ALEX NUSSBAUM   Bergen Record

A plan to shave off the top of the Dundee Dam has been scrapped, removing the threat to hundreds of jobs linked to the Passaic River landmark.

United Water, owner of the 143-year-old dam, says it has changed its mind and now wants to repair it at its current height, starting next June.

That would alleviate the fears of Garden State Paper Co. and Marcal Paper Mills Inc., businesses that depend on the pool behind the dam for water used in their operations. Environmentalists also had reservations, warning that the lake shouldn't be lowered because it could be an important source of water if the drought continues.

Repairs are necessary because the Federal Energy Regulatory Commission has found that the dam is unsound and liable to give way during heavy flooding. The commission approved the new repair plans Friday.

"We're basically following FERC's lead," said Terri Guess, United Water's spokeswoman. "They seem to think the construction can be done without lowering the lake, so we've come up with a plan to do that. Now, hopefully, this decision will satisfy all the parties."

The idea of lopping 2½ feet off the 20-foot span had threatened to turn into a protracted court battle. Enron, Garden State Paper's bankrupt owner, went to court to block the lowering, saying it jeopardized plans to sell the Garfield recycling plant. Garden State Paper closed in the fall after Enron's collapse, taking 250 jobs with it.

Marcal, meanwhile, said its Elmwood Park business would need to spend $400,000 to $700,000 to reconfigure an intake pipe that dips into the river if the lake were lowered. The business employs 1,000 people, said owner Nick Marcalus.

But United Water's reversal seems to solve the problem. "We're satisfied with what seems to be the direction they're taking," Marcalus said this week.

An Enron spokesman declined to comment on the project but said an auction of Garden State Paper would now go forward.

The project will cost more now - $5 million vs. $2½ million if the dam were lowered, Guess said. The company hopes to begin construction June 1, 2003, and finish by Nov. 30.

United Water is a private entity, a subsidiary of Suez Group, a multibillion-dollar French conglomerate. But Guess said the utility will seek government grants to pay for some of the repairs.

United Water manages the dam and is its co-owner, with the region's largest water supplier, the North Jersey District Water Supply Commission.

"Dundee is a separate entity," Guess said. "We're just stockholders, so we have to go for assistance."

Keeping the dam at its present height would serve the public good, said Ella Filippone, executive director of the Passaic River Coalition. The lake helped establish a thriving collection of plants, fish, and other wildlife that would suffer if the water level drops permanently, she said.

Still, Filippone added, "I don't know how many programs allow companies with United Water's portfolio or Suez's portfolio to get taxpayer help."

FERC, which regulates the dam because it once produced power, says Dundee still needs repairs. Recent federal inspections questioned the dam's stability and said its undersized spillway could lead to flooding of Route 21 or surrounding towns. If rains are heavy enough, the results could be even worse, the agency warned.

"Dundee Dam is considered to be unsafe under flood loading conditions and cannot be relied on to perform safely," a FERC engineer wrote in a May 1 memo.

But after meeting with United Water in April, the agency also decided the potential damage from a dam burst was less than feared. That, combined with United Water's promises for electronic monitoring and biweekly inspections, persuaded the agency to withdraw its demands for immediate action.

"Obviously, the commission feels that there's no threat to property or life downstream or they would not have made the decision," said a FERC spokeswoman, Celeste Miller.

Staff Writer Alex Nussbaum's e-mail address is nussbaum@northjersey .com