Gov. Gretchen Whitmer expressed concern in a letter to the Michigan Public Service Commission about Consumers Energy’s possible sale of its 13 hydroelectric dams to Confluence Hydro LLC.
“This deal would impose unacceptable safety and financial risks on Michiganders,” Whitmer said in the letter. “Until the sale includes conditions addressing these risks, I cannot support the sale and urge the Commission to reject it.”
The letter is in response to the governor’s office reviewing the sale and its details in case No. U-21985.
“Private dam owners have too often compromised public safety and imposed extraordinary costs on Michigan taxpayers. In May 2020, I surveyed by helicopter the immense destruction that followed the failure of the Edenville and Sanford dams,” the governor said. “Billions of gallons of water rushed down the Tittabawassee River, displacing more than 10,000 people and causing more than $200 million in damages.
“This past spring, a team of state, federal and private partners worked feverishly to complete needed repairs as the water behind the Cheboygan Dam came within inches of overtopping, threatening the community below. And right now, the Au Train Dam in Alger County lies crumbling from years of neglect. Its owner recently declared bankruptcy, leaving the community and taxpayers in peril.”
Whitmer went on to say that the proposed sale of the 13 dams does not provide sufficient safeguards to prevent failures from happening “again.”
“The deal lacks firm, enforceable protections to ensure the dams will be properly maintained and safely retired when they are no longer economical to operate. It does not require Hull Street Energy, the parent company, to cover all future repair, accident, environmental and decommissioning costs, nor does it require adequately funded reserves to cover those expenses,” she said. “The recently added Hydro Safety Fund is too little, too late, and too difficult to access — leaving the fund unable to prevent near-term safety failures or reliably cover the dams’ enormous long-term costs. Lastly, the deal does not prevent Confluence from moving profits out of the dam-owning companies, allowing one or more of those companies to go bankrupt, or selling a dam to a less financially capable owner. In short, this deal allows the private equity firm and its investors to capture the financial benefits while nearby residents and Michigan taxpayers bear much of the long-term risk.”
Brian Wheeler, media relations specialist for Consumers Energy, said that the company’s reaction to Whitmer’s statement was less than pleasing, noting that they still have yet to hear a path forward from the state.
“We are disappointed with the governor’s letter. The record in the MPSC process includes extensive evidence showing Confluence Hydro is an experienced, capable owner and operator, and not like the owners of the dams referenced in her letter,” he said Thursday, Aug. 13. “The proposed sale includes a number of safeguards to ensure the long-term safety of the dams, which directly address the concerns noted by the governor. Even with this new letter, we have yet to see any proposal from the state that offers a reasonable path forward to keep the dams in place.”
Wheeler continued by saying that the sale is the best option for the communities around the dams.
“The governor’s letter fails to acknowledge the informed and impassioned pleas of the communities around these dams that approving the sale is the best option for their communities and Michigan,” he said. “It also fails to recognize the impact on the communities if the sale is not approved, because decommissioning and removal of the dams’ reservoirs would result. If the deal with Confluence is not approved, the state will be faced with the reality of the permanent impacts to these communities going forward.”
The 13 dams included in the potential sale include:
The Michigan Public Service Commission did not respond, or comment, on Whitmer’s letter prior to the publication of this story.