Pulling Klamath Dams Cheaper Than Leaving Them In
By John Driscoll, Eureka Times-Standard
December 2, 2006

The analysis comes as settlement talks have intensified while federal regulators consider issuing a new 30- to 50-year license for the dams, and may help grease the skids toward a deal to decommission the project.

It would be a far better arrangement for Pacificorp's rate-payers to build power plants to replace the more than 150 megawatts the project generates, the study reads, not to mention it being a boon to salmon and water quality in the struggling river.

Under the most expensive scenarios to replace that power -- which serves about 70,000 people per year -- it would only cost an additional $14 million to decommission the dams. But 16 out off 18 scenarios examined show that it would be $28 million to $285 million less expensive to get rid of the dams and build power plants.

Prepared by the California Energy Commission and the U.S. Department of the Interior, the report considers the likely costs of having to modify the dams to allow salmon to reach spawning grounds cut off for decades. It also includes costs of meeting water quality regulations, and of continuing to fund hatchery operations to bolster salmon runs.

”A critical decision for Pacificorp, regulatory agencies, Indian tribes and stakeholders is whether to invest in modifications to the Klamath hydroelectric project facilities and modify its operations in order to allow for full upstream and downstream salmonid migration,” the report reads, “or to decommission the dams and powerhouses and restore the aquatic habitat.”

Pacificorp, which hadn't yet reviewed the report, was less than enthusiastic about its conclusions. Company spokesman Dave Kvamme said that the project is a low-cost facility important to its larger regional system.

But he said the company would be willing to discuss the report in light of the settlement talks occurring between conservation groups, tribes and government representatives.

”We still think that a negotiated outcome outside the licensing process where people compromise is by far the better approach to this problem,” Kvamme said.

Pacificorp has proposed trapping and trucking salmon above the dams, and has altered that proposal some in recent filings with the Federal Energy Regulatory Commission. It contends that's a more reasonable and economically feasible approach than building fish ladders, like federal fisheries agencies have demanded.

Conservation groups welcomed the joint study.

”It's now official,” said Steve Rothert with the group American Rivers, “the Klamath hydro project is an economic loser.”

Humboldt County Supervisor Jill Geist, who has been a part of the settlement talks, said the report is crucial to leveraging a settlement. Money that could be used toward decommissioning of the dams was approved as part of a bond measure passed by California voters last month. Geist said groups have had productive conversations lately that could produce an offer to Pacificorp for the dams by mid-month.

”These things are archaic and it's time for them to be removed,” Geist said.

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Removing 4 Klamath River Dams May Save Money, Report Finds
By Eric Bailey, LA Times
December 2, 2006

SACRAMENTO — Setting the stage for a knockdown fight over the fate of four towering Klamath River dams accused of hammering salmon stocks and the West Coast fishing industry, a new government study released Friday has found that decommissioning the dams could cost $100 million less than operating them for another generation.

The economic analysis, ordered by the California Energy Commission in cooperation with the U.S. Department of the Interior, should provide ammunition for Indian tribes, environmentalists and commercial fishermen eager to see the hydropower dams demolished to reopen more than 300 miles of river that have been blocked to migrating salmon for more than half a century.

"It's now official: The Klamath hydro project is an economic loser," said Steve Rothert of the group American Rivers.

But officials with the owner of the dams, billionaire Warren E. Buffett's Portland-based PacifiCorp, say they will seek dam license renewal from the Federal Energy Regulatory Commission, which is scheduled to rule on a new permit early next year. On Friday, the firm released its own plan, listing several ways the dams could be modified to ease concerns about salmon.

Bill Fehrman, president of PacifiCorp Energy, said in a statement that the company's proposal probably wouldn't mollify its critics, but that it would prove the firm's desire to be "environmental stewards" while allowing the dams to continue generating "clean, reliable power."

That goal stands in contrast to the conclusion of the 92-page study that California officials released Friday.

The report, produced by a private consulting firm and the U.S. Bureau of Reclamation's Technical Services Center, found that the cost of demolishing the dams and buying market-rate electricity to offset the lost hydropower over the next three decades would be far less than installing the vast infrastructure and improvements expected to be needed for the dams to win license renewal.

Though the hydro project historically has been able to cheaply deliver enough power for about 70,000 homes, new environmental rules would limit the project's unfettered operation, reducing electricity generation by 23%, the study found.

The cost of erecting fish ladders and other projects to help salmon get past the dams and cure water-quality problems would boost the 30-year cost of the project to between $230 million and $470 million, according to the report.

Removing the dams and buying replacement electricity over the next three decades would cost between $152 million and $277 million, the report said. Depending on the price of power in the future, dam removal could save PacifiCorp ratepayers up to $285 million during that period, with a "midline scenario" forecasting a savings of $101 million.

Decommissioning the dams "would create net economic benefits for PacifiCorp's ratepayers" while also offering the potential for "restoring salmon runs to one of the most important remaining salmon rivers on the West Coast," the study concluded.

Howard McConnell, chairman of the Yurok Tribe, concluded that the dams represent "weapons of genocide," hurting the fish that the tribe for generations has depended on for food and spiritual health.

Officials with PacifiCorp objected to several of the study's findings, most notably the cost of removing the dams and the potential negative effects of releasing the huge load of sediment trapped behind them.

Dave Kvamme, a company spokesman, said nobody really knows what it would cost to remove the dams, and added that efforts by PacifiCorp to demolish a far smaller dam on Washington state's White Salmon River had run into numerous roadblocks that have delayed removal for more than six years and driven up the price.

"We're generally skeptical of these sorts of assumptions on complicated matters," Kvamme said of the new study. "There are tremendous risks in taking out dams, and those haven't been factored into any of the costs for that alternative."

In addition, removal of the dams could expose the river to even poorer-quality water pouring out of Upper Klamath Lake, Kvamme said. The lake is loaded with nutrients that can pose problems for fish, and the dams act as settling ponds before releasing water downriver, he said.

But the company left open the possibility of a negotiated solution with dam critics. For more than a year, PacifiCorp representatives have been meeting with dam opponents and government officials. Fehrman said they continue to believe "a better, long-term solution" to the river's salmon woes can be achieved through those talks.

This year, troubles with salmon stocks prompted federal officials to dramatically limit commercial fishing on the West Coast.

Efforts to win more than $60 million in disaster funding for troubled fishing fleets have run aground this year — and time is running out. Republicans have balked despite a plea by U.S. Commerce Secretary Carlos Gutierrez.

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Study Says Buffet Can Save Millions & Restore Klamath
Karuk & Yurok Tribe Press Release
December 1, 2006

Sacramento, CA – Today a joint federal and state working group released a detailed economic analysis of the controversial Klamath Dam project. The study concludes that because the Klamath dams are so old and outdated, it is cheaper for dam owner Warren Buffet to simply remove them instead of bringing them up to modern environmental standards.

The dams are owned and operated by Portland based energy company PacifiCorp which was recently purchased by Buffet’s Mid American Energy Holdings Company.

The dams constitute a meager 2% of PacifiCorp’s generating capacity, but have a devastating impact on Tribal communities dependent on salmon as well as commercial fishing communities up and down the west coast. This year commercial salmon fishing along 700 miles of California and Oregon coastline faced severe salmon fishing restrictions because of low returns of salmon.

The joint California Energy Commission and Department of Interior study compared the cost of relicensing the dams which includes the construction of fish ladders and other technical improvements to address the dams’ dramatic water quality impacts to the cost of simply removing the dams and buying the energy from other sources. The study concludes that dam removal would save PacifiCorp over $100 million.

Removal advocates think buying energy from other sources is reasonable given that surplus energy stores are available. A recent report from the Northwest Power and Conservation Council found that the Northwest currently has a 2,400 megawatt surplus. That’s a surplus big enough to power two cities the size of Seattle www.nwcouncil.org/news/2006_10/3.pdf.

Leaf Hillman, Vice-Chairman of the Karuk Tribe who lives downstream of the dams, says the findings come at an important time. “Our salmon are going extinct because of these dams. This study shows that Warren Buffet can save $100 million by doing the right thing and putting this river on the road to recovery.”

The Karuk and their downstream Yurok neighbors depend on Klamath salmon for ceremonial and subsistence purposes. The dams have disrupted thousands of years of tradition by driving some runs of salmon extinct and others to the brink of extinction. The Tribes can no longer harvest enough fish to feed themselves much less make a living from the river. Upstream of the dams,the Klamath Tribes of Oregon have been denied salmon since the first of the dams was built in 1918.

Explains Yurok Chairman Howard McConnell, “From our perspective, PacifiCorp’s dams are weapons of genocide. Indians depend on salmon for their physical and spiritual health. Salmon are the cornerstone of our cultural identity. As this study shows, we are not asking for a handout from Mr. Buffet, but for a shrewd business decision that would benefit all of us.”

The Karuk and Yurok have requested to meet with Mr. Buffet to discuss the issue, but the billionaire investor has not responded to the Tribes’ request. Nor has he responded to the thousands of e-mail petitions from sport fishermen around the country. (see American Sportfishing Association action alert at: http://www.asafishing.org/asa/government/kr_salmon.html).

The dams are currently undergoing a relicensing process mandated by the Federal Energy Regulatory Commission. PacifiCorp has applied for a new license that could last up to 50 years. Thus, Tribes view the relicensing as a once-in-a-lifetime opportunity to restore what was once the third most productive salmon river on the west coast.

Tribes, fishermen, and Sacramento based Friends of the River traveled to Scotland in 2004 and again in 2005 to disrupt the shareholder meetings of PacifiCorp’s previous parent corporation, Scottish Power. Friends of the River’s Kelly Catlett is a veteran of those Scotland trips. She notes that, “Omaha is a lot closer than Edinburgh.” Catlett refers to Omaha, Nebraska, Buffet’s headquarters and Edinburgh, Scotland where Scottish Power’s shareholder meetings were held.

It’s unclear how this report will factor into the company’s thinking, but when Tribes staged a demonstration at a Portland hydropower conference last summer, PacifiCorp President William Furhman responded by saying, “We have heard the Tribes’ concerns. We are not opposed to dam removal or other settlement opportunities as long as our customers are not harmed and our property rights are respected.”

Hillman concludes, “If Mr. Furhman is true to his word, he’ll urge Mr. Buffet to remove the dams as that is clearly the best option for his customers.”

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