AUTRAIN TOWNSHIP, Mich. — Amid stacked rows of brightly colored plastic kayaks and canoes, Khrystal Crosno recently helped an Ann Arbor family begin a floating trip along the scenic AuTrain River.

The Earl family should spot turtles, herons and river otters during the 7-mile trip toward Lake Superior. Maybe even a black bear, Crosno told them.

Crosno had no doubt the Earls would enjoy the slow trip.

What she worries about is the crumbling dam 6 miles south that helps keep the water flow steady.

“We need the water to do what we do,” said Crosno.

She and others are nervous because the dam’s future — and perhaps their livelihoods and safety — is in serious jeopardy.

For at least 15 years, the federal government has demanded that the dam’s owners upgrade the structure to meet safety standards to handle a potentially devastating weather event.

But, as of August, those repairs — costing up to $4 million — have not taken place. The top of the dam, built nearly a century ago, is pockmarked, with chunks of missing concrete. Streaks of water leak through a seam in the dam.

Should snowmelt or rain swell Forest Lake beyond the dam’s capacity and it fails, the torrents of water would likely wash out M-94, a main east-west artery just 100 yards north of the dam.

Water would then rush downstream, over AuTrain falls, a local tourist spot, and into AuTrain Lake, surrounded by cottages and water-focused businesses, and then down to the AuTrain River and imperil businesses like Crosno’s AuTrain River Adventures.

That would occur though the Federal Energy Regulatory Commission made the 2010 sale of the dam to the current owners contingent on upgrades that have not been done.

“Every time (FERC) would ask them to do (repairs), they’d delay,” said Tom Balmes, 71, supervisor of AuTrain Township. “FERC never forced them to do it.”

And it would happen after lawmakers and state regulators failed to implement reforms pushed after catastrophic dam failures in mid-Michigan five years ago.

Should another dam fail — with lawmakers again expressing outrage and calling for change — Bryan Burroughs, executive director of conservation group Michigan Trout Unlimited, said he’ll say, “Told you so.”

“I will be the old curmudgeon who sits in the back and shakes his finger and says, ‘Shame on you,’ ” he said.

REFORMS PUSHED BUT NEVER ADOPTED

If the story sounds familiar, it should.

In May 2020, two mid-Michigan dams were swept away by rising waters, years after the dam owner put off similar FERC demands to improve the capacity to handle heavy rains, claiming a lack of money.

Since that devastating event in 2020, which caused $200 million in damage and is going to cost the state and local property owners close to $400 million to fix, not much has changed, despite mounting evidence that oversight of Michigan’s dams — both the roughly 90 dams regulated by FERC and the 2,553 dams regulated by the state — needs reform.

The state has beefed up its dam safety unit and it now regularly talks with FERC about potential problems like AuTrain. But other reforms, like more frequent inspections and ensuring dam owners have the money to keep dams safe, have not been approved by lawmakers.

And at the federal level, FERC has not implemented a 2021 proposal that would require dam owners to prove they have the money to safely maintain dams.

But since then, all of the dams have gotten older — and 4% (109) of the 2,553 state-regulated dams are considered in poor condition. Eleven of those in poor condition are among the 98 that have a high potential for downstream risk to life and property if there is a failure.

Burroughs, of Michigan Trout Unlimited, was a member of the commission that proposed changes in 2022.

He said people tend to quickly forget the last disaster and don’t prepare for the next.

MORE DAMS COULD GO PRIVATE

Because there are limited guardrails controlling what a private owner can do with a dam, the Michigan Hydro Relicensing Coalition opposes the proposal by Consumers Energy to sell 13 of its dams along five rivers (the AuSable, Manistee, Muskegon, Grand and Kalamazoo) in the Lower Peninsula. Those dams all currently meet safety standards, but Bob Stuber, executive director of the coalition, fears what could happen years from now if a private owner takes control.

The Michigan Public Service Commission sets the rate that public utilities such as Consumers and DTE can charge for electricity, based in part on the utilities’ costs, including operation and maintenance of hydroelectric facilities. But if the dams are sold to private entities, that commission would not play a direct oversight role, Stuber said.

And with FERC unable to compel private owners to action at AuTrain and at the mid-Michigan dams, new owners of those dams could face the same economic pressures — not enough revenue to keep dams safe.

Stuber said he has no problem with Consumers Energy or how they currently operate the dams. “They are a very responsible company,” he said.

But he does not want them to sell the dams to a private company.

“Once (dams are) owned by private entities, there’s never an incentive to put a penny into it,” Stuber said.

Burroughs said he’s disappointed in FERC because it grants 40-year licenses for electric production but does not ensure that revenues can match future costs to keep the dams safe.

“They’re setting up future disasters for communities,” he said.

Asked about the AuTrain dam, a FERC spokesperson shared an August communication with Renewable World Energies, outlining proposed changes. Celeste Miller said FERC would have no further comment.

HISTORIC FAILURE

In May 2020, just northwest of Midland, heavy rains swelled the Tittabawassee River watershed. Water in Wixom Lake, created by the Edenville dam, rose and northeast winds pushed the water against the earthen dam, which failed. Downstream, the onrushing water took out the Sanford dam.

No one was killed, in part because of a bold decision to call for the evacuation of 10,000 people. Still, the water caused $200 million in damage to 2,500 homes and businesses. Thousands lost the benefit of lakefront homes and cottages.

The disaster occurred after FERC had spent years demanding the dams’ owners make safety upgrades to hold back more water. But Boyce Hydro, whose owners purchased the dams as a tax shelter, claimed it didn’t have enough money.

Yet a former safety engineer said later that the company paid for a music festival and building a sawmill despite being told to invest in dam upgrades. Frank Christie told investigators that he told Boyce Hydro’s chief, Lee Mueller, that he had to fix the dams because “you’re in the hydro business now.”

According to Christie, Mueller responded: “I’m in the money-making business.”

Mueller, through his attorneys, has defended his actions and blamed federal, state and local officials for not sharing in the cost of repairs and for trying to keep lake levels high. In 2021, his attorney also said Boyce didn’t have the money to afford the repairs.

In 2018, FERC pulled Boyce Hydro’s license to generate electricity. The dams then reverted to state oversight and Michigan authorities were in the process of evaluating the dams’ safety when the storms occurred.

After the dams’ collapse, Mueller’s company filed for bankruptcy and still faces a $120 million judgment for damages. Michigan lawmakers ultimately agreed in 2022 to commit $180 million to help restore the dams, with local property owners agreeing to tax themselves to raise another $217 million.

FINANCIAL WOES

The AuTrain dam was one of more than a dozen dams that Renewable World Energies owned in Michigan, Iowa and Wisconsin. Bill Harris, president and CEO of RWE, got into the hydro business in the 1970s and at one point his North American Hydro owned 45 hydro facilities.

In 2010, one of Harris’ companies bought the AuTrain dam from the Upper Peninsula Power Co., which owns and operates other hydro facilities on four Upper Peninsula rivers. In 2012, Harris’ RWE took over the AuTrain dam.

At the time of the 2010 sale, the new company agreed to expand the capacity of the dam at AuTrain, a requirement that continued once RWE took over.

Now, FERC anticipates that RWE will take an interim step to lower the height of an earthen dam on the south end of Forest Lake that would allow water to flow south — away from AuTrain — and into the Whitefish River and eventually Lake Michigan. The work must be done by early November.

When FERC rescinded the license for Boyce Hydro downstate, it caught Michigan officials who oversee dams by surprise. They had not studied the Edenville dam and were not sure what upgrades would be necessary because state safety standards are less restrictive.

Now, Michigan officials are well aware that the AuTrain dam might be next to lose its license and revert to state oversight.

“We talk about AuTrain a lot,” said Luke Trumble, supervisor of dam safety for the Michigan Department of Environment, Great Lakes and Energy.

The questions include how the AuTrain dam would be upgraded, or whether it already meets state flood safety standards. What Trumble does know is that he is cautious about RWE’s intentions or ability to make substantial new investments.

“They’ve been pretty public about it,” he said. “They want to walk away.”

Indeed, in bankruptcy records, Jason Kreuscher, RWE’s vice president for dam safety, said AuTrain is a liability and he told Bridge the power station only generated $173,000 in electric sales in 2024.

“I don’t have any money,” Kreuscher told Bridge. Asked how RWE will then pay for the repairs it told FERC it would do, Kreuscher was blunt: “I don’t know that.”

In the bankruptcy trial, Kreuscher, who is Harris’ son, said the repairs at AuTrain would cost $3.7 million and “it’s well beyond the ability of AuTrain to pay back that debt and to pay back that cost.”

The company’s financial problems also triggered a bank foreclosure on most of its parcels that surround Forest Lake and parts of the power-generating structure. The company had pledged the properties as collateral for a loan.

The foreclosure, and the bank’s ownership of the land, forced the Michigan Department of Natural Resources to close a campground on Forest Lake. It had leased the land from RWE.

Because of the high repair costs and the low revenues, it’s unclear who would be willing to buy the dam.

“To me, it’s reached the end of its economic life,” Stuber said.

Despite the fact his father had privately owned — and apparently profited from — dams for over 40 years, Kreuscher now believes that, if anyone should own the dam, it should be a public entity.

“Dams are infrastructure, and they should not be owned by anyone but the public. It shouldn’t be allowed, that’s why I’m telling you.”