State to watch dam vote before acting
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By Susan Smallheer Herald Staff - Published: August 13, 2005
State regulators decided Friday to stay out of the Rockingham hydro debate until after the Aug. 22 vote on whether the town should buy the Bellows Falls dam.
The board granted Rockingham's request to wait until after the vote to hold a hearing on whether the additional financial incentives offered last week by the town's would-be business partner, Bellows Falls Power Co., constituted any material or substantial change to the deal.
Bellows Falls Power, formed by two Canadian power companies, wants to put up $72 million for Rockingham to buy the 49-megawatt hydro dam and then lease it from the town. Instead of taxes, the town would have received $3 million a year under the original deal approved by voters.
After a petitioned revote rejected the deal, Bellows Falls Power sweetened the pot by adding about $500,000 a year in taxes and power royalties, as well as more town control of local recreational and agricultural lands associated with the dam. The new deal will be put to a vote on Aug. 22.
Under state law, the Public Service Board must review such purchases by municipalities and issue a risk/benefit analysis. The board has already done that analysis on the original deal, saying it did have some risks, but that they were outweighed by the benefits.
The PSB has issued a notice of a status conference in the complicated hydro case, setting a hearing for Aug. 30, but making no statement about the merits of the various legal arguments raised by the various parties to the deal.
"It's significant the board chose to address these issues after the vote," Richard Saudek, the town's hydro attorney said Friday. "It allows Rockingham voters to focus on the benefits and risks of the original deal."
The Department of Public Service had asked the PSB to make a determination before the Aug. 22 vote, but the board declined.
Richard Smith, deputy commissioner of the Department of Public Service, said Friday that the department had thought that was the best avenue for getting more information out to the public before the vote.
Smith said that while the enhancements to the original contract definitely appeared to be all benefit and no risk, the department would have liked something more formal than a three-page letter signed by Bellows Falls Power.
The new utility is a partnership of two Canadian companies, Brascan Power Corp., and Emera Inc., itself a partnership of Nova Scotia Power and Bangor (Maine) Hydro.
Smith said the Department of Public Service would attend Rockingham's public hearing Aug. 18 to answer questions from the public.
He said the department was withholding judgment on the so-called Plan B, which would only go into effect if Rockingham voters reject the purchase again. It may be a moot point, he said.
Under a little-known provision of the Bellows Falls Power contract, if Rockingham voters reject the purchase, Bellows Falls Power can buy the dam outright from the dam's current owner, TransCanada Hydro Northeast. It can use the town's option, which is held by the Vermont State Hydroelectric Power Authority.
John Sayles, interim manager for the hydro authority, said the authority would only own the dam for a short time under the Plan B scenario, turning it over to Bellows Falls Power once state and federal regulatory approvals are received.
Bellows Falls Power would sell the dam to Rockingham for $1 after 74 years, the original length of the Rockingham contract.
Sayles said there was no intent to keep the Rockingham dam under state control for a long period. The hydro authority got involved in the deal last fall at the request of Rockingham, to help facilitate the purchase. In the process, the authority agreed to have the $72 million option written in its name.
"We can't be neutral in this," he said.
Sayles said TransCanada is wrong when it claims Plan B is a violation of the option agreement.
"TransCanada is expressing its opinion," he said. "But I don't agree with it."
Contact Susan Smallheer at susan.smallheer@rutlandherald.com.
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