A federal agency has rejected a private company’s application to relicense three dams on the Mousam River that the Kennebunk Light and Power District no longer wants to operate.

The future of the Kesslen, Twine Mill and Dane Perkins dams remains unclear as the Kennebunk Light & Power District waits to hear from the the Federal Energy Regulatory Commission about its application to surrender the three dams, which had generated power in Kennebunk for a century or more. District trustees will meet in early June with an attorney to talk about possible next steps.

The fate of the dams has been debated for close to a decade as district trustees analyzed whether to relicense and operate them, remove them or face potentially costly upgrades to build fish passages.The license from the Federal Energy Regulatory Commission expires in 2022 and trustees voted unanimously in 2016 to notify FERC that it would surrender its licenses when they expire.

The renewed uncertainty follows FERC’s rejection of an application by America First Hydro to take over the dam licenses. “America First Hydro is out of the Mousam River game,” said Todd Shea, general manager of Kennebunk Light & Power.

Last year the district agreed to sell the dams to America First Hydro LLC, of Mahopac, New York, for $1. The sale was contingent on FERC approving an application for Kennebunk Light & Power to transfer its license to America First Hydro and on the approval of the relicensing application.

On April 29, FERC rejected America First Hydro’s application as “patently deficient” and said it failed to conform to the commission’s regulations, which require the applicant to provide a detailed description of the environmental effects of the proposed project.

America First Hydro had 30 days to request a rehearing, but on May 1 withdrew its application for transfer of license for the project.

Paul Nolan, a regulatory member for American First Hydro, said the license transfer application was withdrawn because America First Hydro could not take on the responsibility of doing “significant” repairs to the dams if it was not licensed. He said he disagrees that the application was patently deficient.

“We thought we had through this year to complete the environmental studies even after filing the application,” he said. “I think everyone got fed up with this project. It’s not operating and hasn’t operated well. You had a lot of people who didn’t want it relicensed.”

Despite that, Nolan said he enjoyed working with Kennebunk Light & Power.

In 2013, the Kennebunk Light & Power District, a consumer-owned nonprofit entity, began to study the costs and benefits of keeping the dams as part of a long process of analyzing whether it would apply to relicense the Kesslen, Twine Mill and Dane Perkins dams, which used to generate power in Kennebunk.

Local conservationists and sportsmen support removing some or all of the dams on the river, including the large Kesslen Dam in downtown Kennebunk, because it would allow the lower nine miles of the Mousam to flow freely. But over the years some riverfront homeowners raised concerns about the release of contaminated sediments, how lower water levels at impoundments would affect property values, and whether the changes would worsen flooding risks.

The most visible of the dams is the Kesslen, located near Main Street. It was in place by the mid-1850s and began generating electricity for the power district in 1893. It is no longer generating power, nor is the Twine Mill dam. The Dane Perkins mill operates intermittently.

In 2015, Kennebunk Light & Power released a 90-page draft assessment that concluded relicensing the three dams would cost $8.9 million to $11.7 million. Much of that cost would cover installing fish ladders or other fish passages that likely would be required to receive a new license from FERC.

Surrendering the licenses and removing the dams was estimated in 2015 to cost $2.3 million and would carry fewer long-term obligations for the utility.

During a meeting last week, Kennebunk Light & Power trustees agreed to meet June 2 for an executive session with an attorney to talk about their options going forward, but did not otherwise discuss the FERC decision. They said they want to provide the public an opportunity to give feedback and elected to hold off on a public session until June, when social distancing standards are relaxed and more than 10 people could attend the meeting

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