First Selectman: Town Has Gained From Dam Study

When it comes to activity surrounding the study of reactivating former Collins Company dams, the town has so far come out ahead fiscally, according to first selectman Richard Barlow.

As part of the process, the town discovered that for the upper dam and related infrastructure it had not been collecting on the state’s Payment In Lieu of Taxes, a program that gives municipalities funds for state land for which it cannot collect taxes. For the past two years the town has received between $20,000 to $25,000 for it, Barlow said. The number can fluctuate depending on the state’s overall funding to the program.

“The overall impact — it has had a net positive on the town budget so far,” Barlow said.

The Connecticut Clean Energy Fund funded a $50,000 pre-feasibility study and the town has spent $20,000 of its own money on the project so far, Barlow said. The latter secured a Jan. 8, 2009 Federal Energy Regulatory Commission preliminary permit for power generation at the upper and lower dams.

Last week, selectmen voted to spend up to $7,500 to have attorney Paul V. Nolan file an application to extend the preliminary permit another three years.

Meanwhile Barlow is hoping current congressional efforts that would allow FERC to issue more permanent licenses to the town come through. Without congressional action, the licensing effort could cost between $75,000 and $100,000, Barlow said.

Despite his campaign criticisms about the hydro effort, selectman Lowell Humphrey joined his colleagues in voting to spend the $7,500. He said he still feels the town has more pressing infrastructure needs and said the money could be useful at budget time. He added that he would be “hard-pressed” to spend a large amount on licensing but based on the revenue the town has received and that the extension would give more time look into the issue, he said he would support it.

“Based on the information that was presented tonight that actually some good has come out of this with the PILOT money and that this a three-year permit . . .  I’m going to vote in favor of doing this just to hold our options open,” he said at the recent Board of Selectmen meeting.

At that meeting, selectmen also heard from David Madigan, a member of the temporary hydro project advisory committee.

He briefly discussed the pre-feasibility study, which was conducted by Massachusetts-based GZA GeoEnvironmental, Inc.

“The study turned up no fatal flaws that would tell us no this isn’t really a viable project,” he said. “The economics, of course, become the big thing.”

Numbers vary depending on different scenarios between the upper and lower dams. However, the recent passage of a state energy bill including a virtual net metering provision, allowing towns to apply power generated a hydro facility to up to five locations at retail rate, really makes things much more viable, he said.

Under one study scenario for the upper dam, the town could see a 12-percent return on investment over 30 years, he said.

“It has some real potential economic benefits for the town,” he said, adding that third-party developers have expressed interest in partnering on the project.

Barlow said Nolan feels that the GZA estimates are overly conservative.

"He (Nolan) feel the project has got a lot better economics than GZA has reported,” Barlow said.

But if Congress comes through and the permits are eventually granted, Barlow said he realizes the town needs to nail down exact costs, likely to come through a full feasibility study.  

“We realize that if we get the permit we’re going to have to sharpen the pencil and get some really good numbers,” he said.

Madigan felt that the lower dam was not as promising but the town needs to ascertain for certain whether Avon and Burlington are interested in partnering in the project for the lower dam, he said. The town’s have participated on the committee but have not committed to the project. The virtual net metering would be very complicated with other towns involved but may be possible if they had a strong interest, Madigan said.

Madigan said it might also be a good time to update the public on the process.

Barlow said it might be a good topic for the annual town meeting held in January since it is an informational session.

Meanwhile, those who want more specifics from the pre-feasibility study can read it here.