Feds fine Boyce Hydro Power for Midland-area dam safety violations

The Federal Energy Regulatory Commission has fined Boyce Hydro Power LLC $15 millon for "numerous dam safety violations at three of the company’s hydroelectric projects" in Midland and Gladwin counties, the agency announced Thursday.

Boyce Hydro owned multiple dams in the Midland area that collapsed in May of 2020 and caused massive property damage, emptied lakes and caused the evacuation of 10,000 homes. The damage occurred during historic rains that breached the Edenville Dam on May 19 by punching through the earthen embankment of the dam to send a surge of water down the Tittabawassee River. The surge overwhelmed the Sanford Dam and flooded the Midland area.

May 2020:State found by January that Edenville Dam didn't meet Michigan safety standards

“Today’s decision sends a clear message to all licensees of FERC-jurisdictional hydroelectric projects: It is imperative that they comply with the safety requirements of their licenses,” said Rich Glick, chairman of the FERC, in a statement announcing the fine. “Public safety is a top priority at these facilities, and we will do whatever we can to protect communities.” 

Boyce Hydro had been scolded by federal regulators for more than a decade before FERC revoked the dam's hydropower generation license in 2018. 

Regulatory authority over the dam was transferred to the state, a move some experts have criticized as a clumsy hand-off that left the state scrambling to understand the dam's full breadth of problems. 

Whether the feds will collect the fine is another matter. In August, Boyce Hydro declared bankruptcy.

FERC said in a release that while it is assessing the $15 million penalty it does not intend that the fine would impact the recovery of damages by victims of the breaches. Boyce Hydro’s liquidation plan ensures that the victims’ recovery costs will be paid before any of the fine, FERC said.

August 2020:Owners of failed Midland-area dams file for bankruptcy

The commission says Boyce Hydro's response to its December 2020 show-cause order "failed to respond to any of the factual allegations...and therefore assessed a civil penalty without holding a trial-type hearing."

The possibility of the $15 million penalty was known at the time of the show-cause order, which asked Boyce "to provide an answer within 30 days as to why the commission should not assess a $15 million civil penalty."

The dams and their upkeep have been contentious issues for years. Michigan's Department of Environment, Great Lakes and Energy has been citing Boyce Hydro for violations dating back to 2010, according to a state timeline.

'Too little, too late'

Boyce Hydro did not immediately respond to a request for comment. 

Timothy Holsworth, a homeowner on Sanford Lake, said in an email that "the FERC fine strikes me as far too little too late."

"In our opinion, if FERC would have done their jobs to begin with, Boyce would have been shut down years before the dams failed and created massive devastation to our area," Holsworth wrote. "So, a fine against a company that claimed bankruptcy July 31st seems like a symbolic gesture at best. The fine should be well into the hundreds of millions of dollars, and should be spent on restoring the community.  It is doubtful that will occur."

Next month, the Four Lakes Task Force plans to unveil its restoration plan for the area. 

Dave Kepler, president of the Four Lakes Task Force, wrote this week that the task force "has a legal and contractual obligation to the state and counties to bring the Four Lakes back to their legal lake levels."

There are two paths forward, Kepler wrote, and only one is believed viable.

The first is to not restore the lakes and tear down the Secord and Smallwood dams. The dam removal and environmental repair would cost an estimated $125 million.

The second is to restore the lakes over the next six years at an estimated cost of $250 million to $300 million. The task force believes restoration is both feasible and the best available alternative, he wrote.

Second and Smallwood lakes would be restored first, by 2024, Sanford Lake by 2025 and Wixom Lake by 2026.

jdickson@detroitnews.com