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Electricity Deregulation Threatens Rivers

June 10, 1999

Electricity Deregulation Threatens Rivers

Public Citizen Report Recommends Protections for Waterways

WASHINGTON ? The deregulation of the electric power industry represents a new threat to the health of rivers because of the changing ownership and operation of hydroelectric dams, according to a report released today by Public Citizen.

Owned by regulated utilities for most of the century, many of the nation?s 2,300 hydroelectric dams — which produce about 10 percent of the nation?s electricity — are now being purchased by new, unregulated companies, according to Dammed Deregulation: How Deregulation of the Electric Power Industry Could Affect the Nation’s Rivers.

“Hydroelectric dams inflict heavy damage to waterways and neighboring ecosystems,” said Wenonah Hauter, director of Public Citizen’s Critical Mass Energy Project. “But regulated utilities in many cases have been required to take actions to reduce those environmental impacts. In a deregulated market, in which utility profits are not guaranteed, there will be enormous pressure to cut corners and operate these hydroelectric plants solely for profit.

“Rivers, however, are not profit machines,” Hauter said. “They belong to the American public, and we must ensure that these dams are operated in ways that protect the public interest.”

Because electricity deregulation is forcing power plant operators to reduce costs, dam owners may cut back on maintenance or abandon operating procedures that lessen impacts to the environment, the report says. Economic pressures may also force some dam owners to abandon their projects, leaving taxpayers stuck with a public safety and environmental menace.

In addition, deregulated power markets are placing a greater value on “peak hour” electricity, creating financial incentives that could harm rivers. And tens of thousands of acres of undeveloped land surrounding hydroelectric projects could be sold to private developers, creating even more stress on riverine ecosystems.

Some electricity marketers are interested in marketing hydro power as “green,” or environmentally benign, in a new deregulated market that will allow consumers in many states to choose their electricity retailer. However, these claims belie that fact that many dams inflict heavy damage to fish and wildlife. They also disrupt the lives of people who depend on healthy rivers for their livelihoods.

“Calling hydro power ‘green’ would mislead consumers into thinking that hydro electricity does not harm people or the environment,” said Charlie Higley, senior policy analyst. “It also could squelch the development of real renewable energy sources.”

The report recommends the following:

  • Hydro power should not be designated as a renewable energy resource in deregulation legislation.
  • Electricity retailers should be prohibited from selling hydro power as “green” electricity.
  • A financing mechanism should be provided to ensure removal of dams abandoned due to the deregulation of electricity markets.
  • Current laws and regulations designed to mitigate the environmental impacts of hydro projects should be preserved.
  • Consumers should be informed about the environmental impacts of their electricity purchases through detailed labels.
  • Before utilities produce plans for either divesting or spinning off their hydro assets, public policies should be implemented to protect environmental resources, including in-stream habitats and surrounding lands.
  • Legislation should protect against damage to Canada?s rivers, which will be under increased pressure as electricity generators seek to build new dams to serve the deregulated retail market in the United States.


The report can be purchased for $10 by calling Public Citizen’s publication department at (202) 588-7780, or click on the title above for a free online version.