Vermont Board OK’s Fee Agreement on Hydroelectric Dam Sale
Sep. 2–ROCKINGHAM — The select board approved an agreement with the state and Bellows Falls Power Co. on Thursday, establishing a revenue structure under the so-called Plan B on the Bellows Falls hydroelectric dam sale.
The agreement guarantees incentives offered to the town in an Aug. 1 letter from BF Power CEO Jeff Martin but can only take effect if BF Power becomes the operator of the facility, not TransCanada, the current owner.
“We’re trying to put that (Aug. 1 letter) in contract form for the purpose of pursuing what has become known as Plan B,” Select Board Chairman Lamont Barnett said. “The town will receive all the benefits from Plan A but the difference is that the town will not be the owner.”
Plan B, as outlined in the master agreement to purchase the dam, would have the Vermont Hydroelectric Power Authority own the facility and lease it to BF Power. VHPA was serving as a facilitator in the original proposal with Rockingham as the dam owner.
Voters rejected the purchase on Aug. 22 by a vote of 887 to 829.
The agreement guarantees the minimum $3 million payments in lieu of taxes to Rockingham as proposed under the original deal, with BF Power also covering any increases in property taxes in other towns where the facility is located. Portions of the facility are in Walpole, Springfield and Charlestown.
The agreement also keeps the dam on the education property tax grand list even though state law may exempt VHPA from taxation as the owner. That means the town could tax the facility, with BF Power paying the education tax to VHPA and then VHPA transferring the money to Rockingham.
Electricity production royalties, rights to manage agricultural lands associated with the facility and outright ownership of the dam after 74 years are also promised to the town in the agreement.
The stipulation agreement responds to concerns from the Public Service Board earlier this week about the legal standing of BF Power’s Aug. 1 letter.
PSB board member John Burke questioned whether the incentives promised to the town in Plan B was specified in a document other than the letter. Rockingham attorney Dick Saudek said he would work out an agreement with the select board’s blessing.
Laurie Rowell, a member of a group that opposed Rockingham’s purchase of the dam, wrote a letter to the select board on Thursday outlining what the group perceives liability concerns to the town under Plan B. Rockingham’s option agreement leaves the town liable for the dam even though it would not be the owner, Rowell said.
“As I understand it, the Town as optionee is subject to all obligations of the Option Agreement despite having assigned the option to VHPA,” Rowell said. “The ‘jointly and severally liable’ language worries me.”
Saudek said VHPA has agreed to take on those obligations.
“They have those obligations,” he said. “The town is indeminfied to that extent.” BF Power and VHPA signed the stipulation agreement with Rockingham in exchange for the town’s support on a motion before the PSB. The motion substitutes VHPA for Rockingham, as the dam owner, in the certificate of public good the board issued on the deal in June.
The new agreement between BF Power and Rockingham was filed with the PSB yesterday, according to the PSB clerk’s office.
The PSB put off ruling on VHPA’s motion during a Tuesday hearing in anticipation of the stipulation agreement. BF Power attorneys asked the board to rule as soon as possible as time is running out on Plan B.
The deal needs approval from the PSB and Federal Energy Regulatory Commission by Oct. 3. The PSB could rule on the motion soon, but FERC has refused to move forward with an application for license transfer without current owner TransCanada’s approval.
TransCanada said Plan B is not legal under Rockingham’s option agreement.
The issue is likely headed for Federal District Court soon.
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