REGULATING DISTRICT TAKES STEPS TO RECOVER COMPENSATION FROM CORPORATE ENERGY GIANT FOR USE OF GREAT SACANDAGA LAKE’S CONKLINGVILLE DAM FOR POWER GENERATION
Brookfield Renewable Ceased Making Payments to State in July After Nearly 100 Years
of Providing Annual Compensation to the State
The Regulating District has sent a letter
to Brookfield Renewable Partners demanding restitution and the resumption of payments for the use of Great Sacandaga Lake & Conklingville Dam in its generation and sale of electricity at the E.J. West hydroelectric plant. Acting on behalf of Great Sacandaga Lake residents and downstream taxpayers, the Regulating District’s November 8th
letter was prompted by issuance of a final order from the Federal Energy Regulatory Commission (FERC) on October 19th
that clearly indicated FERC would not assist the Regulating District in pursuing withheld compensation from Brookfield under the now-expired Reservoir Operating Agreement (ROA).
In its ruling
, FERC rejected Brookfield’s argument that that the payments it had been making until this past July under the ROA were preempted by “headwater benefit” payments required by section 10(f) of the Federal Power Act, determining that the ROA “is an off-license, private agreement beyond the scope of the Commission’s jurisdiction, and, therefore, any payments made pursuant to the ROA are independent contractual obligations not preempted by the Federal Power Act.”
Although FERC concluded that the ROA is outside of its jurisdiction and as such beyond its ability to enforce, it outlined a path for restitution in its order, stating that off-license agreements like the ROA are “not enforceable by the Commission but may be enforceable by other means, for example, in state court.”
Brookfield recently reported
earnings equaling an average of $1.5 million per day
through North American hydroelectric power generation for the most recent quarter, and $2 million per day
through the first three quarters of this year. In contrast, the energy company had been paying $1.5 million per year
to the Regulating District pursuant to the latest in a series of agreements dating to 1927 with Brookfield and its predecessors. The original 1927 agreement
with New York Power & Light conveyed real property to New York State for the construction of Conklingville Dam, reserving 15 feet of the impoundment to New York Power & Light, which its successors (including Erie Boulevard Hydropower, L.P., a subsidiary of Brookfield) have continued to hold and enjoy. These agreements, conveying the necessary rights for Brookfield and its predecessors to utilize the Conklingville Dam and water from Great Sacandaga Lake for the generation and sale of electricity, continued uninterrupted until last July, when the company opted to let the ROA expire, and ceased its payments for compensation.
The Regulating District continues to believe that it is inherently unjust for Brookfield to expect that taxpayers and Great Sacandaga Lake permit holders be required to foot the bill for operation, maintenance and repairs at Conklingville Dam, while a company with a reported
market capitalization of $20 billion uses the dam and the water from Great Sacandaga Lake for free. As required by law, the Regulating District has commissioned an independent, third-party appraisal of the benefits Brookfield enjoys, arriving at an annualized range of value between $1.242 million to $2.503 million, depending on whether Brookfield intends to relicense the plant in 2042. The letter sent to the corporate energy giant yesterday is an important step in seeking restitution in the courts if necessary, so that the company cannot continue to simply increase profits at the expense of Great Sacandaga Lake residents and downstream taxpayers.
In the meantime, the Regulating District continues to work closely with Brookfield’s professional water management personnel on an operational level in the interest of responsibly managing flows and elevations pursuant to the FERC license, and in the interest of those who rely on this incredibly important and valuable resource. The Regulating District’s priority is the important public health and safety benefits New Yorkers derive from its mission of flow augmentation and flood protection, and we will continue to faithfully discharge our water management obligations in close coordination with Brookfield, even as we aggressively seek fair compensation for the people’s assets.