Dover-Foxcroft will surrender Mayo Mill Dam license

DOVER-FOXCROFT — The Dover-Foxcroft Select Board will abandon plans to pursue hydropower at the Mayo Mill Dam and surrender its dam operating license, which could have cost $1.2 million to renew, it decided at a Monday meeting, March 10.

The decision follows a recommendation from the Mayo Mill Dam Review Committee, which will assist in the year-long license surrender process with the Federal Energy Regulatory Commission as the nine-member group continues to plan for the future of the downtown structure on the Piscataquis River. 

The Mayo Mill Dam Committee has worked since to present the town with a plan for keeping the dam and impoundment, with or without power generation, which has not been done at the site in 18 years, along with the associated costs and funding sources, committee member Bill Erspamer told the select board. By June 30, the town needs to not only make a decision on whether to pursue hydropower, but also a plan that will repair the dam, make it compliant with fish regulations, and more. 

An extension for those decisions will be requested and likely granted.

Dover-Foxcroft voters rejected a referendum article last June to remove the Mayo Mill Dam, indicating they were in favor of using tax money to fund studies, permits and repair costs for the structure.

The committee made several conclusions, primarily that power generation is not economical, Erspamer said.

The town previously consulted with engineers, turbine suppliers and a private developer to identify a hydropower retrofit. When the Arnold Development Group of Kansas City, Missouri, converted the former mill building into apartments and office space, the consultants looked at restoring hydropower and had an application submitted to the Federal Energy Regulatory Commission about a half decade ago but did not pursue it further.

“It’s not just a construction job, it’s an engineering job and a whole series of other pieces that are required in order to fully surrender the [Federal Energy Regulatory Commission] license and move on with the town,” Erspamer said. 

The cost to repair the dam is estimated to be between $7 to $10 million, the committee said. 

“Until we have a more detailed project engineered we are not going to be able to know what it is,” Erspamer said of the cost.

The project could be financed over time and doing so could add an additional $6 million in interest. The interest amount would depend on how much is financed and who the lender is, such as a commercial institution or the Maine Municipal Bond Bank, which often has  a lower rate. Outside funding sources are limited and uncertain, as there are not many grant opportunities for dam preservation instead of removal.

The structure must be repaired whether it is licensed or not and no major repairs have been done in two decades. Remediation includes commission repairs, powerhouse removal and fish ladder installation.

The full project cost — including construction, delivery, town overhead and an inflation rate of 2.7 percent a year — is $9,890,000, the committee said at a previous meeting. This is divided into about $6.6 million for dam repairs, $380,000 for powerhouse removal and nearly $2.9 million for fish ladder installation.

Should the $9.8 million be financed for 25 years with a 5 percent interest rate, then the cost would be just more than $16 million, coming to $727,000 a year over a quarter century. For a $200,000 property, the tax increase would be $388.

“Uncertainty is probably one of the themes that came through in the discussions that we had during the project,” Erspamer said. Various project risks include financials and fluctuating interest rates, cost overruns, regulations and compliance, such as with the fish passage for Atlantic salmon, schedules and delays, and supply chain issues.

The committee recommends the select board and town management contact the Federal Energy Regulatory Commission immediately for an extension beyond the June 30 deadline, informing the agency of the plan to surrender the operating license. The group says the town should work with legal council familiar with the commission.

The cost for this process, including consults, legal work, engineering studies and more, could be in the $300,000 to $500,000 range. 

The committee also concluded that it and the select board will work together to raise public awareness about the Mayo Mill Dam.

“It’s really an eye popping amount of money to get this process through, we are estimating our process will be simpler and therefore not as expensive,” Committee Chair/Select Board Vice Chair Steve Grammont said.

The license needs to be surrendered no matter what is done with the dam, Grammont said, as several hundred thousand to $500,000 will need to be spent.

“We are not going to be able to cut our way deep enough to afford half a million dollars in the next year,” Select Chair Tom Lizotte said.

“We have to go on the presumption that nobody’s going to help us out with money,” Grammont said. “At least to get this thing started there are no sources of funding lined up for that.”

Payments for surrendering the license could be made over several years, Grammont said as this will need to be determined. He said one advantage Dover-Foxcroft has is the community is dealing with a federal entity, so the pool of potential consultants with experience is wider than if it were just a state matter.

Last June’s referendum did not include funding in the dam question. 

“I think we need to go to the voters with an item that requests funding for this project and react to that,” Lizotte said.

Whether the funding will be just for the license surrender or the larger project is to be determined. The item should be on the agenda for further discussion at the March 24 select board meeting.

“We have a responsibility to the public to let them know the full picture but we can’t overwhelm at phase one of this, which is just the cost of getting the surrender license,” Lizotte said. He suggested funding the license surrender and educating citizens about the rest.

“We cannot line up outside funding until we have a plan,” Grammont said. The select board and dam committee are unsure how much outside monies could be available for assistance but the town would need to plan for funding the entire project.