HomeMy WebLinkAboutMN-HDPC-1988-08-10 1 psi:•1
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HYDROPOWER COMMISSION MEETING
MINUTES
August 10, 1988
Present: Dan Hoffman, Martin Sampson, Alex Skutt, Ed Brothers,
Ellen Harrison, Liz Mulholland, . Mark Walker, Cathy
Emilian, Terese Araneo
Absent: Mike Sprague, Helen Jones (Staff)
The meeting was called to order by Chairman Daniel Hoffman
at 7:40 p.m.
Chairman's Re ort
Chairman Hoffman reported on a recent update from Common
Council's last meeting. At the Council meeting, Wednesday,
August 3, 1988, Council approved funds.`for the engineering
update, though they did not approve any additional funds for the
fishery study. Since the proposal that they':,received-was1for more '
than $2,000, the study has. -been reduced by deleting the electric
shocking the fish in the creek. Finally Council i reallocated
money that had been earmarked for the safety study of 60' dam
because Helen Jones and Dan had reached the:. conclusion that the
chances of the City developing the 60' :,dam -site . for. hydropower
were very slim. Since . it was : the least likely of the three
licenses that we hold to be developed, , it was just a matter of
time before they would surrender the license that they, hold, and
An:;,.argument could be: made for- surrendering it.before. spending and
additional $10,000, especially since the -City is running out of
these contingency funds for this year :The . P&D Committee of
Common 'Council and the full Council was amendable to the idea of
not spending money to study the 60' dam.;''•�,� The City paid money to
repair the dam a couple 'of. years ago, and it has been inspected
to state standards, but .federal standards ,.are somewhat different
so it would involve - an entirely new "inspection for $101000.
Recommendation by the P&D Committee- was'fnot -to spend that money. .
at this point but instead to . ask FERC ,,for..,. an extension of the f:
time limit; they had told us we musty=s�Tsubmit that report by c
October. We have asked them for an extension until the end of
the year because the' referendum is not occurring until November.
If the site is rejected by the voters, there :.is no .point in our
spending $.10,000. There has been no word in reference to our
request for an extension. If we do : not recieve it by the
deadline ' in -October" for subm tting 'th-e study; Helen recommends
that we officially surrender the license so that we will not be
in violation of its terms.
Beth Mulholland asked why there was not a decision to spend
money on the economist. Dan Hoffman responded that Helen Jones
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felt the Commission could wait on that. Discussion was limited
due to Helen's absence, however Dan did point out that it is
getting very difficult to get extra money from Council.
Dan stated that Helen is encouraged concerning the meetings
with NYSEG representatives, as she has a better handle on what
they may be able to receive for the sale of the power, which was
one of the questions/reasons for hiring an economist. If they
sign a contract with NYSEG by the end of the year, they would
have a good idea of what price they would get for the power.
Alex Skutt inquired as to how much money was allocated for
insurance. Dan responded that it was $10,700.
Committee Re orts
Economic Committee:
Mark Walker brought a package to: hand out to commission
members which would give them an ilea' about!.what the - Economic
Committee members consider the major °questions to date ,and what
is behind- the idea of hiring the engineering firma He stated
that he had a problem with the minutes. of: August 14, 1988 in
which he had made a statement that he felt`.the=Halliwell cost and
design estimate was fairly accurate, and �at I.°this point he is not
sure that he believes that. They did`-.have contact with Peter
Skinner.. of the Attorney General's r_.office:.who::suggests,_that s.the
per kilowatt hour estimates of the cost= are low by a factor of
about 2. He also suggests that, while they felt the major
engineering work had to be done on most of ,the intake structures,
meaning the redesign of the cost estimates, ,that, in his opinion,
was the major capital expenditure. The estimates for the power ,
house and the tailrace were substantially lower than they ought
to . have been. He felt that this may be: explained in considering
that Stetson-Harza did their last' estimate in 1985. In addition,.
a factor that substantially effects- the capital cost of the
public project is the foreign exchange rates, since many of the
turbines and generating facilities are foreign made. What has
evidently happened now, according to Helen, is that Stetson-Harza
has been retained to do a reanalysis of their own work,
including the work that they did not perform before and to give a
... new estimated- capital cost. Hop.efully, . this . will bring. .the
previous f1gures more line with EPRI (Electric Power Research
Institute--who give general guidelines for how much a hydropower
project of this scale, under these conditions, ought to cost per r
kilowatt hour) so as to provide a baseline. Reference documents,
coming from EPRI to the City, should help make those estimates
which will enable the City to have a baseline figure when
Stetson-Harza presents their new esti-rates. Helen also feels
that Stetson-Harza should be able to produce new estimates by the
end -of August. Dan updated this informationf stating that Helen
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thought they should have something by the 24th. Mike brought up
the point that Stetson-Harza felt that they may have
underestimated or they weren't really sure . about the estimates
for the intake structures and that was going to be the focus of
their work. Peter Skinner felt as though everything from the
major items that Stetson-Harza had proposed, apart from the
intake structure, were substantially under estimated.
Ellen Harrison inquired as to whether or not the referendum
would have as part of it a maximum cost figure. If so, it's ,,
critical that they propose a figure, if they are going to go to
referendum, that will cover this. - Dancommented that Council
will only be authorized to spend what : .the referendum approves. _
Cathy Emilian responded that it seems strange to write a ,
referendum without having : a realistic. figure. Mark Walker
responded that even though , that seems';;like a safety valve, in
that if it is substantially underbid then it can't be
constructed, it- still is not 'a good, reason .to press ahead. A
comment was added by a non--commission member who was present as
to the 'poseiblity- of having a contractor.,:provide a maximum. figure. ;
that they could not exceed.
Ellen Harrison commented that, in trying to get a handle on
the capital cost, maybe the question-: should be how the<.figures
were being looked at and not that the figures were wrong. . She
asked if that was something the economic committee has thought
about, or done; some. .dwork. on - . MarkWalker.,— responded .;;that a
question had been posed as to whether the' loss or cost per year
had to be figured back in. He went on .to say that Peter Skinner
will be sending the economic, committee some software which will
help them do an analysis, but it may not be enough to allow them
to do a thorough analysis. Mark stated that Helen had proposed ,
that the City's controller help do the analysis . . He voiced , ;
reservations about this, stating that he would be more inclined-
to hire somebody to do a thorough'job' of an economic analysis, as.: '
it is going to be a relatively extensive .task. He expressed .
concern that factors such as leasing the site to a private
developer to maintain control, or having the City develop project
itself be taken into consideration when the analysis is done.
Dan raised a question concerning the need to compare City .
construction vs. the City leasing it out to so_aebody. Right now
the. decision facing them is:." should the City be involved. at. al.l?
They may. not. need: to go -further and distinguish between"those
different ways of operating as long as they know they have a
maximum cost estimate. Ed Brothers commented that one of the
questions determining whether the City should be involved or not
is whether the City is going to lose :;Toney or not and in
determining this, they would need to know the outcomes of
possible different arrangements. Tf the controller does the
analysis, would they be able to report by the end of the month,
_since that is when, Council needs to make a recommendation.
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A comment was made by Mark Finkelstein, a non-commission
member, that if the City went ahead and acted as the developer,
it would be putting itself in an entrepreneurial role. Is the
City in a position to do that successfully? Dan responded that
most of them were not hydropower enthusiasts, but are "under the
gun", and if they don't act on it, the project would be turned
over to whomever. He went on to state that an affirmative vote t
on the referendum does not commit the City to building the
project. The Common Council could still decide not to build,
even if they had the voter's approval, but they could not build :
without the voter's approval. If they do not get voter approval, iA
they will -. relinquish the license. Mr... Finkelstein asked if an
alternative might be to permit Cornell or ,some other developer to
do. it under an arrangement that you would:,set certain parameters
as. a method of achieving controls over the environmental effects
and also guaranteeing a certain return with less risk involved.
Dan responded that they would probably have,-::".the right to do that,.
but interesting anyone in that would -be- another . topic. Ellen
Harrison commented that- it would still: require....a-ref erendum with: :
an .affirmative - vote of the Council and that .Council needs to be
sure that. the referendum is worded so that this option remains
open. Dan pointed out that questions concerning:; the wording of
the referendum needed to be brought to the'.,:attention . of the City
Attorney.
:.::Ellen also brought.. up the question. that..:if the,-voters . defeat ,
"a referendum and, therefore, prevent the- City from going ahead '
, with the project, can it be resubmitted to the- voters at a future
date? She went on to point out that. if FERC grants the �.
extension, Helen recommends that they .go ahead anyway with the
referendum, but her feeling is that it is .,going to be difficult
to pass a referendum like thisit is going to particularly
difficult if there isn't the pressure. of. deadlines for the
commission members to sell the public. Ellen stated that if it_
cannot be resubmitted, she does not recom,nen_d going forward
unless given an extension.
Terese Araneo brought up the point concerning the question
about municipal preference; if they let the license lapse, can .
they reapply in the future? Ellen responded that FERC said they
would not . lose . municipal preference , if.. •the license was losT.
Terese• Araneo recalled.
a meeting in- Jure "iri is ich Matt McHuoh was
present and she gathered from that meeting that they would lose
the municipal preference if license were lost.
Martin Sampson brought up the issue cf interest that the
City would have to pay if they have a bond issuad to pay . for
this. The only single fact Lhat their do kr.o , about interest, is
that the City would have to pay 1 ass imo7- v than a private
individual.
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He also relayed a conversation he had with Allen McAdams, a
business professor at Cornell, in which Professor McAdams said he
had a group of students working on this as a project designed to
be able to advise Cornell whether or not ;to go ahead with the
project. Martin relayed this information to Helen who called
Professor McAdam. McAdam. refused to relay any information to
Helen because he thinks this is something that Cornell paid him
to do, and that it is Cornell's project, not Ithaca's.
Teresa Araneo informed the Commission that she had done some
telephoning about ways that they could get the site declared
unsuitable- for one reason or another. She spoke with a woman
from the National Parks Service who works for Resource Control .
and she enumerated some of:; the ways.-that a -ite like this . could
be exempted. But it does not .:lookagood. one of them was Natural
Wild and Scenic Rivers which-they do - not qualify for. As far as
this representative knew, there was,- no other scenic designation
on the federal level. The - only only way to go would be through
historic preservation review.�which has' already been done on that
site, or the State Environmental Quality Review Act which has .
already been. done on, that ,site also, 'according to what Helen
said. The only other one ,that needs follow--up is the National
Natural Landmark designation: Other than these, -it doesn't seem
there is any way to have the site exempted. Beth Mulholland
suggested looking into the Historic Anerican Engineering Record.
Martin Sampson asked if anyone had an idea of what Cornell
would charge for water usage rates and for the land needed to
build the project? Dan Hoffman stated that there were ball--park
figures some, time .ago, but have .nrobably gone up since then.
Teresa Araneo commented that if Cornell thinks this is such a
desirable site, why- are they . sending such different messages. ,
Ellen Harrison added that Cornell did make a statement that the-
project was not economically. feasible. Cathy Emilian responded
that the statement > was that the project was economically
unfeasible pertained to beginning it this year. Ellen added that
it is unfortunate that Cornell would not share their economic
analysis with the Commission.
Envi on ental Committee
Ed Brothers stated that there was an absence of - any
discussion about the pulsing issue fl-1,, th-a -rinutes, and that it �
should be recorded. He went on to say t yut they �a�ul d like: to
see a further push to have, USGS PUt , r auoir_g station down the
stream and asked it anyone has pursued that. Dan responded that
he had not heard anything about it to date. dark sulker stated
that he had spoken to theme about the cast, but that was far from
making an agreement. Ellen H�._risbn out- that , the
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expense for this gauging station might be appropriately taken
over by Cornell, since it is mainly concerned with Cornell's
impact on the stream. She then suggested that a possible way to
pursue this would be through FERC because their license to
Cornell has a boilerplate clause saying "we can reopen this and
ask you to do anything that we need to" , so it may be necessary
to take some documentation the environmental committee has put
together concerning the stream flow issue and request this of
Cornell or petition FERC.
Ed Brothers responded that he. needed to get together with
Hal Kraft and see what they are willing to admit to doing and not
doing and -then at that point bring in FERC, if necessary. He
then added that they are going to pursue finding information on
similar size projects regarding eccr-omics and env_ronmental
impacts and suggested that Stetson-Harza,may=have some experience )
with other sites and could help in this area. He knows that the
environmental study has been initiated and surveys have been
mailed, but he has no •-further information about - t.his to date.
Ellen relayed her notes on -the gauging station topic, and stated
that the figures were $6,500, for annual maintenance and
operation -costs, and $10,000-30,000 for initial installation.
Ellen asked what the future role of Stetson-Harza would be
if the project goes forward--are they engineers who oversee the
design and construction? Dan responded that yes, they had been
interested in that capacity since the beginning of. the proje,
Ellen went on to say that Helen had reported to the public
information committee concerning firms that right be approved to
provide a public information campaign. Thoae who are interested
might work with her and inter-view a couple of firms. Elizabeth
Mulholland inquired as to whether they were going to Lpploy a
public relations firm? . Eller responded that $6, 000 had been
approved. Dan Hoffman conn"irmed the amount, but added that there.
had been no discussion as to exactly how that money would be
spent. Dan went on to ask if it had been Helen's -recommendation
that they hire a public relations firm. Ellen Harrison responded
that she understood that Helen's intention was to b--:.re a firm to
produce some television and radio pieces i3nd tc develop display,
commercials, etc.
Alex Skutt commented that i- Ee6med strange -to h _m the. order
in which the priorities had been :yet, rd he thc;�.g! - it r?ic•hU be
more beneficial to spend the $6,000, which had Neer. allocated for
public relat .ons, on a good economi:: feasibility etudy &0 they
would be able to make intelligent •:o the 't-roters
as to whether or not the project i s a good idea. :fan responded
that Council must decide by early Sep,Lemher whether to put this
topic on the ballet, because there -nest be a min=-run of ten days
before a public hearing 7A,iI CC^1.1°- _ t r to Sign':, the
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legislation (September 7, Council Meeting--September 17 after.: '::
ten-day period; Septe:rba_ 2.3 deadlire =cr cett.irg issues on`
ballot) . Dan added that if the issue :foes nct get placed on the
November ballot, a special election could be scheduled, or the ,:-.. :
possibility of an extension by FERC still exists. However,,-:
construction must begin by September 1989, which means they must-' .:
still go through the design stages. He added that it would be
possible for the Commission to say that they are not ready to go
to referendum on vhe n:roject. One r:.:t ion3le for cro_r_g to
referendum in Noverab:r is because it is a Fr side_zt_.al electioa,'
and voter turnout will be very high, leading to the most
democratic decision. If that is not a high priority, they could
call a special election to be conducted during the school board
election which typically has between a 15-20 percent turnout.
Ellen stated that to date`; -there are some critical cfuestions
that have yet to be answered. I) What h-nper_.s to Tnundrinal
preference if they don't" go -ahead with the project now either
because they find it is not .economically , feasible, or because
voters turn it down. She-y,added- that s'_•!e felt -the economics vere a
not clear enough for them to* vote tonight to make a decision and
that it is really not -possible to take a vote contingent on
economic feasibility because there are too many diffEarent- z-irays to
look at what that means . Tf the�_f we-re -.o ~;ch :dole an.nther
Commission meeting at the end of Aucrust, -Lhe economic
information should be there and they shoc.ld be -able to have an
�.: answer on the municipal,. preferrence .question+. - She a!so added that, r� *r-
an important goal for this meeting would be to determine any
other critical outstanding questions that need to be answered
before the meeting at the end of the rnont.h. Also, she stated
that in the neantime, t is importa-hit to be cm rFT�rendnm
language. Lean responded that the City- Attorney is currently
working on referendum laaauage ;:. which will then go to the Charter
& Ordinance Committee on the 18th. Terese Araneo sggested that,
during tonight's meeting, they should come up with some
recommendations about things that -m-_ght ho included in the
referendum and send that t.o'the City Attorney.
Dar. asked the: =om.iissi^n if there was- a ::errtiMzen.-- Or
making a recommendation tonyght to Ccnw on Commission.
agreed they 'were not ready b do so. . He: tl.er. askr__11 if there was
a sentiment . for. meeting agair befcra • Cc�:.n:cil _.leets. T-he
Commission a=greed that ' a riiepti_�g at ' :`_�e ens of t_he month .Ui, s''`
necessary. He went on to add that these would be a releasa of at
least some economic results on the 24_h. -2ha Carrx.:'_ssic~: agreed
on Tuesday, ugust. 3C
Dan brought up arotheT: ; ss_,�s t,11-t- decision r_o
drawback on the 60 ' da-P. prr,-J,ect and _)ossibl._j rel.incuish that
license with no extensiors! r hick ire _.rs nyl�,nd else co•Arl
develop it. It Ayou-" d cos-Z. :r City "i ei_s.: $10 , 00 r _c ht now
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for the study of the dam. If the dam does not meet the
requirments, then it would cost additional money to bring it .up
to the requirements. Dan stated that Helen feels that if the
license conditions are not met, they must relinquish that
license, or they will be in violation and could face penalties.
Ed Brothers asked if the dam otherwise does not require
inspection? Dan responded that to develop the VanAtta dam
project, the 60' dam would not require i.nspec.ticn. Also, 60' dam
was inspected and repaired within the last two years. Dan
commented that by not conducting the study very soon or
authorizing the funding - for the study, they are putting the
license in jeopardy, if they don't get an extension because they
won't have the time to do the study. Ellen Harrison stated that
since the licenses for the VanAtta and 60' are separate, the
worst thing that could happen is they jeopardize the license for'
the one they don't think they-will develop anyway. In terms of a
penalty, is it a financial penalty? Dan e.dded that Helen felt-
they should relinquish the license and not wait for them to take
it.
Ellen Harrison asked that =n terns of the likelihood of
developing hydropower .at the 60' dam, is ' hat ? ?sed on ma-Ln?y an
economic stance? Dan responded that the floes in six rile creek
is considerably lower than Fall Creek, and the site is not easily
accessible. He went on to 'sav that, in his opinion, it would
cause substantial damagejust to construct nhe project in that
location. and he thinks.,.,the City. is going to: he ;very . reluctant:,to
build in that location'. Beth Mulholland b=ought up t:ae point 3
that if the City does not want. to build in that location, then
they would be leaving it open to anyone who wanued to deve _on ice,
and they may be a party who is completely alni_te'rested in the
environment. She went on to ask if anyone else hed expressed an
interest in ' developing hydropower in eithar location. Dan
responded that no one had expressed interest t.r. 60' da:n, but
someone had in VanAtta.'s deur... Eller. Harrison cornented that it
was probably a wise choice not to do the do m safety analysis at
this point, but they shouldn't turn around and say that they
don't want it. Ellen asked if there was grin-.c; to be a single
referendum to address hydropcwer in both lrc.cti ns, and Dan
responded that there wou .d . be three separate onrr s, unless -.';,I e
City decides not to purs-_•.e •che 61- 1 darn p.7'of ect .
In discussing -election possibi=
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Dan Hoffman made a motion to amend and approve the minutes
from the last meeting. Amendments were made and minutes were
approved as amended.
Amendments
1) The following change will be made to the economic
committee report from the August 14, 1988' minutes. Sentence
beginning with "A pre--feasibility.. . " should read, . "The Stetson-
Harza pre-feasibility study was based on the original Halliwell
studies", delete remainder of original sentence through fairly
accurate. -. Begin again, "These estimates are inadequate regarding
. cost to the . ..city to develop the site" and delete remaining
material through "estimates--" . Begin a new sentence, "There is
room for further work in teems of looking at the '!oricrinal data
and reexamining Stetson-Haraa's cost analvsis" Iand delete -
remainder.
2) The:_..bottom of Page 3, under "Disc�lSsion: with Cornell
Representatives" shall read flow/plant factor-of . 33 CFS, (not
33%) , and 50 to 60 CFS (not 50 60%) . The .following shall be
added: Comments from the Commission . a.nd the audience indicated F
that there was considerable variation in flow that was not
related to-natural weather conditions. It is indicated this may x
have substantial impact on fisheries and on safety and operation r:
of a second;.Fall Creek plant.
The fourth paragraph on Page 4 shall have the following
addition: "Mr. Brothers responded by sayi.�c that a flo-rr of. 50
CFS is maintained duh ing the suYrner oral�r i,f ayailable fr_om
natural flow. The remainder of. that paragraph "if a plant ws
built, the capacity for the average flow will be '00-40C CFS. "
shall be deleted.
3) On Page 3, within the paragraph under enumeration
number 4, the reference to the "Legal Committee shall be changed
to the "Economic Conunittee" .
4) On Page 4, tinder the - sub .ect "Discussion vrith Correll
Representatives" the p4rarraph- concerning ;uestions from the
media . and public .shall have -the following, addition: - " . ...federal
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requirements [and recognizing '-the ecological sensitivity of--the
site. Corne.'_1 representati-.rec, said they would utilize all of tie
best information av,E.iI a-Ie, Wi they xjare to desig:z a site, �_-o
protect the environment. ]