Boyce Hydro, the Midland-area dams owner, argued in court that it couldn’t pay for repairs because prices for hydro power have fallen. The company argued that, by revoking its license, federal regulators eliminated revenues that could have paid for repairs.
Sen. Jim Stamas, R-Midland, said the deck is stacked against dam owners who need to make regulatory improvements because the state Public Service Commission — which assigns the rates at which power generators are compensated — sets rates too low for companies to make adequate repairs.
“There was no way in Michigan to recover that cost [of improvements,] which gets back to why it takes way too long for many of these facilities to upgrade their systems,” Stamas said.
The Edenville dam generated about $1 million in annual revenue, according to court papers, while three smaller ones nearby owned by Boyce generated another $900,000. Expenses were $1.2 million or less, records show.
Many neighbors who live near the dams are dubious that Boyce, which is owned by the trust of deceased publishing mogul William D. Boyce, couldn’t afford the repairs. Multiple class-action lawsuits have been filed against Boyce and the state to recoup damages for area residents harmed by the floods.
In some states, governments can step in and make repairs to dams if owners won’t. Michigan has no dedicated fund for such repairs, McDiarmid said.
The problem of deferred dam maintenance is not confined to Michigan.
California is widely considered a national leader in dam safety, with dozens of employees and a budget of $20 million dedicated to the cause. Yet when the state’s Oroville Dam failed in 2017, independent investigators came to a disturbing conclusion: The failure was the result of a “long-term systemic failure” on the part of both regulators and industry.
That conclusion “certainly raises concerns about how good of a job we’re doing in California as well as other states that struggle to have adequate budgets and staff to do their job,” said Martin McCann, who runs the National Performance of Dams Program at Stanford University.
In Michigan, consensus to address the issue has been elusive.
Mark Coscarelli, a senior policy fellow at Lansing-based Public Sector Consultants, led a 2007 project to develop recommendations for Michigan policymakers to address the state’s massive collection of aging dams.
In many cases, the report’s authors found, useless dams could be removed for less money than it would take to shore them up for safety. Removal also eliminates the environmental and safety hazards dams may pose.
In places like mid-Michigan, where Boyce’s dams originally constructed for electricity generation are now prized for the recreational and scenic value of their reservoirs, the report’s authors determined the public should help pay for upkeep.
“There needs to be more public-private partnership when you have members of the public deriving some benefit from these privately-owned structures,” Coscarelli told Bridge.
But much like Michigan’s struggle to fund road maintenance, bridge repair and other infrastructure needs, Coscarelli said, “nobody wants new taxes.” And there is a general perception that societal concerns deemed more immediate — education and health care, for instance — are more deserving of public money.
Until, that is, disaster happens.
Michigan Gov. Gretchen Whitmer has ordered state officials to investigate the cause of the dam’s failure and recommend policy, legislative, budgetary and enforcement solutions to prevent repeat disasters in the future.
Coscarelli has been here before, and he isn’t holding his breath for a solution that sticks.
“Six months will pass and we’ll be on to the next emergency of the day,” he said. “People will lose sight of it and go on with their lives, the impoundment will come back up and we’ll live happily ever after until the next dam blows out.