FERC Licensing of Four St. Croix Dams Debated


FERC licensing of four St. Croix dams debated
by Edward French    
July 22, 2016

The decades-long debate over federal licensing of Woodland Pulp's storage dams on the St. Croix River has gained greater local interest with the filing of legislation by Congressman Bruce Poliquin to exempt the dams from federal oversight and with the increased attention being paid to restoring passage for fish, particularly alewives, on the river. Critics of Poliquin's bill maintain the costs to Woodland Pulp to continue with Federal Energy Regulatory Commission (FERC) licensing requirements are not that significant and fear the company will not maintain the fishways for the passage of eels, alewives and other fish. Woodland Pulp representatives, though, say that the costs of the FERC requirements are becoming too great and that the company would continue to maintain the storage dams, if they are exempted from FERC licensing, the same as it has in the past.

Scott Beal, communications manager for Woodland Pulp, says, "It's an issue of project economics. The increasing costs are far outweighing the benefits."

But Paul Bisulca, a member of the Schoodic Riverkeepers, a Passamaquoddy group that seeks to restore indigenous fish and wildlife to their historic homelands, maintains that Poliquin's bill, by eliminating the FERC process, "simply grants Woodland Pulp, owned by a Hong Kong based holding company, International Grand Investment Corporation, special consideration to avoid public compensation." He adds, "This is a gross overreach of congressional power that sacrifices to narrow corporate self‑interest the broad interests of the Maine public and Canada."

The storage dams in question are the West Grand Lake dam and Lower Sysladobsis Lake dam on the west branch of the St. Croix and the Vanceboro dam and Forest City dam on the east branch. The storage dams were purchased to support the Woodland mill's power dams at Woodland and Grand Falls by spreading the water balance across the year. The power dams are not subject to FERC licensing because they were built before 1920, when the Federal Water Power Act was enacted.

According to Jay Beaudoin, environmental superintendent at Woodland Pulp, the storage dams in a normal year contribute less than 2.5% to the power produced at Grand Falls and on average the amount of power the hydro system contributes is about one-fifth of the mill's power needs.

Beaudoin says that the former owner of the mill, Georgia-Pacific, filed for FERC licenses in 1980 following "an energy crisis where 'robber barons' were going around taking unlicensed dams by filing for a FERC license." Relicensing of the storage dams began in 1994. Licensing was suspended for a time following a FERC ruling in 1997 that the storages were part of the power dams and not required to be licensed. The following year, however, FERC reversed itself and licensing resumed. While the issue also has had a long legal history, a 2003 court ruling that FERC has jurisdiction over the dams has been allowed to stand.

Public input

 Bisulca and others are concerned that the proposed federal legislation is not providing a sufficient opportunity for public input. He notes that the promulgation of fishing rules for almost 7,000 acres of waters within the watershed are under the jurisdiction of the Maine Indian Tribal‑State Commission on which the Passamaquoddy have membership, yet the commission was not consulted about Poliquin's bill.

His view is echoed by Natural Resource Council of Maine Executive Director Lisa Pohlmann, who weighed in on the bill in a letter to a potential supporter. She states that the FERC process protects "the diverse stakeholders with an interest in the St. Croix. If the Poliquin bill passes, it would block guides, tribes and everyone else from weighing in on the Woodland Pulp's management of the west branch dams. The people of the state of Maine own the waters of the west branch, not Woodland Pulp, and they should have a say in what happens on the river."

She adds, "In its new license, FERC is simply asking Woodland Pulp to upgrade its dam infrastructure as part of its normal licensing process. Such upgrades are common and reasonable. If the House of Representatives were to pass this bill, many other dam owners in the U.S. would ask for the same removal of FERC jurisdiction. This would have serious consequences for public safety and the environment nationally."

Concerns about the impact of the legislation are also raised by Dwayne Shaw, executive director of the Downeast Salmon Federation. He believes that granting the exemption from FERC licensing could "set a dangerous precedent." Licensing of the storage dams by FERC is "the law of the land," yet Woodland Pulp is seeking to have the dams exempt. He argues that the state "is totally incapable of managing for the sustainable recovering of our fisheries." To address issues of fish passage, water quality, recreational uses, power costs and lake levels, Shaw says, "The FERC system is the tool we have to use. Trying to cut the feds out of it and handing it to the state would set a very poor precedent."

Fish passage concerns

In a recent letter to Catherine Blewett, deputy minister of Fisheries and Oceans Canada, Bill Taylor, president of the Atlantic Salmon Federation, comments, "The aging fish passage infrastructure at the storage dams is in dire need of improvement, and we fear that the passage of this bill would essentially exempt Woodland Pulp from investing in the necessary improvements to maintain functional fish passage over the long-term."

Taylor and others opposed to Poliquin's bill believe that it will affect restoration efforts for fish such as alewives. Taylor writes, "The Poliquin bill is the latest example in a long and complicated struggle that has unfolded on the St. Croix since 1995, when the State of Maine unilaterally closed fishways and prevented access to nearly the entire watershed for sea-run alewives. The State of Maine did this in response to a small group of smallmouth bass guides in Maine who felt that native alewives were negatively impacting non-native smallmouth bass throughout the St. Croix.      These fears were proven to be scientifically unfounded."

The legislature finally passed a bill in 2013 opening up the fishway at the Grand Falls dam to alewives, and Taylor notes that "healthy populations of native, diadromous fish provide many ecosystem (and in some cases, economic) benefits to the St. Croix watershed, the Bay of Fundy and the Gulf of Maine."

Bisulca maintains that the Woodland and Grand Falls fishways are at the end of their 50‑year life expectancy and that in May 2016 the fishway at Woodland structurally failed. It was repaired by Woodland Pulp but is estimated to have two years of serviceable life, he says. "All of the St. Croix fishways are believed to be incapable of handling the volume of fish expected at full restoration," according to Bisulca. He maintains that if FERC is removed as a regulating authority, all of the fishery‑related prescriptions made by the U.S. Fish and Wildlife Service "will be lost and river sea‑run fishery restoration will be greatly diminished and possibly cease."

Concerning alewife passage, Beaudoin points out that alewife access into the St. Croix is not dependent on FERC, as they pass Woodland Pulp's power dams that are not licensed by the federal agency. He writes, "Today alewife have access as far as they can go up the east or international boundary side of the river above and below Grand Falls."      On the west branch, above Grand Falls, access is only to the West Grand Lake dam. Beaudoin says state and local recreation business interests, including guides, are concerned that alewives will damage the fishery above this dam in West Grand Lake. He notes, "The federal government is mandating through the FERC process that alewives be allowed to pass here." Woodland Pulp is being required by next March to mediate an agreement "between the two opposing sides with the expectation alewives will eventually be allowed passage." Beaudoin says FERC's requirement to mediate an agreement places Woodland Pulp in an uncomfortable if not an inappropriate position concerning fisheries management.

According to Beaudoin, eels have no problem passing through the fishways at the storage dams, but the new FERC licenses require special eel fishways, "not because of biological necessity, but rather because the FERC licensing process allows the federal government to mandate them."

With the new FERC licenses, Woodland Pulp will be directed by the federal government, instead of the Maine Department of Inland Fisheries and Wildlife, on how to operate the fishways. "The FERC process allows the federal government broad authority to issue fisheries mandates," Beaudoin notes. "Because the fishways at Forest City and Vanceboro are in Canada, the federal government has a condition in the Vanceboro FERC license requiring a new upstream fishway at Spednic Lake capable of passing four to eight million alewives," he adds.

Other concerns

If Woodland Pulp is exempted from FERC licensing for the storage dams, Bisulca asserts, "The U.S./Canadian/tribal river restoration loses fish passage improvements, which would represent a loss to Downeast and Maritime coastal communities. Other lost benefits are improvements to impoundment boat landings, ramp work, access road improvements, handicap access and protection of wildlife and historic sites. And this costs less than one tenth of the cost of one million dollars cited by Congressman Poliquin. And we have received no assurances that any needed watershed improvements will be supported and funded by the LePage administration or Poliquin's Congress."

However, according to Beaudoin, cooperative agreements for flood prevention, minimum stream flows, winter water level maximums that protect camps close to shore, summer water level minimums for recreation, and restricted water movement in the storages for bass and togue spawning will continue to be honored by Woodland Pulp.

Beal states, "There has been a good deal of commentary by those with their own agendas promoting a fair amount of inaccuracies. The fact is that nothing will change in terms of lake levels and river flows; in fact it will likely mean that we can keep the lake level in East Grand a bit higher than we are currently allowed by the recently issued FERC license."

He adds, "We are trying to maintain the status quo with how we have operated the system for at least the past 20 years. Representations that, absent FERC, Woodland Pulp will be unregulated, will cause flooding, will prohibit fish restoration are pure fiction, promoted by those that don't know the facts or don't want the facts known."

Regulation by the state

Bisulca notes that Congressman Poliquin says that if the storage dams are exempted from FERC regulation the State of Maine could regulate them in a safe and environmentally responsible way. However, Bisulca says that this has not been demonstrated by those Maine agencies cited by Poliquin's staff. "The Maine Department of Environmental Protection's prescriptive authority under section 401 of the Clean Water Act was waived for all of Woodland Pulp's water storage projects C not environmentally responsible."

Concerning dam safety, Bisulca writes, "The Maine Emergency Management Agency (MEMA) has responsibility to inspect dams to ensure no catastrophic failure with high hazard and significant hazard dams." Vanceboro and West Grand, which are presently FERC inspected dams, are a significant safety hazard, he says, adding, "Maine was given a D+ by the American Society of Civil Engineers in its 2013 report. In 2014 the Association of State Dam Safety Officials rated Maine's dam inspections at 17% compared to the national average of 76%."

As for fisheries management, Bisulca states, "Maine's Department of Inland Fisheries and Wildlife (DIFW) during FERC licensing has offered no recommendations supporting sea‑run restoration of the St. Croix River." He notes that although the Maine Legislature in 2013 and 2015 supported sea‑run fish passage on the St. Croix River, the LePage administration has not supported the ongoing restoration effort, permitting the fishery agencies to remain absent.

Concerning the assertion that the state would not regulate the storage dams in a safe and environmentally responsible way, Beal comments, "That's clearly a matter of opinion. However, in my view, Maine has a solid record for dam safety and protection of the state's natural resources."

Costs disputed

While Congressman Poliquin states that new water storage dam licenses will increase the cost to the mill by more than $1 million per year, Bisulca maintains that based on FERC's calculations the added cost per year for the storage dams would be under $200,000 and could be significantly less than that, depending on whether a fishway needs to be constructed on the U.S. side of the river at the Vanceboro dam.

Beal, though, disagrees about the costs. "By FERC's own analysis, Woodland Pulp loses more than $1 million per year to continue to operate the projects under FERC's licenses, because we could buy the equivalent of the power the storage dams contribute to downstream generation for much less than the cost to operate them. Eliminating the FERC licenses would reduce or eliminate our annual losses. Note also that FERC's increased annual cost represents all of the costs incurred over 30 years, spread out evenly over that time period. But in reality, these costs are not going to be incurred 'flat' like this, and instead will lump toward the beginning of the license -- a big difference for cash flow. The project economics speak for themselves. All one has to do is take the time to read the orders. The congressman's numbers come directly from the FERC orders."

Beaudoin comments, "The Woodland mill has and continues to state a willingness to continue to own and operate the storage dams and follow agreements consistent with historical practice. However, all of the competing uses and demands are at a point where the benefit of these storages is tilted toward the public interest more than their contribution to power, and the new FERC licenses push that balance over the top."

Bisulca, though, observes that if costs are an issue, then Woodland Pulp could surrender the FERC licenses and continue to own the dams but not operate them. The FERC process for surrendering licenses provides an opportunity for the public to request conditions, and he says the process could ensure that "the dams will be operated to support public use."    

July 22, 2016