environmental compliance, potentially reducing the need for time‑consuming environmental assessments or impact statements for the routine work needed to bolster the nation's hydropower fleet.
NEPA categorical exclusions allow certain federal actions to bypass detailed environmental review processes because they are determined to not have significant environmental impacts. The categorical exclusions adopted in FERC's July 3 order promise relief for the hydropower industry, which also fared well in the "One Big Beautiful Bill Act," retaining the ability to claim clean energy tax incentives, while intermittent renewable generation technologies (i.e., solar and wind) were hit hard.
FERC's decision addresses long‑standing concerns from the hydropower industry, where licensees have struggled to navigate uncertain environmental review timelines for minor changes to licensed projects. Specifically, the new order clarifies that hydropower license amendments for in‑kind replacements and maintenance can proceed without additional environmental review.
The newly adopted exclusions, derived from the U. S. Bureau of Reclamation's NEPA regulations, cover the following:
- Maintenance, Rehabilitation, and Replacement: This exclusion applies to existing facilities undergoing minor changes in size, location, or operation. It addresses the challenges faced by hydropower licensees who need to repair or replace aging infrastructure—such as turbines or trash racks—with updated components and technologies, resulting in only non‑substantial changes to the project. The exclusion may enable hydropower dam operators to improve generation capacity and achieve better ecological outcomes without undergoing a costly and burdensome environmental review.
- Minor Safety or Dam Construction Activities: This exclusion is for construction activities confined to the dam and its immediate surroundings, where no major changes to reservoir or downstream operations are anticipated. It supports efforts to maintain and improve dam safety conditions at existing, non‑federal hydropower projects (for example, by stabilizing embankments and spillways).
FERC's decision follows extensive consultations with the Bureau of Reclamation and a thorough analysis of past projects, which demonstrated that the activities identified in the July 3 order typically do not result in significant environmental impacts. The order also delegates authority to the Director of FERC's Office of Energy Projects to apply these exclusions, thereby promoting a streamlined process for the Commission's consideration of licensees' proposals.
Importantly, FERC retains the discretion to require further environmental assessments if "extraordinary circumstances" arise—such as impacts on Tribal lands, endangered species, or public health. In doing so, FERC seeks to ensure that expediting its environmental review processes does not come at the expense of necessary environmental protections.
The July 3 order will take effect on August 4, 2025. The order follows FERC's issuance of a staff manual outlining revised NEPA procedures and may well open the floodgates for further overhauling FERC's environmental review and permitting processes, with similar recent procedural updates being introduced for gas infrastructure projects.
Flowing Forward
FERC's newly announced categorical exclusions present a valuable opportunity for hydropower licensees to streamline project approvals, reduce compliance costs, and accelerate infrastructure upgrades. However, determining whether a proposed activity qualifies—and how best to present it to FERC—requires careful analysis. Our team is available to help you assess how these changes may apply to your operations and to develop strategies that align with FERC's evolving environmental review framework. Please contact the authors to discuss how we can support your project goals.
[View source.]
