Maryland, Constellation reach $341M deal over pollution through Conowingo Dam

The Conowingo Dam would power Maryland homes and businesses for another 50 years under a new deal that requires Constellation Energy to spend $341 million to limit pollution flowing through it to the lower Susquehanna River and the Chesapeake Bay.

The agreement, revealed Thursday at a news conference at the foot of the dam, marks the culmination of a decade of regulatory roadblocks and legal wrangling that has ensnared Maryland regulators, environmentalists and one of the country’s largest power generators.

The deal sets new state water quality requirements for the dam and calls for spending hundreds of millions of dollars on environmental restoration, debris removal, pathways for fish, and funding to study the viability of dredging the sediment pollution that’s piled up behind the dam for decades.

For nearly 80 years, the Conowingo Dam served as a buffer, trapping sediment and agricultural runoff from flowing down the Susquehanna, which supplies about half of the Chesapeake Bay’s fresh water. But as the reservoir north of the dam reached its limit in the last decade, millions of tons of sediment and nutrients accumulated there have become a growing threat to the bay’s health. In heavy rains, those pollutants surge through the dam’s floodgates.

Environmentalists fought the dam’s former owner Exelon Corp. for years over who was responsible for managing these pent-up pollutants. Maryland brokered a $230 million settlement with Exelon in 2019, paving way for a new 50-year license for the dam, but a federal appeals court threw all that work out in 2022 after environmentalists sued to block it.

“Today, we are very proud to announce that despite all the histories, despite all the challenges,” Gov. Wes Moore said Thursday at the dam, “today, the deal is done.”

The new settlement calls for Constellation to spend $28 million to support the passage of fish through the dam. Since its completion in 1928, the dam has largely blocked pathways for American shad and American eels on their migrations up the Susquehanna. The money would be spent to help bring greater numbers of these species over the dam on existing fish lifts and an eel ramp.

The deal also includes $77.8 million to remove trash and debris behind the dam, $23 million for the Maryland Department of Natural Resources to build a new hatchery for freshwater mussels, $9.4 million for managing invasive species and $18.7 million to examine dredging the buildup of sediment behind the dam — seen by environmentalists as a crucial step for remediating nutrient pollution in the upper Chesapeake Bay.

Former Gov. Larry Hogan’s Department of the Environment first issued a water quality certification for the Conowingo Dam in 2018, but its terms drew immediate blowback from Exelon, which sued over the regulations. The Hogan administration then scrapped its certification the following year, announcing a settlement deal that required Exelon to invest $230 million to reduce sediment and debris and foster underwater grasses.

That water quality certification and subsequent settlement became the subject of more court challenges, this time from environmental groups, including Waterkeepers Chesapeake and the Lower Susquehanna Riverkeeper Association.

Since then, Conowingo, whose last long-term operating license lapsed in 2014, has operated in limbo.

A ruling by Washington, D.C.’s U.S. Court of Appeals in 2022 voided the dam’s license and the Hogan administration’s settlement deal.

That brought the parties — Maryland regulators, environmental groups and the dam’s owner, now Constellation, which had been spun off from Exelon — back to the bargaining table.

Maryland regulators, bay advocates and energy power brokers alike praised the compromise Thursday. The agreement represents a $110 million increase over the value of the deal brokered by the Hogan administration, officials said, and maintains water quality regulations the Republican governor’s administration discarded as part of its settlement.

Speaking at the event, Constellation CEO Joe Dominguez lamented that it’s taken this long to renew the power plant’s license. Still, he praised Moore for bringing all parties to the table and brokering a deal that allows the dam to keep operating and bolsters the environment around it.

“I don’t have anything but lint left in my pockets on this one,” Dominguez joked. “But I’m glad it’s resolved. I’m glad we could get up here and proudly say we’re doing all of this work.”

Dominguez, whose Fortune 500 company also operates the country’s largest fleet of nuclear power plants, stressed the dam’s importance for providing reliable electricity as demands on the region’s power grid and customer bills grow. Conowingo is Maryland’s largest source of renewable power, generating 572 megawatts of carbon-free electricity, or enough to power 165,000 homes.

Speaking at the dam Thursday, Lower Susquehanna Riverkeeper Ted Evgeniadis called the agreement the start of “a new day” for Maryland waterways. When construction on Conowingo began 100 years ago, there wasn’t the same awareness of a dam’s environmental impacts on the bay’s health or migrating eels and shad.

Before the dam, Evgeniadis said, millions of freshwater mussels lined every mile of the Susquehanna, filtering its waters. Today, you could probably count them on a few hands, he said.

Investments to rebuild the Susquehanna’s mussels have been a long time coming, said Evgeniadis, adding that work to help struggling species travel upriver is “priceless.”

Maryland regulators will provide their revised water quality certification along with the settlement to federal energy regulators, who will decide whether to relicense the dam for another 50 years.

The 80-page settlement includes varying deadlines for its environmental appropriations, but officials said capital investments would be front-loaded in the course of Conowingo’s 50-year license.

An $87.6 million pool to finance grants for improving water quality would be spread over the length of the license.

Any dredging behind the dam, meanwhile, still may be years away. The U.S. Army Corps of Engineers is studying the impacts of dredging Conowingo’s sediment, and funds included in the new settlement would build on those findings to potentially move ahead with silt removal down the road.

Thursday’s announcement comes as officials from across the bay watershed are convening upriver in Harrisburg, Pennsylvania, to hammer out the terms of a revised agreement to clean up the Chesapeake Bay.

That voluntary pact between Maryland, Pennsylvania and other states in the bay’s watershed has governed efforts to clean it up for over 40 years. Progress over that time to rebuild fish habitat and clear nutrient pollution, though, has been modest, and the watershed states missed key deadlines this year.

Still, officials and environmentalists both voiced hope Thursday that their settlement would help shift the bay’s fortunes.

“2025 is a true turning point for the continued protection of our river and bay,” Evgeniadis said.

This article has been updated to clarify the dredging provisions of the settlement.