Pownal hydro plan shut off, for now

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NORTH POWNAL -- A proposal to generate hydroelectric power at the former Pownal Tanning Co. dam has come to a halt, but both the Select Board and the interested company are still hopeful a similar project could move forward at a later date.

Encore Redevelopment Founder Chad Farrell informed the board of difficulties with the project and why Encore had to remove its application from Vermont’s Sustainably Priced Energy Development (SPEED) Program, which would have subsidized the power generated at the dam site.

"We are on a holding pattern with the project right now, for a number of reasons," Farrell said. "The main reason is the maximum size of the project that will be possible, due to the capacity of the river Š We originally thought that up to 700 kilowatts would be possible, and that was what we submitted to the SPEED program."

Farrell said that Encore’s feasibility study earlier this year determined that the dam site had a maximum generating capacity of 460 kilowatts. That number is based on the capacity of the Hoosic River at the site and flow conditions that must be maintained.

"The findings of the feasibility study were unfortunate," said Farrell. He said that hydro projects generating below 400 kilowatts were exempt from the Federal Energy Regulatory Commission’s regulations, and that it would not make sense to open up jurisdiction to FERC and enter the permitting process at the federal level for that extra 60 kilowatts.

But, Farrell said, "400 kilowatts at the current time is a financially challenging proposition in terms of return on investment -- absent of additional grant funding -- and in the presence of uncertainty in respect to containment of the [river] sediments."

The second obstacle Encore faced was the cost of studying and cleaning up PCB-contaminated sediment.

Farrell said Encore’s project could not support "several hundred thousand dollars worth of sediment characterization Š At a very minimum, there’s going to have to be sediment work at the Four Bay area, as well as the Trailways area. So all of those sediments are going to have to be characterized, so we know the volume and the concentration of PCBs in those sediments, so we could get an idea on the removal and disposal costs. Those costs could be significant."

"The real stopper has always been this stuff behind the dam," said board Chairman Nelson Brownell of previous proposals for the North Pownal site, which is located off Route 346 in the village.

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The town signed a lease-option agreement with Encore last year, which gave the company the option of leasing the town’s dam property for the purpose of power generation. That lease option expired July 19. Since, under the proposal, the town retains ownership of the property, Brownell thought there might be money available to municipalities which Pownal could use for PCB study and cleanup-related costs.

"I guess the thing I’m hearing is that it is very important that we get this study done," said Brownell. "We might be eligible to have it cleaned up, and have it be a productive thing, which would make the costs lower on [Encore’s] end. So maybe the 400-some odd kilowatts will be worth the effort at that point," Brownell said.

The board told Farrell that it were currently waiting for a company to deliver a sampling plan for the dam. Then a study will be mapped out, go through a state environmental review, and be put to bid.

Farrell said that Encore was required to pull its application in the SPEED program after the feasibility study showed that the dam site could not support their initial application’s power generation goals. "The other issue is the SPEED program only allows for a five percent change in total capacity, based on what you submitted at. So we technically had to pull the project, and we could resubmit it, but we would have to do so at that 400 kilowatt, under a completely new application."

Farrell called the investor and lending environment "another source of constant struggle and frustration."

"You could have the best project in the world right now," Farrell said, "and if the banker is not going to lend on it, it’s not going to get done."

Farrell said the hydro project would have an easier time a year from now. "There is some additional grant funding that would need to happen to make the project financially viable," he said of a U.S. Department of Agriculture rural energy grant, which potentially covers up to 25 percent of total eligible budget costs. Encore was not able to secure that grant this year.

Farrell said another year would also give Encore "a better understanding of how the permitting process will go Š There are a couple projects that are moving forward, they’re going to be the first ones [under the SPEED program]. This one would have been difficult for it to be the first, given that it already has all these other environmental challenges."

He agreed to craft an RFP so that a dam breakage study could be put out for bid by the town. The costs for this federally mandated study were expected to be in the $5,000 range. By being able to put that study out to bid, the board would be able to get a better grasp of those associated costs and to potentially find funding.

Encore Redevelopment was founded by Farrell in 2007, he said, to fill an "observed need in the market for expertise with respect to the assessment, remediation, and redevelopment of environmentally challenged real estate."


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