Colonie, N.Y., power authority attempts to gain hydro facility
Times Union, Albany, N.Y. --Aug. 11
Aug. 11--A local public power authority is pushing ahead with efforts to wrest a hydropower facility on the Mohawk River from the hands of a large energy company.
GIPA will meet today with representatives of Reliant Energy of Houston to
discuss its challenge to the School Street dam in Cohoes.
For years, GIPA has been trying to buy or condemn the facility, which
channels water above historic Cohoes Falls to a power plant at the foot of a
canal. The authority wants to decommission the existing facility -- parts of
which date to the 19th century -- and build a new dam for a projected cost of
$50 million to $75 million.
Last month, it filed a preliminary permit application with the Federal Energy
Regulatory Commission. GIPA sees today's meeting as an attempt to broker a deal,
and said it would consider buying the dam.
"If it works from a business standpoint for GIPA, then naturally it's
something that we would entertain," said Jack Brown, GIPA chairman and
chief executive, who spoke to the Times Union editorial board Tuesday.
But Reliant said it has no interest in selling to GIPA because the dam is one
of 71 under contract to a Canadian company for $900 million.
"We are selling those assets as a package and we're not interested in
selling them individually," said Pat Hammond, spokeswoman for Reliant.
Brascan Corp., based in Toronto, said it hopes to close the deal by the end
of the month, and plans to respond to GIPA's application.
"We believe that their application has several technical, legal and
environmental problems," said Shelley Moorhead, spokeswoman for Brascan.
The head of an industry organization, who arranged today's meeting, said he
is not trying to facilitate a sale.
"I'm not there to broker a deal," said Gavin Donohue, president and
chief executive of Independent Power Producers of New York. "I'm there to
get educated."
GIPA claims that it would do a better job of operating the facility because
it works for the public good and not for profits.
Donohue said that's exactly why the authority shouldn't be involved.
"Government's role in the marketplace should be to provide the
regulatory framework so folks can compete, not to compete against the
industry," Donohue said. "The fact that GIPA wants to take control of
a private plant is objectionable."
In the past decade, the School Street dam has often changed hands.
It was built in the first half of the 19th century to power the massive
Harmony Mills; the accompanying plant came decades later.
Niagara Mohawk ended up with both the dam and the plant, and in 1998 sold
them to Orion Power Holdings Inc. of Baltimore. A few years later, Orion was
bought by Reliant, which in May announced it would sell a batch of dams to
Brascan.
GIPA has been chasing after the dam all the while, twice trying to have the
place condemned and at other points trying to negotiate a sale.
If it was able to get the dam, GIPA would run it only until it could get a
new facility built that would have twice the power-producing capacity and be
more fish-friendly.
"As a power plant, it's kind of outlived its usefulness," said Jim
Besha, a local engineer serving as project manager for GIPA.
The dam is operating on an annually renewed federal license because its old
license expired in 1993.
"We don't believe this dam will ever be relicensed," GIPA's Brown
said.
But the holdup was mainly due to a huge backlog of dam cases, said Mark
Robinson, director of the office of energy projects for the Federal Energy
Regulatory Commission. And a license may be on the horizon, after state water
quality issues are resolved.
The head of one environmental group says he doesn't know why this proposal is
coming in the middle of the relicensing process, when the facility is being
evaluated and problems are being resolved.
"It could jeopardize a lot of the work and negotiations," said
Bruce Carpenter, executive director of New York Rivers United, which has been
involved in the relicensing process for all of New York's dams for the past
decade. "All of this work has not been without hard-fought battles. These
types of ideas need to be proposed within the process."
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