CIVIC BEAT // Commission threatens to pull Crown Hydros license

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June 2, 2011
By: Nick Halter
Nick Halter
A federal commission on May 25 told the Crown Hydro project it has 30 days to prove it is still making progress or else the commission would terminate the 50-year license it awarded Crown in 1999.

The project’s attorney, Todd Guerrero, said Crown Hydro plans to adequately respond to what the Federal Energy Regulatory Commission request.  

“This is sort of a standard operating procedure for FERC and I think they want an update, which they’re entitled to,” he said.

The letter was sent to Crown Hydro one week after project attorneys told the Minneapolis Park and Recreation Board not to consider a letter of intent that would have set the parameters of a joint venture agreement between the two sides.

Crown Hydro, LLC wants to build a 3.2-megawatt hydroelectric facility on the west bank of the Mississippi River above St. Anthony Falls. It obtained a FERC license to do so in 1999, but FERC wrote in the May 25 letter, “there has been no progress toward obtaining a lease agreement (from the Park Board) to construct your project since the year 2009.”

Negotiations between the two sides hit a snag in mid-May.

Guerrero said the Park Board and Crown Hydro had together drafted a letter of intent on May 13. But on May 16 — 48 hours before the Park Board was set to vote on the letter — Park Board attorneys made substantial changes to the document that made the project commercially unreasonable, Guerrero said.

Most notably, the changed letter of intent gave the Park Board control over the facility from June 15 to Sept. 15 every year — a provision that would allow the Park Board to close off the turbines and send more water over St. Anthony Falls.

Guerrero chided the Park Board’s late-game maneuver, but said Crown Hydro would continue to try to negotiate with commissioners and staff and explore other ways to move the project along.

“They made their choice,” he said. “We’re going to have to evaluate all of our options.”

He said on May 31 that Crown had not yet met again with the Park Board, but was confident that the two sides would meet when the time was “appropriate.”

The earlier letter of intent — before it was changed on May 16 — would have allowed the Park Board to enter into the project as a minority owner and would have required Crown Hydro owner Bill Hawks to sell his stake in the company to a new investor.

Hawks is a Republican fundraiser whose Lake Minnetonka mansion recently faced foreclosure, according to a Star Tribune report.

Guerrero said Hawks was willing to sell his stake at the Park Board’s request, but the changes to the letter of intent made the project impossible to sell.

Meanwhile, a Crown Hydro bill that had several hearings in the state Legislature failed to make it to the House or Senate floor before the 2011 session expired on May 23. That bill would have forced the Park Board’s hand in granting Crown Hydro authorization to build the facility.

Board’s hand in granting Crown Hydro authorization to build the facility.

Disposing of 2,000 fallen trees

The Minneapolis Park and Recreation Board on May 26 began the arduous task of disposing of 2,000 trees blown over by the tornado that hit North Minneapolis on May 22.

The Park Board must send the trees into wood chippers because of the risk of spreading the Emerald Ash Borer. Though the borer has not been detected in North Minneapolis, it has been found as far west as St. Paul and Southeast Minneapolis.

The fallen trees are being transported to the Scherer Brothers site on the riverfront where they will be double-chipped. Some of the chips will be available to residents, but no pickup time or place had been announced as of press time. Visit minneapolisparks.org for potential pickup sites.