September 22, 2017
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New state law aims to end controversy over Forest City dam

By John Holyoke, BDN Staff
Updated:

A brewing controversy about a small water-control dam in Washington County may have been solved during the most recent session of the Maine Legislature with the passage of a law that would, under specific circumstances, turn the dam over to the state and leave East Grand Lake’s footprint unchanged.

The bill, LD 1626, called for Woodland Pulp LLC — the current owner of the dam — to turn over ownership of the dam to Maine Department of Administrative and Financial Services. In turn, the dam’s management would be overseen by the Maine Department of Inland Fisheries and Wildlife.

Still at issue? The swap in ownership and management won’t take place unless the Federal Energy Regulatory Commission issues a written determination that the facility, known as the Forest City Project, doesn’t require a FERC license in order to operate.

In addition, the Maine DIF&W will not assume ownership unless the state and Woodland Pulp execute an agreement that calls for Woodland Pulp to operate and maintain the facility at no cost to the state for a period of 15 years.

The bill was signed into law by Gov. Paul LePage on July 24.

Rep. Bob Duchesne, D-Hudson, the House chairman of the Joint Standing Committee on Inland Fisheries and Wildlife, said the bill was introduced late in the session by the governor. The bill was designed to address a worst-case scenario, which was becoming increasingly more likely: that Woodland Pulp would set the dam gates at a certain level and not manipulate water flows as it has done for years. The result of that would be a largely dewatered East Grand Lake.

“There’s about 2,000 camps on the lake, including some traditional sporting camps, and it would have had serious impacts,” Duchesne said. “And of course we share it with Canada, so there are a lot of people on the other side of the border, too, who would have concerns.”

In May, the BDN outlined the controversy. Woodland Pulp sought relief from the FERC license that required the company to fulfill many costly recreational and environmental requirements. Woodland Pulp estimated those requirements would cost the company $6 million more than the downstream generation of power would generate over the 30 years of that license, which went into effect in 2015.

The bill that was amended and later passed offered legislators the assurance that they wouldn’t be saddling the state with that $6 million fee, Duchesne said.

“As originally proposed, the state would be taking over ownership of the dam with the assurance that we would no longer qualify for FERC jurisdiction,” Duchesne said. “The committee was fairly reluctant to just believe that on face value, because anyone who is under FERC is going to get stuck with the same sort of problems that the mill wanted to get out from under.”

By adding stipulations that the state would not take over ownership nor responsibility until after FERC’s decision, that hurdle was cleared, Duchesne said.

Scott Beal, Woodland Pulp’s environmental manager, said the company is pleased with the outcome and encouraged that, after some delays, the Trump administration has succeeded in nominating and confirming two FERC commissioners that the agency lacked earlier this year. Without those commissioners, FERC lacked a quorum and could not act on matters like this one.

And he said Woodland Pulp has agreed to continue to own and operate the part of the dam — one gate and a fishway — that is in Canada.

“We figured we’d still be willing to operate the other half of the dam for a period of 15 years,” Beal said.

Beal said that since the bill was signed into law, Woodland Pulp has filed for a declaratory order from FERC, asking the agency to conclude that the state of Maine doesn’t need a federal license to operate the dam, which doesn’t produce electric power.

“We are awaiting, now, FERC’s decision-making,” Beal said. “We’re very optimistic. … [The declaratory filing] lays out a very compelling argument, in my mind, that the state does not need to carry on with a FERC license.”

Beal said he hopes the Forest City Dam situation is a priority for FERC, but wasn’t willing to predict when the issue might be settled.

“I’m sure there’s a considerable backlog, but I think this is something that [FERC] could dispatch fairly swiftly, certainly by the end of the year,” Beal said. “But I wouldn’t bet the farm on it. The honest answer is, I don’t know.”

There’s been a dam at Forest City since about 1840, and the current dam has been in place since 1965, according to the Dale Wheaton, a former sporting lodge owner on the lake. It’s not a power-producing facility, but it does serve to regulate the level of water on East Grand and to determine the amount of water that is allowed to continue downstream.

Power generation takes place more than 60 miles downstream, at Grand Falls in Baileyville. But because a portion of the water that flows through the dam is used for hydropower — and because of a decision made by the previous owner of the Woodland Pulp mill years ago — the Forest City Mill currently falls under FERC oversight.

 


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