The legal and institutional obstacles to the development of small-scale hydroelectric energy at the state level are examined. The introductory section examines the dual regulatory system from the standpoint of the appropriate legal doctrine, the law of pre-emption, application of the law to the case of hydroelectric development, and concludes with an inquiry into the practical use of the doctrine by the FERC. Additional sections cover acquisition; liability; Department for Natural Resources and Environmental Protection; energy utilities; local regulations; incidental impacts; financial considerations; and sources of information. In Kentucky, many of the impacts have not been implemented with regard to small-scale hydroelectric energy, since in Kentucky most electricity is coal-generated and any hydroelectric power that does exist, is derived from TVA or the Army Corp of Engineer projects.