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West River hydro projects face delays

Construction of new hydroelectric turbines at the Ball Mountain and Townshend dams is nearly complete, but PSB grants developer's request for a six-month extension

TOWNSHEND—A developer has a little more time to finish two long-planned hydroelectric projects on the West River.

The Vermont Public Service Board has granted a six-month extension for commissioning hydroelectric turbines at U.S. Army Corps of Engineers’ dams in Jamaica and Townshend, pushing the deadline from Dec. 31 to June 30, 2016.

The projects are being developed by New Jersey-based Eagle Creek Renewable Energy, doing business locally as Blue Heron Hydro LLC. Blue Heron has long-term renewable energy contracts with Vermont, so the state’s deadlines are critical for the hydro projects.

“Blue Heron believes that the projects will be commissioned by Dec. 31, 2015, but given the amount of work remaining, Blue Heron seeks an extension to ensure that its standard-offer contracts are not terminated in the event that the projects are not commissioned by that date,” board members wrote in their order, dated Dec. 10.

For their part, Blue Heron administrators wrote in recent state filings that they were “cautiously optimistic” about completing the project soon but added that a deadline extension was “prudent.”

The hydroelectric plants are located at the Townshend and Ball Mountain flood-control dams, which are maintained by the Army Corps. Together, they’ll generate 3.1 megawatts of power – 2.2 megawatts at Ball Mountain and 900 kilowatts at Townshend.

The two projects have been in development for years and have received 50-year licenses from the Federal Energy Regulatory Commission.

Eagle Creek acquired the projects in 2012, but development has not gone as administrators initially had hoped. A three-year commissioning deadline set by the state in 2009 was extended to the end of 2013; extended a second time to October 2014; and then pushed back again to December 2015.

The company’s latest submissions to the state say the first extension was necessary because FERC licenses were not granted until March and April 2012. One reason for the second and third extensions was an extended wait for the Corps’ permits because of a backlog at that agency.

“The ultimate delay in the construction of the projects was based on the (Army Corps’) timing for the approval of the design, construction and operation of the projects and finalization of the construction access agreements,” Eagle Creek’s November extension request says. “The (Army Corps’) approval process, including its timing, is outside of the board’s and Blue Heron’s control.”

In testimony filed with the state, Eagle Creek Executive Vice President David Youlen said natural disasters played a role in permitting delays. Army Corps manpower “was needed for the work required to continue cleanup and repair of damage caused by three hurricanes/tropical storms that impacted the North Atlantic Division,” Youlen said. “Thus, the final approval and the construction agreement (for Blue Heron) was significantly delayed.”

Corps approval came in January 2015, and a memorandum of understanding with the federal agency was completed in May, documents show. Construction began in late May.

Fabrication of turbines for the two dams had begun in 2012 at Obermeyer Hydro Inc. in Fort Collins, Colo. Earlier this year, Eagle Creek Chief Executive Officer Bud Cherry said he expected on-site work to proceed smoothly in part because “we had a lot of the equipment ordered, and a lot of it was sitting in warehouses in the region just waiting for it to move to the site.”

At the time, Eagle Creek projected that the hydro facilities might be in service sometime in the fall. In addition to installing the turbines, other site work included building new access roads, removing old concrete and installing new concrete. By late summer, Army Corps officials said hydroelectric contractors typically were working 10 hours a day, six days a week at the dams.

But in state testimony dated Nov. 4, Youlen said “two significant precipitation events” raised Ball Mountain’s pool and caused a delay of more than three weeks earlier this year. He also detailed technical aspects of the projects, characterized in state documents as “uniquely complicated.”

“Blue Heron has pushed forward with construction at the fastest and safest speed possible,” Youlen told state officials. At the time, he said Blue Heron had spent or committed more than $14 million on design, equipment procurement, permitting, and construction.

In making a request for a fourth deadline extension last month, Blue Heron administrators wrote that “the projects are substantially completed, (but) there still remains work that is complicated to accomplish from a timing and logistics standpoint.”

Company administrators added that they have “been working with diligence and in good faith to achieve the commissioning deadlines.”

Based on that assessment, the Public Service Board granted the extension. If the company fails to meet the June 30 deadline, “it’s standard-offer contract shall be null and void and of no further force and effect” unless the board rules otherwise.

An Eagle Creek administrator could not be reached for comment. But Frank Fedele, operations division chief for the Army Corps New England District, confirmed that most construction work is finished at the two dams.

“It has taken longer than anticipated, but the quality of work is there, and the working relationship between Blue Heron and the U.S. Army Corps of Engineers continues to be strong,” Fedele said Tuesday. “We look forward to working with Blue Heron as they ramp up to start generating renewable energy at these two projects.”

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Originally published in The Commons issue #337 (Wednesday, December 23, 2015). This story appeared on page B1.

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