Once-coy DEP now entertaining suitors for hydroelectric power project

Photo: Excess water spilling over the Gilboa Dam, the NYC-owned dam with the greatest untapped potential for developing clean hydroelectric power. Image released into the public domain, courtesy of Wikimedia Commons.

After being courted for years by an upstate electric cooperative seeking to develop hydropower on city-owned dams, the agency that runs New York City's water supply says it finally wants to tango. But it may be too late. 

In a story that's become all too familiar in dealings between the New York City DEP and upstate watershed communities, a history of mistrust and failed negotiations appears to have doomed a potential partnership to develop clean power on the reservoirs. 

In a press release issued on Monday, the agency announced that it is looking for partners in the private sector to help them develop hydroelectric power on four reservoirs: the Schoharie, Cannonsville, Pepacton, and Neversink. 

The obvious candidate to build the generators would seem to be the Delaware County Electric Cooperative, a nonprofit, cooperatively-owned electric utility that has long sought to develop hydropower on the reservoirs, and that has been in negotiations with the DEP for years over the issue. A 2008 proposal by the DCEC to use water already spilling over the dams to generate up to 63 megawatts of power earned strong political support at both the local and state level, including support from Congressman Maurice Hinchey and U.S. Senators Kirsten Gillibrand and Chuck Schumer

But after a long and unsuccessful effort to convince the DEP to allow it to develop the reservoirs, the DCEC has little stomach to do further battle with the agency. In an interview with the Watershed Post yesterday, CEO Greg Starheim said that while the DCEC has not made a decision on whether to respond to the DEP's open call to developers, he doubts the cooperative would want to enter into another round of negotiations with the city.

“This has been an enormously costly and time-consuming proposition for our membership. I don't see that as a very viable and smart thing for us to do,” he said.

And though the DEP appears to be welcoming private developers with open arms, Starheim has little faith that the agency has any real interest in developing power on the reservoirs.

“The city has considered hydroelectric generation at some of the facilities in the past, going back thirty years ago. And they've always abandoned those pursuits,” he said. “We have tried extensively to negotiate with the city and have not been successful.”

Whether or not they're serious about hydropower, the city holds the trump card: a permit from the Federal Energy Regulatory Commission authorizing them to develop power on the reservoirs. After direct negotiations with the city failed to yield an agreement, the DCEC applied for just such a permit in 2008:

Delaware County Electric Cooperative application to FERC by Watershed Post


But under FERC rules, other entities can submit competing applications while a permit application is open to the public for review and comment. In September of 2008, just before the open comment period on DCEC's application ran out, the NYC DEP submitted their own application to develop power on the dams:

NYC DEP application to FERC for hydropower permit by Watershed Post


In making permit awards, FERC gives preference to government bodies. The federal agency awarded a permit to the DEP in March of 2009, and the DCEC abandoned its plans soon after. If the city does not act to develop power on the reservoirs, the permit will expire in 2012.

According to DEP spokesman Farrell Sklerov, the agency is seeking private partners because it does not have the capacity to do the development itself.

“The DEP is obviously not an agency that has expertise in building turbines and power plants,” he said.

Starheim takes a more cynical view of the DEP's decision to seek out private partners after spurning his organization's overtures.

“They are obviously looking for compensation in some respects. I think they are creating competition, potentially reaping greater benefits to the city. ” he said. “There could be some perception that they're marketing a federal permit.”

Sklerov said that the DEP is interested in exploring potential benefits to the city, possibly including the sale of power from the dams directly to city government. But he declined to say whether the agency would seek financial compensation from developers. 

“We're seeking ideas for what the private sector could do with this. It would depend on what they proposed. It's somewhat open, in that it allows for creativity and different methods on their part,” he said.

Though the DEP's primary mission is water, not power, holding the federal permit gives the agency more assurance that any development will not harm the city's drinking water, Sklerov said. 

“By having the FERC license, DEP maintains ultimate authority over the site, which allows us to ensure the protection of our water supply and water infrastructure,” he said. 

But Starheim said that any hydropower development on the dams should benefit the watershed region as well, especially since many towns in the region were destroyed in the building of the reservoirs in the last century.

“We've always taken the position with the city that we fully support that their interests need to be protected,” he said. “However, on the other side of the coin, if there is a benefit that comes from resources like those dams that were built from the '20s and '30s through the '50s, that benefit should reside with the watershed communities that have sacrificed, and continue to sacrifice through the city's land acquisition programs.”

Below: DEP's instructions to interested private parties (Request For Expressions of Interest):

DEP RFEI for developing hydropower on NYC reservoir dams by Watershed Post