Corrected: Michigan knew of Edenville dam issues in August 2019

Edenville dam

A May 19 flood caused the Edenville dam in mid-Michigan to fail, leading to the evacuation of more than 10,000 people and some $200 million in damages. (Bridge photo by Mike Wilkinson)

CORRECTION: A Bridge article published Tuesday on the Edenville dam inaccurately characterized a report on the dam’s condition. The article, and its headline, indicated that the Michigan Department of Environment, Great Lakes, and Energy was informed in January 2019 that the Edenville dam didn’t meet state safety standards. Bridge misread a document referencing the report. The document actually noted that the dam did meet state standards at that time, citing the report. It was in August 2019 that EGLE received a report that the dam did not meet those standards. The article has been updated.

State regulators knew as early as August 2019 that the Edenville dam likely did not meet state flood control standards, public records released Tuesday to Bridge indicate.

But according to newly filed court documents, as regulators awaited more information before acting on safety concerns, state lawyers were seeking millions of dollars earlier this year from Boyce Hydro, the dam’s owner, for dead mussels.

“Boyce really needs to get into seven figures if it wants to get the State’s attention,” Assistant Attorney General Nathan Gambill told an attorney for Boyce in an April 22 email, rejecting Boyce’s offer of $200,000. 

“Keep in mind that this is essentially a business decision for the State — why settle for $200,000,” Gambill wrote, “if it can collect substantially more than that by getting a judgment, even taking the costs of litigation into account.”

Three months later, the Edenville dam collapsed following days of heavy rains. Federal regulators had sought for decades to get Boyce and earlier owners to add capacity to ensure the dam could handle historic rainfall.

The documents — filed in federal court in Grand Rapids, which is handling litigation between the state and Boyce — raise fresh questions about whether Michigan regulators were more focused on extracting money from a troubled dam regulator for environmental violations than in forcing the company to invest instead in fixing safety deficiencies.   

In a Tuesday interview with Bridge, Boyce Hydro lawyer Lawrence Kogan called the state’s settlement demands earlier this year “extortion.”

A spokesman for Michigan Attorney General Dana Nessel slammed Kogan for releasing the emails by publicly filing them in a federal court case.

“Settlement negotiations are confidential and information regarding the parties’ settlement positions is not admissible in court,” spokesman Ryan Jarvi wrote Bridge in an email. “Beyond that, Boyce’s one-sided recitation of the negotiations in its lawsuit is inaccurate and misleading.”

Jarvi added that negotiations between Boyce and the state over mussel losses would not have interfered with plans to fix the dams.

At that point, he said, the Four Lakes Task Force, an association of property owners around lakes created by the Edenville dam and three others, was in the process of buying the dams from Boyce and had crafted plans to undertake major repairs.

Claims of poverty met with skepticism

The lawyers argued over the cost of dead mussels between February and late April, with the state estimating they had a value of $300 million. The Edenville dam failed in May after three days of rain filled the Tittabawassee River watershed. Rising waters punched a hole through the dam’s earthen embankment on May 19, draining its reservoir, triggering the failure of another dam downstream and causing an estimated $200 million in damage and the evacuation of more than 10,000 people.

The dam’s failure came after the Federal Energy Regulatory Commission had spent decades trying to get Boyce and prior owners to expand its capacity to handle catastrophic storms.

Boyce Hydro had long argued that it didn’t have enough money to finance the repairs, though documents indicate federal officials were skeptical of the claim.

Records show Boyce enjoyed a sizable profit from its four mid-Michigan dams: Collectively, the business generated nearly $2 million annually in payments from Consumers Power, with expenses of about $1.2 million.

The Edenville dam, the largest of the four, generated just over half of all revenue — money Boyce lost when FERC revoked its license to generate power in September 2018, acting on a long-held threat that was designed to prompt the company to make safety repairs.

As the feds washed their hands of Boyce, Michigan took over dam safety oversight.

But after assuming oversight, the state did not spell out what Boyce would need to do to meet Michigan safety standards, which are less rigorous than federal standards. The state did, however, continue to seek compensation for the loss of millions of mussels that state scientists say likely died when the water level of the lakes was lowered in 2018 and 2019. (Boyce said it had approval from FERC to lower the lakes in 2018.)

EGLE spokesman Hugh McDiarmid on Tuesday called Boyce’s focus on the mussel lawsuit a “red herring” intended to shift blame for the company’s long standing refusal to adequately maintain its dam.

“We don’t believe that giving them a pass on restoring public natural resources they damaged would have compelled them to suddenly change their tune and embrace the safety improvement they’d stiff-armed (the federal government on) for a decade and a half,” McDiarmid said.

Midland was underwater after the upstream Edenville Dam failed amid heavy rains. (Tyler Dittenbir / Shutterstock.com)

Deficiencies known, but action delayed

Records released Tuesday show the state suspected as early as August 2019 that the dam didn’t meet the state’s lower standards, which are half as stringent as FERC’s and some of the least strict in the country.

In a letter submitted late Monday to a U.S. House committee investigating state and federal oversight leading up to the dam failure, EGLE Director Liesl Clark acknowledged the state received information from Spicer Group, a consultant working for the Four Lakes Task Force, indicating the dam could not meet Michigan's standards.

But officials did not order repairs or safety precautions such as lowering water levels in the Wixom Lake reservoir, choosing instead to wait on an inspection report the state would provide conclusive information necessary to take action.

As the state awaited additional details, the Four Lakes Task Force was preparing to buy Edenville and three neighboring dams and pay for needed safety upgrades.

McDiarmid said Tuesday that state officials believed helping facilitate the purchase would be “a much faster route to improvements” than leveling enforcement orders against Boyce, “which would almost surely be challenged and take years to force compliance.”

Dam safety experts have said the state should have acted sooner, even without definitive answers about the dam’s ability to meet Michigan’s lower standard. 

“When there's public safety at stake, you don't have conversations. You actually do something about it,” said Hiba Baroud, a professor of civil and environmental engineering at Vanderbilt University who specializes in risk analysis of critical infrastructure, told Bridge in May. 

Monday’s eight-page letter to the House committee repeats the state’s defense that regulators couldn’t act earlier because they were hampered by a lack of communication from FERC that delayed their access to federal inspection reports and other documents that would have provided a clearer understanding of the dam’s condition.

“No formal consultation regarding the revocation and transition to state jurisdiction occurred,” Clark wrote.

In the wake of the May 19 disaster, a federal judge warned Monday that what remains of the Edenville Dam continues to pose a “grave risk” to the public.

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Comments

Don
Wed, 06/17/2020 - 8:37am

Michigan safety standards, which are less rigorous than federal standards!!!!
BS for a state to take over federal over site its regulations HAS TO BE as rigorous of more>>> that the law so stop you lying for the state!!! The state cared more about the mussels then the people!!!!

Don
Wed, 06/17/2020 - 8:42am

The problem with the state is that they DO NOT employ the right people>>>> I applied a for a job as an asbestos inspector with the state a few years ago!!! At that time I had 30 years as an state of MI certified asbestos inspector and a BS from Ferris State!! the state ruled that I was not qualified and gave the job to a Canadian that had a MS and worked for one of KK environmental companies for 3 years!!!

Jeff
Wed, 06/17/2020 - 9:52am

Plenty of blame to go around here. The Feds spent 10-15 years fighting with the owners about the repairs and didn't get them done, nor did they seize them or do the repairs and place liens against the dams (I'm assuming these were options under federal law, but maybe not). Then the Feds pull the plug on the electricity generation permit which just flips the oversight. 15 years of effort and nothing accomplished except getting it off their books.

Then the state comes in and basically starts from scratch. Because the standards are different they can't just use any reports done for the feds and need new ones. Then they don't react on the preliminary reports because they say they need more detail to verify the calculations. Sorry, but if the calculations indicate a catastrophic failure could occur, you should probably go with them until proven wrong. However, I'm guessing that the regulations are written in a way that makes the state powerless without "conclusive" evidence.

And, yes, the mussels are just a diversion. At the time those suits were filed the dam was under Federal regulation but that didn't exempt the owners from having to work with the state on the lowered levels that they claim the Feds approved. When there are multiple sets of regulations to follow, you have to work to follow them all. Part of being a Federalist system is that you get to deal with Federal and State laws that may be in conflict, but you have to work it out and not just go with what benefits you the most.

Bob P
Wed, 06/17/2020 - 9:56am

Nice, factual reporting. The story of simply bad/corrupt oversight is not so pretty. The United States has 4% of the worlds population and 70% of its lawyers. We could only afford 3 dam inspectors for several thousand dams?
Federal, State and Local governments have overlapping responsibilities for public safety that should be protected by checks and balances. It ain't working. We need a fix before the next big rain.

Jake K
Wed, 06/17/2020 - 10:04am

“No formal consultation regarding the revocation and transition to state jurisdiction occurred,” Clark wrote. So EGLE Director Liesl Clark and others can't pick up a phone and try to communicate with those involved to clarify situations?

And the money grab the state was attempting was ignoring the safety aspects of the issue?
"Boyce really needs to get into seven figures if it wants to get the State’s attention,” Assistant Attorney General Nathan Gambill told an attorney for Boyce in an April 22 email, rejecting Boyce’s offer of $200,000. “Keep in mind that this is essentially a business decision for the State — why settle for $200,000,” Gambill wrote, “if it can collect substantially more than that by getting a judgment, even taking the costs of litigation into account.”

Maybe it time for oversight of the AG's office to make sure they're addressing critical matters effectively rather than continuing the pursuance of charges and punishment against a 77 year old barber for cutting hair to voluntary clients.

Please, please remember these instances when next voting for a governor, AG and other politicians. Once and Done!

Andy
Wed, 06/17/2020 - 10:37am

So the dam failure caused $200 million in damage to the local communities... but the State claims there was $300 million worth of mussel loss?? How in the heck are snuff box mussels valued? Apparently more than gold...

Timothy Sullivan
Wed, 06/17/2020 - 11:51am

I agree with both comments from Don (I am assuming they come from the same person). Hiring standards in Michigan have deteriorated since the (un)civil service commission of the Engler Administration redefined the constitutionally mandated competitive examination to an oral interview (no more multiple choice or scenario testing). This, of course, enables the existing managers to hire who they want, and they apparently did not want you. Neither the administrations of Granholm, Snyder or Whitmer (to date) have sought to fix that problem. To be fair to Governor Whitmer, she has not had the chance to fill a vacancy, but she has not exercised authority under Article 5, Section 10 of the state Constitution to remove any CSC commissioner (voting to privatize DOC food service should be sufficient grounds given that fiasco). You may have run afoul of Standard 5.01 E2 or E3 (I will copy these at the end of this missive). But these Regulations are designed to eviscerate the concept of a civil service, not preserve it.

The state does not have enough inspectors; it lacks the requisite authority and/or desire to enforce the inspections; the administration is too worried about mussels; and the legislature is too busy worshiping at the Cult of the Divine Market to care.

Boyce Hydro and the previous owner(s) did not want to spend the money needed to keep the dams up to code, and in Boyce's case, lost the capacity to generate income. The Feds gave them a quarter century to fix it and they also lacked the ability to force the change other than yanking their permit to generate electricity. This also affected the power grid as it lost any electricity generated by Boyce. Boyce apparently thought they did not need to spend money in order to make some.

Most importantly, the story shows the State was more concerned about mussels, the feelings of lake front property holders and generally shaking down Boyce for more money, than they were in the long-term consequences of dam failure to those who live down stream.

And this is what we get, a state striving to turn itself into a dysfunctional banana republic. Our infrastructure is collapsing, many of our schools are poor, and we argue over whether we are doing enough to protect mussels and the accumulated wealth of those who see themselves as feudal lords.

REGULATION 5.01
E. Salary Upon New Hire (Initial Appointment).
Upon first appointment to a position, an employee is paid the minimum rate in the salary range. The State Personnel Director may authorize a higher starting rate upon application by the appointing authority. An appointing authority may authorize a higher rate without prior approval if any of the following apply:
1. The position has been vacant for a long period of time and there is difficulty in recruiting for the particular position.
2. The prospective employee is currently employed outside the classified service and a salary in excess of the minimum is necessary to attract the prospective employee.
3. The prospective employee has special experience and/or education which should be well beyond the minimum qualifications contained in the specification for classification of the position.
4. The prospective employee was previously a state employee and has experience pertinent to the position.
Note: The appointing authority must document the reason for an above minimum starting rate when one of the above conditions applies. The documentation must be retained for audit purposes.

SamK
Wed, 06/17/2020 - 12:01pm

$300MM for dead mussels? I don’t think so. Once again political antics trying to push the blame and extort money. November can not come soon enough. Too bad it’s not 2022!!!

William C. Plumpe
Wed, 06/17/2020 - 12:10pm

If the Feds tried to get the owner to make repairs to the dam for 14 years and failed to do so then dumped the mess in the State's lap without help how can the State suddenly be responsible and be held to a higher standard than the owner and the Feds?
Looks to me like the owner and the Feds are once again attempting to deny responsibility and trying to make the State look bad because of Governor Whitmer. The mussels are a major red herring an attempt to muddy the waters and deflect blame from those really responsible for the disaster the owner and the Feds.

Barry Visel
Wed, 06/17/2020 - 2:26pm

Just curious. How can mussels living in a man made lake be considered “natural”?

middle of the mit
Thu, 06/18/2020 - 6:36pm

Are the mussels real, fake, man made, or Memorex?

We report, you decide!

Then drain the fake lakes and let the fake mussels die and let the real natural mussels live in the real, natural rivers!

Barry, people like lakes because they offer recreational opportunities that rivers don't. They just don't want to pay for the upkeep or replacement and the other things like a few years of not using the lake to make sure everything is safe and kept up. But they sure do like to give tickets for not mowing your lawn, having a few projects you are working on to sell or other things that give the neighborhood a "bad name".

If you took the time, you would find out that the CCC and the WPA did a LOT of dam building in the late 1930's and into the 40's. Where do you think most of the dams came from? How do you think areas like ours up north got their electricity?

We just want to keep profiting and not put out anything for upkeep or labor anymore. It has to go to those at the top.

Check that lake you visit to this year. Does it have a dam? It is fake! Don't go there!

middle of the mit
Thu, 06/18/2020 - 5:32pm

While I am utterly unimpressed by the Assistant AG's words, let me put the mussle thing to rest. And I hope Bridge reporters will take this into account.

The only action needed to save the mussels was to raise the lake 5 feet. Boyce was draining it 8 feet and the legal level was 3 feet. That is it. Nothing else. If you think raising the lake level to the FULL LEGAL SUMMER LEVEL with that rainstorm wasn't what broke the embankment and the other dam...sorry.

It wasn't the State saving mussels that overdid those dams. And per the article before this, it seems there is a Federal Judge that is going to get a shot at seeing just how cooperative this private owner is. Let's see how that works out.

And the only other thing I would like conservatives to ask themselves is, why did one of yours give a 3 paragraph OK to the dam in 2018 but now you want to hammer the Governor and the AG for a private dam owner not self regulating and you giving them a pass?