By CRAIG FREILICH
POTSDAM – The village’s second hydro plant officially proposed in 2007 is finally about to produce power for the village with the surplus to be sold.
Commissioning, or final testing, is now slated to begin Sept. 25, when a specialist in computer controls begins testing and calibration. If that goes according to plan, the two turbines and generators in the plant could be producing power for sale within days.
While the village is still looking for a long-term contract for a fixed rate with a private buyer, a contract with National Grid is being prepared based on the floating “next-day” rate from the New York Independent System Operator, the state’s electricity broker. That contract will have a clause allowing Potsdam to cancel it if another buyer is found.
The cost of the project has risen from the original $3.5 million to close to $4.7 million, according to village administrator David Fenton, largely because Canadian Turbines, an Ontario-based equipment manufacturer, failed to deliver parts it said it would. The village had to finally purchase the parts elsewhere.
Other extra costs were incurred when work on the plant, next to the western Raquette River Bridge at Maple Street, was stopped and started repeatedly waiting for parts. The village has a judgment of nearly $7 million against the Canadian firm in state court, and work is being done to see what can be done through Canadian courts, but chances of recovering that from Canadian Turbines and owner Richard Kuiper are seen as slim, Fenton says.
The village took out a $3.5 million 20-year loan for the project, which is being repaid at about $250,000 a year.
To make up the shortfall, the village expects to use money from a reserve fund from revenues from the first hydro plat east of the new one, and a capital fund, “money we could have spent elsewhere,” Fenton said.
Another disappointment is the rates being paid for electricity, now as little as half of the five to six cents per kilowatt hour expected when the project began. Fenton says the recession reduced demand for electricity and lower rates for natural gas have made cheaper power available.