Middlebury balks at expedited review of Otter Creek Falls hydro plan

MIDDLEBURY — The Middlebury selectboard has elected to oppose a more streamlined federal review of a proposed small-scale hydroelectric project at the Otter Creek Falls, an action that organizers of the project said could kill the effort.
At issue is Middlebury Electric’s application for the Federal Energy Regulatory Commission (FERC) to review the proposed water turbine project under the agency’s “Traditional Licensing Process (TLP).”
Middlebury Electric had hoped such a process would lead to a quicker review of the project, which calls for restoring hydropower at the falls with a penstock and new powerhouse that would have a rated capacity of 1.59 megawatts.
Middlebury Electric, a venture assembled by Anders Holm and his family, has spent recent months in closed-door mediation sessions with town officials in an effort to work out a mutually acceptable project.
It appeared as though those talks were bearing fruit, as the town sent a letter to FERC officials on April 26 declaring conditional support for the Middlebury Electric project.
That support, according to the letter, was based on the expectation of, among other things:
•  A formal agreement between the town and Middlebury Electric to ensure that the hydro project is operated in the best interests of both the Holms and the town of Middlebury.
•  Assurances to the town of “minimal, continuous flow over the Upper Falls at all times, which meets the Aquatic Base Flows and complies with state and federal standards.” 
•  That Middlebury Electric obtain all permits necessary for the project “in a timely manner,” with the town reserving the right to participate “in any certification or approval process(es).”
•  That Middlebury Electric provide the town evidence that the project is “soundly financed and viable economically.”
But those sessions evidently did not work out all of the selectboard’s concerns, as the town — through the law firm of Maine-based Pierce Atwood — confirmed it will oppose a TLP for the hydro project in order to better preserve the town’s interests on such matters as water rights, aesthetics, aquatic resources and land use.
In a June 3 letter to FERC, Pierce Atwood attorney Matthew D. Manahan declared Middlebury’s preference for a more comprehensive “Integrated Licensing Process,” a review that Manahan said could be less costly and “allow the parties to get together in advance to reach agreement on necessary studies and other issues, to avoid later disagreements and contested proceedings and appeals.”
Manahan, in his letter, disputed Middlebury Electric’s contentions that it had reached common ground with the town on a variety of issues related to the project. He said the town and Middlebury Electric have not come to terms on such things as a compensation agreement and design of the project.
“The town anticipates the possible need to request additional studies relating to impacts on water quality resulting from re-routing of water, fisheries and aquatic impacts of such re-routing, aesthetic impacts of such re-routing, potential erosion from project construction, impacts on historic properties adjacent to and near the proposed project, potential recreational impacts, and a Phase 0 archaeological study,” Manahan said.
Manahan added, “The town has not seen engineering plans for the proposed project, including construction and design plans, so the town is unable to draw conclusions about many of these issues … Further, the town anticipates the potential for significant disputes over the adequacy of studies Middlebury Electric seeks to rely on to show an alleged lack of adverse impacts from its existing proposal; the town has not seen those studies.”
Middlebury Electric representatives were candid this week in their disappointment about the town’s opposition to a TLP review of the project.
“After months of productive mediation leading to the recent positive town letter of support filed with FERC, this sudden and complete change of position from the town came as a total surprise,” Holm said in a written statement.
“We are hopeful that there has been some misunderstanding that led to this submission. But as it stands now, the last-minute letter from the Town’s regulatory attorneys will cause the project’s costs to skyrocket and for it to be delayed significantly. Unless recanted within 60 days, the letter may be a mortal blow to the restoration and upkeep of the riverfronts on both sides of Middlebury Upper Falls.”
The Holm family has been trying for several years to restore hydropower to the Otter Creek Falls site through a water turbine that would harness electricity from the creek as it flows through a flume under a building (owned by the Holms) that borders the south side of the falls. It is a project that proponents say could generate more than 1 megawatt of electricity — enough to power the downtown area.
Middlebury officials said their opposition to a TLP review is not aimed at derailing the hydro project. The request for a more comprehensive review “gives the town more opportunities to comment,” Middlebury Town Manager Bill Finger said. “We are trying to preserve the town’s interests and ability to participate.”
Dave Hallam had been mediating discussions between the town and Middlebury Electric officials. He said the town has withdrawn at this point from mediation but is still interested in talking to the Holm family. Recent meetings had seen Middlebury Electric make an offer and the town pitch a counter-offer related to the lease or purchase of municipal land to help the hydro project advance, according to Hallam.
“The ball is in Anders’ court to decide if he wants to continue to talk,” Hallam said.
Reporter John Flowers is at [email protected].

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