Hydro Plant Plan Chums Up Again

After the Minneapolis Park Board declined to lease land to them three years ago, investors are trying again to build a small hydroelectric plant on the west bank of St. Anthony Falls.

By Pam Louwagie, Star Tribune

Investors trying to build a second hydroelectric plant on the Mississippi’s St. Anthony Falls are back, this time with a proposal they say would go almost unnoticed by tourists and residents in the revived heart of Minneapolis.

Source: Star Tribune (Minneapolis, MN)
Date: 3/21/2007

Investors trying to build a second hydroelectric plant on the Mississippi’s St. Anthony Falls are back, this time with a proposal they say would go almost unnoticed by tourists and residents in the revived heart of Minneapolis.
Crown Hydro, LLC, is again asking the Minneapolis Park Board to lease riverfront land so it can build a generating plant on the falls’ west side, across from an existing hydro plant. The board rejected a similar proposal three years ago over complaints that a new plant would make the falls ugly by lowering its flow and would harm historic mill ruins.
The plans have churned a controversy pitting the ideals of renewable energy against those of historic preservation.
Crown Hydro President Tom Griffin said the plant wouldn’t harm the falls – it would harken back to hydro plants in the 19th century – and would contribute to the country’s need for sustainable energy by producing power for just over 2,000 households. “We need all the power we can get,” he said.

The Park Board is seeking an outside opinion this time. The agency wants Crown Hydro to reimburse it for a consulting firm to study the project.

“Hopefully this analysis will give us information to either go with the project or make it go away forever,” said Park Board President Jon Olson.

Visions of a second hydro plant at St. Anthony Falls have been in the making for more than two decades.
The company’s latest plan is to build an intake structure aligned with the end of 5th Avenue S. The top of it would be at ground level, and river water would fall four stories underground through an angled pipe to two turbines. Water would flow out through a century-old tunnel to the lower part of the river, exiting into an existing Mill Ruins Park canal. The company would sell the electricity to Xcel Energy, which runs the larger hydroelectric plant across the river. As part of a 50-year-lease with option to renew, Crown Hydro would pay the Park Board $1 million at the start of construction and $50,000 a year, along with a portion of gross revenues, if electricity production is high enough.

In addition to concerns about water volume over the falls, Park Board staff identified key issues in a Feb. 21 report that included questions about whether historic Mill Ruins Park is durable enough to handle the project’s flow. Neighbors also worry about vibrations rattling their homes and about the Park Board giving up land rights to a private company.

Crown Hydro spokesman Rob Brown said water would drop through thick, durable steel pipes and wouldn’t harm the mill ruins. The company would negotiate the amount of water it would leave flowing over the falls and regulate it with a computerized device, he added. Crown Hydro would run mostly at night and other non-tourist hours, Brown said. And he assured people there wouldn’t be vibrations.
“When this thing is installed,” he said, “no one will know it’s here.”

Some Park Board members may need to be convinced. “This is a huge tourist attraction … ever since we started turning our back yard into our front yard – the river – this is what lures people down to that area,” Commissioner Walt Dziedzic said, adding later: “I’m really for alternative energy. But I think the negatives outweigh the positives in regard to this project.” Park Board Commissioner Bob Fine, who voted in favor of the 2004 proposal, said he isn’t sure what he will do this time. He said both history and clean energy are important.

“The reason we have this city here is because of the waterfalls and the fact they can make power from it,” Fine said.

Crown Hydro, owned by Bil Hawks, of Minnetrista, has received a $5.1 million grant – some of which has been paid from the renewable development fund. Xcel Energy sets aside that pot of money under a legislative mandate in exchange for permission to store radioactive waste at the Prairie Island nuclear plant in Red Wing.

If the company wins approval, Griffin said, it could get a state subsidy for renewable energy of 1.5 cents per kilowatt hour, which he estimated would add up to about $200,000 a year for the plant’s first 10 years. Griffin said the total cost of the project is about $13 million. The turbines and a generator have already been purchased for $2.2 million, Brown said.

Neighborhood resident Gary Smaby, a venture capitalist who is involved with renewable energy projects at the University of Minnesota, questioned a second plant at the falls when the existing one can’t always run at capacity because of low river flows. “The idea of putting another system in there basically at consumer and taxpayer expense, it didn’t seem viable to me,” he said.

He also questioned the long-term viability of Crown Hydro and said the Park Board should look into the company’s finances before approving the project.

Xcel’s plant, which has five turbines, ran at partial capacity 22 percent of the time from the most recent time frame available, 1992 to 1997, because of low river flows, officials at Xcel said.

Crown Hydro has a license from the Federal Energy Regulatory Commission for its old plan and would have to get an amendment, Brown said. It also would need approval or re-approval from several other state and federal agencies.
Getting the go-ahead from the Park Board is a “keystone,” Brown said. If approved, Crown hopes to be generating up to about 3 megawatts there before 2009.
Pam Louwagie – 612-673-7102