Aldermen vote not to negotiate with Canadian firm about hydropower

Posted: Sep. 9, 2013 9:38 pm Updated: Mar. 19, 2014 9:14 am

Herald-Whig Staff Writer

The city of Quincy is out of the hydropower business.

Quincy aldermen voted 10-4 Monday night not to enter negotiations with a Canadian-based company on whether to form a partnership to develop hydroelectric power at lock and dams 24 and 25 on the Mississippi River.

Representatives of Coastal Hydropower Corp. told Quincy officials in July that the city could recoup more than the $5 million it has spent since 2006 on hydropower development through a partnership to develop power plants at locks and dams at Clarksville and Winfield.

Mayor Kyle Moore issued a tie-breaking vote to prevent the creation of an advisory commission to study if the city should enter the negotiations during the Aug. 26 council meeting. He has reiterated his opposition to continuing the projects, but has said he would support the council's decision either way.

"We tried to be as open and transparent with the community as we can about the options that were before us, and the council had the opportunity to weigh the options, seek input from constituents — and the council has spoken," Moore said after the meeting Monday.

The company was looking to reach an agreement, which would have been reviewed by the Federal Energy Regulator Commission before any work would have been done.

Under questioning from aldermen, Director of Planning and Development Chuck Bevelheimer said there would have been no cost to the city to enter into negotiations, but there would be some unknown costs if the project moved forward. He said any expenditures would have gone before the council.

One of those costs would have been expert legal counsel. Corporation Counsel Lonnie Dunn said his staff would not have been equipped to handle any legal work beyond the negotiation stage.

"I'm not willing to waste our time," said Alderman Terri Heinecke, R-7. "We have other pressing stuff here in the city of Quincy to deal with."

Under the proposal, Coastal would have developed the project and operate the plants under a 40-year operating agreement for the city. The proposal called for Coastal and the city to then share revenue generated by two plants — estimated at between $11.34 million and $15.12 million annually, based on current energy prices‚ for the life of the agreement.

It also offered the city an opportunity to recoup at least some or all of its expenses on hydropower so far.

Alderman Steve Duesterhaus, D-2, who supported the resolution, said he saw the partnership as a way to mitigate risk. "Right now it's not going to cost us anything to partner," he said.

Alderman Dan Brink, R-6, said while he introduced the resolution to form a community advisory commission, he didn't want to spend any additional money.

"The commission would have been tasked with answering the question, ‘Would it require additional taxpayer dollars and would it put the city at risk?' " he said. "Obviously, the answer from the corporation counsel was that we would need to hire outside legal counsel to support the hydro effort."

The city's hydropower focus initially started at Lock and Dam 21 in Quincy, and the city was moving forward with submitting a license application when regulators dismissed the city's preliminary permit and license application after the agency said the city inappropriately worked in tandem with Coastal.

The preliminary permit for Lock and Dam 21 is now held by Hydro Green Energy of Westmont.

A $6.6 million bond was approved in 2009 for the licensing work required to get the permits to develop the power plants. In August 2011, the City Council approved paying off the $7.3 million in outstanding bonds and interest. City officials don't expect an increase in property taxes will be necessary to finish paying off the bond by Dec. 1, 2015.

Aldermen approved reapplying for the permits in April 2012 to try to recoup money invested in developing hydropower at Lock and Dam 21 in Quincy.



Voting to not enter negotiations were Aldermen Virgil Goehl, D-1, Glenda "LeXze" Mann, R-1, Jared Holbrook, R-3, Paul Havermale, R-3, Mike Farha, R-4, Jennifer Lepper, R-5, Jim Musolino, R-6, Dan Brink, R-6, and Terri Heinecke, R-7.

Voting to enter negotiations were Aldermen Steve Duesterhaus, D-2, Dave Bauer, D-2, Mike Rein, R-5, and Jack Holtschlag, D-7.