The agreement is the first critical step in implementing what is being called, potentially, the largest dam removal project in world history.

The AIP provides a framework for the presumed transfer of four dams from PacifiCorp to a government designated dam removal entity, which would then undertake the removal of the J.C. Boyle, Copco 1 and Copco 2, and Iron Gate hydropower facilities.

The dams block passage for salmon, steelhead and lamprey to more than 300 of miles of spawning and rearing habitat.

Originating from Upper Klamath Lake in southern Oregon, the Klamath River flows 240 miles from Oregon into northern California before emptying into the Pacific Ocean near Klamath, CA. The river drains an area of about 13,000 square miles.

Under the AIP, final authority for dam removal must be granted by the Secretary of the Interior following an assessment to confirm the current view of the United States and governments of California and Oregon that dam removal is in the public interest. The AIP also calls for congressional authorization.

"This is a historic announcement and the culmination of years of hard work from the numerous negotiators from the federal government and the states of California and Oregon, and PacifiCorp representatives who have worked toward a common goal of how best to protect the uniqueness of this region," said Secretary of the Interior Dirk Kempthorne.

"We have agreed to a path forward that will protect fish, PacifiCorp customers and the local cultures and communities in the two-state Klamath River basin," Kempthorne said.

"I congratulate the many people of the Klamath River Basin in Oregon and California who recently put forward a shared vision for conservation of the river," President George W. Bush said in a statement released Thursday. "The agreement my administration announced today with Oregon, California, and PacifiCorp, the company that owns four hydropower dams on the Klamath River, will advance that vision. Federal, state, and private partners will now begin studying the feasibility of removing four hydropower dams on the river. This is the first phase of a long-term conservation program for upriver salmon habitats."

"This agreement turns what was a conflict into a conservation success. For years, there had been disagreement among irrigators, States, tribes, conservationists, and others," Bush said. "Beginning with the drought of 2001, the community, working in partnership with the federal government, rallied together to find a long-term solution.

"Since 2002, my Administration has requested and Congress has provided approximately $90 million annually - a total of more than $500 million - for Klamath Basin activities. Working together, the federal government and its partners have restored irrigation and more than 10,000 acres of fish habitat and banked for conservation more than 800,000 acre-feet of water. These actions have provided adequate water for farmers while also helping species recover."

The agreement in principle contains a complex framework for dam removal that balances the timing of removal of each of the four dams with operating conditions and the costs of replacement power for PacifiCorp customers. The AIP provides a target removal date of 2020.

"Today's announcement is the first step in what would be the largest dam removal project ever in history that California, Oregon and our federal and private partners are undertaking to improve water quality, water supply and fish populations in the Klamath region," California Gov. Arnold Schwarzenegger said. "The health of the Klamath River is critical to the livelihood of numerous Northern California communities, and with this groundbreaking agreement we have established a framework for restoring an important natural resource for future generations."

The AIP compels the federal government to scientifically assess the costs and benefits of dam removal. The United States will make a final determination by March 31, 2012, whether the benefits of dam removal will justify the costs -- informed by scientific and engineering studies conducted in the interim, and in consultation with state, local, and tribal governments and other stakeholders, as appropriate.

"We are immediately commencing an engineering study and pursuant to the terms of the AIP will seek legislation authorizing a feasibility study," Kempthorne said in letters to the two governors and PacifiCorp. "Commencing the engineering study will allow us to immediately start analyzing the removal of the dams while also providing the basis for the more detailed feasibility study that, once authorization is obtained, will be completed by 2012.

"The engineering study by the United States will provide detailed information necessary for a final decision on facilities removal and full implementation of the conservation program described by the KBRA," Kempthorne said, referencing a proposed Klamath Basin Restoration Agreement.

The KBRA was released in January, the product of negotiations between local stakeholder groups and federal, state and county governments. It outlines a comprehensive program to rebuild fish populations through habitat work, the reintroduction of anadromous species, flow enhancements and other efforts.

It also would assure a reliable and certain allocation of water sufficient for a sustainable agricultural community and national wildlife refuges; a program to stabilize power costs for the Upper Basin's family farms, ranches, and for the two national wildlife refuges, and a program intended to insure mitigation for counties that may be impacted by the removal of the hydroelectric facilities.

The KBRA assumes the four dams will be removed.

The signing of the AIP is welcome news to the tribes, conservationists, commercial fishermen, farmers and ranchers who see dam removal as the missing element of the more comprehensive KBRA.

"We can remove dams, restore the fishery, and have prosperous farm communities all in the same basin," said Yurok Tribe Chair Maria Tripp. "We are proud to see PacifiCorp joining our effort to provide long term stability to all of the Klamath Basin’s diverse communities."

"PacifiCorp is making a private property rights decision," said Luther Horsley of the Klamath Water Users’ Association. "We support this agreement as part of a larger plan to provide water and power security to local irrigators."

"Under the AIP, the Secretary of the Interior will complete the feasibility study and make a determination by 2012 to proceed with facilities removal if the expected benefits of facilities removal exceed its costs, and if the total cost of removal does not exceed the $450 million State cost cap (unless modified by specific subsequent agreement)," Kempthorne wrote.

"The proposed KBRA would potentially dedicate about $1 billion to fundamental and necessary restoration in the Upper and Lower Klamath Basins and provide a long-term strategy to ensure compliance with the ESA for the foreseeable future," Kempthorne said.

When the study is completed, the government would designate a non-federal dam removal entity to remove the dams, or decline to remove the dams. If the decision is made to leave the dams in place, PacifiCorp would return to the Federal Energy Regulatory Commission to seek relicensing for the dams. There the utility faces the prospect of being required to provide costly fish passage at the dams.

"While many months of work lay ahead, this historic agreement provides a path forward to achieve the largest river and salmon restoration effort ever undertaken in a way that's good for fish, PacifiCorp customers, and local communities and our sovereign tribes," Oregon Gov. Ted Kulongoski said. "With Oregon's best interests in mind, it is with great pride that I will be taking the first step in implementing this agreement by offering legislation to support the dam decommissioning and removal process."

Assuming a final agreement is reached next year and pending congressional approval, PacifiCorp will also set aside millions of dollars for immediate environmental improvements. The funds would be used to implement numerous measures that will enhance habitat, improve water quality, increase fish populations, and benefit fisheries management in the basin.

"This careful effort to balance the complex needs of numerous interests within the community is exactly the type of approach PacifiCorp takes every time we sit down to the settlement table," said Greg Abel, PacifiCorp chairman & CEO. "This flexible framework ensures that our customers will be protected at every step along the way, while remaining consistent with our strong commitment to respecting the environment. We will continue to work diligently with everyone at the table, including the irrigators, environmentalists, the tribes and all local elected officials with the goal of reaching a final dam removal agreement that is in the economic interests of PacifiCorp customers."

The AIP also establishes protections for PacifiCorp customers from liability associated with any removal of the dams and limits the amount customers would pay toward environmental improvements and dam removal.

As part of the AIP, negotiators have committed to another immediate schedule of talks, working toward a final dam resolution agreement and hoping to conclude by June 2009.

Copies of the AIP and accompanying letters from the Department of the Interior to the states and PacifiCorp can be found at www.DOI.gov