Underground hydroelectric plant proposal at Ashokan Reservoir raises concerns

The proposal of a large underground hydroelectric power plant at the Ashokan Reservoir last month caught local officials and the New York City DEP completely by surprise, but the California company behind the plan, Premium Energy Holdings LLC, stressed last week that it won’t move ahead without community and landowner support.

Town of Olive Supervisor Jim Sofranko said he was “blindsided” by the proposal. “It was surprising. It was alarming in the scope, and it created a fair amount of understandable anxiety in our community.”

Sofranko and other local officials said the plans reflected a lack of knowledge of the area, with one proposed construction scenario even resulting in the flooding of a residential community. The DEP, which is mandated with safeguarding the water supply for New York City’s nine million residents, and would surely be interested to know about a large construction project that makes use of that very water, was similarly out of the loop. In the absence of any word from Premium, one local newspaper suggested that if the permit is granted and NYC doesn’t ultimately agree to the project, the company could seek to have it designated as necessary by the New York Independent System Operators and have it approved by the state Public Service Commission through eminent domain, removing the need for local or landowner approval.

But according to the company, there is no need for locals to worry.

“We are not trying to pull a fast one,” said Premium Energy Holdings Managing Director Victor Rojas. “This project will not happen if we don’t have the support of the community.”

Rojas said Premium chose the Ashokan Reservoir site in response to a solicitation for bulk energy storage solutions by PSEG Long Island, an energy company servicing Long Island. He said the company is not necessarily pursuing ownership of the project. “We identify opportunities and make them available to the government, utilities or private investors for development or ownership. We are just engineers.”

Rojas also said specifically that Premium would not seek to use eminent domain to overcome local opposition. “The New York City water department has the right prerogative for the use of their water for this project,” he wroe. “We will never force or even worse, go to the extreme of imminent (sic) domain. This project is for New York and should be done by New York. If they don’t want it, there is no project.”

The company filed a preliminary permit application with the Federal Energy Regulatory Commission (FERC) to study the feasibility of constructing the project back in November of last year. The notice of the application was made public on February 11, which was when local media and officials learned about it.

According to the notice, the preliminary permit, if granted, does not give the company authority to enter or perform any work activities on the property without the owners’ permission.

“The federal filing gives us green light to just explore; investigate the feasibility of the project,” said Rojas. “Talk to all stakeholders. Gain consensus. It is not a permit to construct.”

If the permit application is approved by FERC, the proposal says the company will use a 24-month period to conduct the feasibility study. The study would incorporate numerous economic, environmental, engineering and other scientific investigations, surveys and tests.

The plan lists the company costs for the feasibility studies at an estimated $5 million.

Rojas said that if, following the permit period, the plan is approved and licensed by FERC, the company would require another four years to complete construction.

Rojas said that FERC will not ultimately issue a license to build after the permit phase if “there are real and critical problems that cannot be resolved.”

On its website, Premium bills itself as a sustainably minded developer of large energy storage resources, with a specialization in pumped storage systems.

How it would work

Premium Energy’s 27-page FERC application outlines a project scope, referred to as the Ashokan Pumped Storage Project, that would create a pumped storage hydroelectricity power plant facility reliant on water from the Ashokan Reservoir. The plant would add an additional 800 megawatts to the grid. (According to Central Hudson, this is a “fairly large” amount of energy that could potentially serve 640,000 to 800,000 homes.)

According to details outlined in the proposal, the closed-loop plant would be powered by water from the Ashokan, which it references as the lower pool, that would be pumped to a newly constructed, concrete-lined reservoir at a higher elevation, called the upper pool, which would be roughly between 1180-1500 feet higher than the Ashokan. It lists three prospective sites for the upper pool, some as large as 313 acres, all near the Ashokan, at either the Stony Clove Creek, Woodland Creek or Maltby Hollow Brook.

The application says that energy would be generated when the water from the newly constructed reservoir flows down through a tunnel system to the new underground power plant. After passing through the plant’s turbine, it would exit back into the Ashokan, where it began.

Premium Energy has proposed creating a 500-foot-long underground power plant at 200 to 300 feet below ground level at a location west of the Ashokan Reservoir. The application does not provide an exact location.

In a subsequent email, Premium said it may use solar power to pump the water to the upper pool during the day, and release the water to generate hydropower at night, when the solar farm isn’t operating.

The excess electricity would go to the Central Hudson substation on Hurley Avenue in the Town of Ulster during periods of high demand. Central Hudson spokesperson Joe Jenkins, who said the utility had also not been contacted by Premium, said a new transmission line would need to be constructed to connect the plant the substation. The proposal states the transmission line would require a new corridor to accommodate it, ranging in length from 12.9 to 17.3 miles.

Jenkins said the vetting and approval process is conducted by federal and state regulators and is independent of Central Hudson. “If approved, Central Hudson, by law, must interconnect the system to the substation.”

Rojas said that while environmental considerations for the project remain, ultimately, pumped storage is a green energy solution that the country needs. He said such projects can effectively serve nighttime energy needs, which he said could not be efficiently served by solar or wind projects.

“It is the solution for the 100 percent green-power transformation,” he said.

Rojas said that apart from the energy production, the project would provide benefits to the surrounding communities in the form of tax revenue, material sales, recreational facilities and an overall “economic boom.” He said it would create, “Jobs, lots of jobs, lifetime jobs — hydro lasts over 100 years.”

Concerns, environmental and otherwise

So far, local officials are not impressed with the plan. Several predicted it would likely go nowhere. One vowed to fight it if it did.

Town of Shandaken Supervisor Robert Stanley said in a telephone interview that his town was “vehemently opposed” to the current plan for a variety of reasons. He said it would remove vital property from the town’s tax base and block the spawning areas of trout fisheries, something Shandaken is well-known for.

He said that his interpretation of the proposed locations for the new reservoirs would mean taking away private property from people and in one case – for the prospective Woodland Reservoir – involve flooding an entire community, Woodland Valley.

“That would be a massive loss for the town of Shandaken,” Stanley said.

(When questioned about Stanley’s concerns around the potential Woodland Reservoir site, Premium Energy representative Rojas said the company will be relocating the prospective site from where it was originally proposed.)

Stanley said, “We really don’t think this roughshod plan is going to go anywhere.” He said his town would fight the proposal if it progresses.

“Considering the current circumstances under COVID-19 and understanding how people are suffering, to know that a company may be applying for a feasibility study for something that will never occur is a waste of the taxpayers’ expense and the taxpayers’ money,” Stanley said, referring to his belief that Premium would seek grants to fund the feasibility study if the project advanced to that point.

According to FERC records, Olive Supervisor Sofranko filed a Motion to Intervene on the application on Feb. 26 to ensure that the public interests of Olive residents are represented. He said he had many concerns about the project as proposed, including the “enormous” size of it and potential issues with town infrastructure, individual wells, regional infrastructure as related to the electric grid, and environmental sensitivities.

He also expressed concerns about the accuracy of the plans presented. “It was very obvious that no one from the applicant had visited the area, and visited the site, and understood what they’re proposing here and how it would affect the towns.”

For example, he called the mapping, “a little vague, to be honest. If you look at the description, it says one thing; the GPS information is a little different.”

Sofranko said the proposed new reservoir sites appear to fall within New York State-owned land “which are constitutionally forever wild, so that’s a huge legal hurdle that I don’t know how they would ever approach.”

The submitted plans have invoked environmental concerns as well. In a telephone interview, Kathy Nolan, senior research director at Catskill Mountainkeeper, a nonprofit regional environmental advocacy group, said of the proposal: “It ignores a lot of details about the Ashokan Reservoir, such as its serving as a drinking water source for nine million people.”

Nolan said the project as proposed “has the potential to stir up turbidity — basically suspended solids in the water — that are a problem for drinking water resources.” She said the Ashokan Reservoir already deals with issues around effectively handling turbidity.

She said the general area where the plant would be located, on the west side of the reservoir, is not environmentally well-suited for this type of large-scale construction project.

However, she did say that looking at such renewable energy projects in other areas of the Catskills region is important. “A feasible project could come forward, but my guess is it would need to be much less in scope than this, of a smaller impact on the land, and in an area where there wouldn’t be potential implications for the drinking water supply.”

Indeed, there is already one small hydroelectric plant at the Ashokan and three more at the Rondout Reservoir. However, these involve using existing pathways taken by the system’s water, and are a fraction of the size (4.5 megawatts for the existing plant at the Ashokan vs. 800 megawatts for Premium’s plant).

Shandaken Supervisor Stanley said the topic of adding more such plants has come up before. “There [are] always opportunities where we’ve had conversations with New York City, looking at possibilities of energy production through hydropower from reservoirs,” he said. “They’ve actually implemented that in the Cannonsville Reservoir. But this proposal specifically by this private corporation — it holds no weight in our perspective.”

According to the New York City Department of Environmental Protection website, the Ashokan Reservoir supplies about 40 percent of New York City’s daily drinking water. DEP spokesperson Adam Bosch said the agency was “surprised” to learn of the proposal in mid-February, when the Ulster County Planning Department shared the filing via email.

“We are reviewing the company’s application to the Federal Energy Regulatory Commission and plan to make comments on the proposal in the coming weeks,” Bosch said.

Give your opinion

FERC will be accepting public comment on the proposal through April 12, 60 days after the notice was officially made public on February 11.

Electronic filing is encouraged: Comments of up to 6,000 characters can be made on the FERC website at https://ferconline.ferc.gov/​QuickComment.aspx.

Comments by mail should be submitted to: Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission, 888 First St. NE, Room 1A, Washington, D.C. 20426.

FERC instructions state to include name, contact information and docket number P-15056-000 on any submitted comments.