FirstLight Power Resources to sell Franklin County hydroelectric properties to Canadian investment firm

 For the Gazette
Published: 3/8/2016 3:38:45 PM

MONTAGUE — One of the largest taxpayers in Montague, energy generator FirstLight Power Resources, plans to sell its multimillion-dollar hydroelectric properties in the area to a Canadian investment company. The properties are set to change hands in the summer.
A purchase-and-sale agreement was signed, and the properties that encompass the Turners Falls Hydroelectric Project and Northfield Mountain Pumped Storage Project will be included in the sale, said Gus Bakas, director of Massachusetts hydro operations at FirstLight Power Resources. 
Bakas said the company was looking to go in a different direction. Revenue from hydroelectricity has a high degree of variability, so the company decided to focus more on other more predictable ways to generate earnings, said Bakas.
Facilities on the tax rolls of four Franklin County towns are included in the sale.
FirstLight Power Resources also maintains and operates nature trails, science centers and recreational and environmental programming at or near the company’s facilities. Recreation services at Northfield Mountain, including canoeing, horseback riding, camping and hiking, will be continued and maintained by the new owner, said Bakas. Much of that public programming is required by the conditions of the utility’s federal license.
The hydroelectric facilities included in the sale are in Montague, Erving, Gill and Northfield, but the most valuable property is the Northfield Mountain property in Erving, assessed at $825 million, said Jacquelyn M. Boyden, assistant assessor in Erving.
The new property owner could choose to file an abatement to reduce the value of the property in future assessments, impacting local taxpayers, but it is too early to speculate, said Boyden.
The properties being sold in Montague are worth about $117 million, said Karen M. Tonelli, director of assessing. This includes machinery and about 68 parcels that mostly run along the river.
The buyer is one of Canada’s largest pension investment managers, the Public Sector Pension Investment Board (PSP Investments), which is retaining properties from FirstLight Power Resource, primarily located on the Connecticut River in Massachusetts and Connecticut, for $1.2 billion.
The facilities provide electricity to the regional power grid, said Montague Town Planner Walter Ramsey. He said that it is premature to speculate about the impact of the sale on residents.  
In addition to the potential tax implications for the towns, the Northfield Mountain facility will soon have its license renewed, which could involve negotiations between the new owners and the many stakeholders in the river. Those include organizations concerned about recreation, the environment and fishing, for example.
The hydroelectric facilities include the dam outside Montague Town Hall, which diverts water from the Connecticut River to the Power Canal. Water from the canal is pumped through turbines at Cabot Station in the village of Montague City, creating power, said Ramsey.
The Power Canal, which originally powered the mills throughout the town, was built in 1867. “That’s how we got the name ‘power town,’ because we had all these mills operating before there was electricity,” said Ramsey.
In Turners Falls’ industrial heyday there were about eight mills running along the canal. The only mills that remain are the abandoned Strathmore Mill and the last running mill Paperlogic.  
The Northfield Mountain facility also generates hydroelectricity. Water from the Connecticut River is pumped into a reservoir atop the mountain. 
The water is then dumped back down into the river through turbines to generate electricity at times of peak demand. It was built in 1976 as a companion to the former Vermont Yankee nuclear power plant in Vernon, Vermont. According to FirstLight Power Resources, the Northfield Mountain facility is the largest, most flexible pumped-storage hydro facility in New England and among the largest in the United States. 
“PSP Investments is extremely pleased with the acquisition of these significant hydroelectric facilities which form an important component of the Eastern U.S. energy market,” Guthrie Stewart, senior vice president, Global Head of Private Investments at PSP Investments said in a statement.
The new owner will comply with the licensing agreement set by the Federal Energy Regulatory Commission. At the time of the final sale, the license should be transferred to the new owner, said Celeste Miller, a spokeswoman for the commission. 
 




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