The purchase is an agreement developed when the plant was built 30 years ago.
CHICOPEE – Chicopee Electric Light Department will soon get into the hydroelectric business.
The department is preparing to purchase the hydroelectric facility built on the Chicopee River as part of an agreement created 30 years ago when the facility was first built, said Jeffrey R. Cady, general manager of Chicopee Electric Light.
The power plant, constructed by the Swift River Company in 1983, was built with an agreement that gave the company an easement to the dam. The deal included a provision that it was to be sold to the Chicopee Electric Light Department after 30 years, Cady said.
Eventually the hydroelectric facility was sold to O’Connell Company and its subsidiary, the Chicopee Hydro Electric Limited Partnership, he said.
A formula created with the easement when the facility was constructed in 1983 will require the city to pay $1.1 million for the facility, Cady said.
“The money will come from funds from our operating accounts,” he said. “We are doing some short-term financing through the city because of the low interest rates right now.”
Chicopee Electric Light is a department of the city but is self-supporting through rates charged city customers. The City Council recently approved the sale in a 13-0 vote.
Generating hydroelectric power should help the company and its ratepayers a little, Cady said.
“It will give us diversity in our power supply,” he said. “It will allow us to be less dependent on buying energy from fossil fuels.”
But it will only supply about 2 percent of the power needed for the city. About 10 percent of the city’s power is also generated from methane gas released by the landfill on New Lombard Road. The department is also expecting to purchase solar power from a project slated to be built off Memorial Drive, Cady said.
The power that is currently being generated by the hydroelectric facility is being sold to Northeast Utilities, he said.
The facility is being turned over to the city at the end of the month. The city has already contracted with Swift River Hydroelectric to maintain and operate the plant for a year, Cady said.
“We will review how things go and at that point if we feel confident in the operator we will sign a long-term contract,” he said.
The city is also negotiating with Western Massachusetts Electric Company, a subsidiary of Northeast Utilities, to purchase some circuits and other infrastructure that is tied to the plant. The company already leases a few breakers from the city to conduct the power released, he said.