Hydroelectric Licensing Process Improvement Act of 1998 - Amends the Federal Power Act to prescribe factors which Federal agency participants in Federal Energy Regulatory Commission (FERC) hydroelectric license renewal process (consulting agencies) must consider and document when setting forth conditions for such renewals, including the economic impact of such conditions as well as air quality, flood control, irrigation, navigation, and recreation and drinking water supply.

Requires that each condition be subjected to appropriately substantiated scientific peer review based on current empirical data or field-tested data.

Requires such consulting agency to provide a license applicant opportunity to obtain expedited administrative review of its proposed conditions before filing a FERC application.

Empowers the reviewing body to remand the matter to such agency if the reviewer finds the agency's proposed conditions do not comply with this Act.

Sets a one-year deadline by which a consulting agency must file its proposed licensing conditions with FERC.

Directs FERC to: (1) conduct an economic analysis of each condition submitted by a consulting agency to determine whether it would render the project uneconomic; (2) conduct a single consolidated environmental review for each licensed project pursuant to its status as lead agency for environmental reviews; and (3) set a deadline for the submission of comments by Federal, State, and local government agencies regarding any environmental impact or assessment required for a project. Instructs FERC to consider the need of license applicants for a prompt decision when setting such deadlines.

Directs FERC to study and report to certain congressional committees on the feasibility of establishing a separate licensing procedure for small hydroelectric projects with a generating capacity of five megawatts or less.