The Four Lakes Task Force has reached an agreement with Boyce Hydro to buy the remnants of two collapsed dams for $1.5 million. I don’t really understand why they had to pay to take over the liability of replacing or removing the dams, but that’s apparently how it works.
Village of Sanford President Dolores Porte is glad the Four Lakes Task Force has reached a settlement to buy Boyce Hydro properties.
“I think having Boyce Hydro out of the equation is a great step in the right direction,” Porte said.
Question: Does Boyce Hydro have any liability for damage caused by the dams’ collapse?
The State of Michigan thinks so, and filed suit in June:
“This suit seeks to hold the dam owners accountable for the damage they caused and recoup the money the taxpayers have spent responding to the ongoing emergency created by this devastating flood,” said Michigan Attorney General Dana Nessel. “We know the owners of the dam, with their long history of neglect, are responsible for the dam’s failure. We can see already the devastating results of their inaction. This suit seeks an order requiring the dam owners to pay to remediate the harm they caused, and to take action to ensure it does not occur again.”
Here’s a law firm that thinks so, and is building a class action suit against Boyce Hydro
Boyce Hydro, LLC, the dam owner, is responsible for the proper maintenance and upkeep of the dam. Lawsuits have been filed against the company, as well as owner Lee Mueller and other associated businesses. In addition, a lawsuit has been filed against the State of Michigan for failing to properly regulate the dam.
And, apparently, Boyce Hydro thinks so. It filed for bankruptcy protection in August. MLive reported that Boyce Hydro listed more than $7 million in liabilities owed to its 20 largest creditors, which includes about $6.1 million owed to Byline Bank of Chicago for federal small business loans. Boyce Hydro, of course, blames the government.
The state is largely responsible for the bankruptcy filing, said Boyce Hydro attorney, Lawrence Kogan of The Kogan Law Group, P.C.
“Boyce is insolvent and bankrupt because of the way the state enforced its laws,” Kogan said.
The state filed a lawsuit against Boyce Hydro in 2018. It accused Boyce Hydro, LLC of conducting a major drawdown of Wixom Lake without getting the proper permits. Boyce Hydro said it opened the gates as a preemptive safety measure to ensure dam safety during winter conditions, but the state said the drawdown was intended by Boyce Hydro to avoid paying for winter ice build up maintenance, not as a measure of downstream safety concern.
Michigan Attorney General says the dam collapse is an example of something rampant in public infrastructure.
But Attorney General Dana Nessel said the bankruptcy filing is an example of the problem with private entities owning public infrastructure.
“Boyce Hydro has been a negligent owner and manager for years, and now, rather than dealing with the tragic circumstances that resulted from its negligence and paying the cost to fix those problems, the company is declaring bankruptcy and potentially leaving Michigan taxpayers holding the bag,” Nessel said in an email to MLive.
Bloomberg says “more than half of the nation’s 91,458 dams are privately owned, some by power utilities and large corporations and others by private land owners.”
Boyce put out a statement laying some blame on the state and the communities near the dams. The company, which bought the 95-year-old dams in 2006, said it spent hundreds of thousands of dollar putting together an $8 million plan to upgrade the structures to meet the Federal Energy Regulatory Commission’s maximum spillwater requirements, which would enable the Edenville Dam to withstand more water. Boyce said it couldn’t finance the improvements, and the surrounding communities rejected its request for funding.
Good FEMA page with dam safety contacts.
Excellent background on Edenville and Sanford Dams from Weather Underground.
The predominance of private ownership of U.S. dams complicates efforts to spur needed improvements. Boyce Power had been notified as far back as 1998 that the Edenville Dam’s spillway capacity needed to be increased to avoid failure, according to the Detroit News. In September 2018, the Federal Energy Regulatory Commission revoked the dam’s license to generate power but did not require it to make the specified improvements. A two-county authority agreed in January to buy the four dams and lakes owned by Boyce Power for $9.4 million, effective in 2022, with about $100 million for rehabilitation to be raised through a special tax district.
