03.28.25

Cantwell, Murkowski Propose New Tax Credit to Promote Hydropower Facility Upgrades & Keep Energy Costs Affordable

Bipartisan legislation creates new federal incentive for dam safety and fish passage improvements, as well as help fund removal of obsolete river obstructions

WASHINGTON, D.C. –  Today, U.S. Senators Maria Cantwell (D-WA), ranking member of the Senate Committee on Commerce, Science, and Transportation and senior member of the Finance Committee, and Lisa Murkowski (R-AK), joined Susan Collins (R-ME), Kristen Gillibrand (D-NY), Angus King (I-ME), Patty Murray (D-WA), Gary Peters (D-MI), Jeanne Shaheen (D-NH), Dan Sullivan (R-AK), in re-introducing bipartisan legislation to establish a new 30% federal tax incentive to encourage safety upgrades and improve fish passage at existing hydroelectric facilities, measures that will help ensure clean and affordable hydropower is able to continue power the Pacific Northwest economy. The bill would also create an additional complementary 30% tax credit to remove unused river barriers that do not produce electricity but are harming local ecosystems and outdoor recreation opportunities.

“Clean and affordable hydropower is the backbone of Washington state’s economy and prosperity,” said Sen. Cantwell. “This measure will help ensure we can meet our urgent emission reduction goals while restoring miles of fish habitat.”

“Hydropower provides clean, reliable, and affordable baseload energy around Alaska, but we’ve just begun to tap into our potential for this abundant resource,” Senator Murkowski said. “Our common sense legislation incentivizes hydropower along with innovation that will enhance grid resiliency, make our dams safer, and allow our fish habitats to thrive.”

The Maintaining and Enhancing Hydroelectricity and River Restoration Act of 2025;

  • Establishes a 30% federal tax incentive to encourage upgrades to the safety and security of existing dams, investments that expand fish passage infrastructure, and improvements to water quality and recreational use opportunities at hydropower project sites. 
  • Establishes a first ever federal cost-share to encourage the removal of obsolete obstructions that harm river ecosystems and outdoor recreation opportunities.

Both these tax incentives are available to be accessed by not-for-profit entities.

The bipartisan Maintaining and Enhancing Hydroelectricity and River Restoration Act is widely supported by a number of key hydropower, utility, and conservation organizations -- go HERE for a list of quotes from stakeholders

Hydropower accounts for 5.7% of total U.S. utility-scale electricity generation in 2023, including approximately sixty percent of Washington state’s total and is a vital component of state and regional greenhouse gas emission reduction goals. Hydropower also has the unique ability to provide black start capabilities, grid voltage support, and integrate and balance increasing amounts of intermittent renewable energy sources.

Many hydroelectric dams are decades old and face costly upgrades to keep them operational while providing affordable electricity. The current Investment Tax Credit (ITC) that covers hydropower only applies to investments that produce a marginal increase in power generation.

This bipartisan legislation helps bridge the gap in current law by incentivizing upgrades that don’t result in power increases but are vitally important like adding fish-friendly turbines, fish ladders, and adding or replacing floodgates and spillways. Private, state, local, and non-profit groups can use the 30% federal tax incentive, with a direct pay option, to support efforts to demolish and remove unnecessary barriers with the owner’s consent.

A joint proposal from the hydropower and river conservation community estimated that increased support for existing dam removal efforts could double the removal rate over the next ten years. That would result in the removal of 2,000 obsolete river obstructions and restore ecosystem functions essential for salmon recovery by opening up 20,000 miles of free-flowing river habitat.

Sen. Cantwell has long been a consistent champion for hydropower production and pumped storage, including bipartisan legislation to reduce licensing barriers for small hydropower development, improve the FERC relicensing process to incentivize “early action” by utilities to make upgrades to dams that benefit ratepayers and the environment, maximize hydropower generation capacity where appropriate, and streamline pumped storage project approval.

Last summer, Sen. Cantwell hosted a Pacific Northwest Energy Summit, to bring stakeholders together to discuss technological and policy solutions that will ensure NW ratepayers and our regional economy continue to benefit from abundant, affordable, and reliable clean energy.