With poll: Feds considering installing hydropower stations at Argo and Geddes dams in Ann Arbor

Jeffrey Means, energy manager for the VA's Veterans Integrated Service Network based in Ann Arbor, sent a letter to Mayor John Hieftje and City Council members on Friday. In it, he expressed the VA's interest in using the two dams to power the nearby VA hospital on Fuller Road.

"The VA has determined that the project concept has some value and has taken some steps to determine if the VA believes this project merits funding," Means said, adding the decision will be made by VA officials in Washington, D.C. "VA lawyers and Army Corps of Engineers lawyers are working on this project now to determine if the VA should move forward."

The VA commissioned a study through the U.S. Army Corps of Engineers regarding the feasibility and economic benefits of installing hydroelectric power stations at Argo and Geddes — dams that started their lives nearly a century ago and once provided hydropower. The study was completed in late September, validating a previous study commissioned by the city.

Means said the project has been found to be technically feasible, and it appears to be a good opportunity for renewable power generation. In economic terms, he said, the hydropower project is better than other renewable energy projects the VA has considered, including solar photovoltaic and biomass projects and DTE Energy's Green Currents program.

Means said the study has been forwarded to the VA Central Office in Washington, D.C., and the office agrees with the technical conclusions. He said questions remain regarding legal liabilities and other issues, which are under review in Washington.

Ann Arbor City Council members say they're definitely interested in the idea of using the two dams to help the VA shift away from energy sources that rely on burning fossil fuels.

"Many unanswered questions remain, but the VA's clear and ongoing interest in hydropower at Argo and Geddes is an exciting opportunity to advance Ann Arbor's commitment to renewable energy," said Council Member Christopher Taylor, D-3rd Ward. "The building of power-generation facilities at Argo and Geddes would increase the economic and community value of dams, and, I believe, reduce the likelihood that they would be removed."

Council Member Sabra Briere, D-1st Ward and a strong proponent of keeping Argo Dam, was responsible for Friday's letter being sent by the VA after she talked with Means.

"It certainly changes the perspective of the purpose of the dam," she said. "It has the potential to be a significant game changer, but only if the feds say this is OK and we say yes."

The city owns four dams on the Huron River, including Barton, Argo, Geddes and Superior. Following a 1981 study of the hydroelectric generation potential at all four dams, the city issued bonds to restore hydropower at Barton and Superior.

Higher construction cost estimates and lower energy production potential kept the Argo and Geddes dams from being recommended for hydropower projects at the time.

The proposed hydroelectric stations at Argo and Geddes would power the VA hospital on Fuller Road. The VA's current annual electricity charges total $2.15 million. The study shows that could be reduced to $1.7 million a year — or by about $436,287 — with dedicated transmission lines running from the two dams to the hospital.

However, the upfront costs are substantial. The VA's study found it would cost anywhere from $10.8 million to $14.7 million to construct stations at both dams, depending on which options are selected. The transmission lines would cost another $1.3 million.

Factoring in another $220,000 a year for operations and maintenance of the dams, the net savings grow slimmer, and the payback period looks to be decades.

The Huron River Watershed Council, a group lobbying the city to remove Argo Dam for the environmental benefits of a naturally free-flowing river, has expressed hesitations about the VA's study, saying the cost-benefit analysis doesn't seem to show a feasible project.

"The documents get pretty technical, but from what I understand you don't do a project unless the cost-benefit ratio is one — Argo comes in at 0.33 or 0.37, and Geddes looks a bit better at 0.66 (both with a direct power line)," Laura Rubin, the Watershed Council's executive director, wrote in an e-mail to AnnArbor.com. "Neither are near having the costs equal the benefit, or in layman's term, not worth the cost."

While discussion of removing Geddes Dam has been off the table, city officials have found themselves in the middle of a fierce community debate over Argo Dam. Many environmentalists favor dam removal, while the rowing community and others have fought to preserve the dam for the recreational amenities it makes possible in the form of Argo Pond.

Meanwhile, the state has raised concerns about the stability of an earthen embankment extending from the dam, and city officials are being asked to make repairs.

The City Council meets at 7 p.m. tonight and is expected to approve a $1.17 million reconstruction of Argo Dam's headrace and earthen embankment. The project addresses the state's safety concerns, while adding whitewater amenities and removing a portage.

A related resolution, sponsored by Council Members Carsten Hohnke and Margie Teall, directs the city administrator to fund the project without tapping into the city's water fund. City staff had proposed using $300,000 from the water fund, but an ongoing debate centers on the appropriateness and legality of spending water fund money on a recreational dam.

Additionally, the resolution directs the city administrator to find a way to fund future operations and maintenance costs for Argo and Geddes starting July 1, 2011, without continuing to tap into the water fund like the city has done for years.

The city's Environmental Commission recommended in May 2009 that city officials take steps to remove funding for Argo and Geddes from the water fund and reallocate that money to implement a Source Water Protection Plan. But the council hasn't acted yet.

An analysis by city staff shows the city expects to spend more than $3.3 million over the next two decades on maintenance and insurance for the Argo and Geddes dams. Dam-in proponents say those costs could be avoided or minimized through a hydropower agreement with the VA.

A report prepared for the city by Stantec Consulting Inc. in January 2009 showed it would cost about $1.3 million for complete dam removal.

Click here to read a report titled "Erosion Potential of the Huron River Downstream of Argo Dam Following a Dam Removal," prepared by Barr Engineering of Ann Arbor.