Last week, President Trump was asked about the newly passed House budget bill titled “The One Big Beautiful Bill Act,” which now heads to the Senate.

His reply?

“We will be negotiating that bill, and I’m not happy about certain aspects of it…”

That makes two of us.

Despite the President’s public support for hydropower—highlighted in multiple Executive Orders and his broader energy dominance agenda—the bill advanced by the House impacts hydro in ways that are both deeply concerning and strategically shortsighted.

By pushing narrow timelines and limiting access to tax credits, lawmakers are creating policy roadblocks that undermine the very types of energy projects the U.S. needs for secure, baseload electricity, long-term reliability, and growth.

Below, we break down how the bill’s language, were it to be implemented today, would impact hydropower.

We’ll also introduce our newest advocacy tool — VoterVoice — a fast, easy way to engage with Congress in just a few clicks. It’s simple, powerful, and designed so anyone in your organization can take action. At a moment this critical, staying silent isn’t an option. Keep reading to find out more.

UNPACKING WHY THE BUDGET BILL IS BAD FOR HYDRO

????  Limits eligibility for 45Y/48E (tech-neutral clean energy credits) to projects that begin construction within 60 days of the bill’s enactment

❌ Hydropower projects take years to plan and permit. A 60-day window shuts out most water power developers from accessing these credits.

Most hydro facilities take years to develop, which makes a 60-day construction window for tax credit eligibility effectively a ban on new hydro participation. Even projects already in the planning stage may not be able to pivot fast enough to meet such a compressed deadline.

While the bill may be aimed at accelerating development, it unintentionally penalizes technologies like hydro that are inherently longer-cycle. It’s effectively a cutoff disguised as a grace period.

The result?

Fewer hydro projects, less baseload capacity, and a missed opportunity to support an energy technology that already powers millions of American homes each year.

???? Those resources would be required to be placed in-service by 12/31/2028

❌ Large-scale hydro and pumped storage can’t be built this quickly. Moving up the deadline means many projects won’t qualify at all.

The “placed in-service” deadline reflects policy designed for short-cycle energy technologies, like solar and wind, but it’s being applied indiscriminately to long-lead-time projects such as large-scale hydro and pumped storage, making this language incompatible with the realities of hydro development.

Traditional hydro and pumped storage require extensive environmental review, community engagement, and coordination with regional grid operators. By shifting from a “commence construction” to a “placed in service” requirement, the bill forces developers to complete all of these complex steps and bring the facility online by the sunset date to be able to claim the credits.

A better approach would be to revert back to a “commence construction” standard, as it has been already applied to other baseload sources like nuclear.

The alternative?

Every major hydro project on the table today will miss out on vital financial support to bolster the nation’s energy infrastructure, as communities across the U.S. face greater challenges to reliability due to extreme weather – an area where hydro has shown time and time again to be the deciding factor between keeping the lights on and a blackout. This underscores a broader disconnect between the House bill and President Trump’s stated goal of strengthening America’s energy reliability through proven, baseload technologies.

???? Elimination of Transferability

❌ Without the ability to sell tax credits, many hydro projects will struggle to raise the funding needed to move forward.

The ability to transfer tax credits is a cornerstone of how clean energy developers finance their projects. For hydropower, where upfront costs are significant and timelines long, the removal of transferability could be devastating, particularly for small and medium hydro developers that may not have enough tax liability to use the credits themselves

Eliminating the transferability of clean energy tax credits strips developers of a vital financial mechanism that enables project viability, forcing them to either absorb the credits themselves or enter into traditional tax equity arrangements, which are often expensive, legally complex, and difficult to secure. Without this tool, developers are forced to rely entirely on limited internal capital or hard-to-secure traditional financing, which is often infeasible for capital-intensive, long-lead-time projects, like hydropower. Entities such as public and cooperative utilities, which typically don’t pay taxes, stand to lose access altogether, as they were using transferability to participate in federal clean energy incentives.

The House-passed bill removing this critical financial lever not only threatens to delay or cancel dozens of planned hydro upgrades and new facilities but also undermines the broader goal of building a resilient energy grid.

???? Initiates FEOC restrictions after 12/31/2025

❌ While aimed at reducing dependence on China, these rules could block hydro projects that rely on globally sourced parts, even in small amounts.

The proposed initiation of FEOC (Foreign Entity of Concern) restrictions after December 31, 2025, aims to reduce U.S. reliance on Chinese, Russian, Iranian, and North Korean materials and ownership structures in clean energy projects—a goal that, while strategically motivated, risks sweeping and unintended consequences for the hydropower sector.

Hydropower projects, particularly those involving upgrades or new construction, often rely on specialized components like turbines, generators, and control systems sourced from a global supply chain—portions of which may involve manufacturing in or materials from these countries.

Even minor content from these countries could disqualify a project from receiving federal tax incentives under these restrictions, regardless of whether the project is fully American-owned and operated. This poses a disproportionate risk to hydropower, where equipment is not as widely produced domestically as solar panels or wind turbines.

Without clear exemptions or transition strategies, these restrictions could delay or derail otherwise viable projects, penalizing U.S. developers for the structure of the global market rather than incentivizing meaningful domestic manufacturing alternatives.

UNDERMINING ENERGY SECURITY IN PRO-TRUMP DISTRICTS

One of the most striking—and politically ironic—realities of the House’s budget bill is that it undermines energy security and clean energy investment in the very congressional districts that most strongly support President Trump.

According to analysis by E2, over half of all clean energy projects supported by the Inflation Reduction Act (IRA) are located in Republican-held districts, many of which have already seen job creation, factory construction, and lower energy costs as a result. These investments have brought billions of dollars into communities that had previously been left behind in the clean energy transition, delivering on the promise of a domestic manufacturing renaissance that aligned closely with Trump’s own “America First” agenda.

Yet, with the House advancing a bill that cuts off these investments by rolling back key tax credits and erecting new barriers for technologies like hydropower, lawmakers are effectively pulling the rug out from under the economic progress unfolding in their own backyards.

The contradiction is hard to ignore while Trump continues to champion energy dominance, industrial resurgence, and infrastructure investment, many of his political allies in Congress are advancing legislation that will shutter factories, raise energy costs, and weaken U.S. grid reliability and national energy security.

A CRITICAL MOMENT FOR THE SENATE AND HYDRO

Fortunately, the story isn’t over. The Senate has shown little interest in rubber-stamping the House’s version of the bill, and that gives the hydropower community a real opportunity to shape what comes next.

This isn’t just about one sector. It’s about whether the U.S. will continue to build a balanced, secure, and reliable energy mix—or retreat from a decade of progress.

WHAT YOU CAN DO RIGHT NOW!

Congress is moving fast on reconciliation, and the Senate is already drafting changes to the House bill. Utilize NHA’s newest advocacy tool, VoterVoice, to push for:

• Inclusion of S.1183, which strengthens support for existing hydro
• Fixes to 45Y and 48E, to ensure hydropower receives the same tax treatment as other baseload technologies

VoterVoice allows you to personalize and send a pre-drafted email to your legislators with a few clicks. It also offers the  ability to post to X or directly call your Congressional offices. By making advocacy more accessible, we hope that every single person in your organization can and will engage with Congress.

Look, this isn’t just another ask to elevate your voice. It’s about protecting your projects, your investments, and the future of your business. It’s about ensuring hydropower is finally acknowledged as the indispensable baseload asset it has always been. It’s about finally getting our seat at the table. We’ve come too far and invested too much to back down now. Let’s collectively push forward and secure some real wins for this industry we believe in.

Reach out to Brittney ([email protected]) with any questions related to VoterVoice.