West Lebanon — As part of its effort to finance a new Houston-based natural gas acquisition, Trans Canada Hydro Northeast is looking to sell its New England power generation business, including its hydroelectric dams on the Connecticut River.
At stake are not only some of the most lucrative assets on the river, but control of a critical natural resource in the Twin States. The Wilder, Bellows Falls and Vernon, Vt. dams are among the assets Trans Canada plans to sell.
“The Wilder Dam backs up water all the way almost to Woodsville. It almost defines the Upper Valley,” said W.D. Wetherell, a Lyme resident who writes frequently about the Connecticut River. “It’s not a trivial thing who owns that dam and how they operate.”
The dam’s owner, under a federal license, is responsible for raising and lowering water levels for energy production and to accommodate other uses of the river including recreation and wildlife habitat. Wetherell, a fisherman, pointed out that the company which owns the dams is responsible for alerting people who use the river when water levels rise.
“It can come up fast,” Wetherell said.
David Deen, Upper Valley river steward for the Connecticut River Watershed Council, said news of the planned sale of the Connecticut River dams came as a surprise to him.
“I thought (TransCanada) would be a stable owner and not be flipping the facilities,” he said in an email Wednesday.
Despite his surprise, however, Deen — a Democratic state representative from Westminster, Vt. — said the dams have been through changes in ownership before.
TransCanada purchased 13 hydroelectric dams on the Connecticut and Deerfield rivers from USGen New England in 2005. USGen went bankrupt, and TransCanada’s $505 million bid was the lone offer for the properties.
At the time, the state of Vermont considered purchasing the Connecticut River dams, but ultimately was unable to put forward a competitive bid.
Separately, the town of Rockingham sought to acquire the Bellows Falls dam, but after several public votes on the matter, the town gave up its efforts.
The Wilder dam, which spans the Connecticut between Wilder and West Lebanon and generates 41 megawatts of power, makes TransCanada the largest taxpayer in both Lebanon and Hartford. (One megawatt of electricity can serve about 1,000 average homes in New England, according to Marcia Blomberg of ISO New England, the nonprofit company responsible for ensuring a reliable electric supply on the region’s grid.) The city assesses the West Lebanon-based portion of the dam property at $44.9 million, and Hartford assesses its portion at $32.4 million, according to the online property records.
The Vernon dam is assessed at $30.5 million, according to the Vernon listers’ office. The Bellows Falls dam in Rockingham is valued at $108 million, according to the town’s online property records.
TransCanada’s planned sale did not appear to worry Lebanon Finance Director Len Jarvi.
“It’s a green generating facility,” he said. “It certainly has value.”
The value of the dam properties and associated easements have been subjects of dispute between TransCanada and some communities in the region.
While assessed values of dam properties in Lebanon and Hartford have not been recently disputed, the Vernon and Rockingham values were set by the courts.
In addition, a January decision by the Orange County Superior Court settled a lawsuit between TransCanada and Newbury, Vt., by establishing a value of $1.53 million for flowage easements on 1,860 acres that may be subject to flooding when water levels rise.
According to court documents, TransCanada sought an assessed value of $9,500 for just 19 acres which regularly flood due to dam operations, while the town was arguing for a value of $2.16 million on 1,960 acres.
In addition to the Connecticut and Deerfield river-based power generators, TransCanada also plans to sell its Kibby wind development in Maine; its generation plants in Rhode Island, Pennsylvania and New York and its power marketing business.
TransCanada’s purchase of Columbia Pipeline Group — financed by selling its northeastern assets — would make the Calgary, Alberta-based company one of North America’s largest regulated natural gas transmission businesses, according to an email TransCanada sent to stakeholders on Tuesday.
TransCanada proposed the Keystone XL Pipeline, which would carry crude oil more than 1,000 miles from Hardisty, Alberta, to Steele City, Neb. Opposition to that project became a cause celebre among environmentalists who believe that exploiting that source of carbon-based energy would contribute significantly to global warming.
The U.S. State Department rejected the proposal in November, though TransCanada is challenging the decision.
The announcement of the planned asset sale, which TransCanada hopes to accomplish by the end of the year, comes as the company is working with the Federal Energy Regulatory Commission to relicense the Wilder, Bellows Falls and Vernon dams.
TransCanada’s current licenses for the three dams are set to expire in April 2019, TransCanada spokeswoman Jennifer Link said in an email.
FERC issued the current licenses for a 40-year term in 1979, according to the company’s website. The relicensing process began in 2012 and is expected to take five years.
Even as the sale is pending, the company plans to move forward with relicensing, according to TransCanada’s email to stakeholders.
“As we have demonstrated thus far, TransCanada will continue with the relicensing effort in earnest, with respect and professionalism,” it said.
Doing so is expected to include completing ongoing study reports, meeting with interested parties and working toward the preparation of a draft license application by December.
“Our plan is to continue in a ‘business as usual’ manner,” the email said.
The relicensing process is widely viewed as the only opportunity members of the public have to influence the dams’ operations.
“This is the one and only time you have to get them to do stuff,” said Wetherell.
“Stuff” might include preservation of riverbank land, fish ladders and other conservation projects, he said.
Deen said he expects the ongoing relicensing process will continue without interruption.
“The FERC process will move forward on its own schedule and I would not expect it to miss a beat,” Deen said. “Someone owns the dams at all times and they need a new license regardless of who owns them at the time the license issues.”
A potential change in ownership, however, could make it more difficult for interested parties to work with the owner to negotiate settlement agreements, Deen said.
“None of this is impossible, especially if FERC does what they should be doing and the new owner has an ethic of environmental responsibility,” he said.
Bob Nasdor, northeast stewardship director for American Whitewater, has been carefully following the relicensing process for the three Connecticut River dams.
He said he did not think the potential sales would make a significant difference in the dams’ relicensing, but he did note that the people guiding the process might change, potentially signifying a difference in the “give and take” he said is required for relicensing.
“(I’m) hopeful that the sale of the projects won’t be any kind of impediment to reaching a comprehensive settlement with the new owners,” Nasdor said.
Because the same rules and regulations will apply to the dams regardless of who owns them, Owen David, a water quality certification supervisor with the New Hampshire Department of Environmental Services, said he did not expect a change in ownership would make a difference in how the dams operate. Nor did he think a change in ownership would affect the outcome of the relicensing process.
Though he acknowledged that the people managing the process might change, he said the new company and its employees would undoubtedly be qualified to take over. Sales of such energy generators are subject to approval from federal and state regulatory agencies.
“They still have to comply with the same regulations no matter who owns it,” David said.
Those concerned about the dams’ effects on riverbank erosion are closely watching the relicensing process and some worry the proposed sale may affect the outcome.
Charlestown resident John Bruno, who lives along the river, said he would like to see long-term studies of how the dams may be contributing to erosion. In light of the planned sale, however, Bruno said he was not optimistic such studies would be completed.
He said he thought the planned sale would act as a disincentive for TransCanada to acknowledge any role its operations may play in riverbank erosion or to agree to make any changes that might hamstring a future buyer.
“They’re going to try to get away with as little as possible to get (their licenses renewed) and probably fight hard to not have some FERC restrictions that a buyer would be concerned about,” he said.
Bruno, who sits on the Mt. Ascutney subcommittee of the Connecticut River Joint Commissions, was among those who attended a meeting in Wilder earlier this month to discuss the findings of TransCanada’s ongoing studies relating to erosion, wildlife and recreation as part of the FERC process.
Erosion has been of particular concern to some Lyme residents who have blamed the Wilder dam’s operations for erosion that has forced the town to close a portion of River Road south of the East Thetford Bridge.
In order to relocate or reopen the portion of the road that now is closed, Lyme Town Meeting voters this month approved spending $245,000.
Lyme resident John Mudge characterized the erosion as “one of the largest environmental problems facing the Upper Valley today” in an interview at the TransCanada meeting.
Though he said he plans to continue to follow the relicensing process, Bruno was not optimistic he would be able to influence the outcome.
“Trying to fight the big guys is pretty hard,” he said.
Nora Doyle-Burr can be reached at email@example.com or 603-727-3213.