We are currently on pace for 2024 revenue of 600 grand at most.”

Finance Manager Chris Eitemiller

Currently neither turbine is functioning, meaning the plant is not producing electricity.

Transferring ownership of a hydrokinetic power station is not like selling a house.
In fact, it’s not like selling anything because a transfer of a similar power station hasn’t happened in the last 100 years with the last occurrence allegedly involving Henry Ford himself.
“That just lets you know there is not a prescribed process that you can just say, here’s the transfer,” said Director of Public Works Ryan Stempski at the May 5 Hastings City Council Workshop.
The city of Hastings has recently begun examining this transfer process due to the steep maintenance costs of running its Hydrokinetic Power Plant and the declining revenues from the site over the last 20 years.
These expensive maintenance costs, paired with declining revenues led the city council to support city staff in the effort to turn over the plant to the Army Corps of Engineers, the motion for which will be seen at the May 19 city council meeting.
Hastings Hydrokinetic Power Station was built in 1985 and is uniquely situated between locks, meaning that the water level on both sides can change, which affects when it can produce electricity.
“Our head is variable. Sometimes we are making power, sometimes we’re not,” said Stempski.
Because the Mississippi is also a shipping lane, transportation is often a higher priority than optimal conditions for generating electricity, so when “we’re told to throttle down, we throttle down,” said Stempski.
“It’s just really not a good setup,” said Public Works Superintendent Joe Spagnoletti.
It will cost the City of Hastings at least $10 million over the next 25 years just on the upkeep of its Hydrokinetic Power Station.
Regular maintenance costs include expensive insurance requirements such as $200,000 in annual insurance premiums and five-year de-watering requirements that cost $500,000. Other regular fees include $100,000 of rent to the Army Corps of Engineers, $50,000 worth of licenses and fees, $45,000 worth of regular repairs and 0.5 full-time equivalent (FTE) worth of staff time dedicated to the site.
Part of the reason for the outsized maintenance costs of the facility is due to scale. While the power station is relatively small, it has similar costs to a much larger facility that produces much more electricity and therefore revenue.
Another issue is that of accessibility. Situated in the middle of the Mississippi River, maintenance involves barges and divers which drives up costs.
“The maintenance cost for our facility, our hydro plant, was about for times greater than the average reported by the US Energy Information Administration,” said Stempski.
Revenue for the site has also been trending down for decades.
The five-year average annual income from the site is $720,000, down from over $1 million. Revenue from the site has dropped by an average of 2.2% over the last 20 years with a 19% drop in revenue in 2023-2024 in part due to one of the two turbines at the site being down. A wobble was discovered in turbine two last year which has stopped the turbine from running ever since.
Currently neither turbine is functioning, meaning the plant is not producing electricity.
Based on quarter one data for 2025, “We are currently on pace for 2024 revenue of 600 grand at most,” said Finance Manager Chris Eitemiller.
Another future issue of revenue has to do with the 2033 contract renewal with Xcel Energy, who buys the electricity generated from the site. Contracts with large energy companies have become much worse than in decades past, resulting in dramatic losses in revenue up to 40%, said Stempski.
The $10 million maintenance figure for the next 25 years does not account for declining revenue, contract renewal, major maintenance, nor prolonged stoppages of production, meaning it is almost certainly low, potentially by a very wide margin.
The city looked to various entities that might take over the facility including Dakota Electric, Xcel Energy and “there really was no interest,” said Stempski.
The most straightforward future owner is the Army Corps of Engineers who already owns the site upon which the power station sits. In addition, the Army Corps of Engineers would have different standards for insurance, meaning they would avoid many of the expensive insurance standards that the City of Hastings must pay.
The first step in the transfer process would involve a written proposal to the Corps detailing the situation of the site along with the intent to transfer it with the support of the city council. The specifics of cost, process, and even interest from the Army Corps of Engineers is not yet clear.
This summer the city will undertake the de-watering process of the site that involves draining water from the plant. This process is colloquially known as “changing the oil” due to its requirement as regular maintenance. This year, however, inspection teams are certifying the corrective work being done during the de-watering process so as to better document the state of the facility in the event of a transfer.
A resolution will be brought to the May 19 city council meeting on moving forward with the transfer process.