Sale of TransCanada Hydropower Facilities on the Connecticut and Deerfield Rivers, updated 11/9/2016
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When TransCanada announced its intent to sell its holdings in New England, including its holdings on the Connecticut and Deerfield Rivers, we understood this was an important issue for 12 of our 27 towns where TransCanada owns property and has flowage rights: Brattleboro, Dummerston, Putney, Readsboro, Rockingham, Searsburg, Somerset, Stratton, Westminster, Whitingham, Wilmington and Vernon. According to the grand list data, TransCanada owns 20,344 acres in the Windham Region, which includes land and water/reservoirs (does not include flowage rights). The TransCanada acreage in the Connecticut River and Deerfield River Basins is as follows:
- Connecticut River Basin: 842 acres (does not include flowage rights)
- Deerfield River Basin: 19,502 acres (includes 2 reservoirs which total about 3,500 acres, so about 16,000 acres of land only)
The possibility that the State of Vermont might purchase TransCanada holdings could have major implications for these 12 towns including grand list and revenue impacts; land, water quality and ecological impacts; recreation, jobs and economic activity impacts; and for Searsburg and Somerset, town road maintenance impacts. To that end we have been making the case to the legislature and the Vermont Hydro Power Working Group that town voices must be heard in their deliberations.
The Windham Regional Commission solicited comments from its 12 towns that are home to TransCanada holdings on the Connecticut and Deerfield Rivers. This same survey was subsequently sent by the Northeastern Vermont Development Association, the Southern Windsor County Regional Planning Commission, and the Two Rivers-Ottauquechee Regional Commission to their affected towns. It is our hope that these comments will inform the Vermont Hydro Power Working Group and the legislature about the questions, perspectives, and concerns held by towns and town officials.
In developing and administering this survey we understood that the news that TransCanada intends to sell its holdings is still fresh, that towns may not have had time to deliberate upon the issues and arrive at a unified position about a potential state purchase, and that there may be diversity of opinion among officials in a given town. We also understood the Governor intended for the Hydro Power Working Group to make a recommendation to the legislature before the close of this legislative session. For these reasons we quickly solicited the positions of towns as well as those of individual town officials speaking only on their own behalf. Surveys were sent to town Selectboard and planning commission members, listers, town managers and administrators, and regional commissioners.
Documents related to WRC's efforts to gather town comments:
- Legislative testimony of the Windham Regional Commission
- The survey sent to towns and town officials
- Summary of comments and each response from Windham Region town officials
- Summary from other regional commissions of the comments it received, and each response it received: NVDA, SWCRPC, TRORC
WRC will provide periodic updates of meetings, testimony, and other interactions with state officials.
April 29 update:
- April 29 update from WRC, PDF
June 7 update:
This memorandum describes the current status of the TransCanada sale.On May 26th JP Morgan released a brief description of the TransCanada sale. As is noted, the turnaround time for bids to JP Morgan is quite tight – early July – and as is also noted it is highly unlikely the state would submit a bid for an outright purchase. Among the options that then might be pursued would be a partnership with other potential bidders or a power purchase agreement. It’s also possible that partnerships, power purchase agreements or other options could be pursued or negotiated after the sale has concluded.
Act 130 enables the state to form the Vermont Hydroelectric Power Acquisition Working Group and the creation of the Vermont Hydroelectric Power Authority. Here’s a link to the act: http://legislature.vermont.gov/assets/Documents/2016/Docs/ACTS/ACT130/ACT130%20As%20Enacted.pdf. It is anticipated that the Working Group will be formed quickly so it may deliberate upon the options the state might pursue now that the bid development submission process is underway.
Nov. 9 update: ← new
HydroPower Acquisition Working Group Report
The WRC was given a seat on the HydroPower Acquisition Working Group. This primarily consisted of reviewing drafts of the report which was released on October 25th (click here for the report). Here’s a link to an article that does a good job summarizing the report: http://vtdigger.org/2016/10/25/state-drops-bid-transcanada-dams/). In a nutshell, the working group recommended that the state approach the eventual owner of the facilities to ascertain interest in a long-term power purchase agreement (PPA) with the inclusion of a provision for purchase of all or some equity stake in the dam facilities. The Working Group has been made very much aware of town concerns about payments in lieu of taxes, so if a PPA with equity stakes is pursued in the future that issue will again need to be raised.
One of the things that became clear as a result of our survey of affected towns, and follow-up conversations, is the varying perspectives of the value of the land and lakes and recreation facilities (boat launches, trails, picnic areas, etc.) to local economies and the quality of the management of the facilities by the current owner. An opportunity may exist for the affected towns to have a conversation with one another and with the new owner, as well as the easement holders, about these issues to identify what, if any, changes are desired or needed. To that end the WRC asked that the following language be added to the Economic Development section, which begins on page 28 of the report.
The lands and waters associated with the facilities, especially the extensive contiguous holdings along the Deerfield, may present recreation, forestry, and other economic and social benefits to the host towns and the State as a whole. We suggest the State allocate funding and convene a collaborative effort of affected regional planning commissions, municipalities, and relevant state agencies to: (a) identify the role of the holdings in the life, economy, and fiscal well-being of the towns (individually and collectively); (b) identify how the resources might be more effectively managed; and (c) develop a comprehensive management plan for areas of contiguous holdings.
At the moment this is just an idea. Now that the new owner is known we’ll soon reach out to the affected towns to see if they’d be interested in participating in such an effort. If there is interest, it would make sense to have a Connecticut River group and a Deerfield River group.
Purchaser of TransCanada Facilities Announced
ArcLight Capital Partners said November 2nd that its affiliate Great River Hydro had signed an agreement to acquire TransCanada’s New England hydroelectric power assets. According to press reports this is a Boston-based private equity firm managed by an energy industry investor with deep ties to the Tuck School of Business. For more information we recommend this article: https://vtdigger.org/2016/11/02/firm-buys-transcanada-dams-new-england/.