BELFAST – When operating at full capacity, Larry Gleeson’s hydropower dams on Belfast’s Goose River can crank out 1.5 million kilowatt hours of electricity a year – enough to provide the electricity needs of about 250 households.
But this month, after record rains swelled the river as it flows from Swan Lake to Penobscot Bay through and over Gleeson’s series of dams, the potential energy in the falling water is literally lost at sea.
Gleeson and his wife, Cathy, have been in the hydropower business here since the 1970s, a time when the nation’s reliance on Middle Eastern oil troubled the minds of policy-makers, just as it does now.
And even though oil prices have topped $60 a barrel in recent months, no one is beating down Gleeson’s door trying to get that electricity into the power grid, thereby reducing the need for energy made in oil-fired plants.
Gleeson is philosophical about the seeming paradox. “It’s the public value of competing uses,” he said.
Hydropower is not valued – at the moment, at least – as highly as environmental concerns, or even as highly as other “green and clean” electric generation sources, such as wind power, Gleeson believes.
As a result, Gleeson’s Goose River Hydro is not operating its power plants on the river at anywhere near capacity, because to do so would mean losing money. The turbines in the three power plants and the five dams that hold back water must be monitored and maintained, which costs money.
Conditions that would make running at capacity profitable, Gleeson said, include tax incentives, an easing of environmental regulations and a favorable price structure from the Public Utilities Commission.
The fact that Mainers are likely to see higher electric rates in the coming months while his electricity goes unused frustrates Gleeson, but he has seen the ups and downs of the business before.
Before moving to Maine in 1976, Gleeson worked for Sun Oil in Philadelphia. “We were in the midst of another energy crisis back then,” he said.
His employer allowed him to investigate hydropower opportunities, and Gleeson explored possible licenses on several dams in Pennsylvania, and some in Auburn, Gardiner and elsewhere in Maine.
An old mill on the Goose River in Belfast burned, and its owner contacted Gleeson to see if he were interested in it.
Though the Goose River watershed is about half that of the city’s Passagassawaukeag River – only 18.5 square miles – it had the advantage of having a much better containment area, including Swan Lake some 10 miles north of where the river flows into the bay.
Oil was selling for about $5 per barrel in the mid-1970s, Gleeson said. The cost of oil essentially dictates the price other electric generators can charge, he said, because some electricity is generated by oil-fired plants, and because the cost of oil drives the cost of other fuels.
Running the numbers, Gleeson concluded that running a relatively small hydropower operation on the Goose River would not be profitable.
But when oil increased to $15-$20 per barrel, and by figuring a way to use the five dams and three power plants to achieve some savings through standardized equipment and management, Gleeson decided he could make a profit on the Goose River.
“I got the first one running three months after we started,” in late 1977, he said. By using an induction generator, an unusual application at the time, Gleeson was able to keep the equipment simple and less costly.
“We got some federal regulatory processes changed,” he remembers.
Because some of the dams on the river dated back to the 19th century, some of Gleeson’s operation was grandfathered, “but the regulations became more difficult.”
In the early days, FERC was the regulatory agency, and acted as an arbiter of federal and state fisheries and wildlife management agencies.
“The perceived value of the fisheries rose,” Gleeson said, and FERC became just one of many agencies he had to satisfy.
“To me, a dam is nice. To other people, it’s an encroachment on a natural thing,” he said. “The PUC could value energy in some way that reflects whatever the perceived value is.”
Though he does not believe camp owners and those who enjoy boating and fishing on Swan Lake should subsidize his business, Gleeson notes they are enjoying the benefits of his dams without contributing to his costs.
Through the late 1980s and early 1990s, Goose River Hydro entered into a long-term contract with Central Maine Power by which CMP paid a fairly lucrative rate for Gleeson’s electricity.
But by the mid-1990s, the cost of fossil fuel had dropped to historic lows, and when the contract expired, CMP replaced the deal with a far less favorable rate.
At one point, “we weren’t getting anything for it,” Gleeson said, and he and his wife, who served on the SAD 34 board, tried to donate the electricity to a nearby school. The Gleesons also have looked into hosting an electricity-intensive business on site, such as a greenhouse with grow lights, but have not found one yet.
The current CMP deal allows Goose River Hydro to “bank” electricity it produces for use at an off-site location, which Gleeson is also investigating.
An amateur historian, Gleeson has discovered the remnants of 35 dams in Belfast, most of which date to the mid- and early 19th century.
Yet in the last decade, when energy costs dropped to historic lows, dams such as the Edwards Dam on the Kennebec River in Augusta have been removed to allow fish migration.
Gleeson said he doesn’t understand why the developers of windmills are now receiving tax breaks, while investment in hydropower does not.
“Why is one considered green and hydro is not? Hydropower is the original solar power,” he said. “The sun drives the whole cycle.”
Comments
comments for this post are closed