Woronoco Hydro LLC

PO Box 149, Hamilton, MA 01936

December 18, 2009

Mr. Fred Ayer, Executive Director

Low Impact Hydropower Institute

34 Providence Street

Portland, ME 04103

Re: Request for Low Impact Hydropower Certification

Woronoco Hydroelectric Project (FERC #2631)

Dear Mr. Ayer:

Woronoco Hydro, LLC (Woronoco) has submitted an application to the Low Impact Hydropower Institute (LIHI) for Low Impact Hydropower Certification (Certification) for the Woronoco development (Project) in Massachusetts. This request for LIHI Certification has been required by the Project’s lender andis part of Woronoco’s grant application to the Small Hydro Initiative (SHI)of the Massachusetts Technology Collaborative (MTC).

The ability of the Project to qualify for participation in the renewable energy certificate (REC) market was a key requirement of the Project’s 2006 procurement of bank financing to provide funds for Project enhancements. MTC’s long-term REC contract gives the lender limited assurancethat the project has reliable economics (a predictable revenue source) on which to base its loan. A condition of MTC’s REC contract is that Woronoco Hydro must apply to every New England state that passes a Renewable Portfolio Standard for small hydro (RPS).

The Project was certified as a Class I REC generator in Connecticut because it rebuilt and repowered two low flow turbines, adding capacity that was lost in the early 1980’s. Rhode Island also certified the two repowered turbines as “new capacity” and certified the third unit as “existing” capacity. Recently, Massachusetts added small hydro project generators to its RPS.

As LIHI is aware, the Massachusetts Department of Energy Resources (“DOER”) Renewable Energy Portfolio Standard Regulations (225 CMR 14.00; “RPS I” and 225 CMR 15.00; “RPS II”) require that any hydroelectric project wishing to qualify as either a RPS I or RPS II generator must first obtain LIHI certification. Woronoco submitted its LIHI application to maintain compliance with both the MTC and the lender’s requirements for the Project. The LIHI application recommends obtaining written support for certification from the Massachusetts Division of Fisheries and Wildlife (MDFW).

Woronoco has applied for an MTC grant from its Small Hydropower Initiative (SHI) solicitation to assist in funding proposed Project enhancements. A condition of the SHI solicitation is that grant applicants must obtain a letter from MDFW stating that the project will eventually qualify as low impact so that it will meet the conditions of the Mass RPS. The specific MTC SHI solicitation rule is as follows:

“Unless the facility is already MA RPS-qualified, the applicant must include a letter from DFG that lists concerns that may affect LIHI certification; the letter may also offer potential solutions to those concerns. If possible, the letter should offer a non-binding opinion as to whether (or under what conditions) DFG would oppose LIHI certification. … DFG’s comments would pertain to ultimate RPS qualification. Contact at DFG: Caleb Slater, 508-389-6331.”

Attached is the letter from the MDFW regarding Woronoco’s application for Low Impact Certification. The MDFW letter notes that MA DFW does not support LIHI certification at this time. However, the MDFW states that upon completion of the remaining compliance requirements the MDFW would support LIHIcertification of the Project as a low impact hydropower facility. Woronoco addsthat the remaining compliance requirementsof the FERC license at the Project aredepend upon the results of testing improvements to the downstream fish passage system that an MTC grant would help finance.

Although not required by the Federal Energy Regulatory Commission(FERC) or resource agencies, Woronoco has initiated plans to enhance fish passage at the development. The enhanced passage facility will replace the current functioning fish passage facility at the site. Installation of the enhancements, including relocating the fish passage entrance from the side wall of the forebay to a location in the racks this July when the new Cross Machine rake will be ready for installation. This schedule will delay fish passage testing of passage efficiency until April-June 2011. Also, Woronoco has proactively installed eel protection measures at the site and implemented fish protection measures that exceed the agency’s criteria. The details of these enhancements are provided in our LIHI application. If you have questions, please refer to the attached Revised Comprehensive Fish Passage Plan filed at FERC on 12/19/09 that provides a comprehensive overview of these changes.

In summary, Woronoco’s goals are:

  • To improve the fish passage program as described in its Revised Comprehensive Fish Passage Plan being reviewed by the resource agencies and filed at FERC on 12-19-09.
  • To qualify for the Mass RPS when it has been certified as a low impact hydro project by qualifying for LIHI certification.
  • To have LIHI accept Woronoco’s application (submitted on 12/16/09 and to include Caleb Slater’s letter that is attached to this letter) as conditional upon FERC acceptance of the project’s Revised Comprehensive Fish Passage Plan filed in compliance with FERC license #2631, so that Woronoco’sapplication to the MTC Small Hydro Initiative (SHI) will comply with solicitation rules. Both the LIHI andMTC applications will contain the 12/11/09MDFW letter from Caleb Slaterthat states his conditional support of Woronoco as a potential low impact project as required in the MTC grant solicitation rules.
  • To preserve the Project’s bank financing that is conditional upon continuation of Woronoco REC contract with MTC. This condition obligates Woronoco to apply for the MA RPS. The MA RPS requires that Woronoco Hydro have an accepted LIHI application before it can apply for qualification to be a MA RPS hydro generator.
  • To have MTC accept Woronoco’s SHI application for a 50% matching grant for partial funding of the following projects that will complete Woronoco’s FERC license compliance:

a)to change 1 ¼” trashracks to ¾” spacing to prevent entrainment of smolt and adult eels;

b)to relocation the entrance to the fish passage facility from the side of the forebay to a position in the racks where migrating fish will find the entrance fast in order to speed passage past the Woronoco dam;

c)to repair holes in draft tubes to raise net head and to removal of silt from the tailrace;

d)to purchase and installation of a Cross Machine rake to reduce head losses from ¾” racks clogged by debris and frazzle ice.

Woronoco is providing the attached letter from the MDFW for you use in the review of our application. To avoid default of the bank financing, Woronoco is requesting preliminary LIHI acceptance of Woronoco’s application,conditioned upon Woronoco’s completion of the remaining license conditions currently under consultation with the stakeholders. Please contact me at (978) 468-3999 (email: ) if you have further questions or require additional information regarding Woronoco Hydro’s LIHI application.

Sincerely,

Peter B. Clark

Manager

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