Did Crown Hydro bully Park Board?
Below is a filing the Park Board made to the Federal Energy Regulatory Commission (FERC) strongly opposing the Crown Hydro project back in March of 2003. Why has the Park Board strangely reversed its position and is now actively negotiating a lease with Crown Hydro?
UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION
Crown Hydro Company Project No. 11175-016
MOTION TO INTERVENE and COMMENTS
SUBMITTED BY THE
MINNEAPOLIS PARK AND RECREATION BOARD
INTRODUCTION
Pursuant to Rule 214 of the Commission's Rules of Practice and Procedures (18 C.F.R. * 385.214) and the Notice of Application issued on January 22, 2003, the Minneapolis Park and Recreation Board ("Park Board") files this Motion to Intervene and these Comments in this proceeding involving the application of Crown Hydro LLC ("Crown") for amendment of license for the Crown Mill Project.
I. DESCRIPTION OF MOVANT
The Park Board is a municipal body consisting of nine independently-elected commissioners in the City of Minneapolis, State of Minnesota, and files this Motion to Intervene on its behalf pursuant to Rule 214 of the Commission's Rules of Practice and Procedure.
Communications in connection with this matter should be sent to:
Rachel B. Ramadhyani, Project Manager Minneapolis Park and Recreation Board 200 Grain Exchange, 400 South 4th Street Minneapolis, MN 55415-1400 (612) 661-4814 rramadhyani@minneapolisparks.org
II. GROUNDS FOR INTERVENTION
The Crown Mill Project is located in the historic milling district of the City of Minneapolis and will use water from St Anthony Falls ("the Falls"). The Falls and the Mississippi River are highly significant aspects of the historic and natural environment of the City of Minneapolis and the State of Minnesota. The area around the Falls, including the site of the Crown Mill Project, is listed on the National Register of Historic Places as the St. Anthony Falls Historic District. The Park Board has acquired a substantial amount of property within the Historic District, including the site of the Crown Mill Project, and is in the process of (1) design and construction of "Mill Ruins Park" on this site, in cooperation with the United States Government, (2) planning improvements to the Great River Road adjacent to the Project site, with the intention of providing cultural, recreational, and aesthetic benefits to the public, also in cooperation with the United States Government, and (3) furthering other plans to preserve the historic and natural environment of the Falls as it exists in the City of Minneapolis. These activities involve the expenditure of significant capital resources on the part of the Park Board, the City of Minneapolis, and the United States Government.
At the present time, substantial strides have been made toward the implementation of these plans. The first phase of development of Mill Ruins Park was completed and opened to the public in October 2001, and the next phase of park construction, which also involves improvements to the Great River Road, will be undertaken during the upcoming construction season of 2003. Both park construction phases have received substantial Federal Highway Administration funding, along with funds from various State of Minnesota and local sources.
The Crown Mill Project as originally licensed requires the use of parkland (portions of Mill Ruins Park) owned by the Park Board to convey water from the river to the hydroelectric equipment and to then return the spent water to the river. The amendment of license requested by Crown would additionally locate the powerhouse and ancillary facilities on parkland owned by the Park Board. This parkland was acquired by the Park Board for its historic and natural significance and for the purpose of developing a system of parkways, trails, and interpretive and recreational features intended to provide public access to and interpretation and preservation of the significant natural, historic, and scenic values of the location. The parkland is protected by the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C.A * 4321 to 4370b) and falls within the Mississippi National River and Recreation Area (MNRRA) (1988 Public Law 100- 696), the Upper Mississippi reach of the federally-designated American Heritage River (1998), and the National Millennium Trail designated by the United States Department of Transportation (1999).
The Park Board, the City of Minneapolis, and the public are therefore strongly impacted by the activities of the Crown Mill Project. Any change in the conditions of the project license, and, in particular, the proposed amendment, will have a significant impact on ability of the Park Board and its many partners, including the United States of America, to successfully implement the recreational and preservation goals discussed above. In addition, significant archaeological resources which are contributing features to the St. Anthony Falls Historic District will be impacted by the proposed amendment. The Park Board's motion to intervene is made in the public interest, in that the Park Board is the provider and protector of parks and historic and natural sites within the City of Minneapolis.
The interest of the Park Board and the City of Minneapolis will be directly affected by the outcome of this proceeding. Based on the foregoing, the Minneapolis Park and Recreation Board requests that its Motion for Intervention be granted.
I. STATEMENT OF POSITION
The Park Board opposes the amendment of the license for the Crown Mill Project as requested by Crown Hydro LLC.
COMMENTS
The applicant has requested the relocation of the project's powerhouse to a location within the footprint of the remains of the Cataract and Holly Mills. The result of this change would be that nearly the entirety of the Crown Mill Project would be located within the boundaries of Mill Ruins Park, on land owned by the Park Board. Only a small area occupied by the Crown Mill Project would be on land not owned by the Park Board; that area is owned by the U. S. Army Corps of Engineers.
The Park Board opposes this request, for the following reasons:
1. Negative impacts on the functioning and historic integrity of Mill Ruins Park
Location of the powerhouse and water-conveyance components of the Crown Mill Project on Park Board land will have numerous major impacts on the functioning and historic integrity of Mill Ruins Park. These include, but are not limited to, the following:
a. The ability of the public to access and enjoy Mill Ruins Park is likely to be precluded or significantly restricted during the period of construction of the Crown Mill Project. The Park Board has suggested to Crown that construction be undertaken during the winter months, when park visitation is reduced, but Crown has not entered into any such agreement.
b. Modifications to the "tailrace canal" necessitated by the requirements of the Crown Mill Project will have negative impacts on the functioning and historic integrity of that area of the park. Points "b" through "e" below address these issues. The tailrace canal is a historic feature which carries outflow water from the park back to the river at the "below the Falls" elevation. This feature had been filled and buried c. 1960, and its excavation, restoration, and rewatering formed a major component of the first phase of park construction, completed by the Park Board in fall 2001. This reconstructed tailrace canal is bordered by several hundred linear feet of historic limestone-block canal walls dating to the second half of the 19th century. As a result of their age and subsequent physical damage, these walls are in fragile condition, and the Park Board has stabilized their most critically-deteriorated portions. The reconstructed tailrace basin itself has been designed by the Park Board to be sufficiently shallow and with a sufficiently low water velocity to allow the public to approach its edges without hazard. At present, the basin is designed to accommodate a volume of up to 150 cubic feet per second (cfs).
Implementation of the Crown Mill Project will require a number of modifications to the tailrace canal. In order to accommodate the greater volume of water this project will require (up to 1000 cfs), portions of the tailrace basin will need to be deepened. The velocity of water in the channel is also likely to be higher than that of the current regime. This increase in water depth and velocity will compromise public safety and the ability of the public to interact closely with the tailrace canal, which is one of the central features of the park. It may, in fact, be necessary to install safety railings along the length of the tailrace canal on both sides for safety purposes. At present, no agreement exists between the Park Board and Crown regarding the responsibility for funding these railings. Additionally, the installation of railings along the historic tailrace walls will have significant negative impacts on the historic integrity of the area and on its aesthetic qualities.
c. The above-referenced potential increase in the velocity of flow in the tailrace also has the potential to inflict scour and other damage on the historic tailrace walls. Again, no agreement is in place which would ensure that Crown will assume responsibility for the ongoing maintenance and stabilization necessary to address such damage.
d. Deepening the tailrace basin is likely to require the construction of new, deep walls at some locations. At some times, particularly when the tailrace is dry, these new walls would be visible to the public. Therefore, it is essential that they be designed to be historically and aesthetically compatible with their context. At present, no appropriate design has been proposed by Crown, and no agreement exists to ensure that an appropriate design is developed and implemented.
e. In order to accommodate the required volume and to generate maximum head, Crown has proposed to remove or lower concrete weirs constructed by the Park Board at the downstream (outfall) end of the tailrace canal. These weirs were included in the original design so that the water surface elevation of the tailrace canal would be above that of the river into which it discharges. The difference in surface elevations ensures that the tailrace canal remains "watered" even in low-flow conditions and that trash from the river does not back up into the canal. Removal or lowering of these weirs is therefore likely to result in the dewatering of the tailrace basin during low-flow periods, to the significant detriment of the aesthetic and interpretive nature of the park. Lowering the weirs will also likely result in the back-up of trash from the river into the tailrace basin. No design has yet been presented by Crown which would address these issues.
f. The Crown Mill Project will require water volumes of up to 1000 cfs to generate power at full capacity. The Park Board has been informed that Crown's turbines are unable to operate without damage at volumes under approximately 165 cfs. The Crown Mill Project proposes to close off the pipe- and-tunnel system constructed by the Park Board which currently supplies the tailrace basin with up to 150 cfs. Instead, all water entering the tailrace would first pass through Crown's turbines. Since these cannot operate at low volumes, it therefore would appear that, when the river flows drop to a point where Crown would need to suspend operations, the tailrace basin would be dry. This would likely occur during the late summer and early fall months, which are peak periods for park visitation. It would be highly detrimental to the mission of park operations for the tailrace canal to be dry at these times. To date, Crown has presented no proposal and has entered into no agreement to ensure that the tailrace remains watered under these conditions.
g. The ability of the Park Board to undertake additional planned phases of park development in the immediate vicinity of the tailrace canal will be severely restricted by the financial imperative of the Crown Mill Project to operate whenever sufficient water volume is available. Additional park development planned for 2005 centers on the construction of walking paths immediately along the tailrace canal on both sides, together with a pedestrian bridge spanning the tailrace at its upstream end. The difficulty, environmental impact, and cost of these construction activities will be greatly increased if the tailrace canal must remain watered during their pursuance. If the Crown Mill Project were not operating, the Park Board would have the ability to close off the water flow as necessary during construction, but Crown has not entered into any agreement regarding water shut-downs during park construction. The additional complications this generates may drive the cost of this planned park construction beyond the Park Board's ability to proceed.
h. The Park Board shares the concerns expressed by the Minnesota State Historical Preservation Office (SHPO) in a December 4, 2002 letter to Ms. Evelyn Tidlow of URS, a consulting firm providing services to Crown. In that letter, Mr. Dennis Gimmestad expressed the concerns of SHPO that location of the powerhouse within the footprint of the Holly/Cataract Mills "would appear to be very difficult without creating a major negative impact on the historic fabric." Mr. Gimmestad states that "[i]n addition to being the location of some of the earliest mill development in the district, the site is in public ownership under the Minneapolis Park and Recreation Board and slated for interpretation as part of Mill Ruins Park." His conclusion is that the project will have an "adverse effect" on the site. In the Park Board's view, these negative impacts might have been partially mitigated if the powerhouse itself had been designed to be open and/or visible to the public, thereby offering an opportunity for public interpretation and education regarding hydroelectric generation. However, the design of the Crown Mill Project proposed in Crown's amendment submission of April 4, 2002 would not be open to the public and offers no such opportunities.
i. One longer-term component of the Park Board's vision for public interpretation at Mill Ruins Park is the development of opportunities for the public to explore the tunnels which historically brought water into the upstream end of the tailrace canal. When funds became available, the Park Board would seek to install walking surfaces and other amenities in several of these tunnels to facilitate such access. However, the use of these tunnels by the Crown Mill Project will preclude such an opportunity.
j. Concerns regarding the aesthetic impact of the transformer and transmission cables required by the Crown Mill Project have not yet been addressed by Crown.
Many of the issues outlined above are noted in the minutes of a meeting of January 16, 2002 between Park Board staff and Crown representatives; these minutes were included as part of Crown's April 4, 2002 submission. Most of the issues outlined in those minutes have not yet been resolved.
2. Absence of an agreement between Crown and the Park Board for use of Park Board land, despite Park Board attempts to initiate negotiations
In an agreement of August, 1998, the Crown Hydro Company stipulated that "it will not exercise any power of eminent domain that it has or may have at any time, including any future time, over property owned by the Minneapolis Park and Recreation Board." Crown entered into this agreement in return for the Park Board refraining from filing an objection to Crown's original license application. This stipulation is binding upon the Crown Hydro Company and its successors and assigns, including Crown Hydro LLC.
Given this agreement, Crown therefore cannot move into implementation of the Crown Mill Project without arriving at an agreement with the Park Board for the use of its land. Over the past several years, Park Board representatives have repeatedly invited Crown representatives to enter into negotiations for that purpose. The Park Board also made an offer to purchase this hydropower generation license from Crown and pursue the project itself, an offer which Crown rejected. While Crown has been willing to discuss the design of the forebay/headrace area, its representatives have refused to engage in the preparation of any form of agreement. After learning via media reports in November 2001 of the award of Renewable Energy Funds to the Crown Mill Project, Park Board staff once again attempted to initiate a discussion with Crown on that matter. Park Board staff called a Crown representative to suggest a meeting, and this meeting was then held on December 14, 2001.
At that meeting, as well as on several subsequent occasions, Park Board representatives reiterated the general terms which should be included in an agreement. In addition to lease or encroachment fees payable to the Park Board, an agreement would also need to address such matters as operation and maintenance responsibilities, bonding and insurance, construction scheduling and provisions, protections against project abandonment, compliance with historic requirements, and provision of public access. The agreement would also contain guarantees that Crown would implement park-related construction in the headrace area in accordance with a design which was developed in a series of meetings in the February- June period of 2002. Crown, however, refused to enter into any discussion of terms, citing their desire to complete a power purchase agreement with Xcel Energy before doing so. The Park Board's position has been that, since its lease conditions would not be contingent on Crown's terms with Xcel or other financial arrangements Crown may have, it would have been appropriate to establish a lease framework during this past year. Nonetheless, Crown has been unwilling to do so, and, in fact, there has been no contact between the Park Board and Crown representatives since June 25, 2002.
Despite its unwillingness to develop an agreement for the use of Park Board land for its project, Crown proceeded, on April 4, 2002, to file a request for amendment of license to relocate its power production facilities on Park Board land. This filing was undertaken without prior notification of the Park Board. The principal reason offered by the filing for requesting relocation is that "[u]se of the Crown Roller Building as the powerhouse became impractical, if not impossible, because of the inability of Crown Hydro LLC to arrive at acceptable lease terms with the building's owner to house the project" (Application for Amendment of License before the Federal Energy Regulatory Commission, April 4, 2002, item 2). It is difficult to understand why Crown would now seek to relocate these facilities on land where, once again, acceptable lease terms have not been developed with the landowner. Park Board representatives have repeatedly and in good faith suggested to Crown that it would be appropriate to first arrive at a mutually agreeable set of terms prior to seeking relocation of the license. Had this course been pursued, it is likely that the Park Board would not be in the position of needing to file this Motion to Intervene in order to protect its interests.
3. Crown's demonstrated inability to meet license requirements and deadlines
Since receiving its license on March 19, 1999, Crown has demonstrated a consistent inability to meet the requirements set forth in that license. Despite having received extensions of several deadlines, including the commencement of construction and submission of a recreation plan, Crown continues to be negligent in meeting even those extended deadlines and in engaging in other stipulated consultations and plan submissions. To the best of the Park Board's knowledge, license stipulations including but not necessarily limited to the following have not been met:
a. Preparation of a recreation plan, to have been filed with FERC by an extended deadline of October 31, 2002 (Article 402).
b. Preparation of a Construction Phase Cultural Resources Management Plan and a Cultural Resources Management Plan - Operation and Maintenance, as stipulated by the Section 106 Programmatic Agreement (Article 403).
c. Development of an operation and maintenance plan for the project by a twice-extended deadline of March 19, 2003 (Article 406). To the best of the Park Board's knowledge, consultation on this matter with at least several of the parties stipulated in that article, including the Park Board and the Minnesota Department of Natural Resources, has not yet occurred.
d. Submission (to the U. S. Army Corps of Engineers (COE) and the FERC) of a schedule for submission of design documents and plans and specifications, by a twice-extended deadline of August 19, 2000 (Article 301). Although Crown submitted such a schedule on August 15, 2000, the dates mentioned in that submission are no longer valid, and no replacement schedule has been submitted.
e. Finalization of an agreement with the COE to coordinate its plans for access to and site activities on lands and property administered by the COE, by a twice-extended deadline of August 19, 2000 (Article 303).
f. Submission to the COE of a regulating plan and finalization of a Memorandum of Agreement with the COE describing powerhouse operation (Article 305); these actions were to have been accomplished at least 60 days prior to the start of construction. Since the extended deadline for start of construction is March 19, 2003, this plan should have been submitted no later than January 18, 2003.
g. Commencement of construction of the project works by the extended deadline of March 19, 2003 (Article 310). As of this date, no construction of the project works has occurred, and, since no agreement exists for the placement of those works on land owned by the Park Board, it is not possible for Crown to meet that deadline. A December 12, 2002 submission made by Ms. Jessica Overmohle of URS on behalf of Crown states that Crown plans to meet this deadline through the off-site assembly of turbines. This activity should not be accepted as meeting the requirement of Article 310, which stipulates that "construction of the project works" (italics added) is required.
This flagrant disregard of the stipulations of the license cast into question the ability of the licensee to undertake this project in a timely, cooperative, and competent manner.
Based upon the reasons outlined above, the Park Board holds that granting the requested amendment of license has the potential to do irreparable damage to the goals of the Park Board and the City of Minneapolis in the ongoing development of recreational facilities and historic preservation activities in the project area.
CONCLUSION
The Park Board therefore opposes the amendment of the license for the Crown Mill Project as requested by Crown Hydro LLC .
Date: March 6, 2003 Respectfully submitted,
MINNEAPOLIS PARK AND RECREATION BOARD Rachel B. Ramadhyani Park Board Project Manager
CERTIFICATE OF SERVICE
I certify that I have the 6th day of March, 2003, filed the foregoing document electronically pursuant to 18 CFR 385.2001(a)(1)(iii), in lieu of a paper filing. #