Copco No. 1, a dam built between 1911 and 1918, is on the list for removal if a Klamath restoration plan moves forward. - Tam Moore For the Capital Press Klamath-area farmer Tom Mallams showed lawmakers last week this stack of petitions opposing a plan to remove four Klamath River dams. - Mitch Lies/Capital Press

Klamath dams debate roars on
Legislators weigh costs of removing dams, doing nothing

Mitch Lies, Capital Press 5/14/09

SALEM - For several weeks now, farmer Tom Mallams has been carting around the Oregon Capitol a 1-foot-thick bundle of petitions signed by 1,850 Klamath area residents opposed to a plan to remove four Klamath River dams.

The bundle, he said, is heavy and cumbersome. But it is the best way he knows to show lawmakers the considerable opposition to the dam-removal plan.

The plan, called the Klamath Basin Restoration Agreement, was hammered out over a four-year period by a diverse group of stakeholders, including farmers, ranchers, tribes, conservation groups, fishermen, federal agencies and PacifiCorp, which owns the dams and uses them to generate electricity.

Individual stakeholders, according to the group, all compromised in coming to terms on what they say is the best solution to a controversy that spans decades.

The controversy boiled over in 2001 when the federal government ordered water masters to shut off the flow of Klamath River water to irrigation canals. The shut-off cost Klamath Basin farmers millions of dollars in lost crops.

In addition to removing the four dams, the restoration plan calls for farmers in the Klamath Basin irrigation project to leave in-stream up to 100,000 acre feet of water in dry years - or nearly one-third of their water allocation claims - in exchange for water-delivery assurances.

Farmers outside the project are being asked to leave up to 30,000 acre feet of water in-stream for fish.

The loss of irrigation supplies is painful, said Greg Addington, head of the Klamath Water Users Association. But, Addington said, to be assured of some water is better than risking another complete shut-off.

Under the plan, PacifiCorp ratepayers would pay $200 million toward the cost of removing the dams. California lawmakers are preparing a $250 million bond measure to put before voters to provide backup if the costs exceed $200 million.

Oregon ratepayers, which comprise about 90 percent of PacifiCorp's approximately 600,000 customers, would pony up $180 million of the $200 million ratepayer fund.

The plan calls for PacifiCorp to start removing the dams in 2020. The projected completion date is 2025.

The stakeholders, one and all, call the plan a major achievement.

But Mallams and others disagree.

In hearings before legislative committees on a bill that would set the plan in motion by capping Oregon ratepayers' responsibility at $180 million, they argue the potential loss of irrigation water could devastate their ability to raise crops.

And, they say, removing the dams could cost PacifiCorp ratepayers - and possibly Oregon taxpayers - billions of dollars in unforeseen costs.

The opponents, who claim they were shut out of the stakeholder negotiations - a contention other stakeholders deny - say the $450 million top figure of dam-removal costs falls woefully short. As evidence, they point to two studies - one commissioned by the Federal Energy Regulatory Commission showing costs could reach $4.5 billion and another showing costs peaking in the $840 million range.

Who, they wonder, will get stuck paying those added costs?

Supporters counter that so-called "off-ramps" are built into the plan. If additional studies show costs will exceed the $450 million top figure, they say federal agencies and others will rethink the plan. Further muting overrun concerns, they say, the Oregon Public Utilities Commission must sign off on rate increases, providing another off-ramp.

The restoration plan's genesis can be traced to two events: the water shutoff in 2001, which showed Klamath Basin farmers what can happen if they do nothing to protect endangered salmon runs, and the pending expiration of PacifiCorp's federal license to operate the dams. As part of relicensing provisions, PacifiCorp has been ordered to install fish ladders and conduct other extensive and expensive improvements to the structures, which are 50 years or more old.

A FERC study estimates the expense of installing fish ladders at $350 million.

Also on the table is a state law requiring utilities to generate 25 percent of the state's power from renewable resources by 2025. Removing the dams and replacing the lost power with renewable energy resources will help PacifiCorp meet those requirements, company officials said.

Also on the plus side, dam removal is expected to enhance fish runs, opening traditional spawning grounds now off-limits to endangered salmon - a contention Mallams and others dispute.

"This offers us the surest and quickest ways of restoring fish runs," said Jeff Mitchell, tribal council member for the Klamath Tribes. "We've gone without salmon now for decades."

The biggest unknown in the dam-removal cost is the toxicity of sediment that has built up behind the four dams. Particularly worrisome is the amount of asbestos, which was used extensively in dam construction.

Preliminary studies show the sediment contains only minor levels of toxicity. But those studies, even proponents admit, are cursory. Comprehensive studies are planned before steps are taken to remove the dams.

If the sediment is found to be highly toxic, project backers say the secretary of the federal Department of the Interior could put a halt to the plan in 2012, when the department is projected to rule on whether to go forward.

At that point, money collected from ratepayers in a surcharge pot called for in Senate Bill 76 would either be reimbursed or put toward a beneficial use. For example, it could go toward paying for fish ladders and other structural improvements necessary to relicense the dams.

But opponents say the opt-outs don't provide sufficient protection against officials pushing the plan forward even if dam removal costs skyrocket.

Also, they say, at some point in the dam decommissioning process it will be too late to turn back - regardless of the level of toxicity found in the sediment.

Opponents also question whether PacifiCorp can replace the lost power. If nothing else, they argue, lawmakers should wait for further studies before passing any bill that sets the plan in motion.

"It is irresponsible for us to render a decision on SB76 at this time," Rep. Bill Garrard, R-Klamath Falls, said in testimony before a House committee last week.

Garrard also told committee members the majority of people in his district oppose dam removal.

"I ask you to please wait until we know if dam removal is the right thing to do," he said.

Plan proponents, meanwhile, say it is critical to move forward now with Senate Bill 76. By amortizing the cost to ratepayers over 10 years, they say, it will add only between $1.50 and $1.80 a month to the average electric customer's bill.

Waiting to implement the surcharge, they say, puts ratepayers at risk for a dramatic rate increase at some future date.

"This bill is needed now, not only to demonstrate Oregon's commitment to the (restoration) agreement, but to soften the impact on ratepayers." said Mike Carrier, natural resources policy advisor for Gov. Ted Kulongoski.

But adopting SB76, opponents argue, sets in motion a slippery slope they fear could be far more costly for ratepayers in the long run.