OLD TOWN, Maine — Construction of a replacement pump house near Great Works Dam in Old Town is the latest indication that the 10-year Penobscot River Restoration Project is on track.

Great Works Dam, located on the lower Penobscot River in Old Town, has been generating hydroelectric power since its construction in the late 1800s but is scheduled to be demolished and removed by the end of next summer.

Since Old Town Fuel and Fiber relies on that power to operate its facilities, loss of the dam means not only a significant change in water level, but also a need for the company to create an alternative water source to draw its power from.

“The facility uses a lot of water for boiler feed water and process water,” said Dan Bird, human resource director for Old Town Fuel and Fiber. “Buying water from the city would be very cost-prohibitive.”

The purpose of the new pump house is twofold, according to Bird: to build a head, or depth, of water to draw Old Town Fuel and Fiber’s water from and to generate hydroelectric power. A different type of intake pipe will be relocated because of a water level expected to be about 19 feet lower once the dam is gone.

The “maximum level of difference in water level at the dam is approximately 19 feet and diminishing up and down the river,” said Laura Rose Day, executive director of the Penobscot River Restoration Trust. “That’s based on the levels at August low flow.”

The trust is an organization dedicated, its website says, to the successful implementation of the project, which aims to restore 11 species of sea-run fish; revive not only native fisheries but also social, cultural and economic traditions of the Penobscot, New England’s second-largest river and maintain energy production.

Another longtime Old Town business, the Sargent Corp., is handling the pump house project. Construction began in September and is expected to be finished before the end of the year.

The construction of a new pump house, while costly in the short term, should pay for itself and save money in the long run, according to Tom Rumpf, vice president of the trust’s board of directors and associate state director of The Nature Conservancy of Maine.

“There are a lot of advantages, efficiencywise, with newer, more efficient pumps, and I believe they’re applying to get tax credits or rebates from the Efficiency Maine program,” Rumpf said. “And it’s designed to provide the same capacity per day as the current pump house does.”

The new pump house will differ from the old in its design, however.

“Once the dam is removed, there won’t be anymore impoundment there, so the new water intake is actually downriver from where the dam is now,” Rumpf said. “It’s an intake box in the bottom of the river. It’ll be gravity-fed to the pump house.”

The overall, decade-long project involves the removal of both the Great Works and Milford dams as well as the removal of flashboards and the installation of a fish bypass at the Howland Dam.

The project resulted from an agreement signed in 2004 with seven conservation groups, hydroelectric company PPL Corp., the Penobscot Indian Nation and state and federal agencies.

“It’s been a very collaborative process involving a lot of parties to rebalance the river system and restore native fish,” Day said.