The dams that face removal are JC Boyle, Copco 1, Copco 2 and Iron Gate, and the current plans under the AIP foresee the structures possibly being removed by 2020 in a bid to protect fisheries.

The dams will be removed if it is eventually judged, four years from now, that the benefits of doing so outweigh the costs. A further potential block on removal is if the cost of doing so would exceed the state cap of US$450M, unless otherwise amended.

About US$1B would be spent under the separate Klamath Basin Restoration Agreement (KBRA) to then restore the Upper and Lower Klamath river basins. The AIP and KBRA are both required but are distinct agreements, the latter not involving the electricity utility.

The Klamath basin has 169MW of hydro power capacity and on average generates more than 716GWh per year of electricity. PacifiCorp had faced criticism for years over the dams for their impact on fisheries, and the debate over the future of the facilities heightened when application for a new licence was made four years ago. It presently operates under an annual licence, and has argued that the output from the scheme is strategically important in its portfolio.

Following opposition from the California Energy Commission (CEC), which carried out studies that concluded in favour of extensive dam removal, the utility undertook its own investigations and developed a series of proposed improvements for the assets. In addition to investing in fisheries facilities, PacifiCorp said that three of its assets in the basin cold go – the East Side and West Side units could be decommissioned, and the Keno development removed.

A year ago, the Federal Energy Regulatory Commission (FERC), in its final environmental impact statement (EIS), following investigations that referred to the studies done by the utility and CEC, concluded that there could be relicensing of the facilities on condition of extra works being done. It did not propose removal of any of the four dams now under detailed investigation to be removed.

Following years of work themselves, the state governments, federal Government and the utility issued a joint statement detailing the AIP, which is a major milestone on the road that could eventually see the four facilities removed. They said that such works would be a combination of timing of the operational needs with the costs of securing replacement power for the utility.

Under the AIP, a “flexible framework” has been agreed for the “presumed transfer” of the four dams over to a Government-designated dam removal entity (DRE). That organisation would determine the timing of the final agreement and then, subject to sign-off by the Secretary of the Interior, remove the structures and restore the watercourses.

The current Secretary, Dirk Kempthorne, who chaired the Federal Klamath Working Group, said the AIP agreement was ‘historic’ and as a milestone it provides a way forward. The parties hope that the next stage of more detailed talks for what will be the biggest dam removal project undertaken, will be concluded by the middle of next year.

The states and utility are to help undertake further studies for the dam removal works as well as raise funds to execute the works. The Department of the Interior will complete the feasibility study and aims to decide on the outcome by 2012, enabling a final agreement to be reached.

PacifiCorp chairman and chief executive officer, Greg Abel, said the flexible framework would ensure customers are protected at each step of the process. The AIP also limits liability that the utility’s customers would face associated with removal of the dams and restoration works.