[env-trinity] For PacifiCorp, separate dam removal entity less costly, risky

Tom Stokely tstokely at att.net
Mon Mar 14 19:03:37 PDT 2016


For PacifiCorp, separate dam removal entity less costly, risky
For the power company PacifiCorp, setting up a separate entity to remove dams from the Klamath River is cheaper and less risky in terms of liability than keeping the dams operating or trying to remove them itself, a spokesman says.AP FILE PHOTOThe J.C. Boyle dam near Klamath Falls, Ore., shown in this April 1, 2003 photo, is a piece of PacifiCorp’s hydroelectric project on the Klamath River in Southern Oregon and Northern California. For PacifiCorp, setting up a separate entity to handle the removal of four dams from the Klamath River would be cheaper and less risky for ratepayers than other options, the company’s spokesman says.The revised Klamath Hydroelectric Settlement Agreement — under which a “non-federal entity” would apply to the Federal Energy Regulatory Commission to decommission the dams — caps the company’s costs at $200 million, spokesman Bob Gravely said.By contrast, relicensing the dams and keeping them operating would cost more than $400 million just for improvements such as fish ladders, plus any other costs for measures imposed by the California Water Resources Control Board to obtain Clean Water Act permits, he said. Environmental groups would likely challenge the relicensing application in court, he said.For PacifiCorp to simply handle the decommissioning itself would cost about $292 million, according to government estimates. The third-party entity would enable PacifiCorp to cap its costs while assuming liability and responsibility for the facilities’ removal, Gravely said in an email.“So we have certainty in terms of cost and risk,” he said, “and have concluded that the KHSA is both less costly and less risky than relicensing under our known terms and conditions or pursuing removal on our own.”The non-federal entity — a key component of a new agreement that Pacificorp and state and federal agencies unveiled last month — has come under criticism from dam-removal opponents such as Rep. Doug LaMalfa, R-Calif., who accused the agencies of setting up a “shell corporation … designed to avoid public scrutiny” of the decommissioning process.Oregon state Sen. Doug Whitsett, R-Klamath Falls, opined that the agreement between PacifiCorp, the states of Oregon and California and the U.S. departments of the Interior and Commerce to set up the dam-removal entity amounts to an interstate compact that must legally be approved by Congress.However, Gravely has asserted that dam removals are normally handled by FERC and that congressional approval was sought in the Klamath dams’ case so that the Department of the Interior could handle — and provide funding for — their removal. Bills to authorize the Klamath agreement have languished in Congress since 2011, so having a non-federal entity handle the decommissionings was an alternative, he said.Such an arrangement is not unprecedented, he said. In Maine, a trust operated jointly by a tribe, conservation groups, hydropower companies and state and federal agencies purchased three dams on the Penobscot River in 2010. The trust has removed two of the dams and is decommissioning and building a bypass around the third.PacifiCorp had planned to relicense its Klamath River dams but agreed to decommission them under certain conditions, including the cost cap, liability protection and not being the entity to carry out the dams’ removal, Gravely said. Those terms were in the original agreements in 2010 and carried over to the pacts unveiled in February.“The parties that want dam removal get dam removal, but under terms and conditions that also protect PacifiCorp and its customers and make it a better outcome for customers than relicensing,” Gravely said. “That’s the essence of the KHSA.”
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