January 7, 2015

Aspen faces deadlines on federal hydro permit

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The city's diversion dam on Castle Creek, where the city is studying the prospect of installing a microhydro turbine.

Brent Gardner-Smith/Aspen Journalism

The city's diversion dam on Castle Creek, where the city is studying the prospect of installing a microhydro turbine.

The city of Aspen's diversion dam on Maroon Creek, where the city is now contemplating installing a microhydro turbine, instead of building the proposed Castle Creek Energy Center hydro plant.

Brent Gardner-Smith / Aspen Journalism

The city of Aspen's diversion dam on Maroon Creek, where the city is now contemplating installing a microhydro turbine, instead of building the proposed Castle Creek Energy Center hydro plant.

ASPEN – The Aspen City Council is expected Jan. 12 to face decisions about its federal permit for a hydropower plant on Castle Creek, as the permit expires Feb. 28 and there are deadlines Jan. 29 and March 1 if the city wants to keep the permit alive.

The Federal Energy Regulatory Commission granted Aspen its first three-year preliminary permit for a 1,175-kilowatt hydropower plant on lower Castle Creek in November 2008, and its second three-year permit in March 2012.

In the past nine months, the city’s communication with the commission has signaled varying degrees of commitment for the project.

In March, the city filed a progress report saying it was still working on the project, despite a November 2012 advisory vote where 51 percent of city voters said the city should stop doing so.

“The Aspen City Council has not abandoned the project … ” the city told the agency in March. “The project remains a viable project at this juncture, one which the city continues to study and to defend the water rights upon which its plans are based.”

In June, however, the city settled a lawsuit over its water rights for the proposed hydropower plant. Both the settlement and a subsequent City Council resolution said the city “will not be pursuing or seeking to complete the Castle Creek Energy Center hydroelectric project at this time.”

Instead, the city declared it was going to “pursue other renewable energy projects, including microhydroelectic installations at existing city-owned or controlled facilities.”

Those facilities are two diversion dams located several miles up Castle and Maroon creeks, which are currently used to divert water to the city’s water treatment plant.

The city in June sent FERC a copy of the resolution and the settlement agreement, and feels it gave adequate notice to the commission in that June filing that its position on the project had evolved to embrace microhydro, Aspen City Attorney Jim True said.

But in September, the city sent FERC a progress report that seemed to suggest the city was leaving the door open for the plant on lower Castle Creek.

“In the event the City Council decides to proceed with the Castle Creek Energy Center project as a chosen alternative, the city will move forward as appropriate in accordance with applicable statues and regulations,” the city stated.

On Dec. 23, True said that sentence should not be taken to mean the city is still pursuing the original project.

“The city intends to pursue microhydro and we’ve made that clear to FERC,” True said. “We’re not looking at the Castle Creek Energy Center any more, at all.”

But if the city is not pursuing the lower Castle Creek project and instead plans to study microhydro projects, should it ask FERC to extend or renew its existing preliminary permit?

That’s one question the City Council is facing Jan. 12.

The city does have the right to apply for a third “successive” preliminary permit, but Shana Murray, who manages hydro projects at FERC, said it would be difficult.

“We will take a very hard look at what they have done to develop a license application over the last six years.”

Karl Kumli, an attorney working for the city on its federal permit, was more upbeat about the chances of extending the city’s current permit, even though the city’s focus has shifted.

“A preliminary permit, by its very nature, has some flexibility associated with it because you are studying options,” Kumli said.

Murray said if Aspen did want to file for a third permit, it would be expected to do so on March 1, the day after its current permit expires Feb. 28.

That is because one purpose of a preliminary permit is to secure the location of a proposed hydropower plant, so most applicants don’t leave a gap of even one day.

The city also has the option, with the passage of the federal Hydropower Regulatory Efficiency Act of 2013, to apply for a two-year extension to its current permit.

Murray said so far two-year extensions on second permits are getting about the same level of scrutiny at FERC as applications for a third permit.

However, if the city wants to go that route, it would need to notify FERC officials 30 days before the existing permit expires Feb. 28, which in this case is Jan. 29.

Murray wouldn’t speculate on how the agency would respond if the city applies to extend or renew its permit.

The city also has the option of simply letting its current permit expire and then applying for a new permit, or permits, for its proposed microhydro projects.

And in June, the city signaled to FERC it might go that route, although it did not discuss letting its current permit expire.

“In the near future, the city anticipates filing a separate preliminary permit or permits for such microhydro sites, which will be separate and different projects from the Castle Creek Energy Center,” the city said in its update.

Editor’s note: Aspen Journalism and The Aspen Times are collaborating on coverage of rivers and water. The Times published this story on Wednesday, Jan. 7, 2014.

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