By revoking license, feds tried to 'shock' Edenville Dam owner into making fixes
Federal regulators on Tuesday painted Boyce Hydro Power as a "recalcitrant" owner that refused for 14 years to meet safety and environmental requirements for the now-collapsed Edenville Dam, claiming it couldn't afford the improvements.
Officials with the Federal Energy Regulatory Commission said they exhausted their limited enforcement tools at Edenville and ultimately revoked the dam's hydropower generating license in 2018 in an effort to "shock" the owner into compliance.
But that approach did not work, and regulatory responsibility for the dam then fell to state authorities, who were also unable to get Boyce Hydro to comply.
"This is a very rare circumstance," said David Capka, director of the commission's Division of Dam Safety and Inspections, during remote testimony to a joint Michigan Senate hearing in Lansing.
Both the Edenville and Sanford dams on the Tittabawassee River breached May 19 after heavy rains and winds, emptying Wixom Lake and flooding parts of the Midland area. More than 10,000 people were evacuated.
A lawyer for Boyce Hydro disputed the description of the company as "recalcitrant," saying it was false and "government spin."
Attorney Lawrence Kogan said FERC was wrongly "obsessed" for 10 years or more with the risk that the Edenville Dam could be overtopped in a serious flood. Instead, what happened last month was a breach of an embankment wall — whose stability FERC had approved in its last inspection report.
"FERC looked at the wrong mark when it came to dam safety," Kogan said. "So it was a totally different issue than what FERC had harassed Boyce about."
State lawmakers on Tuesday asked the federal officials about whether the dam's failure was a product of weak enforcement policy lacking "teeth," as Sen. Rosemary Bayer, D-Beverly Hills, put it.
"The problem is when you have someone who says, 'No, I am not going to do what I'm required to do — what I should do,' it's hard to figure out what to do," said John Katz, deputy associate general counsel for FERC.
State lawmakers questioned the FERC officials on why the commission turned over responsibility for Edenville to the state, with Republican Sen. Ed McBroom of Vulcan accusing the regulators of harboring a "wash-our-hands" attitude toward the dam's difficult owner and "backing out."
"I respectfully disagree that that's the commission's attitude. As I said, the commission tried just about everything it possibly could to get this gentleman to comply with the safety regulations," Katz said.
He said FERC was not required by federal law or regulations to turn the dam over to state regulators; rather it was a "policy judgment" made in the hopes that Boyce Hydro would be more responsive to state authorities, hoping the state "might have better luck."
"The commission doesn't have its own bulldozers and construction equipment and can't fix things by itself," Katz said.
"And the sense at the commission was that — rather than waving our fingers from Washington — it might be more effective for the local authorities who are on the ground and in the project area to improve things."
McBroom said, "Well, if you want to argue over the attitude and the approaches, that's fine. I stand by my characterization."
Asked whether FERC considered Michigan's less stringent capacity rules for dams before ceding regulation of Edenville, the officials said that doesn't usually figure into the decision.
"Most states have different requirements than the federal government," Capka said. "Ultimately, it's that state's determination of whether the project meets their standards or it doesn't."
The transfer of regulatory authority over the dam from federal to state authorities happened after years of efforts by FERC to force Edenville to expand the capacity of its spillways so it could survive a major flood.
Capka said Michigan officials were aware the Edenville Dam did not meet FERC's spillway capacity requirements.
"I wouldn't want them to seem as though there's any gap between Michigan and the commission," Katz said.
"We both had the same ends in mind, and I think we both want to protect the public and do the best we can to bring a recalcitrant entity into compliance. And, as you've seen by the result — it's very difficult."
Kogan, the lawyer for Boyce Hydro, said the spillways that FERC wanted to be installed cost several million dollars, and that Boyce Hydro as a private operator didn't have a way to finance the construction.
He predicted the team of forensic analysts appointed to complete an independent investigation into the dam failures would find that the federal standards were outdated.
"With a structure like this, those standards may be inadequate to the present needs, considering the age of the dam and its structure," Kogan said. "I'm not drawing a conclusion. I'm just saying that's a possibility."
The forensic report process could last 18 months, he added.