MorganEnergy

From the January 2009 issue of EEnergy Informer.

Nobody imagined the day would ever come

It is taken for granted that environmentalists and conservation advocates are not fond of polluting power plants. But few know that they don’t like large hydroelectric schemes either, especially when scenic rivers are dammed, endangered species are threatened or communities go under rising reservoir waters. This explains why large hydro schemes are not counted as eligible renewable resources under renewable portfolio standards (RPF) in many jurisdictions including
California.

For some years, the American Rivers, an environmental group, has been fighting to remove 4 dams on the Klamath River, which starts in Oregon and ends in California, to restore a scenic watershed to its natural state and resurrect depleted stocks of salmon and steelhead. Farmers upstream of the river and PacifiCorp, a utility based in Portland, OR – a unit of Berkshire Hathaway Inc. – were not enamored with the idea, leading to a rancorous and protracted dispute. The dams were built over a period stretching from 1918 to 1962.

In mid November, the warring parties came to a historic compromise – nobody got all they wanted, but everyone agreed that it was better than the alternative, which was to continue the dispute. Under the plan, the 4 offending dams will be removed by 2020 – not 2015 as American River had wanted – and PacifiCorp would be compensated for the estimated $450 million cost of removal of the dams – $200 million would be recovered in rates from customers, the balance will come from the state of California.

The loss of 160 MW of hydro capacity – roughly 2% of PacifiCorp’s installed capacity – will be replaced from other renewable resources. Greg Abel, CEO of PacifiCorp assured his shareholders that the deal “ensures that our customers will be protected at every step along the way.”

Oregon’s Governor Ted Kulongoski, said, “while many months of work (lie) ahead, this historic agreement provides a path forward to achieve the largest river and salmon restoration effort ever undertaken.” The parties hope to finalize many remaining details by June 2009. Interior Secretary Dirk Kempthorne said, “This makes the first step in a future process, but it’s a giant step.”

US hydroelectric schemes have to obtain renewal licenses from the Federal Energy Regulatory Commission (FERC) once their initial licenses expire. That is usually when environmentalists intervene to undam the dams. But they have had very few successes to date. The Klamath case will give them new hope and aspirations.