Pucker Street Dam surcharge money could be returned to ratepayers if project is abandoned

Published 11:35 am Thursday, February 25, 2016

Despite encountering recent unanticipated complications in the ongoing effort to remove the Pucker Street Dam, Niles city officials remain optimistic that the project will move forward.

However, if for some reason it doesn’t, what will happen to the money customers of the city’s electric utility have been paying in the form of a surcharge to help fund the decommissioning of the dam?

Jeff Dunlap, the city’s director of utilities, said the surcharge has to be used for the purpose of decommissioning the dam and restoring the Dowagiac River. It can’t be used for any other purpose.

In order for the surcharge money to be returned to the ratepayers, Dunlap said the city would have to abandon the decommissioning of the dam altogether.

He said that scenario is unlikely, even in light of recent complications.

“All of the granting agencies, all of our partners, which include the state and federal officials, are all confident this project is going to happen,” he said. “But I can’t say that [it will be removed] with 100 percent certainty.”

In May of 2015, the Niles City Council voted to place a surcharge on electric sales in order to help pay for the cost of decommissioning the dam.

Dunlap said the city has collected $598,987.55 from the surcharge as of January. That money, he said, has not been spent and is currently being held in a restricted account.

Earlier this month, city officials discussed a situation concerning a pair of pipelines running below the Dowagiac River near the dam. A project engineer said the pipelines, which carry natural gas, might have to be relocated, but there was a question as to who would have to pay for the cost of relocating them — the pipeline company ANR/TransCanada or the city.

The engineer said the cost might be around $6 million — a cost too great for the city to afford.

Dunlap said the city has received no updates on the pipeline situation and that attorneys on both sides of the table are still talking.

“We haven’t heard anything from them yet,” he said.

Thus far, the city has received $1.35 million in grant funding for the dam’s removal.

The total cost of the project is estimated at $3.4 million.

Dunlap said they are finishing up an environmental assessment of the project now and will be applying for construction permits next month.

Work to remove the dam, he said, is expected to begin in April.