by TIM HEARDEN Capital Press October 27, 2011

YREKA, Calif. -- With all the talk about property rights, doesn't PacifiCorp have rights, too?

Preserving the rights of property owners has been a recurring theme in the Klamath Basin and California's Siskiyou County, where residents fear fisheries restoration efforts tied to the proposed removal of four dams from the Klamath River could deprive them of the right to irrigate.

However, the energy company that owns the dams and the land they're on has concluded that removing them would be in its best financial interest.

"For us it comes down to (the) less costly and less risky option" than trying to get the dams relicensed, said Bob Gravely, spokesman for PacifiCorp.

The process of renewing the dams' federal licenses would cost at least $300 million, and the company "would continue to be exposed to further costs down the road from litigation, water quality and other regulation," Gravely said.

Under the Klamath Hydroelectric Settlement Agreement, the cost to PacifiCorp's ratepayers will be capped at $200 million and the company's liability will be lifted, he said.

"Obviously feelings are strong on all sides about this," Gravely said. "We have customers on both sides of this ... The company is not in the business of removing its own facilities, but frankly the status quo is not an option. Our license is expired, and we know that continuing to operate the dams would cost more than pursuing a settlement."

Tom Mallams, a Beatty, Ore., hay farmer who has led opposition to the dam removal project, said it's true that PacifiCorp has private property rights "under a normal situation." However, the company's decisions are affecting ratepayers and taxpayers.

"It may be their private property, but we pay the bills," Mallams said, adding that local governments will lose tax revenue and surrounding property values will decline if the dams are removed.

Mallams and others say PacifiCorp's rights were compromised anyway. They point to a meeting in May 2008 at which they say state and federal regulators made it clear to company representatives that they didn't want the dams' licenses renewed.

"The decision to remove the dams is a political decision," Oregon state Sen. Doug Whitsett, R-Klamath Falls, told state and federal officials during a public hearing on the dam removal project Oct. 18. "It's not based on science and it's certainly not based on economics."

The company doesn't deny that political pressures played a role in its decision to remove the dams, Gravely said. PacifiCorp had intended to relicense and continue operating them, but it became apparent that the federal government, Oregon and California had a "policy priority" to have them removed, he said.

"That combined with the terms the agencies put on obtaining a new license ... brought us to the table," Gravely said. "What happened at that point is we began negotiations and were able to secure terms that clearly made a settlement a much less costly alternative."

"It's a little strong to say the government forced us," Gravely said, adding that established laws such as the Endangered Species Act are "a reality for us."

"Right now we're all in on the settlement," he said. "That's the path we've chosen. We're working with the other parties of the agreement to get it through Congress. The only thing that's a certainty is we can't continue to operate the dams as they are. Something has to be done."