FERC on Thursday ordered the former operator of a New York hydro project to explain why it should not pay a $600,000 civil penalty for failing to complete safety repairs over six years before losing its lease rights to the facility (P-9685-034).

Ampersand Cranberry Lake Hydro has 30 days to respond to FERC regarding the 595-kW Cranberry Lake project on the Oswegatchie River in St. Lawrence County, N.Y. The project, which is owned by the Oswegatchie River-Cranberry Reservoir Regulating District Corp. (OR-CRRDC), a state municipal corporation, includes a dam that is 195 feet long and 19 feet high and a 57,400-acre-foot reservoir.

The dam has a “high hazard potential” rating, FERC said, “which means that a failure of the project works would result in a probable loss of human life.”

FERC awarded Ampersand Cranberry a license for the project in 2015 after the company promised to complete safety work involving the facility’s fuse plug spillway in the dam’s embankment and to raise the earthen embankment crest. The fuse plug is designed to fail during very high flows to provide a controlled release and avoid a full breach and uncontrolled release.

Although the company promised to complete the work by mid-2017, “it has failed to do so,” FERC said. “Instead, Ampersand Cranberry Lake has submitted a lengthy series of extension requests covering nearly the entire time that it has held the license for the project.”

Ampersand Cranberry notified FERC in July that it had agreed to terminate its lease and give up access rights to the project site to settle litigation with OR-CRRDC, which sued the company in early 2019 over its failure to make rent payments.

The commission said the settlement came despite its repeated warnings that terminating the lease would violate the company’s license and would not relieve it of its responsibility to complete the outstanding dam safety work.

The commission criticized the company for “delaying for many years the work … that it committed to complete when it applied for transfer of the license.”

“Based on the reports that it submitted, it appears that Ampersand Cranberry Lake made few efforts to take remedial action regarding its loss of property rights, notwithstanding repeated letters from commission staff directing it to ensure that it did not lose possession of the project,” the commission continued. “In fact, seeing the potential loss of possession, Ampersand Cranberry Lake sought to absolve itself of its dam safety obligations (and the economic cost of complying with such obligations), claiming that OR-CRRDC would be responsible for completing the work on the fuse plug and embankment that it had committed to do.”

As a carrot, the commission said it would consider offsetting the repairs against the civil penalty if Ampersand Cranberry is able to negotiate access to the project and complete the fuse plug and embankment work.

But it also included a stick, warning that it “will consider naming Ampersand Cranberry Lake’s corporate parent(s) as alter-ego defendant(s) in any federal court enforcement action if Ampersand Cranberry Lake fails to make timely payment of any civil penalty that is assessed.”