VERMONT BUYING TRANSCANADA DAMS WOULD BE A MAJOR FIASCO

TransCanada, TC, purchased 13 hydro power plants, total capacity 560 MW, on the Connecticut and Deerfield Rivers from bankrupt USGen New England for $505 million in 2005. Almost all of the plants are located in New Hampshire. All plants and their drainage areas are shown on an enlarged map. See URL.

The current Federal Energy Regulatory Commission, FERC, licenses of the Wilder, Bellows Falls and Vernon Plants expire in 2018. The renewal process takes about 5 years.

TC has offered for sale all 13 plants. The asking price for the 13 TransCanada dams has passed $1 billion, Vermont Secretary of Administration Justin Johnson said Tuesday, July 12. Till now, TC has received no offers from a private buyer. However, the State of Vermont has begun a study.

Below is discussed the Wilder Dam Hydro Power Plant, as it is typical of most dams. As part of relicensing, the Connecticut River Management Plan recommendations for Wilder Dam likely would alter operations that likely would reduce annual revenues and profits.

http://www.transcanada-relicensing.com/wilder-project/

Relevant VTDigger Articles

http://vtdigger.org/2016/05/09/john-mcclaughry-public-power-another...

http://vtdigger.org/2016/04/06/shumlin-forms-working-group-to-explo...

Wilder Dam Hydro Power Plant: Wilder Dam, located between Hartford and Lebanon, has three turbines, one on the Vermont side of the river, and two on the New Hampshire side; they were installed in 1950; total capacity 35.6 MW; (2) 16.2 MW units, (1) 3.2 MW unit. License expires in 2018 

Design flow capacity: 162,000 ft3/s, equal to the flow during the 1927 flood

Largest river flow since 1950: 55,000 ft3/s

Fish passage, $40 million, completed 1987

Active river area stretches about 46 miles upstream. See URL.

http://www.hanoverconservancy.org/calendar/council-updates-2/wilder...

Wilder Dam has a useable storage capacity of 13,350 acre-feet, based on a 5-foot maximum drawdown. It generated an average of 153,738 MWh/y during the 1982 - 2011 period; CF = 153738/(35.6 x 8760) = 0.49. Average energy generation is 12,809 MWh per month, and varies from a low of about 8,500 MWh in August, to a high of about 26,000 MWh in April.

Design flow through the turbines is 12,700 ft3/s for rated output of 35.6 MW. Annual average flow is 6,260 ft3/s. During typical energy generation, the water releases vary between the required minimum flow of 675 ft3/s and the design flow of 12,700 ft3/s. Maximum allowed change of water elevation to minimize riverbank erosion is 5 feet, per FERC license; it is less, for recreational purposes, during summer. 

What is the dam worth?: Revenue = 153,738 MWh/y x $0.07 c/kWh, annual average wholesale peak rate = $10,761,660/y. After subtracting several million for property taxes; ordinary O&M/staffing expenses; insurance; upgrades and replacements; plus several million for debt service there would be next to nothing left over as profit for private investors.

If, as part of FERC relicensing, additional water level and flow restrictions are imposed, the plant’s revenue would decrease and its profits may decrease to zero, or less, i.e., the dam would be worth near nothing. That likely is the reason no private buyer has shown any interest in buying the dams.

Plant Operation: The water level upstream of the dam is built up during off-peak hours and drawn down, up to 5 feet, during peak hours. The timing and quantity of the water releases depend on river flow conditions and electricity wholesale prices.

During the period of sustained high flow, usually March, April, May, plant energy generation is continuous, and peaking operations are not used. This is a period of maximum energy generation and maximum revenue and profits. See page 39 of below URL.

During about 9 months of the year, the plant is operated as a “peaking” plant, based on wholesale price signals, to maximize revenue and profits from a limited water supply. Prices go up, energy generation is increased; prices go down, energy generation is decreased. TC operates most of the other 12 plants in a similar manner.

http://scholarworks.umass.edu/cgi/viewcontent.cgi?article=1061&...

Based on the above, these plants have very limited use for year-round peaking, filling-in, and balancing variable wind and solar energy, as such operation would significantly reduce its revenues and profits, which presently are maximized by operating during peak hours, based on price signals.

Wilder Dam FERC License Expires in 2018: In preparation for its next FERC license, TC is beginning the five-year process of gathering information about the dam and the region it influences. River communities, citizens, and organizations, such as the Hanover Conservancy, will have opportunities to participate in the re-licensing process, helping to shape the management of the dam and the river for the next 30 - 50 years.

http://www.hanoverconservancy.org/wp-content/uploads/2013/02/Hanove...

http://www.crjc.org/news-and-events/relicensing-of-connecticut-rive...

As a “daily peaking” plant, Wilder Dam raises and lowers the water level in its impoundment during energy generation. Whereas Wilder Dam’s current FERC license allows water levels upstream of the dam to fluctuate by as much as 5 feet [from an elevation of 380 to 385 feet above mean sea level], the water level usually rises and falls within a narrower range. During the summer, the plant operates within narrower limits to accommodate recreational uses.

Wilder Dam Impoundment: Wilder Dam impounds the river for 46 miles to Newbury and Haverhill. Because Wilder Dam impounds such a long section, water is released when high flows are expected. Public safety is a prime concern, and the company uses loudspeaker announcements when gates are opened, plus flashing lights and signs. The phenomenon known as “pond tilt” allows water levels to be very low near the dam, yet quite high some miles upstream. This occurs because it takes time for water to travel from the upstream end of the impoundment to the dam.

History of the Wilder Dam Site: Wilder Dam occupies the former site of Olcott Falls, a pair of natural falls, which were over 650 feet long with a 40 feet drop. A canal with locks on the New Hampshire side, built in 1810, allowed boats and rafts to pass around the falls. The first dam, built in 1882, was an 808-foot cribwork dam at the upper falls. A new concrete dam, just downstream, was built in 1927. Wilder Dam, built in 1950, about 0.75 mile below the cribwork dam, flooded both of the original dam sites.

Design of Wilder Dam: Wilder Dam is designed for flows up to 162,000 ft3/s, equal to the flow during the 1927 flood. Since the dam’s construction, the largest recorded flow was only 55,000 ft3/s. The company uses vegetable oils for hydraulic lubricants in its machinery. The FERC license, issued 1978, requires an upstream and downstream fish passage facility (as do Bellows Falls and Vernon), which was installed at a capital cost of $40 million in 1987.

“Black Start”: Usually, a hydro plant is capable of “black start” for providing energy to the grid, as Wilder Dam and others on the Connecticut River, did during the blackout of the Northeast in 1965. A small diesel-generator provides power to open the gates, allowing water to flow through the turbines to produce power, first to re-start other power plants throughout New England, and then for users.

Influence of Wilder Dam: The construction of Wilder Dam resulted in several benefits to the river and its corridor. It provides energy without using fossil fuels, and contributes to the tax base of the towns in which it is located. By inundating tributary mouths and other low-lying areas, the dam created ecologically rich backwaters and wetland areas such as Wilder Wildlife Management Area in Lyme, the Ompompanoosuc flats in Norwich, and Reed’s Marsh in Orford, which provide habitat, especially for waterfowl, warm water fish, and other wildlife. The flatwater impoundment upstream of the dam provides deeper water for power boating and other forms of recreation, which was not possible until the dam was built, although the dam itself forces paddlers to portage their craft. Local people recall it was possible to wade across the river from Bradford to Piermont before the dam was built. The dam also provides ways to influence flooding, ice breakup, and flows in time of drought.

Pine Park on the Connecticut River in Hanover: However, when a dam creates an impoundment, it alters the natural character of the river and changes the pattern of flow, so that the river behaves more like a lake. Water temperatures increase as a result of the greater surface exposure to sunlight, leading to reduced dissolved oxygen and reducing habitat quality for trout and other cold-water fish. The fish population shifts to warm-water species, and walleye, perch, and bass now inhabit the warmer water of the Wilder Dam impoundment, using the shallows of tributary setbacks for spawning. Nutrients and contaminants may accumulate as they are not as quickly flushed, and some sediment and toxic substances may settle out in the quieter water. Because the dam can alter patterns of flooding and sediment deposition, some floodplains no longer function as before, although they are still essential.

Water Level Fluctuations and Erosion: Daily fluctuating water levels are a particular concern regarding the Wilder Dam impoundment. There are many causes of riverbank erosion. The primary cause is natural scour. Rapidly changing water levels can cause pressure imbalances at the water-saturated bank face, causing water to seep out of the bank, carrying small particles of soil with it. This is called “soil piping,” and it can contribute to bank collapse. Water level changes also magnify the area of riverbank face that is exposed to erosive wave action. The second cause is water level fluctuations from operations at Wilder Dam, as determined by the US Army Corps of Engineers, USACE.

Eroding riverbanks in the Wilder Dam Impoundment: An Upper Valley River Subcommittee member has recently discovered a disturbing feature of some parts of the Hanover riverbank in the Wilder Dam impoundment, where even heavily forested banks have been undercut, forming cavities that reach back five to six feet. As these cavities remove physical and nutritive support for the trees, they could result in bank failure. The cause of these cavities, thought to be primarily wave action, deserves investigation, particularly because of the high economic and aesthetic value of the riverfront in this region.

Riverfront landowners and other observers have reported in recent years, i.e., after TC acquired the dams, the level of the Wilder Dam impoundment appears to show more pronounced variation than in earlier years, with higher highs and lower lows, and more rapid draw-downs. This creates concern for riverbank stability and sedimentation. TC is required to operate within the terms of the license, raising and lowering the water level within limits, but changes in operation of the plant seem to be exploring the full range of allowable limits, rather than the narrower ranges of earlier years. The license does NOT specify a maximum “ramping rate,” i.e., how quickly the impoundment water level can be raised or lowered.

Connecticut River Management Plan’s Recommendations for Wilder Dam: The FERC should: 

- Specify a “ramping rate” in the next operating license, to reduce soil piping in the riverbanks of the impoundment and to minimize negative effects on aquatic and riparian habitat. Restricting the ramping rate likely would reduce revenues and profits of the plant.

- Include a provision for emergency gate operation to enable a “black start” to provide immediate power, in case of a blackout.

- Assess possible effects of upstream sediment build-up, and the extent to which it has affected flood storage capacity.

- Require TC to maintain discharge at run-of-river levels during periods of low flow to protect downstream aquatic life. Maintaining such discharge levels likely would reduce revenues and profits of the plant.

- Allow continuing participation by local citizen groups in the re-licensing process.

An Economic Evaluation:

Amortize $700 million, 30 y, 5%; total payments $1.353 billion, or 45.1 million/y

Annual production = 541 MW x 8760h/y x 0.26 capacity factor  = 1,287,720 MWh/y

Revenue = 1,287,720 x $0.07/kWh, annual average on-peak wholesale price = $94.0 million x 30 y = $2.82 billion*

Hartford property taxes, $777,100 in 2015, actual

Lebanon property taxes, $750,000 in 2015, estimate

*This is overstated, as during three months (March, April, May) the plant is not operated as a peaking plant and sells at about $0.05/kWh.