By RUSS OLIVO

WOONSOCKET — Idle since 2002, Thundermist Hydroelectric Plant would once again churn out clean, renewable power under a three-way agreement between the city, the state Department of Environmental Management and a Connecticut company that wants to lease the facility, officials say.

Putnam Hydropower Inc. of Woodstock, Conn., is offering the city $3 million to lease the facility for 20 years, according to Administration/Public Works Director Michael Annarummo.
The deal boils down to $150,000 a year, but DEM would take a cut as part of a complicated side deal stemming from fines the agency lodged against the city for operating the Regional Wastewater Treatment Facility in violation of its permits in the 1990s. The City Council must approve the deal on July 14 for it all to become official.
“It’s a three-way negotiation, which is why it took so long to reach this agreement,” said Annarummo. “It wasn’t easy.”
DEM would take a one-time payment of $45,000 from the lease after Thundermist has been running a year, following by annual payments of $16,576 for the balance of the contract, still leaving the city with a healthy profit, Annarummo said.
Dave Chopy, supervising engineer in DEM’s division of compliance and inspection, said the agency plans to dedicate the funds to programs aimed at the continued restoration of the health of the Blackstone River.  He said DEM wants to put together a task force consisting of advocates for recreation, the environment and the Blackstone River to decide how the money would be used.
Although the city had been operating Thundermist at a financial loss, DEM ordered the facility closed in 2002 because the agency was worried that it was having an adverse impact on marine habitat in the Blackstone River.
The plant generates power by using the current of the Blackstone to turn a large electrical turbine, said Chopy. Water is diverted into the plant through a series of intake grates that often become clogged with debris and have to be cleaned out.
The equipment at the plant is so antiquated that the grates must be cleaned out by hand, and in order to do so, the plant must be switched off. The plant was permanently idled because DEM believed that the cycle of stopping and starting the plant was creating powerful fluctuations in the current of the river that were having an adverse impact on the riverine ecosystem, said Chopy.
 To alleviate the problem, Putnam Hydropower has agreed to install a new automated “trash rack system” at an initial cost of about $500,000 — money the city did not have the inclination to spend to keep the plant operating.
“It’s the startup and the shutdown that causes the fluctuation in the river,” he said. “The changes in the river won’t be as pronounced as they were before.”
Chopy said the deal is good news because it would generate electricity from a clean source that does not emit carbon into the atmosphere, help clean debris out of the Blackstone River and establish a fund to continue promoting the health of the Blackstone River.
DEM maintains a say in the operation of Thundermist because the plant was a key bargaining chip in the settlement of fines lodged against the city in 2000 for violating the conditions of its permit to run the Regional Wastewater Treatment Plant. In return for shutting down Thundermist, DEM granted the city a $1.8 million “credit” against a stiff package of fines and penalties the agency was seeking to settle the matter, according to Chopy.
A Superior Court consent agreement memorializing the accord would have to be amended as part of the deal authorizing the lease with Putnam Hydropower, said Chopy.
Operational since 1981, the plant, located just south of the Woonsocket Falls Dam in Market Square, was the brainchild of the city’s Planning Department at a time when rising costs of electricity made tapping the renewable power of the Blackstone River seem like common sense. While the plant, at best, was only marginally profitable for much of its life, changing energy markets are once again encouraging small companies like Putnam to invest in hydropower.
Planning Director Joel Mathews, one of the architects of Thundermist, says the plant had a track record of generating some 5 to 5.5 million kilowatt-hours of electricity per year, enough to power more than 800 homes.
The Putnam deal marks the second time the city has tried to lease Thundermist to a private company since the plant was shut down. A similar deal fell apart two years ago, soon after negotiations began, according to Annarummo.
An online profile of the company says Putnam was established in 1987 with just three employees. The company operates at least one other hydro plant, the Putnam Project on the Quinebaug River. Efforts to reach a principal of Putnam Hydropower for comment Monday were not successful.