Hydro operator, state agency negotiating cost of access to water flows
By Zachary Matson
Negotiations over a new operating agreement at the Conklingville Dam will go on for at least six more months after a hydropower operator and state agency agreed to extend the current contract.
The deal was set to expire Dec. 31, and the parties in recent weeks signaled the talks were close to falling apart, but they agreed to an extension in the final days. The Hudson River-Black River Regulating District owns and operates the dam and Great Sacandaga reservoir, while Erie Boulevard Hydropower operates a powerstation across the dam’s spillway from the main dam. Erie is a subsidiary of Canada-based Brookfield Renewables.
After Erie suggested it didn’t plan to agree to an extension, the regulating district last month threatened to limit the water flows Erie relies on to generate electricity effective Jan. 1. The extension staved off that possibility until at least June 30.
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The underlying 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. But Brookfield has asserted that the district is obliged to allow water through its powerhouse structure at no additional cost.
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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Brookfield has argued that it pays for accessing the water and dam structure through a “headwater benefit,” which hydropower generators pay under Federal Energy Regulatory Commission 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.
The extension will also buy time to ask the FERC to decide whether the agreement is necessary in the first place, which Erie has contested in recent talks. Planned payments reductions for the counties that benefit from the dam’s flood control also hinge on the outcome of the negotiations.
John Callaghan, the district’s executive director, in a statement last week said the district was encouraged by the extension and confident federal regulators would side with the district in the payment dispute.