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Bill may raise power rates
Governor’s proposal is part
of Klamath water settlement
A state legislative committee is
scheduled to consider a bill today
that will increase power rates for
PacifiCorp’s Oregon customers. The
increase is aimed at paying for the
removal of four hydroelectric dams
on the Klamath River.
Dam removal is a key component of the proposed Klamath Basin Restoration Agreement that seeks to resolve disputes about water in the Basin. If passed, Senate Bill 76 would raise up to $180 million a year to pay for the dam removal.
Opponents criticize the bill for being too open-ended, allowing PacifiCorp to raise rates at will for its half-million Oregon customers, potentially as much as $35 to $65 more per month.
“The big fallacy of it is, they don’t even know what the dam removal cost is,” said Tom Mallams, an irrigator off the Klamath Reclamation Project and head of the Klamath Off-Project Water Users.
Proponents say the bill is
critical for moving the restoration
agreement forward and that it limits
liability to the Portland based
utility’s customers, limiting any
rate increase to about $1.50 per
month.
“That’s the reason we
negotiated the deal we did,” said
Art Sasse, PacifiCorp spokesman.
A group of
stakeholders, state and federal
officials and representatives from
PacifiCorp reached a tentative dam
removal agreement in November. They have
until July 1 to hammer out a final
agreement, with dam removal beginning no
later than the year 2020.
Gov. Ted Kulongoski promised he’d bring about the legislation during the current session that would direct the state’s Public Utility Commission to raise PacifiCorp’s rates to pay for dam removal. He submitted the bill for consideration.
The $180 million, along with
$20 million from PacifiCorp’s ratepayers
in other states, would be combined with
$250 million in voter-approved bonds
from the state of California.
Returned to customers
If dam
removal does not take place, money collected
through rates to pay for it would be
returned to ratepayers.
The Senate Environment and
Natural Resources Committee hearing on the
bill will be the first opportunity for state
lawmakers to weigh in on dam removal and the
broader restoration agreement.
“We definitely
have an interest in seeing it passing,” said
Jillian Schoene, Kulongoski’s spokeswoman.
Greg Addington, executive director of Klamath Water Users Association, said his board supports the bill because it would push the restoration agreement closer to implementation.
“This is an element of the bigger package to bring stability to a place that hasn’t seen a lot of it,” he said.
Sen. Whitsett objects
But state Sen. Doug Whitsett, R -Klamath Falls, said in a press release that the bill would “establish an open ended financial liability of near biblical proportions” for PacifiCorp’s ratepayers.
The state lawmaker wrote that
sections of the bill allow the utility to
collect additional money to cover any
unforeseen costs, such as the removal of an
estimated 9,000 acre-feet of sediment behind
the dams.
A study from the Federal Energy Regulatory Commission indicates removal of that sediment could cost up to $500,000 per acre-foot, or up to $4.5 billion.
A study from the Federal Energy Regulatory Commission indicates removal of that sediment could cost up to $500,000 per acre-foot, or up to $4.5 billion.
Other sections allow the company to charge customers for finding new power sources and other liabilities, many of which there are no cost estimates available.
$35-65 a month
The result would be an increase of up to $35 to $65 a month for the average PacifiCorp customer, Whitsett wrote.
Mallams said studies should have been conducted on the feasibility of dam removal before introducing any legislation.
“They’ve put the cart way before the horse,” he said.
Sasse refuted the allegation the legislation will give PacifiCorp carte blanche to raise rates, saying it effectively caps the contribution from Oregon ratepayers at $180 million. Any cost overruns for dam removal would have to be paid from some other source.
A request by the Herald and News for further comment from Whitsett was not returned. State Sen. Jason Atkinson, R-Central Point, and vice chairman of the Senate Environment and Natural Resources Committee also did not return a request for comment.
Side Bar
How much of a rate
increase?
A bill in the state Senate would increase PacifiCorp’s Oregon customers’ rates to help pay for removal of four hydroelectric dams on the Klamath River.
PacifiCorp officials have said the proposed increase would raise the average Oregon customer’s bill by about $1.50 a month. Agricultural power users would see about a 2 percent increase in their bills.
Art Sasse, spokesman for the Portland-based utility, said the bill represents the best-case scenario for customers, as the maximum they pay with dam removal is the minimum they’d pay if the dams are relicensed with federal government’s requirements for continued operation, such as installing fish ladders.
“This caps costs and eliminates the risk of relicensing,” he said.
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