PacifiCorp says dam upgrade preferable

GRANTS PASS -- PacifiCorp told federal dam regulators Monday that it might actually save money by upgrading four hydroelectric dams on the Klamath River to protect salmon, contrary to a widely circulated report that estimated it made economic sense to remove the dams.

In a filing with the Federal Energy Regulatory Commission, the Portland utility said it had commissioned a review of a report done for the California Energy Commission by M. Cubed consultants of Davis, Calif., which had found PacifiCorp could save $101 million by removing the dams and buying replacement power.

Christensen Associates Energy Consulting of Madison, Wis., found problems with the economic model used to make the initial estimate, as well the data fed into the model.

Problems were such that no good estimate could be reached. But when data fed into it was corrected, the model came up with an estimate that PacifiCorp would save $46 million by upgrading the dams and continuing to operate them, Christensen Associates Vice President Dan Hansen said.

The M. Cubed report looked only at removing all four dams, the review added. Looking at the dams individually, the model indicates it makes sense to remove the Iron Gate Dam, but Copco No. 2 and J.C. Boyle would be profitable.

"The CEC report is clearly not an appropriate tool to help us and other interested stakeholders make any of these very difficult decisions," PacifiCorp energy President Bill Fehrman said in a statement.

The California Energy Commission received a copy of the Christensen Associates review, but had not yet had a chance to go over it fully, a commission spokeswoman, Susanne Garfeld, said.

Richard McCann of M. Cubed did not immediately return telephone calls for comment.

PacifiCorp, which serves 1.6 million customers in six Western states, is seeking a new license to operate the dams for as long as 50 years.

Indian tribes, commercial fishermen and conservation groups have been trying to persuade PacifiCorp to remove the dams to expand habitat and improve water quality for salmon struggling to survive in the Klamath River.

PacifiCorp has said it would be willing to remove the dams if it could be done in a way that benefits customers. It also has said it is willing to spend $300 million to upgrade the dams, arguing they are an important source of electricity free of the carbon emissions blamed for global warming.