Termination of License by implied surrender: Herkimer Dam
Termination of License by implied surrender: Herkimer Dam
Move by FERC may result in removal of the Herkimer dam on the West Canada Creek
The Herkimer Hydroelectric Project, on the lower part of West Canada Creek, is a small hydroelectric project that has not been operational since 2006. It is owned by ECOsponsible, a limited liability company that specializes in medium-sized hydroelectric and solar projects in NY State (see 2020 portfolio summary here). They purchased the property from Trafalgar Power Inc. in late 2014, and the property and license were transferred in March 2015. The goal was renovation and rehabilitation, and this required coordination with the Federal Energy Regulatory Commission (FERC), which oversees licensing. The project is a run-of-the river project with a nine-foot head and a licensed capacity of 1.68 mW. It is the lowest (first) dam on the West Canada Creek (WCC), close to the confluence with the Mohawk River: there are several other hydroelectric dams farther upstream.
Since transfer of the property and license in 2015, FERC’s Division of Dam Safety and Inspections New York Regional Office (NYRO) has issued eight letters to ECOsponsible requiring plans for restoration. Five plans were submitted by ECOsponsible, but apparently these “lacked sufficient detail” and were not approved by FERC [A1]. An inspection in August 2021 by NYRO found the dam in “unsatisfactory condition and largely abandoned” (FERC filing - A1).
View of the Herkimer Hydroelectric Dam from Project 8 at Current Hydro (diagram modified from video captured by a drone at Current Hydro - video at Vimeo and explanation here).
Hydroelectric facilities overseen by FERC are up for periodic licensing (or re-licensing) and the involved licensing process commences five years before license expiration (the submission window is 5.5 to 5.0 yr prior to expiration). The license for the Herkimer Project expires in March 2027, which means the early paperwork for initiating this process (the Notice of Intent or NOI and the Pre-Application Document or PAD) is due between October 2021 and March 2022. FERC filed its Termination of License by Implied Surrender in the window of time required for the NOI and PAD [A1] Most other NYS dams (i.e., non-hydro dams, which are most common in NYS) are overseen and regulated by NYS (see NYS DEC Dam Safety program) and they are subject to an entirely different process of inspections and regulations. We will get back to the Herkimer Dam and the difference between Federal and State oversight, but first let’s look at the context of this dam in the NYS and the watershed.
Dams in NY State and the Watershed. In the last few years dam safety has received greater public scrutiny, in part because there is a national movement to remove dams, especially those that have outlived their useful life. But there is also an increasing emphasis on dam removal to allow fish passage and restore aquatic connectivity. On the Hudson River, for example, there are dam removal projects to allow passage of River herring, which are an important forage fish, especially in the marine realm.
Dams can impair passage of migratory fish, and this is especially important for diadromous fish, which are those fish that migrate between freshwater and saltwater. Foremost among them on the Atlantic Slope (which includes the Mohawk Watershed) are River herring and the American eel. Recent FERC license applications for hydroelectric schemes on the lower Mohawk (Crescent and Vischer, both with ongoing license processes) have had to explicitly detail fish passage in the license applications, which makes sense because there is a direct connection to the Hudson, which is the route to the ocean.
In November 2019, the Associated Press released a two-year study on the health and safety of dams in the US (see my summary here). The AP report was primarily focused on intermediate and high-hazard dams because these have the most potential to cause downstream damage if they fail. One dam in the Mohawk watershed that is of special interest is the Harrower Pond dam in Amsterdam NY because this is a high-hazard dam (Class C), and apparently its owners are delinquent and non-responsive to requests from the State (see my summary here). In this case, the State is in a tricky position with respect to how to proceed with removal of this high hazard dam that is falling apart and is not sound. Dam removal is expensive and in general you cannot remove a dam you do not own.
In December 2021, Rick Karlin and Emilie Munson at the Albany Times Union explored dam safety in NY State in a special report entitled “147 New York dams are ‘unsound’ and potentially dangerous: thousands of dams have not been inspected in more than 20 years” (here). They highlight important issues with respect to dam inspection and the hazard rating of dams in NYS. They write: “New York’s approach has been to focus its resources mainly on high-hazard dams and attempt to bring those into compliance with safety guidelines. With thousands of dams in the state and a relatively small cohort of inspectors, the state is unable to regularly monitor them all.”
The special report explores dam safety, hazard classification, ownership issues, and dam removal. It also rightly notes that failures may increase as extreme rainfall events (which I recently explored here) are “straining dams’ ability to keep watery chaos in check.” One item that emerged from the report (see endnote) is that hydropower dams are under the jurisdiction of the Federal Energy Regulatory Commission (FERC), and not NY State, so determination of a dam’s health can be complicated because records are kept by different agencies.
The constellation of dams in the Mohawk Watershed can be explored in the mapping tool embedded in the Karlin and Munson special report (here) on dam safety in NYS. The Herkimer Project is a small hydroelectric scheme on the West Canada Creek, and it is the focus of a recent “Termination of License” filing by FERC (map above is modified from part of the dynamic mapper in the Karlin and Munson special report).
Herkimer Dam. Let’s get back to the situation of the Herkimer Dam and explore issues directly related to the FERC termination notice and all the subsequent filings by stakeholders. Issues raised in these documents center on dam safety, oversight by federal/state authorities, and dam removal to facilitate aquatic connectivity on the West Canada Creek in the upper part of the Mohawk Watershed.
Very little has emerged in the media about the situation of the Herkimer Dam. Elizabeth Ingram, writing for HydroReview in November 2021, provides an overview of the project and the move by FERC to terminate the license [02]. Her summary is largely based on FERC termination notice [A1], because that was all that had been submitted at the time. Since that time, a number documents have submitted to FERC as part of the intervention and comment process [A2-A8].
Dam owner - ECOsponsible. The current owner of the dam is ECOsponsible LLC, which appears to focus on developing renewable energy projects, with an emphasis on medium-size solar and hydro projects. Dennis Ryan Sr. was the owner of ECOsponsible LLC and he was responsible for day-to-day operation. The company has used contracts with third-party vendors for regulatory, legal, operations, environmental, and maintenance work.
We learn quite a bit about the company from a portfolio summary put together in June 2020, which is referred to as Tranche I Hydro Project Overview (here). Their project portfolio includes five medium-sized hydroelectric facilities with a total capacity of 4.7 Megawatts. The Herkimer Project is one of these five projects (others include: Adams, Ballard, Mount Morris, and Springville), and of the five, the Herkimer Project has the highest projected five-year revenue. The prospectus notes that the Herkimer Dam was built in 1987 for a cost of $4.4 m, it is authorized for 1.680 Mw, its FERC license expires in 2037, and it has been offline since 2006. The plan was to renovate and upgrade the Herkimer project for a cost of $2.5 m; upgrades/rehabilitation could technically occur in about six months (estimate from 2020).
Termination Notice and timeline of intervention. On 8 November 2021, FERC initiated a Termination of License by Implied Surrender and set a deadline of 27 Dec 2021 for filing comments, motions to intervene, and protests. The Termination resulted in a number of filings to intervene and protest (all available at the FERC eLibrary). The NY State Department of Environmental Conservation (NYS DEC), the US National Wildlife Service (NWS) filed motions to intervene by the deadline [see A2, A3 below]. Peter Blanchfield submitted a motion to Intervene and Protest by the deadline [see A4]. Dennis Ryan Jr. (manager of ECOsponsible) filed a motions to Intervene and Protest by the deadline [A5]. On 27 December the NYS DEC filed an explanation of its motion to Intervene [see A6 below]. Finally, Daniel Hyman, who holds the note (loan) for the original purchase of the dam by ECOsponsible, filed a Motion to intervene out of time and protest on 10 January 2022 [see A7 below]. On 14 January 2022, the NYS DEC submitted a Comment, which addressed the content of the ECOsponsible intervention/protest of 27 December 2021 [A8]. Much of the information in this Note that follows is from those filings, which are only available at the FERC eLibrary (here).
The Motion to Intervene and Protest submitted by Dennis Ryan Jr. (now manager of ECOsponsible, LLC) goes a long way in explaining issues the company has faced, primarily during the COVID-19 pandemic. In short, this protest states clearly that it is not the intention of the company to surrender the license, and COVID-19 has deeply affected company operations, including the death of two company members, one of which was Dennis Ryan Sr., founder and manager of Ecosponsible.
According to Ryan Jr.’s motion/protest, the company is in discussions with several prospective buyers or investor groups, and it seems that the intention of the company is to liquidate the property rather than rehabilitate it. Obviously termination of the license agreement complicates sale or transfer. Ryan’s motion concludes: “In the event that the Commission is not inclined to reverse its decision, ECO respectfully requests that the Commission refrain from involuntarily surrendering the License to provide ECO with the requisite it needs to facilitate its effort to evaluate the best options for the Facilities. These options include repair or decommission the Herkimer and other facilities; a prospective sale of some or all of the Facilities. In the event that the Commission rejects the foregoing requests, ECO request (sic) that the license be terminated with the project facilities left in place.” [A5]
NYS DEC intervenes and advocates removal. The NYS DEC filed a notice of intervention on the Herkimer Hydroelectric Project on 7 December 2021. In a separate letter sent to FERC on 27 December 2021, the DEC provided critical background and potential future directions if the license were to be revoked. This letter is informative: the dam is in disrepair, it impairs aquatic passage, and it may be hazardous to downstream communities. The DEC is apparently concerned about the effect that the dam has on the fishery on the West Canada Creek, and the two primary targeted game fish are Smallmouth bass (Micropterus dolomieu) and Brown trout (Salmo trutta). The DEC notes that the dam does not provide fish passage upstream or downstream (although it looks as if a brave fish could tumble over the top and survive in a downstream journey or out migration).
Presumably the primary reason the DEC has intervened is that the project appears to be abandoned and because it is a barrier to aquatic species. Hence they advocate for dam removal if the license for the project is terminated. While we do not have an explanation from the Fish and Wildlife Service, we can guess that they too are interested in aquatic connectivity. The DEC notes that removal provides a new benefit to the People of the State of NY because it removes a hazard to life and property, and because it would be a net benefit to natural resources.
Dam removal may be complicated. The DEC outlines potential issues that need to be evaluated if removal is considered. While it may seem premature to be talking about removal, they note four preliminary issues that need to be considered in the case of dam removal: 1) threatened and endangered species need to be evaluated, including freshwater mussels; 2) it is in an archaeologically-sensitive area that needs to be evaluated; 3) the project occupies the floodway and the 100 year floodplain and thus studies need to evaluate the hydrologic effort of removal; and 4) the project is downstream from the Mohawk Rifle Range, a NY State superfund site (site 622032) with elevated heavy metals, presumably including lead (Pb) from bullets.
NYS DEC Dam Safety staff visited the site in early December of 2021 and found that the project was unmaintained and that parts of the spillway were blocked by debris. Recall that the dam is not under State jurisdiction but instead under the jurisdiction of the Division of Dam Safety and Inspections New York Regional Office (FERC). The State made an interesting comment about erosion of the spillway. “NYSDEC is aware that there have been incidents of apparent overtopping of the dam’s left embankment, the most recent to the NYSDEC’s knowledge being the October storm of 2019 [aka the Halloween storm of 2019], causing erosion of this embankment. This may indicate that the dam has inadequate spillway capacity. If the dam were regulated by NYSDEC, it would be found to have violations of state dam safety law.”
In the event that FERC (Federal) terminates the license, the NYS DEC (State) has four requests because presumably this termination would result in Federal-to-State transfer of authority. The DEC suggests that FERC require the following: 1) confirm the hazard classification (currently classified as Class A - low hazard); 2) confirm that the dam meets safety criteria for its classification; 3) provide an inspection and maintenance plan and ensure that that plan is being followed; 4) provide an Emergency Management Plan (EAP) if the dam is found to be High or Intermediate hazard (class C or B).
There is clearly a concern at the DEC that if the license is terminated and the owner of the dam walks away from the project, the State and local authorities will be left holding the bag (i.e., responsibility for the dam). Final comments in the DEC letter seem unambiguous: “Termination of license by implied surrender should by no means vacate the current Licensee’s responsibility to property and facility ownership, including liability for protection of the natural resources within and adjacent to the West Canada Creek, and the protection of public health and safety. Furthermore, allowing the Licensee to walk away from the Project would place financial hardship on the local community to rehabilitate or decommission the Project if it undergoes tax foreclosure.” And “The Licensee should be fined by FERC in accordance with the Revised Policy Statement on Penalty Guidelines for failing to meet its license obligations, including failing to operate and maintain the dam in a safe condition and resulting in a risk of harm to life and property.”
Environmental conflict. When FERC issued the Notice of Termination it changed the fate of the dam forever. There are now basically two paths for this process to follow. One path involves a change in ownership and what would probably be a requirement for a rapid submission of rehabilitation plans with a strict timeline. The other path involves termination and transfer, which will likely lead to the long and expensive process of removal. I am not a lawyer, but it seems likely that in either scenario, there may well be legal issues that would extend the process.
Hydroelectric power development is an important piece of the ongoing transformation to low-carbon clean energy. ECOsponsible appears to have emerged with this in mind as it develops solar and hydro projects in NY State. In their Tranche 1 report they point out that NYS is the largest producer of hydroelectric paper east of the Mississippi. They suggest that the clean-energy transformation will not be possible without both centralized and decentralized sources, especially those that are rural, such as in Herkimer County. Current Hydro LLC, a energy company that has an interest in the Herkimer project, is positioned to advance large and medium-sized hydroelectric projects in the east. They call hydropower a hidden “superpower” because it has the lowest CO2 emissions per kilowatt hour of all energy technologies. They also suggest that modern engineering results in more efficient generation from turbines, and that development can occur with a minimal impact to ecosystems with run-of-the river projects (source).
However, the ecological impact of dams is significant, and in the US we are seeing a renaissance in river restoration by dam removal (see this 2020 report from American Rivers). Some significant and groundbreaking removals have occurred in Maine (here), and these dam removals have resulted in a stunning return of diadromous fish, especially River herring that are so important as a forage fish in both the freshwater and marine realm. In general, there have been two principal reasons for dam removal in NY state. One is safety, and the other is fish passage and aquatic connectivity. In the Hudson, there have been a number of removals of barriers to allow better passage for spawning and completion of the life cycle for River herring and the American eel. In the Mohawk watershed, dam removal has moved very slowly.
Unfortunately the West Canada Creek and its stakeholders are no strangers to legal issues surrounding dams and water use. In 2001 the Gray Dam on the Black River was removed due to safety concerns. The dam was used for compensating flows into the Hinckley Reservoir (on the West Canada Creek), which has many users, but foremost among them are the NYState Canal corporation, companies that produce Hydropower (Erie Boulevard Hydropower), and the Mohawk Valley Water Authority, which supplies water to the City of Utica. The long and involved legal proceedings resulted in a new agreement for water use, which can be read in this summary judgement, in 2009. The last significant dam removal in the Mohawk Watershed was also in the upper part of the watershed at the Oriskany Falls Dam on Oriskany Creek in 2018 (source), which was also removed for safety issues.
This is just the beginning of this story, and we don’t know how it will end. ECOsponsible indicated that it could submit a plan for repair, decommission, or sale of the dam within 180 days (6 months, which would be June 2022). The NYS DEC agreed to this time frame in a letter submitted to FERC on 14 January 2022 [A8].
This story hinges on issues related to licensing of power generation by a low-carbon source, or ecological restoration and establishing aquatic connectivity in the watershed. We will undoubtedly see this story develop significantly in the next few months.
{Note: an earlier version of this post incorrectly identified the affiliation of Peter Blanchfield]
This and other Notes from a Watershed are available at: Mohawk.substack.com
Further Reading
The following documents have been submitted to the Federal Energy Regulatory Commission (FERC) and are available from their eLibrary (search project P-9709).
[A1] Federal Energy Regulatory Commission (FERC),10 November 2021. [Project No. 9709–070] ECOsponsible, LLC; Notice of Termination of License (Major Project) by Implied Surrender and Soliciting Comments, Protests, and Motions To Intervene. Herkimer Hydroelectric Project (Docket No. P-9709-070) (Accession #: 20211110-3021).
[A2] NY State Department of Environmental Conservation. 7 December 2021. New York State Department of Environmental Conservation Notice of Intervention. Herkimer Hydroelectric Project (Docket No. P-9709-070) (Accession #: 20211207-5076).
[A3] US Department of the Interior on behalf of the US Fish and Wildlife Service. 17 December 2021. Notice of Intervention, Herkimer Hydroelectric Project (Docket No. P-9709-070) (Accession #: 20211217-5277)
[A4] Blanchfield, Peter J. 27 December 2021. Motion to intervene and protest and requests regarding on-going relicensing. Herkimer Hydroelectric Project (Docket No. P-9709-070) (Accession #: 20211227-5169)
[A5] Ryan, D. Jr., Manager of ECOsponsible LLC. 27 December 2021. Motion to Intervene and Protest Herkimer Hydroelectric Project (Docket No. P-9709-070) (Accession #: 20211227-5206).
[A6] NY State Department of Environmental Conservation. 27 December 2021. COMMENTS: Termination of License by Implied Surrender. Herkimer Hydroelectric Project (Docket No. P-9709-070) (Accession #: 20211227-5214).
[A7] Hyman, D.C., 10 January 2022. Motion to Intervene out of time, Protest, and Answer motion of Applicant for party status and comments. Herkimer Hydroelectric Project (Docket No. P-9709-070). (Accession #: 20220110-5076).
[A8] NY State Department of Environmental Conservation. 14 January 2022. COMMENTS: ECOsponsible, LLC Motion to Intervene and Protest (Docket No. P-9709-070) (Accession #: 2022 0114-5055).
[01] Karlin, R, and Munson, E., 17 Dec 2021. 147 New York dams are ‘unsound’ and potentially dangerous: thousands of dams have not been inspected in more than 20 years, Special report in the Albany Times Union (here).
[02] Ingram, Elizabeth, 10 November 2021. FERC terminating license for 1.68-MW Herkimer Hydroelectric Project in New York. Hydro Review (link).
[03] EcoSponsible, LLC. June 2020. Tranche I- Hydro Project (Project summary PDF here).
[04] Lohan, T., Feb 2019. How Removing One Maine Dam 20 Years Ago Changed Everything - The removal of the Edwards Dam on Maine’s Kennebec River helped river conservationists reimagine what’s possible. The Revelator. (here)