State plans to limit private power plant’s access to Great Sacandaga flows
By Zachary Matson
The state agency that controls Conklingville Dam is planning to restrict a private hydropower plant from accessing water flows out of the state’s largest impoundment on Jan. 1 after negotiations over an operating agreement broke down in recent days.
If the parties don’t strike a last-minute agreement this month, the Hudson River-Black River Regulating District will mete out punishment: prescribed flows will be directed through the main dam structure, limiting flows through a separate powerhouse structure on the opposite end of the dam spillway. The operational changes would disrupt power generation at the E.J. West plant and toss the dispute to a federal commission to mediate.
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The Hudson River-Black River Regulating District on Wednesday filed a letter with the Federal Energy Regulatory Commission indicating it did not expect to resolve a compensation dispute with Erie Boulevard Hydropower, which operates the E.J. West power plant at the site of the dam. Erie is a subsidiary of Canada-based Brookfield Renewables.
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The district’s letter set off a 45-day clock before they can file a petition with FERC to initiate a formal dispute resolution process outlined in a longstanding settlement over the reservoir and dam. The state agency, which owns the main dam structure and manages reservoir levels on Great Sacandaga Lake, offered to extend the current agreement for six months, but Erie declined.
The disagreement boils down to an argument over what Brookfield must pay to the district to continue operating under its license. The district argues that Brookfield must pay to access a certain height of water provided by the existence of the dam.
Erie, which operates a litany of hydropower facilities around the Adirondacks, is currently paying nearly $1.5 million in annual water fees under the operating agreement, according to the regulating district. The E.J. West powerhouse has the capacity to produce 22 MW of energy at the site.
The regulating district this year commissioned an appraisal that valued access to the water created by the dam at $2.5 million annually and sought to increase the payment.
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“That has value,” John Callaghan, the district’s executive director, said Thursday. “We are not authorized to give it away.”
Root of the dispute
Brookfield has argued that it pays for accessing the water and dam structure through a “headwater benefit,” which hydropower generators pay under FERC rules for the upkeep of upstream dams, and that the only other value it should compensate the district for is the ability to time releases through the generation facility. Brookfield estimated the value of timing releases at $80,000 to $100,000 per year.
“We are already compensating the district for the value of the water and the cost of maintaining the Conklingville Dam through our payment of headwater benefits,” Brookfield attorney Justin Glick wrote in a Nov. 21 email to the district. “If we were to enter into a new operating agreement with the district, it would need to be based on some other value to be derived by E.J. West.”
In an October memo, Brookfield lawyers argued the fees assessed in the underlying operating agreement were not allowed under federal law and that renewal is not necessary for Brookfield to continue operating E.J. West.
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The district filed some of its communications with Brookfield alongside the FERC letter and posted them on its website.
Mark Luciano, Brookfield stakeholder manager for New York, did not provide a response to questions from the Explorer.
The dam times releases to meet certain flow and water level targets that fluctuate depending on the time of the year, recent precipitation, ecological needs, downstream conditions and other factors. Under the operating agreement, the regulating district would allow those flows through the E.J. West power station. Beginning Jan. 1, the district plans those releases through the main dam structure, which it controls, Callaghan said. He said it would be hard for E.J. West to continue generating power within FERC license constraints once the district commenced those releases.
Brookfield had argued the district does not have the authority to redirect the flows.
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Jeopardizing relief to counties
If the dispute continues, it could threaten planned reductions to payments assessed on counties that benefit from the dam’s flood control.
The district had long relied on downstream hydropower producers to fund its operations through separate beneficiary assessments, but those payments in 2008 were rejected in federal court on the grounds any such bills must be approved by FERC. The district shifted the budget burden downstream to Albany, Rensselaer, Saratoga, Washington and Warren counties.
Last year’s state budget, though, opened the door to easing the counties’ burden by moving certain local tax payments around Great Sacandaga from the district to the state. If Erie prevails or the FERC process drags on, the district may not be able to provide the budget relief.
“A loss of $1.5 million in annual revenue certainly stands to cut into that,” Callaghan said.
The district operates under a three-year budget. The next budget goes into effect July 1, 2024, so how the Conklingville dispute plays out will influence how much relief the district can provide the counties.
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Maybe putting the words collapse and dam in the same headline is not the ideal choice.
Let’s do some quick math.
Electricity (just the energy, not the delivery) costs the consumer about $0.10 per KWh right now. Let’s assume Erie gets half that, or $0.05 per KWh. They produce 22 MW, or 22,000 KW. For 24 hours a day and 365 days a year, that comes to about $10 million.
So their source of energy, the falling water, costs them $1.5 million. Seems like they should pay at least that, and probably more.
“The E.J. West powerhouse has the capacity to produce 22 MW of energy at the site.” Not correct. The power plant has an installed CAPACITY of 22 mW and thus cannot produce more than 22 mW of POWER. Energy is the product of power and time thus the term “kilowatt-hours.” Bad timing on my part (late comment), sloppy reporting on your part. HRBRRD should have bought the plant and leased it to an operator.