Dam upgrade hits snag

Bids exceed estimates

By Tom Benton

Staff Writer

Just
The Facts

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ENOSBURG FALLS — The Enosburg Falls Village Trustees are attempting to make rapid progress on a proposed upgrade to the village’s hydroelectric facilities, without which the facility could become inoperable within less than a decade. Regulatory uncertainties and financial feasibilities have complicated their efforts.

The village utilizes two hydroelectric facilities, the Kendall Plant and Village Plant Number One. The Kendall Plant received a major renovation in the early 1990s, but Village Plant Number One has only ever received basic maintenance and minor repairs.

A Hydropower Facility Assessment commissioned by the village in 2012 determined that components of both facilities are in need of immediate attention, but many of the replacement parts are no longer manufactured.

Without the necessary repairs and upgrades, the assessment determined, the plants could become inoperable within five years.

During a public presentation of the assessment in March, then-Director of Finance Caroline Marcy gave an illustrative example. When a more than 70-year-old wooden ball bearing in one of the facilities’ turbines finally crumbled in fall 2015, it cost $500 to specially manufacture a polymer ball bearing. That doesn’t include the thousands of dollars in lost generation during the six weeks the unit was offline.

Marcy said the increased production stemming from the upgraded facility would outweigh the cost of the financing bond and even result in a net benefit to ratepayers.

For example, after the removal of large stones blocking the Kendall facility’s tailrace pipe in Aug. 2015, production increased nearly 20 percent, providing an immediate return on investment.

Similarly, Marcy said an upgrade to the Kendall plant in fall 2014, allowing the plant to generate electricity during the winter, had two benefits for ratepayers. The upgrade brought in additional revenue due to the facility’s increased generation. Additionally, the village receives a higher credit price per kilowatt produced during the winter than in the summer or fall.

The assessment was completed by the H. L. Turner Group, from Concord, N.H.

By the end of May, in coordination with H. L. Turner’s engineers, the village had determined a schedule for moving forward with the hydro upgrade project. The project would be put out for bids on July 14, with bids due Aug. 12 and the project awarded on Aug. 23. Construction would begin Sept. 7, with a firm end date of Nov. 2017.

Initially, H. L. Turner’s engineers, led by project engineer John Lavigne, suggested the village upgrade to a five-blade turbine runner. The village currently has a four-blade runner. A five-blade runner would increase the facility’s capacity by 25 percent.

However, in June, Lavigne sent the village a memo suggesting they simply upgrade their four-blade runner, after H. L. Turner reviewed the upgrade costs and permitting requirements for upgrading to a five-blade runner. They estimated those costs to be between $250,000 to as much as $500,000, delaying the project by six months and doubling the “breakeven” period.

At the village trustees’ June 28 meeting, Village Manager Jon Elwell pointed to concerns that the village’s current four-blade turbine may be in a worse condition than Lavigne realizes, noting there is a “serious crack” in one of the blades.

Additionally, Marcy said the promised 25 percent increase in generation from a five-blade runner was a significant component in her financial analysis regarding the return on investment.

But in July, Lavigne presented a solution: a more efficient four-blade design, hypothetically increasing generation by 15 percent, bypassing the need for re-licensing from the Federal Energy Regulatory Commission (FERC) and still benefiting the ratepayers, according to Marcy’s new calculations.

With that, the village decided to proceed with a four-blade turbine upgrade.

By the trustees’ Aug. 23 meeting, the bids were in, with Kingsbury Inc. the low-bidder — but even Kingsbury’s low bid was $1 million over the project’s construction budget, prompting Elwell to ask Lavigne how H. L. Turner’s projections could be so far off.

Elwell criticized the group’s lack of guidance toward solutions to the bid results, after engineers had a week to prepare recommendations, such as areas in which the scope of work on the project could be reduced to lower the cost.

Lavigne said that without the ability to thoroughly inspect the turbines, contractors had provided “worst-case” estimates. He said a more thorough investigation of the turbines to give contractors a better idea of their condition had been discussed. But even Lavigne was surprised by the high estimates.

Elwell also noted that per their contract, representatives from H. L. Turner were to appear at the bid opening. No one showed, clearly violating the contract.

Lavigne apologized.

Discussion turned to FERC compliance. Elwell had conferred with an attorney specializing in FERC regulations, who told Elwell he was not sure the village was in compliance to replace the turbines for either a four- or five-blade runner.

Lavigne said he was not “100 percent sure” either, despite telling the village they could do so during discussions of a four-blade upgrade the previous month. Lavigne offered to review the village license and contact FERC.

The trustees went into executive session to consider the contract with H. L. Turner, and discuss possible litigation. No action was taken as a result of the session.

The trustees were scheduled to discuss the project further during their meeting Tuesday evening.