Wisconsin company wins $2.9 million contract to get Potsdam generators back online
Thursday, January 23, 2020 - 1:40 pm

BY CRAIG FREILICH

North Country This Week

POTSDAM -- The New York Power Authority and village trustees have accepted a bid by a Wisconsin engineering company to bring the East Dam hydroelectric generators back online.

The work should be complete this summer, village officials say.

The Eaton Corporation of Waukesha, Wisc. is "a solid power provider,” said Village Administrator Greg Thompson at the trustees meeting Monday, Jan. 20.

Once complete, the project, with substantial technical and funding assistance from the power authority, is expected to "provide cash flow even after the debt service to NYPA," Thompson said.

In separate resolutions Monday night, the trustees voted to approve a commitment to NYPA for a repayment obligation of $3,074,872.43 at a fixed interest rate of 4% over 15 years, and to approve the $2.9 million Eaton bid to perform the work to repair the troubled generating equipment at the East Dam.

The difference in the bid price and repayment plan is for servicing the debt that the power authority arranged and for their technical input.

Late last year the village approved a $4.5 million bonding limit for the work, intentionally allowing for higher than expected expenses.

"We will be using the revenue from the dam to pay NYPA back, but according to projections, even as we pay them back, we will have positive cash flow" from the electricity produced, Thompson said.

After his research and discussions with interested parties, the administrator said he expects Eaton to do "a top-notch job" for the village.

Earlier in the month, Thompson had said he hoped to have the bid approved by Jan. 30 to avoid bumping up against a "sunset" in the financing which requires the work to be completed by July 31.

Since then the NYPA legal team finished reviewing the contract proposal and forwarded their recommendation to NYPA and the village, and the village board added its approval of the contract.

Thompson said two qualified bids were received for the work.

While repairing the failed gearboxes is the main aim of the work, engineers added to the project replacement of the electrical controls, which date from the 1970s.

The village entered into an agreement with the New York Power Authority to help with financing and provide engineering and project management, “acting as the general contractor and bank,” Thompson said.

After several decades sitting unused, the East Dam Hydro-Electric Generating Plant with two 400 kW generators was put back in service in the early 1980s as part of the village’s replacement of its water treatment plant. Electricity generated at the dam has historically been used to offset the cost of operating the village’s water and sewer plants, the Pine Street Arena and area lighting for village facilities such as the Civic Center.

In 2015, the plant was shut down after mechanical problems were detected in the machines gearboxes.

The first attempt at repair was unsuccessful, and the project has foundered since then, in part because village finances were thought to be unable to move repairs forward, but the village believes it is much better shape now.

At the West Dam, meanwhile, one of the two generators is out of service, and the power authority might help with getting the installation back up to full capacity.