Forest City Dam petition for declaratory order

The owner of a dam and reservoir spanning the East Branch of the St. Croix River on the international boundary between the United States and Canada has applied to federal regulators for a ruling that the project will no longer be required to be licensed as a hydropower project if it transfers the dam to a Maine state agency.

At issue is the Forest City Project. The water storage project currently operates under a license issued by the Federal Energy Regulatory Commission to Woodland Pulp, LLC.on November 23, 2015.  But on December 23, 2016, Forest City Project licensee Woodland Pulp LLC applied to the Commission to surrender its license and decommission the project by removing gates.  In its surrender application, the licensee noted that operating costs for the project as licensed would significantly exceed the downstream hydroelectric generation benefits, particularly given "significant new restrictions on operations" with unknown extra costs.  That surrender and decommissioning proceeding remains pending before the Federal Energy Regulatory Commission.

In the meantime, on July 24, 2017, Maine Governor Paul LePage signed into law a legislative resolve authorizing Maine Department of Inland Fisheries and Wildlife to assume ownership of the Forest City Dam pursuant to two conditions: (1) the Commission finds that the Forest City Project will not require a license from the Commission if Maine DIFW owns the U.S. portion of the dam; and (2) Maine DIFW executes an agreement with Woodland Pulp that provides that Woodland Pulp and its successors will operate and maintain the Forest City Dam consistent with the manner in which the dam was operated in most recent 12 months, at the direction of the State, and at no cost to the State, for a period of 15 years. The state agency and the licensee executed an operation and management agreement on July 27, 2017.

That same day, the licensee petitioned the Federal Energy Regulatory Commission for a declaratory order declaring that if Woodland Pulp transfers ownership of the U.S. portion of the project to the Maine DIFW, DIFW will not require a license from the Commission to continue to operate and maintain the Forest City Dam. As noted in the petition:

Woodland Pulp cannot continue to operate the Forest City Dam if it is subject to the FERC license. Although FERC has suggested that Woodland Pulp could avoid FERC jurisdiction by simply locking the gates in place, such a solution would be irresponsible because of flood, stream flow safety, and dam stability reasons. Thus, the only two possible ways for Woodland Pulp to avoid FERC jurisdiction, based on FERC’s rulings during the past 20+ years of litigation over this issue, is (1) to remove the dam gates so that the dam is not operated to produce downstream power generation benefits (as proposed in Woodland Pulp’s December 23, 2016 Surrender Application), or (2) to transfer the dam to another owner that will not operate the dam as part of a consolidated hydropower generation system. 

The petition suggests that transferring the dam would avoid the need to remove the dam's gates -- and thus transferring would enable the maintenance of East Grand Lake, the Forest City Dam's impoundment -- a key feature for a number of commenters in the case.

The Federal Energy Regulatory Commission has issued a notice of the petition for declaratory order and set deadlines for comments, protests, and motions to intervene.