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Hamilton breaks ground on $500M hydroelectric plant

Project expected to be complete in 2014, will make 70% of city’s energy renewable

State Rep. Courtney Combs, R-Hamilton, and Hamilton Councilman Robert Brown look over the future site of the $500 million Meldahl Hydroelectric Plant before a groundbreaking ceremony Tuesday, June 29, in Willow Grove, Ky.

Staff photo by Greg Lynch State Rep. Courtney Combs, R-Hamilton, and Hamilton Councilman Robert Brown look over the future site of the $500 million Meldahl Hydroelectric Plant before a groundbreaking ceremony Tuesday, June 29, in Willow Grove, Ky.

ENLARGE PHOTO

Photos: Hydroelectric plant construction

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By Dave Greber, Staff Writer Updated 7:11 AM Wednesday, June 30, 2010

WILLOW GROVE., Ky. — The $500 million hydroelectric plant under construction here since the beginning of May is the product of perseverance and partnerships that expand beyond state lines.

Although shovels officially hit the earth during the first week of May on the power plant at the Captain Anthony Meldahl Locks and Dam — of which Hamilton will be operator and majority owner — their ceremonial counterparts were in operation Tuesday, June 29, as city, state and federal officials came together for a celebratory groundbreaking.

The half-billion-dollar project, which is expected to be completed sometime in 2014, would not have come to fruition had it not been for the involvement of federal and state legislators, city officials have said.

“It probably would have taken years longer,” said City Manager Mark Brandenburger about the federal permitting process necessary to get the Meldahl project moving. “And when you’re talking about building an electric-generating facility, each year lost equates to millions of lost revenue and millions of dollars in increased cost.”

Locally, decisions by City Councils past and present were critical to seeing Hamilton would have a spot along the shovel line Tuesday.

“We still want to be able to control our own utility rates and our own utility destiny,” said Mayor Pat Moeller. “I believe the past councils would be proud of what we’re doing today. We’re glad they did what they did, and it’s going to be good for our residential customers and our commercial customers.”

City administrators were directed to focus their efforts on utility operations and pursue projects like Meldahl to diversify Hamilton’s electric portfolio. Once Meldahl is complete, nearly 70 percent of the city’s electric generation will come from renewable sources, exceeding every other municipal generator in the Midwest, and nearly every one Hamilton’s size in the country.

Hydroelectric plant was No. 1 goal for Hamilton City Council

The more than $500 million hydroelectric project at the Meldahl Locks and Dam that by 2014 will set Hamilton apart as a green electric operator almost didn’t include the city of Hamilton.

That it now does, though, is a matter of persistence, competitiveness and focus on behalf of city leaders.

In 1999, City Council gave its top official an ultimatum: Make Hamilton’s utilities competitive — or they’re gone. At least a handful of times since, Council members have said they have been presented with opportunities to sell off part or all of their utilities.

That never happened, officials said Tuesday morning, June 29, just before ceremoniously breaking ground at the 86-acre site along the Ohio River where the hydroelectric powerhouse and plant will be built.

“This project was our No. 1 goal on Council,” said Don Ryan, former mayor and councilman. “We said in 2000, 'Go for it.’”

Added Ryan: “We knew what this could do for the city. It’s an incredible feat for the city.”

Hamilton first lost its bid for a plant at the Meldahl Locks in the mid-1980s; then again to Augusta, Ky., in the early part of this century.

But Augusta’s time line for starting construction at Meldahl ran out in 2005, and Hamilton began the federal permitting process once again. They received word in March from the U.S. Army Corps of Engineers and the Federal Energy Regulatory Commission to construct and operate a hydroelectric plant at Meldahl.

“You have to have patience,” said Marc Gerken, chief executive for American Municipal Power, a conglomerate of 48 communities in six neighboring states that is a partner in the Meldahl project. “These people (in Hamilton) had the innovation and the know-how to go back after that license because it was the right thing to do.”

Work officially began approximately three months ago on the southern banks of the river in the shadows of the Capt. Anthony Meldahl Locks and Dam. Progress has been delayed twice thanks to archeological finds — a several monthslong hiatus after crews found tiny pieces of ancient artifacts, and a slight delay earlier this year after crews uncovered two graves dating back to the 1840s, City Manager Mark Brandenburger said.

Hamilton holds the license to construct and operate the future facility, and is 51.4 percent owner of the hydroelectric plant and its potential 105-megawatt output. The remaining 48.6 percent will be owned by AMP.

As a result, Hamilton will pay for a little more than half the project’s overall cost, which is being fronted by AMP.

By comparison, Hamilton’s other hydroelectric plant at the Greenup Locks and Dam east of Portsmouth in Franklin Furnace, Ohio, has a maximum output of 66 megawatts. Once the Meldahl project is complete, Hamilton will sell 48.6 percent of the power produced at Greenup to AMP.

Power is expected to flow from the Meldahl plant sometime in 2014, and Hamilton will station 20 full-time employees upon its completion, Brandenburger said. Once completed, more than 70 percent of Hamilton’s electric portfolio will emanate from renewable sources. It also will mean the city’s utility operation will have an annual budget that exceeds $250 million.

“What a great legacy,” said Brandenburger, who will eventually lead the city’s utility operation once his replacement as city manager is named. “What an opportunity to leave a small mark on the city’s progress. It’s perfect.”

The construction project will add between 300 and 400 jobs to the Bracken County books and create its first county-owned park — per the requirements of the permit provided by the Federal Energy Regulatory Commission.

The run-of-the-river Meldahl plant will be the largest hydroelectric facility on the Ohio River and the Midwest, and generate power beyond the next five to six decades.

Following the first few years of operation — when debt service from the four-year construction cycle expires — electric produced from Meldahl will also provide a cost-effective alternative for Hamilton and AMP customers, Gerken said.

“Long term, we believe we will have the most competitive rates in the country,” Gerken said.

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