2016-05-13 / Letters

There is no good reason to take out the dams

To the editor: To all KLPD ratepayers:

While having a cup of coffee one morning, I started asking myself the same questions over and over. Why take down the dams? How come it’s taking so long to figure out? Could factoids advertised by believable parties concerning the alternatives’ cost and kilowatt hours (KWH) be influencing our thinking? A factoid being something fictitious or unsubstantiated that is presented as fact, devised especially to gain publicity and be accepted because of constant repetition. So I got my calculator out and went to work and gave it the old coffee test. What I discovered gave me a strong taste of the matter at hand.

First, there is a 10-year historical average of 1.8 million KWHs per year being generated by our dams that is not reflected in the updated Wright Pierce (WP) Report. They say it is 1.4 million KWHs-factoid #1. Secondly, WP says Alternative #4 (demolish the dams) will cost only $1.9 million“ factoid #2.” The truth is with the omission by WP of an unmistakable opportunity cost, the price tag of Alternative #4 will be driven up to roughly $8.1 million.

WP in its updated March 2016 report has agreed upon $10.5 million as the revenue for Alternative #1 (keep the dams). By demolishing the dams, the ratepayer will lose this revenue. Moreover, there is a profit generated from this revenue too (subtracting the dam operating expenses from revenue). This profit now becomes an opportunity cost that needs to be addressed and added to Alternative #4 as a cost.

Summarizing a chart I made that could not be published due to technical reasons, the price tag for Alternative #4 is around $8.1 million. In comparison, Alternative #1 will cost only $900,000. Thus, by removing the dams the cost to ratepayers will be around $7.2 million more than if the dams remain standing.

The general cost in cans of coffee for a ratepayers using 750 KWH yearly is as follows: Alternative #1 (keep the dams) shows the average rp will pay a half can of coffee extra per year; Alternative #4 (dam removal) shows a rp will pay 5 cans of coffee extra per year.

My numbers are based on the following: 1.8 million KWHs per year; kWh rate set at $.08158; revenue of $13.5 million; the inclusion of an opportunity cost of $5.6 million for Alternative #4; the augmentation of bond interest costs for all alternatives; at 100 million KWH used yearly by KLPD rate payers; and a can of coffee priced at market rate of $3.69 per can.

Additionally, the rate of the kWh was first reported by WP in its October 2015 report @ 10.5 cents. In March, I uncovered a disturbing fact when I spoke with Todd Shea, general manager of KLPD. Shea said that KLPD’s board of trustees had a heated debate about what rate to charge per kWh and finally settled on .08158 cents. The effect of this new rate lowers the total revenue for Alternative #1 in WP’s updated March 2016 report. This new rate also is unclear to many and needs further explanation.

If 10.5 cents per KWH were utilized, the numbers would change substantially. The result would be for a residential ratepayers using 750 KWH as follows: Alternative #1’s cost would float between a ratepayers paying absolutely nothing to a cost of a half can of coffee extra per year; Alternative #4 would have a high cost of seven cans of coffee extra per year. Furthermore at this rate, dam removal is estimated to be at a massive cost of $12 million.

Remember, the major advantage of hydropower is the virtual elimination of the cost of fuel. With flowing water as their power source, hydroelectric plants are practically immune to increases in the cost of fossil fuels. Also, hydropower produces no emissions into the air, including emissions of carbon dioxide in reverse.

By making our own electricity, this acts as a hedge against the inflation of the KWH. Furthermore, with evidence of infrastructure costs escalating sharply over the last 15 years, the KWH could spike substantially in the future. So once again by generating electricity from our hydropower, KLPD is giving itself a hedge against this inflation.

According to a generator consultant, a strong indication exists too that our generators can be tweaked to put out even more power. This translates into a greater hedge and more free KWHs. The cost of Alternative 1 will be offset likewise. Thus reducing cost even further.

The desired goal advocated by some for a free flowing Mousam River can not be obtained unless all the upstream dams are demolished as well. It’s either all or none. Spending up to $12 million to remove these three dams will not get the desired effect and is viewed by many as a huge waste of money.

KLPD’s continuing mission is to provide the most reliable system and the lowest cost is at the core of all the district does. I believe whether we keep or decommission the dams, it will still cost the ratepayers extra money. There is no silver bullet here. So the big question is, do we want to spend the money wisely or foolishly?

So, I ask you, why is this so hard to figure out? Why should KLPD take down the dams? There is no reason.

So remember, do the right thing – make sure KLPD keeps the dams. Help the planet and our town. Then make yourself a cup of coffee and enjoy.

Daniel Bartilucci

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