Potsdam village weighs options in repairing East Dam hydro plant

POTSDAM — Having received an estimate from a hydro consulting firm, the village now must decide what to do with its idle East Dam plant — which could cost up to $1.2 million to overhaul, and cause property taxes to increase 4.5 to 6 percent.

Mayor Steven W. Yurgartis laid out several options for trustees in a presentation Tuesday, ultimately reporting that even if the village does not repair the East Dam plant, there still will be a property tax increase of 2.8 percent to deal with deficits.

Trustees Ruth F. Garner and Eleanor F. Hopke did not attend the meeting.

Mr. Yurgartis explained that in an “optimistic scenario,” the village would borrow $900,000 to overhaul the plant’s two units, both of which include a gearbox, turbine, generator and other components.

He said taking into account operating expenses, inflation, interest payments, and recent data on revenue generated by the East Dam plant through remote net metering, the village would be able to pay the $900,000 back in about 12 years. The deficit that would be created, which he said would last 15 years, would require a 4.5 percent increase in the property tax rate in the first year.

“If you look at that scenario, what you see is that right from the first year, we come out ahead after we pay our expenses on the East Dam, pay off the loan,” he said.

Mr. Yurgartis said in a more conservative scenario, the village would borrow an additional $300,000 to pay for repairs to electronic controls at the plant, which he said are also aging and likely need replacing. He said the resulting loans from that scenario would take an estimated 23 years to pay back. In this scenario, the deficit would last about 20 years, and require a property tax increase of 6 percent in the first year.

“If we do that, we can see that in the first year, we will be down about $40,000 and we will continue to be spending more money than we’re making for about 10 years,” he said.

Ultimately, Mr. Yurgartis said, the village has two choices: pay to repair the East Dam plant, or leave it as is and use the West Dam plant to generate revenue through remote net metering.

He argued that because net revenue generation at the East Dam plant would be negative in the conservative scenario, the village shouldn’t hurry to repair it, instead advising that the village spend several months on research.

“It’s not like we’re losing $100,000 a year while the East Dam sits idle,” he said. “To get the East Dam up and running we have to borrow a bunch of money, and because we have to borrow a bunch of money, it’s going to cost us more money than we make, probably. So there is no comparative here to make that decision very quickly.”

Overhaul cost breakdown per unit:

Dewatering of draft tube for access to runner and turbine bearing — $16,000

Disassembly and removal of generator, shaft and runner — $24,000

Generators – cleaning, new bearings and seals, inspection and testing — $35,000

Gearbox rehabilitation — $65,000

Turbine – runner hub overhaul — $200,000

Turbine – new bearing shell — $28,000

Reassembly – components installation — $58,000

Reassembly – unit alignments — $16,000

Rodney hunt roller gate inspection & rebush some wheels — $8,000

Information obtained from an estimate from Hydro Consulting & Maintenance Services Inc., York, Penn.

 

By Alan Rizzo, Times Staff Writer