Re-evaluation of Basin Mills Dam Project in Maine may prevent future litigation

April 1996

U.S. Water News Online

Bangor, Maine -- A recent agreement between Bangor Hydro-Electric
Co. and the Penobscot Indian Nation has temporarily suspended the licensing
process for the proposed Basin Mill Dam. The agreement, announced in Feb.
by Gov. Angus King, was brokered by state and federal governments in hopes of
avoiding any potential litigation by the Penobscot Nation and other groups
opposing construction of the dam. The agreement may affect up to five dam
projects planned by Bangor Hydro Electric, say company officials.

Bangor Electric had expected the Federal Energy Regulatory Commission
(FERC) to make a decision on the licensing of the dam project sometime
this spring. But the 90-day petition for stay of the licensing process, though
not yet officially announced, is expected soon, according to Bangor Hydro
spokesman Alan Spear, and will most likely delay any further development
of the dam project for at least several months, he said.

Spear said the delay is intended to give the parties involved
more time to work out a settlement, thus avoiding a fight over the issue in
the courts. "All parties have agreed on the need for time to examine
all the issues without the pressure of a ticking clock," Spear said.

Under the agreement, two review groups are being formed, one to
examine policy issues, and one to address technical issues of dam development
on the Penobscot. According to a prepared statement from Gov. King's
office, these two groups will explore all aspects of the Basin Mills proposal.
Solutions which emerge from these deliberations, the statement read, could
mean that one or more of the dams on the lower Penobscot might not be built.

"The groups need to identify all the issues, and then tackle
them one at a time," said Spear. As to whether any dam would be eliminated,
including Basin Mills, Spear said it was premature to tell what will come from
deliberations. But he acknowledged that "in the spirit of true negotiations,
anything is possible."

The Basin Mills Dam project was proposed about 11 years ago, but
has faced a number of challenges by both environmental groups and the Penobscot
Nation as it slowly worked its way through the state and federal approval
process.

In July, the Maine Supreme Judicial Court rejected efforts by
conservation and wildlife groups to block the dam's construction, reaffirming
a 1993 state decision that gave conditional approval for the 38-megawatt dam
at Basin Mills.

The Penobscots had also sought unsuccessfully to get the Maine
congressional delegation to amend the Federal Power Act, giving the nation more
authority on a dam Bangor Hydro-Electric wants relicensed in Milford near
the Penobscot reservation. As well as seeking greater control over the licensing
process, the Penobscots had also sought to require Bangor Hydro to pay
$6 million to compensate for losses in the tribe's traditional fishing resources
and pay $69,000 annually for use of the Penobscot River.

Spears said it's impossible to tell whether any of these grievances
will be addressed in current negotiations. He said Hydro-Electric is looking
forward to a "fruitful discussion with all parties involved."

"I give the Governor a lot of credit for bringing all these
disparate groups together," he said. "It does make the whole process
more complex, but we feel the extra effort will be well worth it. We are confident
a resolution can be reached which will be acceptable to all."



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