NYC's Cannonsville hydropower plan is bittersweet news for local co-op

For half a century, a valuable source of local energy has gone untapped: the billions of gallons of water that pour each year through the release works at New York City's Cannonsville Reservoir and flow into the West Branch of the Delaware River. 

The Cannonsville will soon start to generate clean electric power -- and more tax revenue for the town of Deposit, where the plant will be located. But for a local electric co-op that once hoped to develop hydropower on city reservoirs, the news that the city is moving forward with the project is bittersweet. 

On Monday, Sept. 15, the New York Times broke the news that the New York City Department of Environmental Protection (DEP) was planning to build a 14-megawatt, $72 million hydropower facility on the Cannonsville; the DEP officially announced the building project the next day

Delaware County officials quickly hailed the project, which the DEP estimates will create 60 construction jobs and five jobs for facility operators. Groundbreaking could begin by 2016. When the plant comes online, DEP officials say, it will produce enough energy to power 6,000 homes, lower greenhouse gas emissions as much as taking 5,400 cars off the road, and reduce the overall cost of electric energy on the market by displacing energy from higher-cost fossil fuel-based sources. 

Leaders at the Delaware County Electric Cooperative, a local nonprofit electric utility that spent several years and hundreds of thousands of dollars on a futile plan to develop hydropower on New York City reservoirs, greeted the news with a mix of satisfaction and regret.

"I'm really glad that something's happening finally, that we're not wasting the resource anymore. I just wish that the co-op were doing it," said co-op CEO Mark Schneider. "It still baffles me that the city stood in the way of that happening."

Co-op leaders spent several years courting the DEP with a plan to develop 63 megawatts of hydropower on four city-owned reservoirs: the Schoharie, Neversink, Pepacton and Cannonsville. The co-op's plan earned broad support from New York State elected officials, including then-Congressman Maurice Hinchey and Senators Kirsten Gillibrand and Chuck Schumer.

In 2008, after direct negotiation with the DEP failed to yield an agreement, the co-op submitted an application to the Federal Energy Regulatory Commission (FERC) for a permit to develop hydropower on the city's reservoirs. Later that year, the city submitted its own competing application, which FERC granted. 

In 2010, the DEP announced that the agency was seeking private partners to develop hydropower on the reservoirs. But by then, the co-op had lost the stomach for ongoing (and costly) negotiations with the city (see the Watershed Post's 2010 story, "Once-coy DEP now entertaining suitors for hydroelectric power project").

The DEP's current plan for the Cannonsville is smaller than the co-op's 2008 plan, which proposed a 20.5 megawatt facility. 

"In our opinion, they're undersizing the plant. They're trying to live within constraints that are artificial," Schneider said.

The DEP has also been weighing the possibility of developing hydropower on other city reservoirs. In a letter dated June 2, 2014, a lawyer for the DEP told FERC that the city did not consider hydropower to be economically feasible on the Neversink Reservoir, but that DEP staff were still investigating the potential for developing hydropower on the much larger Pepacton Reservoir. 

The DEP already operates two hydropower facilities in the city's upstate water system, both in the town of Neversink: a 25-megawatt facility in the Neversink Tunnel Outlet, and an 18-megawatt facility in the East Delaware Tunnel Outlet. Two other non-city-owned facilities also rely on releases from the New York City water system to produce hydropower: The New York Power Authority's pumped-storage plant at Blenheim-Gilboa, and Brookfield Renewable Energy's facility near the Rondout Reservoir. 

The license for the Cannonsville project, granted by FERC in May of 2014, includes a list of conditions that the city must meet. Among them are provisions for protecting bald eagles and other endangered species, providing downstream flow under the city's existing agreements, protecting water quality downstream during construction, and making sure any cultural artifacts discovered during construction are preserved. Soon afterward, the city filed a request with FERC for a re-hearing on some of its license conditions; FERC denied that request, but clarified several of the city's license conditions, in an order dated Sept. 18

Although the co-op's leaders gave up long ago on the prospect of working with the city on the development of reservoir hydropower, Schneider still holds out some hope that the DEP might agree to sell low-cost power to the co-op and other local nonprofits.

"For municipalities, for nonprofits, for co-ops -- to offer some kind of power purchase agreement would be welcomed as some kind of an olive branch," Schneider said. "[The Cannonsville plant] should've been a lot bigger than it is. And all the dollars it produced should've stayed in the community. Since that can't happen, what else do we have?"

Documents related to the Cannonsville hydroelectric project (source: FERC library): 

Final Environmental Assessment for the project (Jan. 28, 2014)

FERC order issuing license for Cannonsville hydropower project (May 13, 2014)

Neversink/Pepacton progress report from the DEP (June 2, 2014)

FERC order denying a NYC DEP request for a re-hearing on some of their license conditions (Sept. 18, 2014)