NEW FAQ: Public Information Meetings & Circuit Court Hearing
UPDATED FAQ: Lake Levels & Special Assessment
What is the current situation with the dams that create Smallwood, Secord, Wixom and Sanford Lakes
- The four lakes were created about 100 years ago by a series of four dams, which are currently owned and operated by Boyce Hydro.
- The Federal Electric Regulatory Commission (FERC) has revoked the license that allows generation of hydroelectric power at the Edenville Dam. FERC contends, among other issues, that Boyce Hydro has not committed to the investment needed to the Potential Maximum Flood requirement (PMF) to ensure that the spillway is large enough for a significant flood event. Wixom regulatory governance now reverts to Michigan Department of Environmental Quality (DEQ), this requires establishing a legal lake in accordance with state law.
- Given the current power pricing available for independent producers, and increasing Federal regulatory oversite, it’s unlikely that electricity revenue alone can sustain re-investment in the systems unless hydroelectric power is priced differently in the future.
- The Gladwin and Midland County Lakes’ Associations have formed a task force and are working together with our elected officials to address the current challenges through investments, and a new governance structure, and establishing a legal lake level to create a sustainable lake system in the two counties.
Why are more upgrades required now?
- First, it is important to note that over the last several decades several owners have struggled to keep investing in the Dams and meet all the requirements. These dams, with maintenance are made to last, but they require ongoing investments to properly maintain dams and protect lake levels into the future.
- The work necessary to meet FERC’s PMF requirement in the case of the Edenville dam is very expensive to keep the dam up to this standard with the revenue being generated.
- It is clear that it is in the communities’ best interest to find a better long-term, financially-sustainable solution to maintaining and operating the dams with only a private operator and FERC oversight.
What is a PMF?
- The Probable Maximum Flood (PMF) describes a massive flood resulting from the theoretical maximum possible amount of rainfall within a particular river basin. The largest recorded floods in Midland and Gladwin Counties are much smaller than the PMF for those locations.
- Federal dam safety regulations for hydroelectric dams require the dams to have enough spillway discharge capacity to safely pass a PMF-size flood. The Edenville Dam has roughly half the spillway discharge capacity required by these Federal regulations.
- If a dam does not produce hydroelectricity, dam safety is regulated by the State of Michigan, not the federal government. State of Michigan dam safety regulations require dams to have slightly less than half the spillway capacity required under Federal dam safety regulations. The Sanford, Edenville, Smallwood and Secord dams have safely passed the largest Michigan floods since the dams were built 90 years ago, including the major floods of 1947, 1948, 1986 (the "Flood of the Century"), 2014 and 2017, with spillway capacity to spare.
- Other than the differences in spillway capacity requirements, Michigan dam safety standards do not appear greatly different than federal dam safety standards.
Who is responsible for helping resolve this challenge with the dams?
The Four Lakes Task Force is engaged with public officials, and has privately raised $200,000. These funds are paying for four main actions:
- Filing a request that FERC revisit the Edenville Dam license revocation decision until the Lakes’ Communities have a transition plan in place.
- Support Gladwin and Midland counties efforts to create lake level requirements with authorities who will manage them. Resolutions were recently passed in both counties that ask the Task Force to recommend lake levels, and petition Circuit Courts in each county to establish a legal lake level and special assessment district(s) to fund and manage the levels. They also delegated authority to Four Lakes Task Force to negotiate a resolution to this matter.
- Complete engineering studies to get confident estimates of cost and timing estimates to repair and maintain the dams.
- Create an economic model that includes initial capital and long-term financing mechanisms to cover costs for non-electrical repairs and future investments, in the event the current owner/operator is unable to do so.
What do the resolutions passed in Gladwin and Midland counties do?
- The resolutions do four things, focused on laying the regulatory and financial foundation to resolve the matters associated with the lakes and dams.
- First, it directs that a normal lake level should be established for the four lakes.
- Second, it assigns the Four Lakes Task Force as the Delegated Authority, with legal counsel from Gladwin and Midland County.
- Third, it asks the Task Force to prepare a plan and petition the Circuit Courts to approve the Lake Levels and create the proper authorities to ensure the lakes are managed to those levels.
- The process requires that the lake property owners are kept informed.
Are the dams financially stable now?
- The current owner/operator is required to continue to run the dams where FERC licenses are in place while we work to establish lake level requirements through the courts.
- Without electrical revenue, its unlikely that a dam owner can operate a dam without the Counties intervening.
- In the meantime, the Task Force is working hard to evaluate all possible solutions, and generate the data and support the counties so they can create a State Lake Level requirement.
- We will continue to work with elected officials and the current owner/operator to bring this situation to a long-term solution that meets everyone’s needs.
Do the dams make money currently?
- The revenue stream generated from selling hydroelectric power to the local power grid is currently declining over time, and the recent loss of the Edenville dam license has resulted in the loss of roughly half of the revenue.
- The revenue has not been sufficient to fund the work needed to meet FERC’s PMF requirement.
- We are working to restructure the ownership and revenue streams of the dams so we can ensure long-term lake levels across the four lakes.
- The Task Force, consistent with the resolutions that have been passed, is committed to transparency and will share the financials with the community on a regular basis. We expected to have a clear view of this in early January.
What will the Task Force do differently than the current owner/operator?
- The community has relied on a private operator to own and manage the system, under FERC oversight, with little community involvement. This is not sustainable. The Four Lakes Task Force members come from the boards of the existing lake associations.
- Our interest is in maintaining and operating the dams safely, and at consistent lake levels so the community can enjoy the lakes. Any revenue generated will be directed to that goal.
- We will share updates and financials with the community on a regular basis, and invite input on the path forward. You can do this most directly by joining your lake association if you are not already a member.
Are the dams safe?
- The dams are considered safe, operating under both state and federal regulations and requirements.
- They do, however, need maintenance to ensure long term safety. Our goal is to to maintain the water level and complete the need maintenance within the next couple of years.
- The Task Force has been created so that a new public owner/operator model can be used to ensure long-term viability and safety of the four dams. It will allow us to be proactive in addressing issues while maintaining lake levels that the community has come to expect.
Will the lakes be back to their normal levels next summer?
- For Sanford, Smallwood and Secord, Boyce Hydro required by FERC to run the dams to maintain normal lake Levels. While there are FERC compliance issues, it seem that the owner is working to address them.
- For Wixom, the objective is to have the lake level up for next years boating season. However, there is a significant about of work and continued cooperation needed from the community, FERC, DEQ, DNR, and Boyce to make this happen. This process will take a few months.