Consumers Energy has sold all 13 of its hydroelectric dams in Michigan to Confluence Hydro, a subsidiary of Washington, D.C.-based private equity firm Hull Street Energy, which was formed to own and manage the assets.
That deal includes the Calkins Bridge Dam on the Kalamazoo River, which is located in Allegan.
Trisha Bloembergen, a spokesperson for Consumers Energy, said the dams themselves cost a dollar a piece — but Confluence Hydro also purchased the energy rights that come with the dams.
“So that comes out to $13," Bloembergen said. "However, there's the other financial component, which is this 30-year power purchase agreement where Consumers Energy has committed to buying the energy, capacity, and renewable energy credits for these dams for the next 30 years."
And Bloembergen said those energy rights are worth much, much more than $13.
“That 30-year power purchase agreement is worth tens of millions of dollars over the 30 years," Bloembergen said. "So, that's where the two parts of the financial components of the deal really start to make sense.”
Bloembergen said the sale will take roughly 12 to 18 months to finalize, during which Consumers will continue to operate the dams and provide power through them. After that, Confluence Hydro will take control of all operations.
Though the exact plans for the future of the dams haven’t been released, a spokesperson for Confluence Hydro, Dana Whyte, said in a statement:
"Confluence Hydro intends to invest significant intellectual and financial capital to ensure the continued safe, compliant and effective operation of all 13 dams. The mission of Confluence Hydro is to retain and improve existing clean hydroelectric resources for the future. Our team has a long track record of successfully owning and operating a wide range of assets, including hydropower, and we intend to leverage this experience, as well as the expertise of the existing hydro workforce, to meet our objectives."
Though much conversation around the dam in the past has focused on whether it will stay in operation or be decommissioned with the goal of restoring the river to its original banks, specific information hasn't been published about the fate of the dam. But Bloembergen said the two companies are hoping for a smooth transition, and as of right now all jobs currently at the dam will stay.
“Another component that we're pleased has come out of this partnership is that Confluence Hydro has offered all existing Consumers Energy co-workers that work at these dams a position if they would like it," Bloembergen said.
The Calkins Bridge Dam is the only dam on the Kalamazoo River that was owned by Consumers Energy, which acquired it in 1969.
