The Town of Tonawanda is considering using eminent domain to take over the former Huntley Power Plant to ensure the plant continues to provide the 19 million gallons of untreated water used every day by nearby manufacturers.
Even if the town is successful, acquiring the generating station from NRG Energy through eminent domain is only a short-term solution, according to town officials. Over the long term, the town wants to upgrade its water treatment plant to directly provide "raw" water to Sumitomo Rubber USA, DowDuPont and other industrial customers.
Building a new water-pumping station and other necessary infrastructure would cost an estimated $27.2 million, but the town is seeking millions in state grants and pledges of funding from the companies to help pay for the project.
"We want to protect the jobs and the industries on our waterfront," Councilman Bill Conrad said.
The town hosted its latest meeting on the slippery water question on Friday with representatives from industry, various state agencies and the union whose members fill many of the jobs at the manufacturers. The town wants to move forward quickly on both eminent domain and improvements to its own treatment plant, but that requires buy-in from the state and companies.
Empire State Development and the state Department of Environmental Conservation did not immediately respond to a request for comment. One manufacturer, Sumitomo Rubber, said it is open to working with the town but wants more details on the cost. For its part, NRG said it is willing to cooperate with the town to reach a solution that works for everyone.
"The current contracts for water services are still in effect and could be amended or extended by mutual agreement," David Gaier, a spokesman for NRG in this region, said in an email.
For nearly a century, the coal-fired Huntley plant generated electrical power and provided untreated water from the Niagara River to nearby manufacturers including PeroxyChem, the tire-maker Sumitomo and 3M Ocelo Sponge for free — or for far less than the cost of the treated water they could buy from the town.
The companies use the untreated water as a coolant in their manufacturing processes.
After NRG closed Huntley in 2016, the plant continued to provide low-cost water to the five neighboring manufacturers on a year-by-year basis. But town officials fear NRG will shut off access to that inexpensive water, saying thousands of jobs at the companies are at risk.
"That's what's making them nervous," said Michael Kessler, water department director for the town, referring to the companies whose agreements end in 2019.
Tonawanda officials say that, without a commitment from NRG to continue providing the untreated water, the town needs to consider all of its options to ensure the water continues to flow.
First, the Town Board at one of its next two meetings expects to vote to seek bids from law firms for the eminent domain work, Conrad said. The town then would hire one of the firms to guide it through that process.
If it is able to take over the plant through eminent domain, this would be a stop-gap measure to make sure the companies have access to untreated water during the period the town upgrades its own facility, Conrad and Kessler said.
"Eminent domain is something no one wants to do in government. Private property is private property," Conrad said, but NRG has kept the town "in the dark" about its plans.
The town wants to build a water-pumping station at its treatment plant, on Aqua Lane off River Road, and invest in the infrastructure needed to sell untreated water directly to the five manufacturers. Officials estimate that project would cost $27.2 million.
The town hopes to receive about $16 million in grant funding from the state, with $5.5 million each coming from the state Senate, the state Assembly and the executive branch, Kessler said. State Sen. Christopher Jacobs, R-Buffalo, has obtained $5.5 million in state funding for the project.
If the town can whittle its share down to $11 million or so, the town would borrow the cost and then work out a way for the five companies to contribute, Kessler said. Construction would take three years.
Negotiations continue, Conrad said, with the town weighing whether the companies would help pay for the upgrades up front or pay an ongoing charge based on their usage. Payments could be spread out over three, five or 10 years, Kessler said, adding, "We would structure it based on what industry's thoughts are."
Sumitomo, which uses several million gallons of water per day from Huntley, has an agreement that expires in the spring, said Tim Noe, Sumitomo's senior vice president for manufacturing.
If that agreement ended tomorrow, Noe said, the company could continue making tires at the plant. But its backup plan includes fulfilling a portion of its water needs with treated water from the town, at a far higher cost.
"We're prepared for that, but it's not optimal," he said.
The town sells treated water to its residential and commercial customers at a rate of $3.60 to $3.90 per 1,000 gallons, compared to the 22 to 25 cents per 1,000 gallons that untreated water costs.
Noe said Sumitomo appreciates the effort the town has put into reaching a solution. Everyone, he said, is seeking a reliable supply of water for the long haul.
The United Steelworkers Union represents about 1,600 employees at the companies, primarily at Sumitomo, DowDuPont and 3M, said David Wasiura, staff representative for the district that covers the Northeast and Puerto Rico.
"Our main focus is protecting their livelihood and making sure the companies are healthy companies," said Wasiura, whose members have lobbied state officials on behalf of the project.
NRG, for its part, downplayed any conflict between the company and local officials.
"NRG is aware of the importance of this water to these industrial customers, and we'll continue to work with them and with the Town of Tonawanda in good faith to find a solution concerning future operations of the water intake infrastructure," Gaier said in the email.
The town already has conducted a feasibility study and has begun studying the project's environmental impact. Town officials also are asking the DEC, as part of the proposed expansion, to increase the amount of water the town is allowed to take out of the river.
The DEC said it has not received a formal application from the town, or the industrial customers, related to the project.
"Although certain water withdrawal permits may change, DEC does not expect there will be a net increase in the amount of water withdrawn from the Niagara River," the agency said.
The project must meet federal and state regulatory requirements to protect against harm to the river and the aquatic ecosystem, the DEC said, and the cost of making the necessary improvements is the responsibility of the permit holder.