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Klamath-Dams-FERC-Ruling

The Iron Gate Dam, powerhouse and spillway on the lower Klamath River near Hornbrook, Calif.

A Thursday decision by the Federal Energy Regulatory Commission (FERC) has complicated the historic push to remove four dams on the Lower Klamath River.

After four years of review, FERC granted the transfer of the license for the J.C. Boyle, Copco No. 1, Copco No. 2 and Iron Gate dams (collectively known as the Lower Klamath Project) to the Klamath River Renewal Corporation, a nonprofit that would carry out the dam removal. But it requires PacifiCorp, the utility that currently operates the dams, to remain on the license, too.

The Amended Klamath Hydroelectric Settlement Agreement, reached in 2016, was a revision of a 2010 deal that failed to get congressional approval. The new agreement did not require the Department of the Interior to oversee the decommissioning of the dams, which made it unbeholden to Congress.

If it moves forward, the hydroelectric removal project would be the largest in U.S. history. Indigenous nations — including the Karuk and Yurok Tribes, which are both signatories of the agreement — have pushed for the dams to be decommissioned in order to restore salmon populations on the Klamath River. The four dams in question do not contain fish ladders, effectively cutting off salmon migration. Two dams on the Upper Klamath River, the Keno Dam and Link River Dam, are not part of the removal agreement, as they contain fish passage mechanisms and provide irrigation for the Klamath Project.

Under the Amended Settlement Agreement, PacifiCorp would transfer the license for the project to KRRC, which would then assume all legal and financial responsibility for the removal.

To help foot the bill, PacifiCorp customers in Oregon and California have collectively contributed more than $200 million to the $450-million project through utility bill surcharges. The license transfer was a major step in the removal process, but FERC’s decision Thursday wasn’t exactly what the parties of the settlement agreed to.

Bob Gravely, a PacifiCorp spokesman, said the full transfer of responsibility to KRRC was a key component of the agreement. But a joint license holds PacifiCorp (and, by extension, its customers) financially liable for hiccups in the project.

“Our concern is that if PacifiCorp remains ‘on the hook’ for dam removal, that the costs of that could spiral well in excess of what the cost would have been to simply relicense the dam,” Gravely said. By remaining on the license, PacifiCorp could be obligated to pass any additional costs associated with the removal onto their customers.

“The Klamath River Renewal Corporation’s inability to become the sole licensee for removal of the Klamath River dams denies the customer protections PacifiCorp negotiated on their behalf,” PacifiCorp wrote in a news release.

Though FERC approved the license transfer on the basis of KRRC providing documentation that it would have adequate funding and ability to carry out the removal, it cited a “significant degree of uncertainty associated with the project” as reason to keep PacifiCorp attached to it.

“Were the Renewal Corporation to be the sole licensee, it might ultimately be faced with matters that it is not equipped to handle,” the order said, adding that it was in the public interest for PacifiCorp, with its financial resources and prior experience with removing major dams (namely the Condit Hydroelectric Project on Washington’s White Salmon River in 2011), to remain involved. Gravely said that’s been a theme throughout FERC’s review of the agreement.

“The concern [from FERC] has always been, ‘What if it takes more? What’s the Plan B?’” he said. The Commission’s order detailed several requests it had made of KRRC since the application for the license transfer had been submitted, mostly regarding the organization’s estimated costs and contingencies for the project.

While FERC’s surprise ruling doesn’t spell the end of the project, it means the agreement’s stakeholders may have to reopen negotiations and further amend the agreement. KRRC released a statement calling FERC's decision "a pathway for the project to move forward," adding that there is still work to be done.

The order acknowledged that the parties to the agreement did not ask for a co-license setup, saying, “PacifiCorp and the Renewal Corporation may elect to amend their arrangement in order for the Renewal Corporation to indemnify PacifiCorp for any expenses it bears as result of it being a co-licensee.”

Gravely said language like that will be the starting point for evolving the agreement.

“We remain committed to working with our other settlement partners to keep the agreement moving forward,” he said.

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Previous story:

A Thursday decision by the Federal Energy Regulatory Commission (FERC) has complicated the historic push to remove four dams on the Lower Klamath River.

After four years of review, FERC granted the transfer of the license for the J.C. Boyle, Copco No. 1, Copco No. 2 and Iron Gate dams (collectively known as the Lower Klamath Project) to the Klamath River Renewal Corporation, a nonprofit that would carry out the dam removal. But it requires PacifiCorp, the utility that currently operates the dams, to remain on the license, too.

The Amended Klamath Hydroelectric Settlement Agreement, reached in 2016, was a revision of a 2010 deal that failed to get congressional approval. The new agreement did not require the Department of the Interior to oversee the decommissioning of the dams, which made it unbeholden to Congress.

If it moves forward, the hydroelectric removal project would be the largest in U.S. history. Indigenous nations — including the Karuk and Yurok Tribes, which are both signatories of the agreement — have pushed for the dams to be decommissioned in order to restore salmon populations on the Klamath River. The four dams in question do not contain fish ladders, effectively cutting off salmon migration. Two dams on the Upper Klamath River, the Keno Dam and Link River Dam, are not part of the removal agreement, as they contain fish passage mechanisms and provide irrigation for the Klamath Project.

Under the Amended Settlement Agreement, PacifiCorp would transfer the license for the project to KRRA, which would then assume all legal and financial responsibility for the removal.

To help foot the bill, PacifiCorp customers in Oregon and California have collectively contributed more than $200 million to the $450-million project through utility bill surcharges. The license transfer was a major step in the removal process, but FERC’s decision Thursday wasn’t exactly what the parties of the settlement agreed to.

Bob Gravely, a PacifiCorp spokesman, said the full transfer of responsibility to KRRA was a key component of the agreement. A joint license holds PacifiCorp (and, by extension, its customers) financially liable for hiccups in the project.

“Our concern is that if PacifiCorp remains ‘on the hook’ for dam removal, that the costs of that could spiral well in excess of what the cost would have been to simply relicense the dam,” Gravely said. By remaining on the license, PacifiCorp could be obligated to pass any additional costs associated with the removal onto their customers.

“The Klamath River Renewal Corporation’s inability to become the sole licensee for removal of the Klamath River dams denies the customer protections PacifiCorp negotiated on their behalf,” PacifiCorp wrote in a news release.

Though FERC approved the license transfer on the basis of KRRC providing documentation that it would have adequate funding and ability to carry out the removal, it cited a “significant degree of uncertainty associated with the project” as reason to keep PacifiCorp attached to it.

“Were the Renewal Corporation to be the sole licensee, it might ultimately be faced with matters that it is not equipped to handle,” the order said, adding that it was in the public interest for PacifiCorp, with its financial resources and prior experience with removing major dams (namely the Condit Hydroelectric Project on Washington’s White Salmon River in 2011), to remain involved. Gravely said that’s been a theme throughout FERC’s review of the agreement.

“The concern [from FERC] has always been, ‘What if it takes more? What’s the Plan B?’” he said. The Commission’s order detailed several requests it had made of KRRA since the application for the license transfer had been submitted, mostly regarding the organization’s estimated costs and contingencies for the project.

While FERC’s surprise ruling doesn’t spell the end of the project, it means the agreement’s stakeholders may have to reopen negotiations and further amend the agreement. KRRC released a statement saying they are reviewing the order to determine next steps.

The order acknowledged that the parties to the agreement did not ask for a co-license setup, saying, “PacifiCorp and the Renewal Corporation may elect to amend their arrangement in order for the Renewal Corporation to indemnify PacifiCorp for any expenses it bears as result of it being a co-licensee.”

Gravely said language like that will be the starting point for evolving the agreement.

“We remain committed to working with our other settlement partners to keep the agreement moving forward,” he said.