More Than Energy: Hydro Dam Purchase Would Put State In Charge Of Land Along Rivers

May 10, 2016

The Shumlin Administration is deciding if the state should purchase a 560-megawatt hydro system on the Connecticut and Deerfield rivers. But the deal would impact much more than Vermont's energy portfolio.

The transaction would give the state control of recreational facilities along the rivers, and there are environmental issues like erosion and wildlife and aquatic habitats to consider.

There are also millions of dollars in tax revenues at stake for the towns with dams and land holdings within their borders.

Some of the numbers connected with TransCanada's hydro system can be simply mind-numbing.

The company purchased the 13-dam system in 2005 for $505 million.

Fifty-three communities in three states receive tax revenues from TransCanada. The hydro system has more than 30,000 acres of land associated with it.

But when you ask Bruce Lessels about it, he just wants to make sure he can keep kayaking on the rivers and lakes.

"It's a big multi-use resource," says Lessels. "Controlling and managing a river system is a big project and it's something that affects a lot of different people. It's one of the best examples of a multi-use system in the country and I'm hoping that it stays that way."

Harriman Reservoir is owned by TransCanada and would be included in the sale of the 13-dam hydro system on the Connecticut and Deerfield rivers.
Credit Howard Weiss-Tisman / VPR

Lessels is a co-owner of Zoar Outdoors with kayak and raft rental shops in Wilmington, Vermont and Charlemont, Massachusetts.

Both businesses are located right on branches of the Deerfield River, which is part of the TransCanada hydro system.

Keeping the waterways and land open to the public is part of the hydro system's license agreement with the Federal Energy Regulatory Commission, so Lessels says he's not worried about losing access to the water.

"I would just want to make sure that whoever was running the river appreciated the complexity of it and the need to keep track of  a lot of details around the management of the system," he says.

The Windham Regional Commission asked some of its members who could best manage the natural resources.

"Regardless of who the purchaser is maybe we can use this as an opportunity to again have towns look at how do we make better use of this corridor? ... Can we have a conversation among the towns to look at how can that corridor be even more meaningful to them?" — Chris Campany, Windham Regional Commission executive director

Commission Executive Director Chris Campany says the responses ranged from those who said a private company had the time and money to best protect the lands and waters to those who think the state would do a better job.

"One of the questions that looms large is what is the state's capacity to manage these lands and manage them well," Campany says.

There are boat launches, and picnic areas and campgrounds, along the Connecticut River.

Harriman Reservoir, which is solely owned by TransCanada, is the second largest lake found entirely within Vermont and the company says more than a half-million people use the natural resources every year.
 

A sign along the Deerfield River warns people about sudden changes in water levels due to dam activity.
Credit Howard Weiss-Tisman / VPR

Campany says the hydro sale could spur conversations throughout the state on ways to better manage the land and water.

"Regardless of who the purchaser is maybe we can use this as an opportunity to again have towns look at, how do we make better use of this corridor," says Campany. "Because there are a lot of forestry resources. There are a lot of water resources. Fisheries. Recreation. Can we have a conversation among the towns to look at how can that corridor be even more meaningful to them?"

While the state has to consider what its role will be in managing the natural resources, there are also some big questions to answer about tax payments to the towns.

The state wouldn't have to pay local taxes if it owned the dams.

"If the state were to purchase the whole facility up and down the Connecticut River, our main concern would be would we be made whole, at the current value." — Lamont Barnett, Chairman Rockingham Selectboard

The town of Rockingham has the only hydro station entirely within Vermont. The other power stations sit partly in New Hampshire.
 

TransCanada provides about 25 percent of the town's annual tax revenues, according to Selectboard Chairman Lamont Barnett.

"If the state were to purchase the whole facility up and down the Connecticut River, our main concern would be would we be made whole, at the current value?" Barnett says.

Administration Secretary Justin Johnson says it's way too early to make promises to the dozens of towns that are reliant on that tax base.

The Bellows Falls power station on the Connecticut River would be included in a deal to purchase a 13-dam hydro system from TransCanada.
Credit Toby Talbot / AP

But Johnson expects the state to make sure those communities don't lose out on the taxes if the state ends up owning the dams.

"The long-term interest of the state includes the benefit and interests of the towns and communities that will be impacted," says Johnson. "It's not much good to collect money in one area but reduce payments to all those towns and then send the money somewhere else. That's more like a shift of cost as opposed to a long-term interest."

TransCanada is selling the hydro system to help fund a $13 billion natural gas pipeline acquisition.

The company says it wants to sell the hydro system before the end of this year.

Update 9: 30 a.m. 5/11/16 The original story on this headline was More Than Energy: Hydro Dam Purchase Would Put State In Charge Of Land Along Ct. River. It has been changed to reflect the fact that the land concerned is along multiple rivers: the Connecticut and the Deerfield.