Critics hint at lawsuit over Aspen hydro project
June 28, 2011
ASPEN – For the first time in several months, critics of the proposed Castle Creek hydroelectricity plant lashed out vocally against the project during a City Council meeting Monday – and even hinted at the likelihood of legal action.
While opponents have written many letters and emails to federal and state agencies, city officials and local media to air their concerns, Monday’s meeting marked the only time this year that complaints were registered in a public setting. Even at a June 16 forum at The Paepcke Building, sponsored by a local environmental group, critics limited themselves to asking questions rather than stating opinions, at the host’s request.
The criticisms – as well as questions and concerns from council members about the rising costs affiliated with the project – came up amid the absence of Mayor Mick Ireland, who is on vacation in Europe. Ireland has been a strong supporter of the hydro plant and has vehemently defended the city’s course of action.
“The city of Aspen water department does not have water rights for a hydro plant on Castle Creek – period,” said Dick Butera, who resides near the creek. “Two of the leading water attorneys in the state of Colorado have both said to our committee that we have a 90 percent chance of winning the case to prove that the water department does not even have the water rights.
“We haven’t filed that lawsuit because of all this spirit of mediation; everybody’s trying to get along and figure this out,” Butera said. “We haven’t filed it, but we’re going to have to, to stop this out of control, reckless, reckless project that we can’t afford.”
Andrew Kole, a former TV and radio talk-show host who unsuccessfully ran for mayor in the May 3 election, spoke before Butera. Kole also has been critical of the city’s plans for Castle Creek.
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“I believe when this was voted on it was a $5.5 million project,” Kole said. “I didn’t vote for it because I bet someone that it would be over $7 million – which I’ve collected that money now – and I’ll take ‘the over’ on the $8.3 million. This appears to be a really nice idea … and that’s about all it is right now.
“To give them another million dollars is gonna say, ‘We’re in the game with you.’ So at this stage, I would hope that the financially conservative foursome here would put a halt until you get some real definite facts,” Kole said.
Butera, Kole and others aired their opinions during Monday’s public hearing on two requests to the council from Aspen Utilities Director David Hornbacher.
The first, which was approved, asked for the transfer of $2.8 million from the city’s Water Fund to its Renewable Energy Fund. Part of that amount will be used to cover costs of the “emergency drainline” that is near completion at Thomas Reservoir. If the Castle Creek Energy Center is ever built, the facility will lease the drainline for use as a penstock when it begins hydroelectric production. Hornbacher said the drainline is a necessary safety measure, reducing the possibility of flooding below the reservoir, and independent of possible use by the hydro plant.
The second request asked for $1.02 million in additional budget authority for the proposed energy center: an increase from $7.29 million to $8.32 million. Following comments from project critics and after openly weighing the issues themselves, council members unanimously supported a smaller increase of $744,000.
Butera’s statement that city is falsely claiming Castle Creek water rights was refuted by Councilman Steve Skadron and Hornbacher. The city has hired an attorney, Cynthia Covell, who specializes in water law and is of the opinion that Aspen does have the legal authority to use Castle Creek for the hydro project.
In late April, the city said it would seek to change gears with regard to its plan for the hydroelectric facility. The council, along with city officials, said the new plan would be to withdraw the request for a “conduit exemption” from the Federal Energy Regulatory Commission (FERC). That exemption would have allowed the city to move forward without doing a full-blown environmental assessment on the project and its effect on local stream flows, ecosystems and surrounding areas.
Instead, officials said they would seek a license for a “minor water power project,” a designation that likely will require more stringent environmental review and greater federal oversight of the plant. The move was cited as something that grew out of a closed-door mediation session involving environmental groups and city and county officials, and a way to build support for the Castle Creek Energy Center.
Ireland’s support for the project has centered on the city’s desire to lessen its reliance on fossil fuels, such as coal-generated electricity from a Nebraska source, while continuing to develop local sources of renewable energy such as the proposed hydro plant.
Among his many comments, Butera said a state inspector reported that Thomas Reservoir is not a safety threat.
“This pipe was labeled an ’emergency’ as a result of wanting to get the construction started for the hydro [plant] before it was approved,” he said. “And they put a label on it as an emergency pipeline for the Thomas Reservoir: A, to get more money out of you guys and the Water Fund and whoever else all of this magical money comes from; and B, to get around the FERC issues.”
Butera asked the council to look harder at the “cash flows” associated with the project. He said the debt service on the $5.5 million bond issue to initially fund the project, which city voters approved in 2007, will cost taxpayers $2.4 million between 2007 and 2014.
According to his assessment, the city won’t be saving money by operating a water plant at Castle Creek – even if it were run at full stream-flow capacity. “We will lose $134,000 a year for the foreseeable future as a result of spending, as of today, $8.3 million,” he said. “I don’t believe anyone in this room can believe that that’s where it’s going to stop. It’s going to be a $10 million project.”
Council members noted that the city never has said that the Thomas Reservoir was in a state of emergency, but that there is a question of safety that required the emergency drainline.
Before scaling back the budget-authority increase before approving it, most council members said that the critics’ concerns about the project would be examined in more detail and taken seriously.
“I think we’re in over our head,” said Councilman Adam Frisch.
Councilmen Torre and Skadron defended the motives of city staff, saying there has been no attempt to misguide the council into approving more and more money for the reservoir emergency drainline and preparations for the hydro project.
Torre said the main reason he was supporting a portion of the request was because of the safety issues regarding Thomas Reservoir.