[8] Oregon Senate OKs Bill To Fund Klamath Dam Removals

The Oregon Senate passed a measure Feb. 17 to underwrite removal of four Klamath River hydroelectric dams with a 2-percent surcharge on PacifiCorp's customers in the state.

Senate Bill 76, which came from Gov. Ted. Kulongoski's office, was approved 18-12 on mostly party lines, with most Democrats supporting it.

The bill stems from an agreement reached in November among Oregon, California, the federal government, and PacifiCorp. Prior to this, PacifiCorp resisted the call for the removal, citing impacts to customer rates and company revenues.

The dam removals would also require laws passed by Congress and the California Legislature.

The agreement hinges on the bottom line--it was judged cheaper to remove the dams than to relicense them and have to build expensive measures such as fish ladders.

The bill does not guarantee dam removal. Rather, it would authorize the collection of a surcharge from 500,000 Oregon ratepayers--up to $180 million over 20 years--to fund the removals, which could begin in 2020. Ratepayers would pay an average of $1.50 per month, to be saved in a trust fund managed by the state's PUC.

Another $20 million for the task would come from the utility's customers in California, and California voters would be asked to approve up to $250 million in general obligation bonds to pay additional costs.

PacifiCorp would be allowed to recover the balance of its investment in the dams over the next 10 years, and replacement power would be paid for, as usual, by spreading the costs across the utility's six-state jurisdiction, with about 25 percent coming from the utility's Oregon customers. However, dam-removal costs will be borne by Oregon and California alone.

In addition, if some of the dams aren't removed, the corresponding surcharges will be stopped, and the outstanding balances applied, first, to relicensing requirements, and then to ratepayer refunds.

Republican Jason Atkinson backed the measure, while Democrat Rick Metsger opposed it.

In a floor speech leading up to the vote, Atkinson declared a "potential" conflict of interest because his company had consulted for PacifiCorp, but he nevertheless voted.

"I will lose friends over this bill," said Atkinson, adding that as a "fourth-generation landowner on the Klamath River," he was doing what he thought was best for the watercourse.

Metsger, the Legislature's Senate president pro tempore, said the measure did not adequately protect Oregon ratepayers or the state from liability stemming from dam removal, a theme most of the chamber's 12 Republicans echoed.

"This is not about fish," Metsger said. "It is not about agriculture, or irrigation, or the environment. Senate Bill 76 is about utility law. It's about ratepayers."

Those ratepayers, he said, were almost, but not quite, protected by the bill. Although it included caps on funds that could be gathered for dam removal, it had no language limiting liability, he noted, despite intense discussion of that issue, which was why he refused to vote for it.

"I am very disappointed that I have to vote 'no' today, because this is so easy to vote yes with a few extra words to protect the ratepayers of Oregon," Metsger said.

The bill now moves to the House. -Rick Adair

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