State agrees to controversial take-over of Forest City dam.

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 A very-late-in-the-session legislative bill calling for a state takeover of the Forest City Dam on the St. Croix River was hotly debated. Several key changes were made, and the bill was enacted and signed by the Governor.

One of the major concerns expressed by IFW Committee members was the expense of maintaining this large dam, half of which is in Canada. The state will only be responsible for our side of the dam, not the Canadian side.

Rep. Bob Duchesne, House chair of the IFW Committee, said during a work session on the bill that he was concerned about not setting a precedent for accepting liability for a dam. He expects more dams are headed DIF&W’s way.

Rep. Denise Harlow, also a member of the IFW Committee, told me, “While I understand the importance of the forest city dam to the region, I thought it was important to develop a long term policy regarding dam takeovers since we have so many aging dams.”

Woodland Pulp LLC asked the state to take over the dam, after the Federal Energy Regulatory Commission ordered the company to make many very expensive changes. DIF&W Commissioner Chandler Woodcock testified for the bill, calling the bill “extremely important” and that “the ability to continue the state’s management of East Grand Lake’s water levels and Landlocked Salmon, Lake Trout, Brook Trout, and Smallmouth Bass fishing resources is of the utmost concern.”

Scott Beal, Environmental Manager for Woodland Pulp, told the IFW Committee, “We are not happy to have to be here in this situation. The Forest City Dam is a water storage only dam. It does not produce power. It was licensed by the Federal Energy Regulatory Commission at a time when licensing was quick and inexpensive.”

The rules and FERC process got much more complicated and costly. When FERC issued a new 30-year license for the Forest City Dam in 2015, the cost to the company to maintain the dam skyrocketed at least $6 million more than the generation of benefits the dam provides to Woodland Pulp.

Congressman Bruce Poliquin has introduced a bill to remove those costly FERC requirements from the dam, but Woodland Pulp, in the meantime, filed a request with FERC to abandon the dam and remove the gates that hold back water.

One of the more foolish requirements from FERC was that Woodland Pulp construct a fishway in the dam. There is already a fishway in the Canadian side of the dam, but Beal said, “The requirement is in place because the USFWS doesn’t have control, and apparently, no interest in working with the Canadian Department of Fisheries and Oceans.”

East Grand Lake is home to more than 2000 camps and is a popular fishing destination. Ironically, the Lakeville Camp Owners Association and other local interests refused to accept ownership of the dam, looking to the state instead to accept this liability and responsibility.

The Nature Conservancy testified that the legislation “granting sole authority for management of the dam to IFW violates Maine law, which requires joint management with the Department of Marine Resources.” TNC’s Tom Abello urged the committee to amend the bill to do that, but they did not.

The Natural Resources Council of Maine opposed the bill. TNC’s Nick Bennett, in his testimony, said “We do not think it is wise for the Legislature to take ownership of this dam at all, and we certainly think it would be unwise to do so without much more time to consider the impacts.”

He made a good point, because the bill came to the committee very late in the session, without much time to fully explore its complexities. Bennett also said that “NRCM believes the best option is to let the federal surrender process that Woodland Pulp has begun take its course… The Legislature should not intervene in this process at such short notice and at the risk of harming fisheries and incurring substantial costs to Maine taxpayers.”

The original bill was significantly amended. Rep. Duchesne summed the final bill up for me this way: “The Federal Energy Regulatory Commission rules, but the committee amended the bill so that the state would not take ownership until after FERC had signed off any state liability.”

The fiscal note that accompanied the amended bill reported: “The transfer of ownership of the dam and water storage project known as the Foresty City Project to the Department of Inland Fisheries and Wildlife (IF&W) is contingent on an agreement with current owner Woodland Pulp LLC to maintain and operate the Facility for a period of 15 years at no cost to the State. During that period any costs to IF&W are anticipated to be minor and can be absorbed within existing budgeted resources. The bill does not indicate what will happen after 15 years and the fiscal note assumes the State's ownership would mean it would assume all costs of operation and maintenance, which have been estimated between $55,000 and $80,000 annually.”

Here’s the final language in the bill that was enacted and signed by the Governor.

Resolve, Authorizing the Department of Inland Fisheries and Wildlife To Assume Ownership of the Forest City Project

Sec. 1. Forest City Project. Resolved: That, if the provisions of sections 2 and 3 are met, the Department of Inland Fisheries and Wildlife is authorized to assume ownership from Woodland Pulp LLC of that portion of a dam and water storage project known as the Forest City Project, together with associated flowage rights, easements and related facilities, located on the East Branch of the St. Croix River in Washington County and Aroostook County and referred to in this resolve as "the facility." The authorization under this section is limited to that portion of the Forest City Project that is located within the territorial limits of the United States; and be it further

Sec. 2. Federal Energy Regulatory Commission contingency. Resolved: That the Department of Inland Fisheries and Wildlife may not assume ownership of the facility pursuant to section 1 unless the Federal Energy Regulatory Commission issues a written determination that no license issued by the Federal Energy Regulatory Commission to own or operate the facility will be required if the State owns the facility; and be it further

Sec. 3. Operation and maintenance agreement contingency. Resolved: That the Department of Inland Fisheries and Wildlife may not assume ownership of the facility pursuant to section 1 unless the State and Woodland Pulp LLC execute an agreement that provides that Woodland Pulp LLC and its successors will operate and maintain the facility at the direction of the State and in accordance with all applicable laws, rules and regulations and prudent industry practice, except to the extent that Woodland Pulp LLC or its successors are prevented from doing so by an unforeseen extraordinary event. The agreement must ensure that Woodland Pulp LLC and its successors operate and maintain the facility in accordance with the agreement required under this section at no cost to the State for a period of 15 years from the date the State acquires the facility; and be it further

Sec. 4. Project management. Resolved: That the Department of Inland Fisheries and Wildlife shall oversee the management of the facility if the facility is acquired pursuant to this resolve.

 

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