In the two months since the failures of the Edenville Dam and the downstream FERC-licensed Sanford Dam (Project No. 2785) in central Michigan, there has been a flurry of correspondence between the Federal Energy Regulatory Commission (Commission or FERC) and the licensee, including a series of directives and the warning of potential enforcement actions from the Commission, as well as discussion of possible harm to protected species following the dam breaches.
As reported in the June 1, 2020 edition of the WER, the Commission issued a letter the day after the dam failures ordering the licensee to fully lower the reservoirs behind all three FERC-licensed dams impacted by the dam failure (Sanford Dam, Secord Dam – Project No. 10809, and Smallwood dam – Project No. 10810), to perform safety inspections of the dams within 3 days of the floodwaters receding, and to immediately begin formation of a fully independent forensic investigation team. The Commission’s letter specifically noted that since the Edenville Dam is not under FERC jurisdiction, FERC would be coordinating with the Michigan Department of Environment, Great Lakes, and Energy (EGLE) for investigation of the Edenville breach. The Commission has issued additional directives in the weeks since the dam failure.
Warning of Potential Enforcement Action
On July 1, 2020, FERC issued a letter to the licensee serving as notice under Section 31 of the Federal Power Act (FPA) that the Commission may pursue enforcement actions against the licensee for failure to abide by the Commission’s orders, including orders to:
- immediately inspect the three licensed dams within three days of flood flows receding and to file corresponding reports within three days of the inspections (the initial inspections were conducted over two weeks after the floods receded and as of July 1, inspection reports had not been filed for the Secord and Smallwood Dams);
- reach out to the Michigan Department of Natural Resources and the United States Fish and Wildlife Surveys (USFWS) regarding mussel surveys;
- submit incident reports for each dam under Part 12.10(a)(2) of the Commission’s dam safety regulations;
- remove flood-related debris from the Sanford Dam; and
- have a professional engineer conduct a shoreline survey of the Sanford Dam project to identify areas of instability caused by the reservoir drawdown, followed by immediate stabilization for any residences or structures in jeopardy of additional damage.
The Commission’s letter ordered the immediate submittal of the required information and notified the licensee that its failure to submit the information constituted a violation of Part 12 of the Commission’s dam safety regulations as well as the FERC-issued licenses for the projects. FERC indicated that failure to comply could result in an enforcement proceeding which could result in civil penalties or license revocation.
One week after issuing the July 1 FPA Section 31 notice, FERC issued another letter responding to a request for clarification from the licensee regarding the scope of the required forensic investigation—namely, whether the investigation must address the Edenville Dam breach. In its response, FERC confirmed that the investigation must address the dam failures at both the Edenville and Sanford Projects. FERC explained that even though Edenville is not under its jurisdiction, the FERC-licensed Secord and Smallwood Dams upstream of Edenville may have played a role in the failure at Edenville, and similarly, the failure at Edenville may have been a factor in the failure of the downstream FERC-licensed Sanford Dam. In closing its letter, the Commission warned the licensees that the delays in starting the investigation were “unacceptable” and ordered the licensee to submit fully executed contracts within three days that authorize the investigation team to immediately begin its work. FERC, again citing Section 31 of the FPA, notified the licensee that any failure to comply could result in civil penalties or license revocation, (both mentioned in the letter a week prior), an order to cease generation, or even a criminal proceeding.
Endangered Species Act Concerns
One of the issues raised by the dam failures is the possible impacts of the resulting reservoir drawdowns and future dam repairs on the snuffbox mussel, a federally listed endangered species under the Endangered Species Act (ESA). Prior to the May 2020 dam breaches, USFWS had advised the licensee that fresh shells from the snuffbox mussel had been documented during a 2019 drawdown at the reservoir impounded by the Edenville Dam and had recommended that the licensee assess the potential for its other operations on the same river to affect other snuffbox populations. USFWS repeated that recommendation to the licensee following the dam breaches and independently encouraged FERC to undertake emergency consultation with USFWS and have the licensee conduct a stranded organism survey during the reservoir drawdown. According to a July 8, 2020 letter from USFWS to FERC, the survey was not conducted, and any snuffbox mussels left stranded likely did not survive. USFWS recommended that FERC require a mussel survey prior to any other actions at the licensed projects other than those requiring immediate implementation for the protection of human life and property, after which USFWS would determine whether a formal consultation is required. The licensee replied to the July 8 letter from USFWS the following day, objecting to a number of characterizations in the letter and expressing the hope that FERC and USFWS would identify “a practicable and reasonable protocol” for addressing concerns related to the possible presence of the snuffbox mussel along the 175 miles of shoreline that circumscribe the licensee’s dams.