MIDDLEBURY — The Middlebury selectboard last week took what could be an important step to clear the path for a hydropower plant to someday be established at Middlebury’s downtown waterfall.
Board members and Anders Holm, principal of Middlebury Electric LLC, signed a term sheet that outlined a roadmap to build a new hydro facility at the Middlebury falls of the Otter Creek.
Since 2006 the board and Middlebury Electric LLC have engaged in occasionally contentious talks about how such a facility could be built while still protecting the town’s interest in preserving the beauty of the falls and the historic integrity of downtown’s heart.
Holm’s family owns the Holm building that borders the Battell Bridge on the falls’ south side in downtown Middlebury. Nine years ago Holm first proposed a project at the falls that could generate between 500 kilowatts and 1 megawatt via a turbine under that building — enough to power about 400 homes.
Holm and the selectboard have not always agreed on how that project should move forward.  Holm believed the board did not support the effort firmly enough, and board members hesitated to back it without what they perceived to be adequate assurances on whether the project would be viable in the long term and if the falls and its surroundings would be protected.
But the entire selectboard and Holm signed the term sheet at the board’s Feb. 10 meeting.
Selectboard Chairman Dean George said in a later interview the board is hopeful, despite what will be a long federal permitting process, for any proposal.
“We’ve never had a formal term sheet we’ve agreed on, so this is a good step forward,” he said.
George acknowledged what he called an occasionally “challenging” relationship between Holm and the selectboard, but said neither side lost sight of the potential benefit of small-scale hydro on Middlebury’s central waterfall.
“No one ever disagreed that this is a good idea to pursue,” George said. “We also want to make sure this is a viable project.”
Key sparks in recent talks between Holm and the board are his statement that a larger firm will probably take over the project from Middlebury Electric and move toward making it a net-metering project that would allow the town to offset some of its energy costs.
In a Feb. 9 email to Middlebury Town Manager Kathleen Ramsay, Holm wrote that he planned to move to Boston and that “we hope to merge with a large interested party who is interested in the power via net metering. Our goal is a merger which keeps the local flavor of the Middlebury Electric name but backs it with a large and powerful entity with connections and resources to assure the project comes to fruition.”
The term sheet, which states that it “reflects the parties’ intent to work together to develop a binding agreement to proceed in a mutually beneficial manner,” contains 10 provisions, including:
•  Middlebury will support the project, assuming Middlebury Electric complies with the agreement.
•  Middlebury Electric will consult with the town during design and address concerns on the project’s impact on aesthetics, historic preservation, other property owners, and the waterfall.
•  Middlebury Electric will “work diligently” to obtain funding and permitting for the project, with a five-year deadline.
•  The town will agree to assign necessary water rights to Middlebury Electric.
•  Middlebury Electric will offer security to the town in the form of a bond, letter of credit or similar instrument; properly insure the project; and offer the town the first right of refusal if it chooses to sell the project to a third party.
For the project to be built, it requires Federal Energy Regulatory Commission approval. Typically, George said, obtaining a FERC permit can be time-consuming, but he hopes that process can start soon.
“Maybe this time it can work. It’s still a long ways to go. The permit process from what I understand is pretty complex,” he said. “But we don’t want to be the ones standing in the way.”
Andy Kirkaldy may be reached at [email protected].