| 
Heading downstream?
Wisconsin’s largest, most dependable
source of renewable energy has an uncertain future.
Chances are Neshkoro (population 453) wouldn’t
be the first place you’d look for a company with world-class
engineering and marketing reach. But after a few minutes with
Chuck Alsberg, president of North American Hydro, Inc., it seems
to make perfect sense that the Midwest’s largest independent
operator of hydroelectric dams would be headquartered in this
little Waushara County village.
On a gray, early-fall morning, visitors to North
American Hydro watched a pair of local residents catching bluegills
below one of the company’s small dams. In an office about
a hundred feet away, amid reminders of his own love of fishing,
Alsberg has put his energy, his heart and, significantly, his
own money into growing a company that owns and operates power
dams, refurbishes and repairs aging hydro facilities, and manufactures
a full line of the components required to build and keep them
working.
Not bad for something that started as a hobby. Working
for a public utility about 25 years ago, Alsberg says, he became
aware of some old, abandoned small hydro plants “and just
thought it was such a tremendous waste to see them sit there,
and so we started putzing around with the mechanical, electrical
side of it and actually got one running.” Over time, the
hobby turned into a career choice. “We finally decided let’s
give it a go, and we did about one a year until we figured out
what we were doing and it got a little easier,” he says.
Boulders in the Stream
North American operates 33 hydro facilities in
Wisconsin, Minnesota, Iowa, Illinois, and Upper Michigan. It owns
29 of these and has installed electrical control equipment for
others in Costa Rica, Nepal, the Philippines, and Turkey.
Alsberg says an Arkansas project—developing
three new facilities—is probably North American’s
biggest challenge thus far. But there are other kinds of challenges
that never really end, and they keep this successful entrepreneur
guessing about the future of his industry.
“You don’t see any new development in
Wisconsin and pretty much in the United States,” he says,
citing two reasons: slow cost-recovery and another that’s
downright startling. “Typically, it costs as much to license
a project as it does to build a project.”
“It’s not only the costs but the time,”
Alsberg says. “If you could get a license in three years
in my opinion that would be nothing short of a miracle, but more
typical would be a five- to six-year process.”
The quest for a license ends at the Federal Energy
Regulatory Commission, but it’s a winding route getting
there. For example, Washington won’t hand over a license
until Madison grants a water quality certification under the Department
of Natural Resources (DNR) administrative code.
And licensing—these days relicensing of old
facilities, since it’s rare to be building new ones—passes
through plenty of other hands.
“You get all these agencies involved, and
they all have their requests,” Alsberg says, listing the
U.S. Forest Service and various advocacy groups. The demands of
one or another agency may not be overly burdensome, he acknowledges,
but “when you start adding them up it’s just not economical.”
“The problem with small hydro is maybe you
have this impoundment that’s been there 60 years and nothing’s
changed, but now that you’re going through relicensing it’s
the opportunity for all these people to fund their own studies
that they can’t get through their own budget cycle, so let’s
shove it on this guy ’cause there’s a hydro plant
there,” he says.
Alsberg cites DNR-required fish-entrainment studies
as one significant cost. “We’ve inherited projects
from utilities and paper companies that have studied these things,
in my opinion almost to the economic death of them,” he
says, “and the cost of these studies is just so expensive
that for a small hydro project to go through that it would just
kill the project.”
With extensive field work, he says, a fish-entrainment
study can cost as much as $300,000 “and you might be doing
that on a project that generates $30–$40,000 in gross revenue
a year.”
Alsberg disputes the idea that significant numbers
of fish are harmed by small hydro generation. In visits to two
dams, fish weren’t hard to find and all appeared healthy,
including those being caught and released by local anglers. If
his hydro facilities are killing fish, Alsberg asks, “Where
are they?”
“We do a lot of tours for school kids and
local citizens to explain to them how these hydro plants work,
how fish and the rivers are protected, and how we ensure dam safety,”
he adds.
Renewable and Expandable
Wisconsin obtains more than 4 percent of its electricity
from hydro dams, making them by far the state’s largest
contributors of renewable energy and dwarfing the contributions
of more-publicized technologies such as wind and solar.
A strong believer in renewables, Alsberg serves
on the board of Madison-based RENEW Wisconsin, whose stated mission
is “To promote clean energy strategies—conservation
and energy efficiency, renewable energy, and low-emission distributed
generation—for powering the state's economy in an environmentally
sound manner.”
Alsberg is also president of the National Hydropower
Association, a role he sees as wholly consistent with the goals
of RENEW.
As an outdoorsman and angler, he believes hydroelectric
power and protecting the environment go hand in hand, and that
the environmental benefits of hydroelectric facilities far outweigh
their costs.
“First of all,” he says, “we’re
not going out and building new dams,” and by adding hydro
generation to an existing dam, “we get a clean source of
renewable energy.”
In addition, “you get a care-tender at the
existing structure who has a vested interest in it…I would
argue that any dam that has a hydroelectric facility on it is
a safer dam. It’s more regulated. It’s more scrutinized.”
One visitor thought Wisconsin’s hydropower
capacity was already fully exploited. Not so, says Alsberg. “There’s
something like 70 hydroelectric plants in Wisconsin and there’s
something like 3,000 dams. I’m not saying all those dams
are viable…but I think [Wisconsin] could get at least 100
megawatts more out of existing generating stations.”
Dairyland Power Cooperative of La Crosse recently
recorded an incremental gain, upgrading its Flambeau River station
to boost generating capacity by almost 5 percent, from 21 to 22
megawatts. (A megawatt is enough electrical energy to power about
800–1,000 average homes.) The facility was granted a new
license last spring, after an application process that took 12
years.
Churning Out Bargains
Some Wisconsin hydro facilities are nearly 100
years old. Refurbishing them, an important part of North American’s
business, is cost-effective compared with the huge capital investments
required for new fossil-fueled generation.
In fact, hydroelectric power is the lowest-cost
form of generation—by far—compared with any other
source. At three-fourths of a cent per kilowatt-hour, hydro power
costs less than half as much as any other form of electric generation.
That doesn’t mean adding new generators to
dams that can handle them is inexpensive. Alsberg estimates a
short-term cost of 5¢ per kilowatt-hour. Still, he believes
utilities and regulators ignore the low long-term costs of new
hydro. “These things last a long time,” he says.
But if hydropower is to remain viable in Wisconsin,
Alsberg says, regulatory foot-dragging must end. “We have
to get these problems fixed. We’re required to do these
fish studies over and over again and the results don’t vary
significantly from one project to another,” he says.
The future, he predicts, will depend on regulatory
reform or legislative action, possibly including tax credits similar
to those that have been offered for wind energy. “People
right now are fighting to retain existing capacity, let alone
look at new capacity; that’s hardly even on the page and
unless you get some legislative reform, it’s headed downstream.”
He is not entirely pessimistic. “There are
some new projects, I’m sure, that could make it without
tax credits if you had regulatory reform,” he says.
National surveys, according to Alsberg, show about
93 percent of Americans supporting hydropower as a valuable source
of clean, renewable energy, versus a small minority who believe
dams harm river systems.
“I’ll argue that maybe they did, back
when they were built, but they’re there and they’ve
been there 80 or 100 years now, so what’s the impact today?”
he asks. “Every dam we have, that’s where people are
fishing.”—David Jenkins and Dave Hoopman
|
