|
|
|
|
The owners of Sebec Electric Limited Partnership (SELP), represented by the General Partner, Swift River Company (SRC), are seeking offers to purchase the Sebec Hydro project located at the outlet dam of 11-mile-long Sebec Lake. The project has operated for 20 years, selling power under a 40-year power purchase agreement (PPA) to Bangor Hydro Electric Company (BHE). The PPA has a fixed price schedule escalating from $74.38 per MWh in 2002 up to $128.30 per MWh in 2014. The energy prices is based on a schedule of avoided costs filed by BHE in 1988 and approved by the Maine PUC for BHE in 1989. Energy prices during the last 10 years of the PPA will be based on 85% of the most recent MPUC approved avoided cost schedule for BHE approved prior to January 1, 2015. There is a provision in the PPA for estimating avoided costs if the MPUC no longer determines avoided costs. Beside energy, Sebec will be able to sell its "green" renewable energy attributes starting in February 2005 when the contract with Constellation Energy to buy all of Sebec's output generated until that the end of February 2005 terminates. The latest decision of the Federal Energy Regulatory Commission (FERC) is that attributes are separate from energy and that under PURPA contracts, the interconnecting utility did not buy these attributes. Therefore, Sebec Electric has registered its attributes in with the Connecticut DPUC and was approved as generator of Class I RECs in July 2006 when FERC issued an amendment to Sebec's Exemption. SELP sold its nearly 3,000 RECs to be generated in 2007 into the forward market for $34 per REC, with 80% firm and 20% unit contingent. Also, starting in December 2006, Sebec qualifies to sell its 867 kW capacity in the NEPOOL market at a transitional price of $3.05/kW/mo. The 867 KW Sebec hydro project is located 50 miles north of Bangor, Maine. It operates under varying weather conditions, ranging from 5 months of steady flow under the frozen lake ice, followed by spring flood flows when ice from the streams making up the 327 square mile drainage pass over the dam. Generation is curtailed for a month or two during summer to maintain lake recreation. Finally, the hydro used to draw down Sebec Lake twice a year, first in October to encourage higher spawning rates for lake trout and in late March, to make room for the spring runoff to refill the lake in order to lessen seasonal flooding. SELP's amended Exemption changing operations to run-of-river mode, now require only a spring drawdown to takes advantage of Sebec Hydro's 38,097 acre feet of Maine DEP-licensed storage in Sebec Lake if there is danger of flooding lakefront properties or downstream from high flows. Sebec is an example of constructive reuse of a low-head, abandoned powerhouse site. SRC selected 2 ESAC bulb turbine-generators in 1983 because the ESAC bulb design did not require reconstruction of a powerhouse in the Sebec dam. Stability analysis of the dam and flood flow analysis showed insufficient crest length for such a design. Therefore, the new controls and switchgear are located in a small "rural school-house" well above the 1000-year flood level. ESAC's bulb turbines fit into the dam and BHE's former powerhouse foundation. This structure and dog-leg forebay help to stabilize the Sebec timber crib dam. Also, flood gates were designed into the downstream wall of the two bulb turbine flumes such that there was no change in flood passage capacity.
Sebec operated for the first 15 years just below design output levels and had only a few days lost to unplanned outages due to voltage variations on BHE's transmission line. However, in 2000 and 2005 the gears in the H-4 gearbox and H-6 gearbox respectively, were replaced prior to their expected "useful life." Consequently, production during 2001-2 and 2005-6 were below expected levels. SRHOCO has worked to preserve lake levels at their full elevation, even with historic minimum summer season inflows to Sebec Lake from its 327 square mile drainage area because of the lake's popularity for boating, fishing and all types of summer recreation..
Bulb turbines and draft tubes before being enclosed by downstream powerhouse wall and gates Energy Sales Price Dispute During 2000, Sebec's owners exercised the arbitration clause in the BHE power sales contract regarding the language defining the energy sales prices during the second 15-year period of the PPA. The arbitrator determined that the most recent MPUC-approved schedule of avoided costs for BHE was set in 1989. Three times after that date, BHE filed and then withdrew its request for MPUC approval of BHE's avoided costs. Thus, the most recently approved avoided costs were those set in 1989 and approved by the MPUC. Thus during years 16 to 30 of the PPA, Sebec agreed to sell its output to BHE for 85% of these MPUC-approved avoided costs. Therefore, the rates that will be paid to SELP from 2001 until 2015 will be as follows: 2002: $74.38; 2003: $74.77; 2004: $86.35; 2005: $89.47; 2006: $93.19; 2007: $100.42; 2008: $104.29; 2009: $112.98; 2010: $115.53; 2011: $118.61; 2012: $121.84; 2013: $125.70; and 2014: $128.30. Generation from 2015 to 2025 will also be sold under the same PPA at 85% of BHE's most recently established avoided cost schedule approved by the MPUC prior to the commencement of year 31 of the PPA for 10-year contracts.
1987 flood passing though Sebec's downstream wall and flood gates BHE Lease of Sebec Dam Site Sebec leases the dam and surrounding property from BHE. Under the terms of the lease, Sebec must maintain all hydro design improvements installed in 1984 and share 50/50 the maintenance cost of the dam. Since selling all of its operating hydro stations, BHE offered to sell the site and dam to SELP at a nominal price. BHE wants to eliminate its risk of dam repair costs should floods damage the timber crib dam. However, BHE withdrew its offer to transfer the property to Sebec. Thus, there is a trade-off involved: if Sebec were to accept the property, it will no longer have to lease the site and BHE's right to buy the equipment at the end of the lease would lapse. On the other hand, if the lease were bought out by SELP, BHE would not have 50% of the dam repair cost risk, but Sebec would not pay rent to BHE, which is 5% of gross revenue, plus a kicker of 25% of the incremental revenue earned by prices above 8 cents per kWh. Repairs to the dam were made by SRHOCO in 1986 and in 2004. Each time, BHE paid half of the dam repairs.
Crane placing stone ballast at toe of dam before extending concrete cap to match other sections of dam Extra Pictures of Sebec Project: Click here for more photos of Sebec dewatered. |
|
[Projects] [Services] [News] [D. Hobbs Contracting] |
