By Bill Kirk
Business Editor
February 17, 2008 07:21 am
LAWRENCE — Pacific Mills, a vast complex of buildings at 300 Canal St., wants water.
A lot of it.
The company wants to use water from the adjacent North Canal to power three hydroelectric turbines sitting unused in the basement of one of its buildings.
But this is Lawrence, and when it comes to water, or, more specifically, water rights, nothing's simple.
It's apparently going to take resolution of a lawsuit later this year for the Pacific Mills to use one drop from the canal — and only then if it wins the case.
In 1845, when the city was created from land taken from Andover, North Andover and Methuen, the Essex Company owned everything. It built the Great Stone Dam and then the canals adjacent to the mills. Water from the canals coursed through raceways that traveled under the mill buildings, flowing over enormous paddles that turned huge belts that powered equipment for making textiles.
One of the primary sources of income for the Essex Company was the money it charged mill owners for use of that flowing water.
Over the years, as the source of power shifted to coal or oil, the need for the raceways and the adjacent canals slowly dissipated — with at least one exception.
Around the turn of the last century, according to Alida Davis, property manager for the Pacific Mills Industrial Complex that houses commercial and manufacturing tenants, the Essex Company installed three hydroelectric generators in the basement of one of the mill buildings. Those generators created enough power to provide the energy for Pacific Mills from the early 1900s to 1989.
Fast-forward to the present: Enel, one of the world's largest energy companies, buys the Essex Co., along with the Great Stone dam, the canals, waterfront property, alleys all over the city and a host of other parcels across Lawrence.
"We own a lot of property" in Lawrence, said Julie Smith-Galvin, director of corporate affairs for Enel North America, a subsidiary of an Italian company that is one of the largest energy companies in the world. When Enel bought the Essex Company, it also bought a functioning hydroelectric facility on the south side of the Great Stone Dam, which it uses to generate power that it sells into the regional electric grid.
Several years ago, Pacific Mills realized it had a similar opportunity on its hands: It could refurbish the old hydroelectric turbines in the basement for just $500,000 to $600,000, Davis said. Open the raceways from the canal, flip a few switches and Pacific Mills could provide a clean, cheap source of energy for its tenants as well as other buildings in the vicinity, the company thought.
"Our hope was to generate 12 million to 14 million kilowatt-hours of energy per year — we'd be able to offer our incoming tenants better rates for our electricity as well as overflow to other mill owners on the island," she said. Any surplus could then be sold into the regional power grid, helping Pacific Mills make an extra return on the investment.
She said Pacific Mills uses just 1 million to 1.3 million kilowatt hours of electricity annually, leaving plenty of power for other mill owners on the island.
However, as the plans progressed, Pacific Mills hit a snag when it was discovered that Enel wanted to plug the raceways.
A story in The Eagle-Tribune in May 2004 reported that Enel wanted to cover the openings that lead to the raceways, which would block the water from the hydroelectric turbines.
The result was that in late 2004, Pacific Mills filed a lawsuit against Enel to prevent it from blocking the raceways. Pacific Mills is hoping, through the case, which is in Massachusetts Land Court, to force Enel North America, based in Andover, to maintain the North Canal, fill it all the way with water and fix some of the machinery, such as floodgates, that allow water into the raceways.
Enel North America is refusing to comment on the lawsuit, actually brought against the Essex Company and Lawrence Hydroelectric Associates, subsidiaries of Enel North America, citing the active legal dispute.
But the attorney for Pacific Mills, Thomas Moriarty of Marcus, Errico, Emmer & Brooks, P.C., of Braintree, said the suit is based on what Pacific Mills claims is an obligation by the Essex Company to provide enough water to run the turbines.
"It's a question of the right to use water power to generate electricity," Moriarty said. "In order to use the water power, you need the water in the canal."
He said part of the suit is about the canals themselves. "Even if you weren't trying to generate electricity, it's an aesthetic obligation of the Essex Company to maintain the canals."
He noted, "Our case is based on the original grants of water power going back to the 1800s. It's based on agreements going back to 1845."
In fact, the Lawrence History Center on Essex Street is filled with detailed, old records of water useage by all the mills in the city, because engineers had to account for every drop of water used to power the mills' looms and textile machinery.
Moriarty noted that Enel's "position is: 'You don't have a right to the water, and we are maintaining the canal.' "
Maintenance and ownership of the canals has been an issue for years.
In the past, Enel has disavowed ownership of the canals. City officials have said they don't want the canals, either.
In 2005, Groundworks Lawrence conducted a North Canal Restoration and Enhancement Study, during which the nonprofit group raised a number of questions about ownership of the mile-long canal, the nine bridges over it and the machinery built into canal walls used to carry water under the mills.
While the canal walls were deemed by the study to be "essentially intact in most places," there was at least one cave-in noted as well as problems with weeds and overgrowth along the edges of the waterway.
Perhaps more important was that the penstocks and gates that allow water into the raceways are in terrible condition.
Davis said Pacific Mills would be willing to do some of the repair work needed for the penstocks and gates.
But she said the canal is really the obligation of Enel.
"The canal has to be full in order for us to use it for power," she said. "They'd need to make repairs. It's an obligation of the Essex Company to maintain the integrity of the canals."
Moriarty said attorneys for both parties have filed motions for summary judgment with the Land Court in an effort to avoid a trial and get an opinion from the judge.
He said he is "optimistic" that the case is "nearing the end."
About Enel
r Enel North America owns and operates renewable energy projects in North America, including hydropower, wind turbines, biomass facilities and geothermal installations. It has projects in 21 of the United States and three Canadian provinces. It owns four hydroelectric facilities in Massachusetts. Enel North America is based in Andover.
r Enel NA is a subsidiary of Enel SpA, one of Europe's largest diversified energy companies and the world leader in renewable energy. In addition to Canada and the United States, Enel has facilities in Italy, Guatemala, El Salvador, Nicaragua, Chile, Brazil, Panama, Spain and Slovakia.
r Enel NA owns and operates the Lawrence Hydroelectric project, a 15 megawatt power plant located along the Merrimack River at the south end of the Great Stone Dam. It was placed into operation in 1981, at a cost of approximately $28 million. Each year, the plant generates enough power to electrify more than 10,000 average New England households. The facility is owned by the Essex Company and Lawrence Hydroelectric Associates Inc., subsidiaries of Enel North America.
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