I am confused about the claims made regarding theI'm sorry you're confused. I only summarized the top reasons I felt it was a bad idea, and did not include the details. If you visit the 2 links I provided, you can read much more. However, I will still try to add a few details in this response below.
Crown Hydro Project.
Statements made:The compensation Crown Hydro will pay the Park Board is $100,000 up front, and $30,000 a year for 10 years, and the amount per year for the remaining 50 year lease to be determined. $30,000 a year is a pittance for a multi-million dollar business to lease that kind of space. Further, the Park Board could quite easily receive $30,000 a year in revenue by leasing 2 or 3 cell phone antenna sites, as they typically lease for $10,000 to $15,000 per year.
1. Risks the Mill Ruins Park area, the Stone Arch Bridge and the surrounding historic buildings and ruins for relatively little financial compensation to the Park Board.
How does is risk these areas? The plant is completely
underground and from what I have heard takes in water
from one end, uses it to produce electricity and spits
it out the end. Is it contaminated when it's done
being used for electricity? I didn't see a report
anywhere that said that. Is there one? If it's not
contaminated, then just what is the risk?
There are a number of unknown risks, that is, the size of the following risks are unknown but should be known since they could be large or could be small.
First, this area is riddled with ruins of mills and underground tunnels and caves. The geology is limestone and sandstone, neither of which is particular strong rock. Historically, this area has had 2 major cave-ins, one of which nearly destroyed the falls, during construction projects. What is the degree of risk involved in excavating the gatehouse intake area, the generator "pit" and the tail race connections? What might they run into? What accident might happen? Despite a large amount of insurance, some accidents are hard to reverse. What if part of the falls or Stone Arch Bridge collapses? What about loss of life?
Perhaps all of those risks are minutely small. But we don't really know, so it seems premature to build this project without knowing.
There are other less concrete risks. During construction, the area will be a mess, as is common for such projects. That might deter enough tourists and potential buyers of new riverfront lofts away that some development might stall or be canceled. Maybe Minneapolis' reputation will be tarnished. Just the idea that this project might go through already has the residents in the area upset. Even if their concerns prove to be false fears, how much financial impact will such fears have on developers doing business or about to do business in the area? Word will get around. People will think twice about buying a $200,000 to $1,000,000 riverfront condo if they hear horror stories, even if false, from people who live there.
Again, such risks are probably small. But they need to be considered.
Another small, but completely unanalyzed risk is that of pollution. What sorts of contaminations might be found in all that soil to be excavated and moved around? And being hard on the river, and in channels which open to the river, what are the chances some of it might find its way into the river? Do we want to take that chance?
There are risks to the aesthetics of the Falls (water flow levels) and the Stone Arch Bridge (modern, cheap extension). Those are hard to quantify, but if people think the falls or the bridge don't look as good, it makes a difference -- to residents and visitors, and the businesses which depend on those visitors.
2. Risks lowering the property values of the many surrounding residential properties who pay a large amount of property taxes to the city, county and even the Park Board.
How does it lower property values when you can't even
see it? It is completely underground. Is that a report
that says the walls of the river homes will vibrate or
that these people will hear noise from the plant?
Property values, just like stock market values, are highly affected to subjective, personal opinion. The people who live there now are virtually up in arms about it. Does it matter whether they will be able to see it after it's built? Only slightly. If people perceive it as undesirable, property values will be less. If people think an area is great to live in, the property values go up.
Read my other details, and you may find that not only do the people have some subjective reasons for worrying about property values, but they have some objective reasons, as well.
Did you know that prior to trying to site the generator in the Mill Ruins Park on Park Board property, Crown Hydro was working on building it in the basement of the Crown Roller Mill? Did you know that the reasons they are not building it there is because they would not promise in writing to the owner of the Crown Roller Mill building that there would be no vibration and no damage from such vibration?
Further, the owner of the Crown Roller Mill visited 2 hydro power plants similar in size and nature to the one that Crown Hydro proposes, and observed significant vibration and noise being emitted at both sites. This is what caused his concern for his building.
One last risk, of sorts. Crown Hydro is building this with $5.1 million from the renewable energy fund. That's $5.1 million that will not be used to fund other renewable energy projects, such as wind generation. Did you know that Minnesota is the 3rd largest wind power generator? Maybe that money would be better spent somewhere else. The "risk" here is called "lost opportunity cost." We may never know what good we could have done with that money, and how it would affect our state's economy and welfare.
3. Generates a relatively small amount of electricityCrown Hydro proposes to build a 3.2 megawatt (with full flow) generation plant, which is roughly enough to power 2,700 homes, they say. Their FERC license requires Excel Energy to pay Crown Hydro its "highest avoided cost" which in essence means a rate equal to the highest cost that Excel has to generate electricity anywhere in its system. While that provides a premium price to Crown Hydro, it also means a higher cost to customers of Excel Energy.
at the very highest price Excel is allowed to pay (and
thus charge) its consumers.
Don't know about this one.
4. Puts the Park Board at risk for future lawsuits.Right. So we should just ignore all potential liabilities when evaluating any project? Give me a break. This project has a couple of very significant possible liabilities.
Everything we do in this world puts everyone at risk
for future law suits. We live in a litigious society. Anyone can sue for any reason.
One, the zoning for the area is not correct for building the hydro power plant there. FERC will not issue the generation license unless it is. The Park Board staff proposed to the commissioners that they approve a "partial" lease, which did not include many of the details which would in theory be worked out later. However, by state law (as I understand it and I am not a lawyer) the lessor, in this case, the Park Board, is responsible for getting the zoning changes made. If for some reason, the zoning is not changed, or for some other reason, the Park Board and Crown Hydro cannot come to terms on the details of the lease and operation and maintenance agreements, than Crown Hydro has some really good standing in court to sue the Park Board because they have leased some land they cannot use as intended. The Park Board is essentially liable for making the project work if they sign the lease.
Likewise the amount of water available to Crown Hydro gets caught up in similar liabilities. Other potential uses of the river which might affect the flow would be at risk, because they might prevent Crown Hydro from conducting business as promised. Crown Hydro may again have solid ground in court to sue the Park Board or the City or the County or whoever messes up the water flow (e.g. the proposed white water rafting facility on the river).
In the end in all of these lawsuits, we the taxpayer will pay Crown Hydro.
Crown Hydro is not stupid. They have been working on this a long time and they have some good legal and project advice. They are not going to foolishly risk their investment and future income to some situation they can legally prevent from happening, or make somebody else pay them for.
Just curious. Is there a report somewhere that backsWhat do you have? Apparently you have not read the documents at the Mill City Lofts web site, which I provided a link to. Do you think I'm just making this stuff up?
up the claims made here? Nothing I have states
anything that would lead one to draw these
conclusions. Am I missing something?
I know of no "report" other than the marketing materials that Crown Hydro has provided to the Park Board, and the verbal report given by staff to the commissioners. Neither of these qualifies as a dispassionate analysis of the situation.
I've received lots of information and answers from folks at Crown Hydro -- thanks go to them. It wasn't easy to come to a decision on what I felt would be the correct path. Crown Hydro clearly is doing a good job of developing its project, but you have to remember, they are motivated by self interest first. This isn't a charity cause; they're in it for the business.
Just because an upstanding business wants to do something, does not mean it is a good idea for the taxpayer to endorse and support it. Sometimes our best needs and purposes are going to conflict.
This is one of those cases. We don't need 3.2 megawatts (maximum, low water will mean less) of additional hydro generated electricity at this location that badly. The Park Board can get $30,000 a year from other sources. The downsides are not outweighed by the upsides.
Chris Johnson Fulton
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