PacifiCorp, the owner of the 169MW Klamath hydro scheme said recently that CEC’s economic analysis for dam removal was ‘flawed’, based on the findings of a consultant it hired, Christensen Associates Energy Consulting. However, CEC has come back fighting with a supplemental report claiming the economic case is even stronger than previously believed.

The Klamath hydro scheme is currently under relicensing review with the Federal Energy Regulatory Commission (FERC). Both sides have submitted their case and this month additional volleys in their argument and counter-argument for dam removal.

PacifiCorp most recently said the CEC analysis had particular weaknesses in its financial modelling due to assumptions on future energy costs. It further claimed there was bias towards decommissioning, and that there were errors in the inputs, methodology and key assumptions in the financial model, based on the consultant’s findings.

The utility wants FERC to approve the relicensing of the hydro scheme in which it plans to invest in fish ladders to help protect fisheries. It has proposed about US$300M of investment in fishways.

However, in a swift comeback the CEC issued a supplemental report to its December 2006 submission to FERC arguing its case for dam removal even more strongly. It said that removing the dams and enabling equivalent power capacity to be sourced from elsewhere would be about US$114M less expensive than relicensing the hydro scheme and installing fish ladders.

The Commission said it reviewed the consultant’s critique, ‘rectified’ the data and then plugged in the numbers from PacifiCorp’s own power cost forecast. The outcome of the re-run financial model showed decommissioning would be US$114M, a further saving of US$13M on costs than it originally calculated.

CEC stated that PacifCorp should be making the choice that ‘makes the best economic sense for its ratepayers’, and raised the issue again of river and power disruption during dam improvements.