This commentary is by Kathy Urffer, river steward for the Connecticut River Conservancy in Vermont and New Hampshire.
The owners of five hydroelectric facilities on the Connecticut River — the Wilder, Bellows Falls and Vernon dams in Vermont and New Hampshire, and the Northfield Mountain Pumped Storage Project and Turners Falls dam in Massachusetts — are seeking new operating licenses under the Federal Energy Regulatory Commission that will allow these companies to continue to profit on more than 175 miles of the Connecticut River for the next 40 to 50 years.
How much of that profit will come back to the local communities to support your river?
The three facilities in Vermont and New Hampshire are owned by Great River Hydro, a limited liability company subsidiary of ArcLight, a private equity firm headquartered in Boston that invests in energy infrastructure. The Wilder, Bellows Falls and Vernon dams, as well as several more on the Connecticut and Deerfield rivers, were previously owned by TransCanada and were sold to ArcLight in 2017.
Because this company is a private, limited liability corporataion, there is limited financial information available to the public about how Great River Hydro profits from our river. The Connecticut River Conservancy and many other stakeholders want to be sure that, in exchange for this license, the public gets a good deal for the use of its river for the next 40 years.
Great River Hydro professes that it will spend $10.1 million at Wilder, $12.5 million at Bellows Falls and $12.4 million at Vernon over the next 40 years to reduce impacts on aquatic species and to improve river health, public recreational and cultural facilities. That sounds like a lot of money — a total of $35.1 million over 40 years, or $877,825 per year — but let’s put that in context…
While there is no public reporting of annual revenue and expenditures for these LLCs, there is some financial information available from required disclosures from the company’s FERC license applications filed in 2016 and 2020, property tax assessments by local towns, and public information based on electricity and capacity prices.
Based on its filings, Great River Hydro indicated that Wilder, Bellows Falls and Vernon collectively made $27.9 million in revenue in 2016 and $33.5 million in 2019. Depending on what is reasonable to include in their stated operating costs, it nets somewhere between $1.8 million and $18.3 million a year, yet they intend to invest only $877,825 a year in protection and mitigation measures, such as providing improved fish passage, improving access to the river, and educational programming for our communities.
These hydro companies invest in the short term, and as the people forget what the companies promised as a result of the relicensing process, they reap the profits from the facilities for decades to come.
Let’s not forget that Great River Hydro has worked hard to reduce its taxes by using its lawyers to strong-arm the towns that host these facilities. For example, the town of Vernon had to engage in a settlement agreement in 2014 to satisfy TransCanada’s (Green River Hydro’s precursor) appeal of its 2012, 2013 and 2014 taxes, which locked the assessed value of the Vernon facility until 2019.
Similarly, Rockingham had to spend four years in court with Great River Hydro to resolve an appeal of its 2012 tax assessment. While waiting for this to be resolved, Great River Hydro appealed its 2015 taxes and 2016 taxes in Rockingham, which resulted in the town agreeing to a settlement in 2018 that fixed the assessed value of the Bellows Falls facility at $103.6 million through 2022, even though the result of the 2016 court case set the assessed value at $127.4 million.
Great River Hydro has proposed a change in how the facilities will operate over the coming license which will help the river and will not impact their revenues. A real win-win!
We’re not against Great River Hydro making a reasonable return on its investment, but it should get that only after making a better deal with the public and our local communities. That means being transparent and telling the whole story about its revenue and expenses and guaranteeing a return of that profit annually to support our communities and the health of your river over the next 40 years.
Local communities, the states and individuals should be ready to comment to the Federal Energy Regulatory Commission when we get the chance to ensure that these new licenses give back to support the river and your local communities. You can learn how to speak up at ctriver.org/hydropower or at powerofwater.fish.
