Klamath dam removal bill clears senate committee

by Matthew Preusch, The Oregonian February 11, 2009

A legislative committee on Tuesday approved a plan to pay for removing Klamath River dams with a surcharge on Oregon ratepayers -- a step supporters say is necessary to salve long-running disputes over water, salmon and other resources in the Klamath Basin.

Senate Bill 76, which is supported by Gov. Ted Kulongoski, would permit PacifiCorp to charge its Oregon customers an additional $1.50 a month for a dam removal fund, capping the state's contribution at $180 million.

The bill passed the Senate Environment and Natural Resource Committee, 4-1, and could go before the full Senate as early as next week. It is needed to fulfill Oregon's part of a tentative agreement it signed in the fall with California, the federal government and the utility.

That agreement is part of a larger compromise supported by an array of farmers, fishers and environmental groups that hinges on the removal of Pacificorp's four power-generating dams on the Klamath River.

Opponents of the bill argue that it places a disproportionate amount of the cost of dam removal on the more than half-million Oregonians who buy their power from Pacificorp, which operates in six western states. And they say it bypasses a standard Public Utility Commission review of rate increases.

"The bill essentially hard-wires in the obligation to enact the surcharge for $180 million," said Michael Early, executive director of the Industrial Customers of Northwest Utilities.

California ratepayers are expected to chip in another $20 million, and that state will seek a voter-approved bond measure for another $250 million to pay for any further costs.

Those supporting the bill that advanced Tuesday argue that Oregon ratepayers could end up paying much more if the dams are left in place and must be upgraded to meet requirements for a new operating license.

Preliminary estimates say cost of those improvements, including new fish ladders and screens, could exceed $300 million.

"Ratepayers have two choices: It's a rate cap, or going through re-licensing," said Craig Tucker, Klamath coordinator for the Karuk Tribe of California. "This is a pretty darn good deal for ratepayers compared to re-licensing costs."

And the bill includes a review process to protect Oregon ratepayers, said Jeff Bissonette, organizing director for the Citizens Utility Board of Oregon.

"We're comfortable with seeing this bill go forward," he said.

The committee's lone dissenting vote came from Brian Boquist, R-Dallas, who was worried that if dam removal costs rise, Oregon ratepayers could be on the hook for further charges.

"I still remain quite skeptical that we're not signing up for severe liability here," he said. "Though we've sold it as a cap, it really isn't a cap because we can come back in two years and change this."

-- Matthew Preusch, mattpreusch@news.oregonian.com