Basin settlement proposal puts the cart before the horse

PacifiCorp puts concerns of customers first for hydro power

ROB LASICH

Guest writer

Klamath Falls Herald and News

April 20, 2008

   This statement was released in conjunction with PacifiCorp’s announcement of a new operating schedule for its Link River facilities. 

   We are not breaking new ground here today. We are still helping lead the charge for sound science and common sense in balancing numerous interests in the Klamath Basin — while providing clean, renewable low-cost power for our customers. 

   We continue to listen to all voices here in the Klamath Basin – and our customers remain on all sides of these complex issues. 

   However, in light of this newspaper’s extensive coverage of the draft Basin settlement agreement and some misunderstandings that persist, we need to reiterate a few key points. 

   First of all, while the draft basin settlement agreement is based, in part, on the signatory parties’ support of dam removal, the proposed agreement deals with what happens after a dam removal agreement is struck — and PacifiCorp has not reached any dam removal agreement with any party. The proposed agreement places the proverbial cart before the horse. 

   In terms of the removal question itself: PacifiCorp has been quite consistent in saying that we are staunch advocates for our customers and their ability to access low-cost, carbon-free hydroelectric power or be fairly compensated for that loss. So, the question for the company isn’t about whether PacifiCorp is “for” or “against” any agreement, settlement group, or interested third party. Rather, our concern is what outcome is in our customers’ best interest.

Customers should be protected    

   If the appropriate government bodies consider all voices in setting public policy and utilize a foundation of sound science in determining that dam removal is the best course of action – we will engage with those governmental bodies to explore implementation of that policy. However, those same government entities must also ensure that our customers don’t bear unreasonable costs or liability for the risk associated with removal. 

   There are significant environmental trade-offs in removing the Klamath hydroelectric Project. 

   It generates power for 70,000 residences, which, based on 2.75 people per home, is about 192,000 people. 

   The Klamath’s emissions-free generation offsets 473,000 tons of CO2, which is the amount of emissions from 102,000 cars or burning 1.2 million barrels of oil a year. 

   Replacing the average annual Klamath electric generation with fossil fuel each year would consume 5 billion cubic feet of natural gas or 360,000 tons of coal. 

   In terms of economic balance, this is not just about a simple trade-off between the cost of physically removing the dams versus building fish ladders and screens. 

   The economic equation must consider an enormous amount of unknown risk associated with removal. 

   Even advocates admit that dam removal of this magnitude is unprecedented and they lack the scientific research to properly define and quantify the risks associated with removal. For example, some advocates concede dam removal means a sediment surge will likely have a negative impact on aquatic life in the river, including returning salmon and the real debate is over how long that impact will last. 

   For PacifiCorp’s customers, the ultimate decision on dam removal comes down to risk and price. Customers need to be compensated fairly for the loss of their low-cost, carbon free renewable energy supply and be protected from the many risks associated with removal. Our customers should not be expected to pay an enormous price for implementing public policy and covering the complex needs of numerous stakeholder interest groups in the Klamath Basin . 

   PacifiCorp has an excellent track record in hydro relicensings – a proven history of engaging in collaborative processes with multiple stakeholders including federal and state agencies, tribes and environmental groups; in fact, we have reached settlement outcomes recently in six hydro licensing cases with diverse parties at the table and some of those agreements included dam decommissioning. 

   There are many questions remaining in this long and complex process that need answers. For example, if federal and state governments decide that the public interest dictates that the dams cease to be used to provide hydropower to the West, how long and under what conditions can our customers continue to receive hydropower service from each of the dams — hydropower that has been supported by rates paid by those customers? 

   As we continue to work on answering these questions and understanding the various positions in the Basin and beyond, we will proceed with our relicensing application and work toward a common sense, balanced approach to serving the Klamath Basin – while providing clean, low-cost energy to all of our 1.7 million customers.

About the author

  Rob Lasich is president of PacifiCorp Energy, one of three business units that make up PacifiCorp, which serves the Klamath area and much of the rest of the West. PacifiCorp Energy includes PacifiCorp’s electric generation, commercial and energy trading functions and coal mining. It is headquartered in Salt Lake City , Utah .

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