You might remember from the post that the Gibson Dam was never built to produce electricity, though it has the capability. Learn about that in my post, Building the Sun River Irrigation Project and Gibson Dam. I'd like to add that there is a transmission line from the dam to Augusta, but it was decommissioned due to a lack of power sales market.
Proposals were put forth in the 1980s to get the Gibson Dam producing power, but in the end they were abandoned, seen as too cost-prohibitive. By 2005 things were moving again. In 2008 the Great Falls Development Authority submitted plans to the Federal Energy and Regulatory Commission (FERC) to start making power at Gibson Dam. The plan would cost $25 million and get that 15 MW potential up and running.
Tollhouse Energy Co. of Bellingham, Washington, was an early supporter and FERC issued a permit to them. In 2009 Tollhouse began building transmission lines, but then, as we saw in the earlier report, this was stopped.
Toll House earned their license from the Federal Energy Regulatory Commission in January 2012. After that, however, the U.S. Fish and Wildlife Service raised a concern over the power line voltage permitted in the FERC license. Toll House would then have to reduce the voltage of the power line from 69kV to 35kV, something that seriously would have undermined the efficiency of the system.
Thankfully, this was gotten around. They did this by allowing the Sun River Cooperative to take the lead, which means that the 69kV transmission lines can still be built. This appears to have satisfied the Fish and Wildlife Service as well.
You might remember me complaining about David Letterman and his lawyer blocking the above-ground transmission lines that the dam would use to move that energy to where it was needed. Well, one of the stipulations the U.S. Fish and Wildlife Service put down was that those lines had to be buried. All the power lines moving through the Sun River Canyon won’t be eyesores – you won’t see them at all.
One of the most advantageous aspects of this Gibson Dam power projects is that it will provide both Teton and Lewis and Clark Counties with “hundreds of thousands of dollars each year for many, many decades,” Papadakis says. He goes further, however, showing which areas in particular will be impacted:
“I am refining what funds and districts would be impacted the most, but I know that the Augusta School District, the Choteau School District, the Teton County Road Fund and the State ‘Education Fund’ would receive the lion’s share of direct funding. The Teton Hospital District and the Nursing Home would also receive funds from the property taxes collected from the project, of course...only if the project is completed. The property tax collected amounts to $150,000 to $200,000 each year for each county!”
It’s clear from this that we’ll have new income sources, and from infrastructure that been there for more than 100 years now. Let's do this! And we're doing this without raising taxes.
What this means is that we can start moving the electricity that we’re producing already, and get that out of state, to the east of us where demand is high. That means we make money. The beauty is that when you get far enough, you connect with existing infrastructure and power grids, negating any costs once this Gibson Dam project is finished.
But…why does this matter now?
Montana is expected to have a $400 million surplus now that we aren’t funding any major infrastructure projects. Sadly, many are saying this surplus will be eaten up by future healthcare expansion costs. At the same time, we’re seeing a serious reduction in our oil tax revenue. Just the other day, Dave Galt at the Montana Petroleum Association said that all Montana wells have stopped producing, and we’re certainly not drilling new ones. At the same time, there’s talk of raising oil shipping costs by 800% over the next three years. How is that tax money going to be made up? One place to start is with existing infrastructure like the Gibson Dam. It’s dam time if you ask me, and I think the people of Teton County would agree with me.
For the last fiscal year, Teton County’s general revenues looked like this (PDF):
Why aren’t we doing this? I asked Papadakis this and he said it was because things just take time. Permitting processes and dealing with so many agencies, as well as easement issues…these things all take time. Time, however, is something that’s in short supply.
One of the stipulations of the FERC permits was that the project had to begin construction within two years. That wasn’t going to happen, so Tollhouse managed to get an extension on this. That means the project has to begin construction by January 12, 2016.
Wow, that’s coming up fast! The key to getting construction started, however, is getting a buyer for this energy. We’re talking about funding and financing, and this project is big. Right now, there is no buyer, and that means construction isn’t likely to happen by January.
Thankfully, there’s bipartisan support from Senator Tester, Senator Daines, and Representative Zinke. These men got this issue in front of the U.S. Senate, together with Clark Canyon (a similar project), and it’s likely that we can get this through.
It’s important to remember that Tollhouse Energy isn’t going alone on this. They’re partners with the Greenfield Irrigation Project here in Montana. And there’s a good bet that either Northwestern Energy or Basin Electric will buy this energy. This project looks like it’ll be moving forward.
Montana’s Teton County only has about 6,000 people living there, and it’s a Republican area. So figuring out ways to increase revenues without raising property taxes is key. It’s key for Democrats that want to take that district and it’s key for county commissioners that want to retain their seats.
Governor Steve Bullock doesn’t have a lot to do for the next year or so. He’s signing bills into law right now, vetoing others. He’s got 150 more bills to sign, but after that…gosh, I’m not sure.
Yesterday he said that he’d be doing a lot with business. “With legislators back in their home districts,” the Missoulian reported, “the governor’s office becomes the dominant force in state government.” That’s a lot of power, and using it to get long-stalled projects moving is a fine way to expend some of it. “Bullock said he would be working with business and higher education leaders on job workforce development,” the Missoulian went on to say, and the Gibson Dam project falls under that heading.
I hope someone in his office decides to call up FERC and USWFW and maybe even Tollhouse. Let’s get things moving even faster! Tollhouse is encouraging Montana utilities and those in a position to purchase this output to take a hard look at the Gibson Dam project. It's important to take a long position in order to recognize that our hydropower can provide long-term, cost-effective renewable electricity, stable public revenues, and environmental benefits for the foreseeable future. This project will become a strategic asset for Montana in the 21st century.