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HomeMy WebLinkAboutMN-HDPC-1988-12-13 DRAFT - Minutes - Hydropower Committee Meeting December 13 , 1988 Third Floor Conference Room City Hall, Ithaca, New York Present: Dan Hoffman, Martin Sampson, Ellen Harrison, Ed Brothers, Mike Sprague, Mark Walker, Seth Mulholland, Helen Jones Absent: Cathy Emilian, Alex Skutt, Therese Araneo Stated Agenda (Memorandum from City of Ithaca Department of Planning and Development - no date) : 1. Approval of Previous Minutes 2 . FERC License Requirements - Compliance Report 3 . Fisheries Update Analysis - Final Approval 4 . NYSEG Power Sale Contract Negotiations - Report 5. Ithaca Falls Project Timetable 6 . Six Mile Creek Projects Minutes of the Meeting The meeting began at 7 :30 PM. Roughly a dozen members of the public attended. Chairman Hoffman suggested that the agenda be changed to ensure that issues important to them be discussed before considering other Commission business, particularly the minutes from previous meetings. Chairman Hoffman gave a brief report about the status of the proposed hydropower project on Fall Creek. He reported that the November referendum to build had been approved by a majority of city voters. In order to preserve this option, the city must continue to comply with license requirements set by the Federal Energy Regulatory Commission (FERC) . 1 . FERC License REquirements - Compliance Report Helen Jones gave a brief report of the city' s efforts to meet FERC requirementss . She has been working to meet two requirements - the design of a fish diversion rack at the intake for water piped to the generating plant and the design of an emergency action plan in case of a dam break. Helen consulted with the New York State Department of Environmental Conservation about the specifications for the fish diversion rack. The design is determined by the size of the bars needed, which in turn is related to the maximum allowable water velocity at the rack. Helen reported that no extra measurements of stream velocity would be needed for the final design. In conducting her studies for the Emergency Action Plan, Helen found that although the reservoir behind the existing Fall Creek dam is small, the dam is larger than previously thought. The structure appeared to be set on a weathered rock formation, which, upon closer inspection, was found to be concrete. The concrete spans twelve to fifteen feet from base to crest of the dam. However, based on the amount of storage behind the dam, the city has requested exemption from filing a comprehensive emergency action plan. Ed Brothers suggested that threat of dam break would coincide with high flow times when the downstream portions are least used. Flow measurement after the dam is an important requirement that may be more difficult to meet than was previously thought. Helen' s conferences with the U.S. Geological Survey (USGS) have found a few options for measuring flow, though this is complicated by the lack of a good control structure in the creek bed below the falls . Helen and Jim Campbell of the USGS are examining alternatives. 2 ) . Fisheries Update Analysis - Final Approval Ichthyological Associates, Inc. submitted revisions to the "Angler Survey and Fish-Stocking Review for Ithaca Falls Hydroelectric Power Project - DRAFT, " which was submitted on September 6 , 1988 . The Commissionls discussions focussed on further revisions to clarify parts of the report important to determining operating policies for the plant. These include a clearer, stronger statement to support extra conservation releases to make sure that fish don' t mass in the tailrace pond, where they would be very vulnerable to anglers. Eric Seidler, an observer in the audience, suggested that the survey was limited, in that it did not consider potential effects on "non-glamorous" species -- those not stocked by the NYSDEC. The commission agreed that the revisions called for were not major, but that final payment should follow completion of the report. However, rather than asking the consultants to wait for approval and payment until full commission approval, Ed Brothers and Dan Hoffman will review and approve the revisions if these are completed before the next commission meeting. 3 . NYSEG Power Sale Contract Negotiations - Report Before the November referendum the City began negotiations with New York State Electric and Gas for a purchase price for power generated by the proposed Fall Creek plant. Helen and the city ' s controller and attorney have been the negotiating team. The negotiations lead to substantial agreement on several proposed rates and types of payment schedules. The Budget and Administration Committee of the Common Council received a draft version of the contract and will discuss it during its final meeting of 1988 . The contract is NYSEG' s standard agreement. In Helen' s opinion the most difficult parts of the contract to accept will be the "out clauses, " that serve as safeties for NYSEG in the event of a city default or circumstances that force NYSEG to nullify their contract with the city. One further complication lies in a requirement that the city post a letter of credit or security bond if some levelized cost options are adopted. This would be to insure that in the event of a city default on the contract NYSEG would be able to recoup losses from initial overpayments. However, much larger decisions being made in the State are forcing contract negotiation and acceptance deadlines that may be difficult for the Common Council to meet, given the complexity of the contract and possible need for further negotiations. These include a change in the way that NYSEG sets prices for power. On December 1 NYSEG petitioned the Public Service Commission to suspend negotiations with roughly 30 small power generators, such as the city, in favor of a proposed bidding system. The city is nineteenth or twentieth in line for a final contract and all of the others are trying to negotiate and sign before the Public Service Commission lets NYSEG suspend negotiations. Suspended negotiations will lead to a bidding system that may be very unfavorable to pursuing a direct sale to NYSEG. The system may be in place in the first months of 1989 . Under this arrangement, NYSEG would request bids for power to offset peak power demands, which generally come in the winter and summer. These are low flow seasons for Fall Creek, and consequently the predicted power generation curve for Fall Creek would be unappealing to NYSEG under the new bidding system. Fall Creek' s peaks occur in Spring and Fall. 4 . Other Options for Hydropower Development on Fall Creek a ) . Exemption Chairman Hoffman suggested that the option to exempt the site had not been pursued with vigor by the City. when Matt McHugh was approached two looming deadlines may have influenced his response about the possibilities for protecting the Fall Creek Site from development. First, the congressional year was drawing to a close and second, the obligatory referendum for developing the site was to take place in November. Hoffman believes that faced with these two factors and no clear sense of what the Ithaca voters wanted, Congressman McHugh had no reason to pursue the exemption. Hoffman pointed out that two things have changed since the first request to Congressman McHugh. First, FERC granted the city a two-year extension of the construction deadline. Second, the referendum passed ensuring the city' s control over the site for at least the next two years. Hoffman felt that the results of the referendum had not sent a clear mandate for hydropower to the Common Council. In fact, now that the project economics are becoming more difficult to predict the Council may wish to consider a new recommendation from the Hydropower Commission to petition Congressman McHugh for a federal exemption. Hoffman suggested that he would write such a recommendation for the Commission to consider at its next meeting. b) , wheel the Power - to Other Utilities or to City Facilities Wheeling the generated power by sending it along NYSEG distribution system to other utilities or the City may be possible. Helen reports that the city has the option of sending generated power to city buildings and operations, such as the city garage or the sewage treatment plant, along NYSEG lines free of charge. The city may send power through NYSEG' s lines without charge to any facilities within a mile of the proposed plant. The power could then be used to offset the city' s electric costs. Selling power to other utilities by wheeling it through the NYSEG system would involve transmission costs that vary according to distance to customer. Helen mentioned both Niagra Mohawk and Long Island Lighting Company as potential customers, though the city has had no contact with them about this option. Although bidding specifications from these or other utilities may be more favorable than those proposed by NYSEG, gains in power sales may be offset by wheeling charges. It may also be possible to develop the Falls cooperative with Cornell, with Cornell as consumer of the power. However, Martin Sampson pointed out that Cornell currently sells all generated power from its Beebe Laxe plant to NYSEG. Members of the Commission were uncertain about the attractiveness of this idea to Cornell. c) . A Smaller Plant Chairman Hoffman noted that plants designed to generate less than 2 megawatts of power will be exempt from price- setting through bids. He suggested that a smaller plant than that specified in the license would be a further option for Fall Creek. Helen concluded the discussion by saying that if the economics of the project were unfavorable, the city would surrender their license to build. 5. Ithaca Falls Project Timetable The construction deadline for the Ithaca Falls project is September, 1991. Helen reported that the city will need at least nine to ten months to complete the engineering design and detailed study leading up to construction. Design and study will be preceded and followed by soliciting bids and contracting for the work at all phases. The two year extension allows for a comfortable margin of time between now and when construction would begin, though much many tasks be completed between now and then. Helen suggests that, beyond negotiating with NYSEG, all plans are awaiting resolution of the project costs and returns. 6 . Six-Mile Creek Projects a) . 60 Foot Dam In order to retain the license to develop this site, the city must complete a dam safety study by January 9, 1989 . The study is extensive and costly (estimated $10 , 000 ) and the Common Council has already refused to authorize funds for this purpose. Both for lack of time and lack of funds the study will not be completed by the deadline. The Commission passed a motion that City surrender its license to FERC. b) . Van Atta' s Dam This small plant will be exempt from bidding because of the proposed amount of power generated. A private developer, Bill Allen, is very interested in this site. The city has the options of either developing the site or leasing it to a private developer. Either option would have to be approved in a Spring referendum, though (as with the Fall Creek site ) a referendum may not be mandatory for a leasing arrangement. Construction must begin by March, 1990 to meet the requirements of the license. 7 . Approval of Previous Minutes The Commission reviewed two sets of minutes from meetings held on August 10 and August 30 . The minutes from August 10 were approved. Those from August 30 were reviewed and the Commission suggested some amendment and editorial work before approval. 8 . Next Commission Meeting The next Commission meeting will be held on January 17th, 1989 .