CALIFORNIA ENERGY COMMISSION PRESS
RELEASE
Energy Commission Analysis Says Klamath
Dam Removal, not Upgrades, More
Beneficial than Earlier Projected
Sacramento - The California Energy
Commission said today that removing four
PacifiCorp hydroelectric dams from the
Klamath River would be more beneficial
than originally projected.
After reviewing data from a 50-page
filing submitted by PacifiCorp recently
to the Federal Energy Regulatory
Commission (FERC), the Energy Commission
issued a supplemental report showing
that it makes more economic sense than
first thought to remove the dams and buy
replacement power. Removing the dams
would be about $114 million less costly
than relicensing the project and
installing expensive fish ladders,
according to PacifiCorp data.
"PacifiCorp must choose the alternative
that makes the most economic sense for
its ratepayers," commented California
Energy Commissioner John Geesman. "Using
PacifiCorp's own numbers the new
analysis clearly indicates that it is
best for the ratepayer that these four
dams be removed. The Energy Commission
will work with the six state public
utilities commissions to ensure that
they are informed on how to protect the
ratepayers."
The Klamath River is one of the most
important rivers for imperiled
populations of Chinook and Coho salmon
and steelhead trout on the West Coast.
PacifiCorp, which serves 1.6 million
customers in six Western states, seeks
relicensing to operate the dams on the
Klamath for up to 50 years.
The company's four dams comprising the
Klamath Hydroelectric Project produces
169 megawatts, but remains a major
threat to salmon along nearly 300 miles
of habitat in the upper Klamath Basin.
FERC is reviewing the project's existing
Federal Power Act license and will
impose mitigation measures to reduce
environmental impact if it issues a new
license.
Recent determinations by the U.S. Fish
and Wildlife Service and National
Oceanic and Atmospheric Administration
Fisheries show that an expensive network
of fish ladders will be required to
allow adult salmon to migrate up river
to the 300 miles of historic spawning
grounds.
In an addendum released today, to the
December 2006 Klamath Project
Alternatives Analysis Model (KPAAM)
Consultant Report, the Energy Commission
said dismantling instead of upgrading
the dams could actually save the
company's ratepayers up to $286 million
-- $13 million more than originally
suggested. The range in benefits from
removing the dams is from $32 million to
$286 million, depending on the
assumptions used. The addendum used data
provided by PacifiCorp in the recent
FERC filing. (The Klamath Consultant
report previously found that removing
PacifiCorp's dams could range from a
cost of $14 million to a benefit of $285
million for the ratepayer.) This new
information makes the economics for
dismantling the dams even more
compelling.
Both the addendum and the original
report are available on the Energy
Commission's website:
http://www.energy.ca.gov/klamath
In a filing with FERC, the
Portland-based utility said it had
commissioned a review of the Energy
Commission report and had found problems
with the economic model used to make the
initial estimate, as well as the data
fed into the model.
The report by Christensen Associates
Energy Consulting, LLC, (CAEC) of
Madison Wis., said the Energy Commission
analysis did not reach a good estimate
of the cost difference between removal
and licensing of the dams. When data fed
into the model was rectified,
Christensen said it came up with a
contrary result: that PacifiCorp would
save $46 million by upgrading the dams
and continuing to operate them.
"Their assertion that the model is not
credible is not supported by the facts.
The CAEC critique makes an even stronger
case for decommissioning when their data
is used," commented Geesman. "More
importantly, we now have an economic
model that state and federal agencies
can use to weigh the options of
relicensing the dams versus removing the
dams and restoring the habitat."
The model, called the Klamath Project
Alternatives Analysis Model (KPAAM) is a
rigorous and transparent tool that
provided the parties involved with a
good faith analysis of the pros and cons
of the proposed strategies for the dams,
the Energy Commission said in the
supplement.
As such, the Energy Commission expected
a good faith scrutiny of the model from
stakeholders who were welcomed to add
their preferred assumptions to the data
and the model. PacifiCorp's consultants
did not disagree with the fundamental
principles and structure of the KPAAM
model. Energy Commission staff,
according to the supplement found that
some of Christensen's analysis provided
important PacifiCorp data that had been
denied the state in earlier requests.
The report addendum said after revising
the model, using the appropriate
corrections from the CAEC, Energy
Commission consultants and staff had
found that removal instead of upgrading
the dams increases the economic benefits
to ratepayers from a range of $32
million to $286 million.
Originally, KPAAM report forecast that
the difference between the options
ranged from a cost of $14 million to an
economic benefit of $285 million. For
the revised scenario using PacifiCorp's
power cost forecast -- decommissioning
would now be $114 million cheaper than
relicensing - a savings of $13 million
more than suggested in the original
KPAAM report.
"Mitigated relicensing" remains the
highest economic risk to PacifiCorp
ratepayers, the Energy Commission said.
Upgrades, such as building fish ladders
and installing water quality improvement
devices to meet modern, legal and
scientific standards are "complex and
expensive."
Dam improvements would cost from $223
million to $415 million. During
improvements, the report said power
production from the dams will be reduced
by 23 percent and the project will be
unable to provide quick supply during
peak periods of electricity demand.
S. Craig Tucker, Ph.D.
Klamath Campaign Coordinator
Karuk Tribe of California
office: 530-627-3446 x3027
cell: 916-207-8294
ctucker [at] karuk.us
