NASHUA – Nashua alderman approved hiring a consultant to determine if it would be a good deal for the city to buy the Mine Falls Dam and take over its hydroelectric generating facilities at year’s end.

Last week, aldermen approved spending up to $50,000 to have an expert assess the dam’s condition and do an economic analysis of its potential for electricity production.

The money comes from the waterways and water bodies expendable trust fund.

“What we’re trying to do with this is get that work (done) and some of those answers in very quickly so you can sit down and consider what condition it is in before you make other decisions,” Mayor Donnalee Lozeau told aldermen, according to transcribed minutes of the board’s April 14 meeting.

The city contracted with Mine Falls Limited Partners in the late 1980s to allow the group to build and own the dam facility. In exchange, Mine Falls Limited Partners pays the city a percentage of its annual generating income.

The contract contains a provision that allows the city to buy the facility during predetermined time frames for predetermined prices.

The most attractive time for the city to buy the dam and power plant is late 2015 when it could buy it for about $3.4 million, which is about half the original construction costs, according to the bill introduced by Lozeau.

The city must decide if it wants to buy the Mine Falls Dam and its hydropower plant by December, which is when the city’s option to buy it expires, Lozeau said.

In January, the city resumed ownership of the Jackson Falls Dam and its hydroelectric facility after the 30-year lease the city had with Nashua Hydro Associates expired. The city hired an engineering firm to assess that dam’s condition and power-generating potential in the current market.

The city hired Essex Power Services Inc. to operate, maintain and administer the hydroelectric project for $45,000 for the next year, along with a possible one-year extension. Lozeau described the contract as a “stop gap” measure while the city develops a long-term plan for proceeding with hydropower and dams.

“The potential to control both hydro facilities could allow the city to leverage economies of scale and realize a revenue-maximizing long term deal,” the resolution proposed by the mayor said.

The consultant’s analysis of Mine Falls Dam is expected to be complete in late spring.

Kathryn Marchocki can be reached at 594-6589, kmarchocki@nashuatelegraph.com or @Telegraph_KMar.