Should Birmingham Get in the Green Energy Business?
Monday, the Birmingham City Commission gave HydroPower Capital the green light to study the feasibility of producing hydroelectric power at the Quarton Lake dam.
Could producing and selling hydroelectric power be in Birmingham's future?
On Monday night, the Birmingham City Commission gave HydroPower Capital LLC, a Phoenix, AZ-based hydropower firm, the exclusive rights to study the feasibility of hydroelectric projects along the Rouge River in Birmingham.
Specifically, HydroPower is looking at harnessing the potential energy-production capabilities at the Quarton Lake dam.
Should the project prove feasible and the city move forward, HydroPower could potentially operate a hydroelectric dam at Quarton Lake, then sell the energy as Power Purchase Agreements (PPA) to interested buyers in Michigan and across the country.
According to Steve Hohulin, director of engineering at HydroPower Capital, part of the proceeds from the sale of those PPAs would then go directly back to Birmingham.
"Birmingham is kind of a green community. If everything you say comes true in the study, then I think that's something we might want to consider," said City Commissioner Gordon Rinschler.
According to Hohulin, should Birmingham decide to move forward with the plans, HydroPower would:
- Assess the proposed site, specifically the area surrounding the Quarton Lake dam.
- Take care of all necessary permits locally and statewide, including annual permits.
- Faciliate all Power Purchase Agreements with interested buyers.
- Design, construct, operate and maintain all hydroelectric facilities.
- Insure all facilities and assume all operating risks.
All this work, Hohulin said, would be at no cost to the city.
Decisions whether to build and monetize the hydroelectric dam, meanwhile, are still to come. On Monday, city commissioners merely gave HydroPower the green light to study the project.
"During the initial 'due diligence' phase, HydroPower Capital will not only analyze the potential of the city's hydropower resources, but if the resources appear to be viable, will also report back to the city with the type and nature of any proposed development ... so that the city of Birmingham can make an informed decision as to whether to proceed," a letter from HydroPower president Joseph Bond reads.
'Do we want to be in the business of selling electricity?'
According to Hohulin, there are several advantages to hydroelectric power, particularly over wind or solar power. Hohulin said hydroelectric power is:
- More efficient.
- Can be considered a baseload energy, meaning it always generates power regardless of whether the wind is blowing or the sun is shining.
- Beneficial to the environment since the equipment lasts longer.
- Can be used for longer-term PPAs.
Those advantages aside, Hohulin admitted hydroelectric power requires steep capital costs upfront, as well as specialized technical expertise — reasons why a company like HydroPower Capital is useful should Birmingham want to enter the green energy game.
Still, City Commissioner Rackeline Hoff asked: "Do we want to be in the business of selling electricity? I'm not sure that's what the city wants to do."
Commissioner Scott Moore said city commissioners didn't have to make that decision Monday, though he cautioned Hohulin that Quarton Lake is a city park and should be preserved as such. A memo from the city's Engineering Department also reflected that concern.
"We have cautioned the company representative that the Quarton dam is a sensitive, historic area, and the city will not entertain any proposal that in any way diminishes the beauty or character of the immediate area," the memo reads.
After passing by an unanimous vote, HydroPower Capital will begin assessing conditions at Quarton dam, looking at flow rates and the existing structure. There will be no construction during the study phase.