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Hydropower

Economic Impact

How It Works

The greatest benefit from the Corps hydropower program is the abundant low-cost energy the projects contribute to electric power grids. Because hydroelectric powerplants burn no fuel, operating costs are low and are immune to rising fossil fuel prices. In addition, most of these projects were built years ago, when construction costs were low. As a result, these plants are playing a significant role in keeping electricity costs affordable for consumers, creating a positive impact on the economy.

In most parts of the country, Corps hydropower plants can only meet a portion of an area's power needs. The Corps strives to use this limited amount of energy in a way that will keep the overall cost of electricity to consumers as low as possible. This is often done by generating as much energy as possible during peak demand hours of the day. This saves consumers from having to rely on power produced at high cost oil- and gas-fired "peaking" plants.

In years of ample runoff, hydropower plants produce extra energy. This is used to displace more expensive generation at fossil-fuel powerplants, which further helps to reduce consumers’ electricity bills. Revenue from power sales is also repaid to the U.S. Treasury. In 2010, repayments were estimated at $800 million.

Corps hydropower pays its own way. The full cost of building and operating these plants must be repaid, with interest, in fifty years. This includes a share of the dam, reservoir, spillway, and fish ladders costs.

USACE is the largest owner/operator of hydroelectric power plants in the U.S. and one of the largest in the world. The 75 USACE plants have a total installed rated capacity of nearly 24,000 megawatts and produce over 70 billion kilowatt-hours (kWh) a year (USACE, 2012b). This is nearly one-third of the Nation’s total hydropower output: enough energy to serve about ten million households, or roughly ten cities the size of Seattle, WA (USACE, 2009c).

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