The final run?

16 January 2008

Arguments over fisheries protection on Klamath river and the future of the dams have lasted for years, but FERC has issued a final EIS in the relicensing process, and a verdict awaits, reports Suzanne Pritchard

US POWER utility PacifiCorp’s application for a licence renewal at the Klamath hydro power development included a proposal to decommission two of its own facilities. The prohibitive costs of installing environmental improvements for fish passage had serious implications for the economics of the elected schemes. But, the California Energy Commission (CEC) took its bat to swing at the economic arguments in a bigger way, wanting all of the dams on the river gone and it has even lobbied against any rates allowances to subsidise such costs.

“The point of a dam relicensing,” says Craig Tucker, Klamath campaign coordinator for the Karuk Tribe of California, “is to ask the question – does the project provide net benefit or harm to society?” In this instance, he says “it’s a slam dunk case” for removal.

But a report emerged from the Federal Energy Regulatory Commission (FERC) late last year that further inflamed an already burning debate. Following an analysis of PacifiCorp’s proposal and a range of alternatives, the staff of FERC gave their recommendation in a final Environmental Impact Statement (FEIS) – basically, keep the dams but put in place more improvement measures and hence costs, resources and time (see box). While the report is now with the chiefs of FERC for consideration along with all the other evidence and arguments, it does carry some weight.

Relicence or Remove?

Historically, the Klamath river was the third largest salmon producing river in the US, but the fish runs are reportedly 8% of their historic averages due to dams, along with logging, diversions and mining. Decommissioning of dams elsewhere in the US has increased pressure in the Klamath relicensing saga. As the matter now enters its final phase, it will offer an interesting insight into how, in this instance, fisheries and the environment are being balanced with energy and economic needs.

On 25 February 2004, PacifiCorp filed an application with FERC for a new licence at the Klamath hydroelectric project. This 169MW project on the Klamath river catchment, which runs in Oregon and California, would see its licence expire in March 2006 and the utility was hopeful. While the relicensing question has remained unresolved, the project has had to operate under annual licences.

In response to PacifiCorp’s own recommendations, other interested parties intervened. Opponents say that, of all the causes of reduced salmon runs in the river, dams are the main culprits. More than 560km of historic spawning habitat have been cut off by the lowest dam on the river, Iron Gate, which Tucker says is especially devastating for spring run salmon. He adds that the spring fish need the higher elevation and cooler habitat all summer until they spawn and die in the autumn, and their run was the biggest before the dams were built.

Changes in water quality have also had an effect, Tucker continues. He says the reservoirs are shallow and act as heat sinks in the summer, and it takes longer for the river to cool to temperatures suitable for the migration of the autumn run Chinook salmon. There are also complicating problems with algae and fish parasites, he adds, arguing that a more dynamic river following removal of dams would improve environmental conditions.

“The dams have had the biggest impact,” Tucker concludes.

His stance on dam removal has the backing of CEC, the state of California’s principal energy planning agency and its function involves balancing the reliability of electricity supplies with cost and environmental considerations.

Claudia Chandler, assistant executive director at CEC, says: “In the 2003 Integrated Energy Policy report, the Commission identified restoration of imperilled salmon and trout fisheries as one of California’s environmental policy objectives. Since FERC licensed most of the state’s hydroelectric facilities more than 30 years ago, these were not subject to the state’s environmental review. Now, with the relicensing of the facilities, they must meet those environmental standards.”

Chandler adds: “Dam removal and river restoration will remove a major barrier to salmon fish migration to the upper half of the Klamath watershed. Furthermore, the California Department of Fish and Game indicates that the restoration potential of the Klamath river ecosystem and its salmon fisheries is substantial and unique in California – due to the absence of any major flood control or water supply dams on the river.”

PacifiCorp says it has been willing to invest US$300M-US$350M to build state-of-the-art fishways at the four dams the opponents want rid of – Iron Gate, Copco No 1 and No 2, and JC Boyle – as prescribed by federal fisheries agencies. The utility had earlier invested in fisheries improvements on the Klamath, it says. In 1961, it built a fish hatchery at the Iron Gate which today supports at least 25% of all Chinook. The facility is operated by the California Department of Fish and Wildlife and the owner, PacifiCorp, pays 80% of the annual operating costs.

CEC became involved in the Klamath relicensing process after being requested by the California State Water Resources Control Board and the Department of Fish and Game to evaluate potential loss of all or some of the hydroelectricity at Klamath as part of a decommissioning scenario. A series of reports were prepared and, in 2003, it was concluded that “loss of some or all of the project’s electricity would not have a significant effect on PacifiCorp’s ability to serve customer load”, says Chandler, .

That is not PacifiCorp’s view on the relative merit of Klamath’s hydropower assets in its generation portfolio. The utility, instead, counters that it does not have enough generating capacity to supply its customers’ energy requirements. Indeed, it adds, a significant amount of new generating capacity will be required to meet increased customer demand by 2014. Klamath provides 1.8% of the its total generating capacity and it is valued as a “highly dependable” hydro resource.

Meeting the regional need for power

According to the FEIS from FERC staff, the Klamath project would not only be useful in meeting PacifiCorp’s power needs but would also continue to help meet part of the regional need for power.

“If any of the Klamath hydroelectric project developments are decommissioned as part of the relicensing process,” states FERC, “the energy and capacity produced by those facilities need to be replaced as part of future energy and capacity planning. The decommissioning of any generating facilities would advance the year of need for new facilities.”

Both the states of Oregon and California are in the process of developing Renewable Action Plans (RAPs), which call for increased renewable energy in each state. While assets are not required to be located in the states there are incentives being implemented to encourage developers to construct facilities in the territories. But most of the planned or approved facilities in the Northwest region are far from Klamath hydro project.

Oregon has set a goal of using renewable energy to supply 10% of the power used in the state by 2010, increasing this to 20% by 2025. California has accelerated its Renewable Portfolio Standard to require 20% of all power used in the state to be generated by renewable resources by 2010. This is set to rise to 33% by 2020.

Although one new generation facility exists and one is proposed in the Klamath area, depending on applicable market rules for these facilities, FERC states that the electricity generated at these sites may not be available to replace generation from the Klamath hydro scheme. Any available facilities would most likely be fuelled by natural gas.

“The loss of hydroelectric facilities and replacement by those fuelled by non-renewable natural gas would hinder the efforts of the West Coast Governors’ Global Warming Initiative to reduce greenhouse gas emissions and increase the percentage of energy consumed in the states produced by renewable resources,” FERC says.

PacifiCorp claims that the Klamath project avoids the creation of approximately 473,000 tonnes of carbon dioxide emissions. Over the past three years the company has constructed or purchased 400MW of renewable resources and by 2015 expects to have at least 1400MW of new renewable generation, primarily wind. The company emphasises the importance of “dependable” hydro in supporting its other renewable schemes.

Bill Fehrman, president of PacifiCorp Energy, said: “To firm up our variable wind generation, we need the available capacity that hydro provides. Our rapid installation of wind projects is one of the reasons we are so focused on ensuring that we can maintain our critical hydro assets like the Klamath project.”

In addition, studies indicating that environmental improvements at Klamath may be more costly for PacifiCorp customers than decommissioning are “not properly reflecting the total value to our customers”, according to Fehrman.

CEC disagrees. Chandler says that dam removal would be “good for the environment, good for the local economic development and better for PacifiCorp’s ratepayers. It seems like an obvious solution, especially since power is easily and economically replaced.”

CEC’s own Klamath consultation report produced findings that, Chandler says, show that it would generally be cheaper to remove the dams and procure replacement power for 30 years, than to relicense the project with a full array of litigation measures for fish passage and water quality improvements as imposed by FERC.

“Using PacifiCorp’s own replacement power forecast, estimated savings to the ratepayers would be US$114M if the project was to be decommissioned,” she says. “It is important to note that PacifiCorp and its ratepayers are legally obligated to mitigate the environmental damage from the Klamath hydro project. Now that the licence has expired, PacifiCorp and its customers will either have to pay for relicensing with mitigation, or decommissioning with replacement power.”

However, while it should noted that PacifiCorp’s proposals involve some decommissioning, of the Eastside and Westside facilities where the cost of installing fish screens was prohibitive, it has otherwise rebutted the analysis by CEC. It will be facing even higher costs should FERC chiefs opt to keep the dams, possibly backing the option advocated by their staff. PacifiCorp says it “stands ready” to make investments to bring back salmon in the project areas. It asserted that total dam removal would be “an extreme outcome that does not balance environmental issues”.

PacifiCorp said of the relicensing process that it would like “reasonable outcomes that serve the public interest”. Yet, it is CEC’s contention, based on scientific information provided for FERC’s relicensing process, that decommissioning with replacement power is the biologically superior, least-cost project option.

Publication of the FEIS, in November 2007, appears to have re-drawn the battle lines and PacifiCorp has said it would consider a dam removal outcome only if its customers’ interests were protected and property rights respected.

Thorough analysis

The basis for considering dam decommissioning during a relicensing process came from the work done by FERC and various resource agencies, which together established an Interagency Task Force. They delivered a report on the analysis methods in 2000, in which factors were identified for determining whether a more thorough study of a such a major option on a project was warranted. The factors can help ascertain if decommissioning would be a reasonable alternative or should be eliminated from the licensing process.

There are 17 factors in total, including:

• Listed, threatened or endangered species.

• Economic viability, including environmental protection measures.

• Feasibility of fish passage.

• Water quality issues.

• Support for decommissioning.

Out of the potential list of 17 factors, FERC analysis of the Klamath hydropower scheme concluded that Iron Gate and Copco No 1 have 11 and 10, respectively, of the listed attributes that warrant a more thorough look at decommissioning. It will be noted, therefore, that one of FERC’s options to review was to group together the two projects as a decommissioning proposal.

FERC staff say that although the removal of Iron Gate and Copco No1 dams would provide better benefits to fish, the option would also result in substantial reductions in power generation. High decommissioning costs might also be incurred, especially if sediment contamination levels are large enough to warrant dredging and off-site disposal.

The Fall Creek and Spring Creek diversion dams did not warrant more analysis with their scores. An yet, while Copco No 2 and JC Boyle scored considerably less on this scale, FERC thought it was still appropriate to group them with Copco No 1 and Iron Gate for the four dams to be investigated as a distinct decommissioning alternative due, it says, to the “support for a four-dam removal action alternative by numerous entities”.

Though the big option of total dam removal was considered, CEC would appear perplexed and frustrated that it was not recommended in the FEIS. It claims that FERC staff’s economic analysis of the Klamath project tracks with the results of its own analysis, and wonders how the preferred project alternative satisfies minimum legal standards as established in the National Environmental Policy Act, the Federal Power Act or the Endangered Species Act. Furthermore, Chandler says that “conformance with all applicable laws and regulatory standards is a prerequisite to granting a project licence”.

Tucker, from the Klamath Campaign, concurs. He believes the FEIS to be “irrelevant” to the relicensing consideration because, he claims, it does not comply with mandatory terms and conditions.

As the licence application for Klamath is pending, FERC was unable to comment. But a spokesperson did point out that the FEIS is a staff document; it only forms part of the documentation the FERC board will review prior to making a decision on the licence application.

Whether and when FERC issues a new licence to PacifiCorp for the Klamath hydropower scheme remains unclear. As the sides to the relicensing standoff await the next step in the process and possibly the decision, the debate looks set to continue up until the end, if not beyond.

Klamath hydroelectric project

The 169MW Klamath hydroelectric project is located primarily on the Klamath river in Klamath County, Oregon and Siskiyou County, California. Built over 1908-62, the project consists of seven plants and one non-generating dam, and on average generates more than 716GWh/year. The plants are:

- Eastside (3.2MW).
- Westside (0.60MW).
- JC Boyle (80MW).
- Copco No 1 (20MW) and No 2 (27MW).
- Fall Creek (2.2MW).
- Iron Gate (18MW).

All of PacifiCorp's projects use water from the Upper Klamath Lake or from the mainstream river to generate power. However, Fall Creek is located on the tributary to the Klamath river. Keno dam is located downstream of the Westside plant and regulates river flow. The projects have a total of 12 turbine generators, five limited storage reservoirs and five concrete or earth/rockfill dams. The 53m high earth and rockfill dam of the Iron Gate project is the tallest.

FEIS - the final word on Klamath?

In its licence renewal application, PacifiCorp proposed decommissioning the Eastside and Westside facilities (total 3.8MW), as well as removal of the Keno site (which has no generating facilities). It sought for Copco No 1 and No 2, Iron Gate, JC Boyle, and Fall Creek on a tributary of Klamath to continue operations, offering to incorporate 41 improvement measures.
The measures focus on: enhancing the quality of project-influenced waters at Iron Gate; improving the aquatic habitat at JC Boyle; and, improvements to spawning habitats and the provision of fish screens and ladders at the developments.
In their review, FERC staff considered the following other options:
- No change.
- Take up the PacifiCorp proposal but with additional or modified measures, including conditions from the depts of Interior and Commerce. The project would generate 663,381MWh/year with total annual costs of US$29M.
- Retire Iron Gate and Copco No1, undertake additional measures elsewhere and generate 443,694MWh/year with costs of US$28M.
- Retire Iron Gate, Copco No 1 and No 2, and JC Boyle, with modified measures for the remaining sites. The project would generate 12,817MWh/year with total annual costs of almost US$14M.
"Based on our detailed analysis of the environmental benefits and costs associated with the four alternatives considered in detail in the environmental impact statement, we conclude that the best alternative for the Klamath hydroelectric project would be to issue a new licence consistent with the environmental measures specified in the staff alternative," the FEIS states.
FERC staff commented on a preferred alternative in the FEIS and gave reasons for disregarding full decommissioning as a viable option. It selected the second alternative listed above, which takes most of PacifiCorp's proposals and adds 25 more measures, chiefly related to implementing an integrated fish passage and disease management programme, and an adaptive spawning gravel augmentation programme in the JC Boyle bypassed reach and downstream of Iron Gate.
The alternative was the preferred option because: issuing a new licence will allow PacifiCorp to continue to operate the project as a dependable source of electric energy for its customers; and, the project would avoid the need for an equivalent amount of fossil-fired generation and capacity, continuing to help conserve these non-renewable resources while reducing atmospheric pollution.
The list of recommended environmental measures would enhance water quality, help restore and protect fish and terrestrial resources, and improve and maintain recreational, historic and archaeological resources.

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