Pulp mill seeks exemption for St. Croix dams

Woodland Pulp LLC, which owns three water storage dams along the St. Croix River watershed, is seeking to have them become exempt from new federal licensing requirements because of the high cost of both the licensing process and the regulations that would be imposed. The company is being assisted by Senator Olympia Snowe, who recently met with FERC to demand that the agency end the costly regulations imposed on Woodland Pulp.
Woodland Pulp's three dams at West Grand Lake, Vanceboro and Forest City, which are used to store water, are licensed by FERC as hydropower projects. However, the company maintains that they contribute very little to the power generation downstream. Woodland Pulp's dams at Grand Falls and Woodland are used to generate power and are exempt from FERC licensing because they were built before 1920, when the Federal Water Power Act was enacted.
The licenses for the West Grand Lake and Forest City dams expired in 2000, and Woodland Pulp is receiving annual extensions from FERC for them. The license for the Vanceboro dam expires in 2016. The mill currently pays more than $700,000 per year in compliance costs for the three dams and estimates it will have to pay $30 million over the next 30 years.
In March 2010 Woodland Pulp filed a petition with FERC to have the dams no longer be under FERC jurisdiction. In July 2011, FERC's Office of Energy Projects, Division of Hydropower Licensing, denied that request. Woodland Pulp then asked the commission to reconsider the action, and that appeal was denied on September 15. The company is now seeking an alternative compliance method that will reduce regulatory costs while preserving the water system of the St. Croix River.
Following a meeting on December 13 with FERC Chairman Jon Wellinghoff, Senator Snowe stated, "We must do everything within our power to reduce regulatory costs, and the FERC's unnecessary regulation is not commensurate to the hard work of the more than 300 employees who are working daily to compete in an internationally competitive pulp market. I requested that Chairman Wellinghoff work with this company, the State of Maine, and the local community to preserve jobs and reduce regulatory cost and will not rest until we find a solution to this illogical regulatory burden, and I am encouraged that he has agreed to my request."
Scott Beal, a spokesman for Woodland Pulp, says that the company would continue to meet current FERC regulations concerning minimum flows and elevations. However, the licensing process is very expensive, and new licenses usually include more regulations, such as for gate changes to adjust lake levels, that are costly to implement, according to Beal.
Beal says the company doesn't want the dams to be licensed by FERC but does want to continue to own and maintain them. The company would continue to operate them under orders and agreements with the International Joint Commission, which handles issues related to the boundary waters between the U.S. and Canada, and with state resource management agencies and in consideration of the wishes of camp owners, recreational fishermen and boaters.
At a scoping meeting held by FERC on relicensing the Vanceboro storage project on October 19 in Baileyville, Jay Beaudoin, environmental superintendent at Woodland Pulp, stated that hydropower is responsible for less than one-fifth of the mill's power generation capacity, and the water storage dams contribute less than 3% of that amount. He said that the three dams are not essential to the mill for power generation.
Through the maintaining of flow levels, the dams do help with flood control, fisheries and habitat management and controlling water levels for recreational uses of the lakes and river. If the river was not regulated, summer flows and water levels would be lower and spring freshets would be higher. The mill is neutral on the issue of allowing alewives to get past the dams so their run can be restored to the upper part of the watershed. At present, only the fish passage on the Woodland dam has been opened, under an amended bill that was enacted in 2008 by the Maine Legislature.