TOWNSHEND -- State regulators have granted a request for still more time to construct two new hydroelectric plants on the West River.

But the Vermont Public Service Board's deadline extension also comes with a warning: If Blue Heron Hydro LLC doesn't get the work in Jamaica and Townshend done by the end of next year, the company risks losing a long-term power-purchase agreement -- also known as a SPEED contract -- through the state.

"Pursuant to the standard-offer contract, if Blue Heron fails to complete commissioning of the Ball Mountain project and the Townshend project on or before Dec. 31, 2015, its standard-offer SPEED contract shall be null and void and of no further force and effect, absent an order of the board to the contrary," officials wrote.

In 2012, New Jersey-based Eagle Creek Renewable Energy acquired the rights to the proposed hydro projects at Jamaica's Ball Mountain Dam and at Townshend Dam. The company is pursuing the work under the Blue Heron name, and the projects already have 50-year licenses from the Federal Energy Regulatory Commission.

Also in place is a long-term power-purchase agreement through Vermont's Sustainably Priced Energy Enterprise Development Program. Those agreements were finalized on Dec. 30, 2009, and they carried a three-year commissioning deadline.

But Blue Heron had twice received extensions previously, with the second extension set to expire Oct. 31. On July 3, the company asked the state Public Service Board to move the commissioning deadline again.


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The problem is that the hydroelectric plans have not yet received required approvals from the U.S. Army Corps of Engineers, which owns both dams. In its extension request last month, Blue Heron said the Army Corps has been busy due to major storms over the past several years and also cited "reduced resources and manpower" as a result of federal budget cuts.

There also are construction-scheduling issues.

"Due to certain characteristics of the dams and how they are operated by the (Army Corps), Blue Heron has a limited window in which to accomplish certain necessary evaluation and construction activities. This window closes after June 15," a company administrators wrote in the deadline-extension petition.

In granting that request this week, the Public Service Board cited a letter of support that had been filed by the Vermont Public Service Department, which is a separate entity.

The board's Aug. 6 decision also notes that hydroelectric projects must undergo a separate permitting process "that can take significantly longer than the board's Section 248 permitting process."

"Accordingly, the board has granted waivers of the milestones in the standard contract to hydroelectric plant owners, but the board has cautioned that there will be a limit to the length of time for which the milestones could be waived," officials wrote.

"Because Blue Heron has demonstrated good-faith compliance with (Army Corps) requirements and has demonstrated that it has made all reasonable efforts to obtain (Army Corps) approval as quickly as possible, we grant the requested extension of time to allow for the commissioning of the projects to no later than Dec. 31, 2015," the board's decision says.

Mike Faher can be reached at mfaher@reformer.com or 802-254-2311,, ext. 275. Follow him on Twitter @MikeReformer.