Maryland, Constellation Energy finalize $340M Conowingo Dam agreement

Maryland has sealed a notable $340 million agreement with Constellation Energy for the relicensing of the Conowingo Dam in Cecil County, concluding a period of prolonged litigation and regulatory ambiguity. This development restores Maryland’s power to implement water quality standards under the Clean Water Act and may set a benchmark for numerous hydroelectric relicensing proceedings across the United States in the future.

This agreement encompasses both direct and related investments focusing on habitat restoration, debris removal, fish passage improvement, and various environmental initiatives. Oversight will be handled by the Maryland Department of the Environment (MDE), with contributions from two advocacy groups—Waterkeepers Chesapeake and the Lower Susquehanna Riverkeeper Association—who were instrumental in overturning a previous inadequate settlement.

Reinstating a 2018 Water Quality Certification, the new settlement supersedes a 2019 waiver made with Exelon, the former dam operator, which led to a legal protest by advocacy groups. This challenge resulted in a 2023 federal appeals court decision that invalidated the license granted by the Federal Energy Regulatory Commission (FERC). The new deal ensures Constellation, now operating the dam, adheres to enforceable conditions by both state and federal authorities.

Governor Wes Moore celebrated the deal as a victory for both environmental protection and energy security. “The Chesapeake Bay is the keystone to Maryland’s prosperity,” Moore stated. “This agreement will lead to real improvements in water quality in the biggest tributary of the Chesapeake Bay, while securing the future of one of our state’s largest clean energy producers. By bringing everyone to the table, we have struck an agreement that is good for the environment, good for energy production, and good for Marylanders.”

Environmentalists lauded the agreement for its potential as a precedent. Evan Isaacson, senior attorney with the Chesapeake Legal Alliance, remarked, “This agreement shows what can be accomplished with the Clean Water Act as it is. Constellation and all parties are legally bound by the terms of the settlement.”

The Conowingo Dam has historically posed challenges for Bay restoration due to its sediment-trapping reservoir, which has reached capacity, leading to significant pollution discharges during storms. Under the revised agreement, Constellation pledges $340 million over 50 years towards restoration, focusing on Maryland’s Lower Susquehanna watershed. Of this, $87.6 million is designated for pollution reduction and resilience, including shoreline restoration and underwater grass planting.

An additional $77.8 million is allocated for trash removal, while $28 million will enhance fish and eel passage at the dam. A freshwater mussel hatchery, significant for natural water filtration, is set to receive $23.3 million. The agreement also provides for invasive species control and other restoration efforts.

Only $18.7 million is earmarked for dredging studies, a contentious subject among environmentalists and scientists. Studies by the U.S. Army Corps of Engineers and the state of Maryland indicate that dredging is costly and potentially harmful to aquatic ecosystems. Nonetheless, the Lower Susquehanna Riverkeeper argues that sediment removal is crucial to reduce pollution from the dam.

Ted Evgeniadis, the Lower Susquehanna Riverkeeper, emphasized the need for sediment management in written comments to Inside Climate News. “The dam alters the timing and delivery of sediment and nutrients to the river and Bay by scour events,” Evgeniadis noted. “Providing a pathway for dredging was one of our top priorities.”

The new agreement establishes a robust framework with oversight provisions, with Evgeniadis’s organization participating in annual consultations on fund utilization, including dredging. He mentioned that future federal funding might be necessary for comprehensive dredging efforts.

While experts are divided on dredging’s role in Bay restoration, the agreement’s reestablishment of Maryland’s authority under Section 401 of the Clean Water Act is seen as a crucial feature. This provision enables states to impose conditions on federally licensed projects to ensure state water quality compliance.

Isaacson highlighted that the 2019 settlement’s attempt to waive this authority was invalidated by a federal appellate court. The revised deal provides Maryland with mechanisms to hold Constellation accountable, with the Waterkeepers and other stakeholders closely monitoring compliance.

Waterkeepers Chesapeake and the Lower Susquehanna Riverkeeper Association now have a formal role in monitoring the settlement’s compliance, including project prioritization. Constellation, having assumed dam operations in 2022, must maintain a public website for non-confidential documents, alongside MDE’s dedicated page.

Robin Broder, acting executive director of Waterkeepers Chesapeake, underscored the importance of launching restoration projects promptly. “Many of the payments are frontloaded so projects can be launched early in the license’s term so we begin to see restoration and improvements of fisheries, habitats and water quality as soon as possible,” she said.

Although upstream states are not bound by this settlement, the agreement commits to advocating for stricter conditions in future relicensing of upstream dams. The Chesapeake Bay Foundation, though not a settlement party, welcomed the improved environmental commitments and accountability.

Paul Smail, the foundation’s vice president, emphasized the need for Constellation to manage sediment levels but also stressed the importance of upstream pollution reductions. “The dam affects how and when sediment and nutrients, particularly phosphorus during sediment scouring events, are released into Chesapeake Bay,” Smail explained. “However, it’s also critical that upstream sources of the sediment and nutrient pollution must be reduced.”

Smail expects clear deliverables, particularly in restoration and resilience projects in Maryland’s watershed, within the first five years. “The actions of the Waterkeepers on behalf of the public, and ongoing citizen enforcement, have been and will continue to be key to accountability,” he added.

Ultimately, the Conowingo agreement is recognized as a model for leveraging the Clean Water Act in federal relicensing negotiations, particularly amid challenges posed by increased storm frequency causing sediment scouring. Isaacson noted, “There will be a lot of major hydroelectric projects coming up for relicensing in the coming years and many of them may share similar issues. We secured a major victory here, but there’s no doubt it took a lot of persistence.”