The Septuagenarian Speaks – published July 22, 2020, Siskiyou Daily News
Last week, I worked on a draft column for the Siskiyou Daily News that I haven’t yet submitted to the editor. It was another in a series of articles opposing removal of four dams on the Klamath River, a topic I feel passionate about. But last Thursday, the United States Federal Energy Regulatory Commission (FERC) issued a blockbuster order that may have a huge impact on the outcome. The order is 31 pages, with 142 footnotes. After seeing it, I initially thought I would write a piece attempting to condense, clarify, and explain it. I would throw my original article away, or at least set it aside for later. But Siskiyou Daily News editor Skye Kinkade has already written an excellent article in a separate story in today’s paper, making my plan superfluous. I do have some additional thoughts about the order, and then, if space permits, I will return to my original story
PacifiCorp, a public utility, currently owns and operates the dams, and holds the license to do so. The Klamath River Renewal Corporation (KRRC) is a newly-formed corporation created specifically to receive ownership of the four dams from PacifiCorp and then to demolish them. To accomplish this, PacifiCorp and KRRC filed two licensing applications to FERC. The first was to transfer the license from PacifiCorp to KRRC, and the second was for KRRC to surrender the license and remove the dams. The first application was intended to transfer to KRRC not only the license but also all the risks and liabilities associated with the removal of the dams, and to release PacifiCorp from those risks and liabilities. Last week FERC ordered that the transfer could proceed, but that PacifiCorp must remain on the license as co-licensee, and therefore must remain on the hook for the risks and liabilities. Quoting from the order:
“In this order, we review (KRRC’s) ability to undertake the proposed decommissioning and removal as part of our review of the license transfer, but we are not yet deciding whether to authorize the proposed surrender and removal. The decision as to whether, and under what conditions, to authorize decommissioning and removal will occur in the surrender proceeding … We recognize that the intent of the parties to the Amended Settlement Agreement was for PacifiCorp to wholly relinquish its interest in the Lower Klamath Project to (KRRC), with PacifiCorp continuing to provide management and operations services, but having no responsibility or liability as a licensee. While we have yet to address the surrender application, because of the magnitude of the proposed decommissioning, the uncertainties attendant on final design and project execution, and the potential impacts of dam removal on public safety and the environment, we conclude that, should we ultimately approve a surrender and decommissioning plan, it would not be in the public interest for the entire burden of these efforts to rest with (KRRC) should we approve the surrender application. Although, as we discuss below, the financial and technical arrangements envisioned by the parties might well suffice to carry out the planned activities, there is a significant degree of uncertainty associated with the project. Costs could escalate beyond the level anticipated and unexpected technical issues could arise. Were (KRRC) to be the sole licensee, it might ultimately be faced with matters that it is not equipped to handle. Unlike (KRRC), which has limited finances and no experience with hydropower dam operation or dam removal, PacifiCorp has additional resources as well as experience in removing a major project and the experience of operating the facilities associated with the Lower Klamath Project for the last nearly 32 years. Accordingly, we believe that the public interest requires that PacifiCorp remain a co-licensee, and we condition our approval of the transfer upon it doing so … We recognize that this conclusion represents a significant change from what the parties envisioned … However, it is not necessarily the case that the final results will change from those the parties anticipated. For example, should we approve the proposed decommissioning, it may be that the funding available to (KRRC) will be sufficient to cover the costs of decommissioning and that no substantial unforeseen issues will arise. Further, PacifiCorp and (KRRC) may elect to amend their arrangement in order for (KRRC) to indemnify PacifiCorp for any expenses it bears as result of it being a co-licensee. In the final analysis, however, we do not find it consistent with our obligation to protect the public interest to transfer the Lower Klamath Project to (KRRC) as sole licensee for the purpose of decommissioning the project.”
As we can see, Thursday’s FERC order is but the first in a two-step process. The second step will be for FERC to directly address the question of whether the dams should be decommissioned and removed. That will come later. Thursday’s order was a setback for those who are pushing for dam removal, but not necessarily a permanent roadblock. The ball is now in PacifiCorp’s court to decide how it will want to proceed. Getting out from under the burdens of dam ownership and the larger risks associated with dam destruction were a major part of the incentive driving PacifiCorp’s application to transfer the license. That is also what prompted the creation of KRRC, essentially a shell corporation. I’m not going to attempt to speculate on what PacifiCorp’s next step will be, but I’m quite sure that, damaging as it is, Thursday’s FERC order doesn’t put an end to the dam removal quest. It ain’t over till it’s over.
So, for those of us who believe that dam removal is a terrible idea, we need to keep on fighting. A month or so ago, I wrote an article about how there are many influences in addition to the dams that affect fish habitats above the dams, and that taking out the dams simply won’t magically solve the flow dynamics problems of the river that hinder the salmon migration. The opinion piece that I intended for today’s paper has to do with fish habitats below the dams, and how the dams actually provide a benefit to those habitats. I have run out of space, so I’ll save that brilliant opinion piece for a later date. I’m sure, dear reader, that you are waiting with bated breath. Or should I say, with baited hook?