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NW Fishletter #384, August 1, 2018

[1] Nonprofit Group Takes Major Step Toward Klamath Dam Removal

A "Definite Plan" to tear down four dams on the Klamath River in California and Oregon estimates the planning, removal and restoration costs will total $397.7 million, the Klamath River Renewal Corporation reported to the Federal Regulatory Energy Commission (FERC) in a June 29 filing.

The "most probable" cost estimate is well within the $450 million already being generated from PacifiCorp customer surcharges and a California bond.

KRRC Executive Director Mark Bransom told NW Fishletter that removing the four Klamath River dams would be the largest and most expensive dam removal project in U.S. history. That's based on the number of dams to be removed (four), their combined height of 400 feet and the 76 miles of river and tributary habitat that would become accessible to fish also make this the nation's largest dam-removal project.

Filing the 2,300-page Definite Plan with FERC is a major step forward in the nonprofit group's ongoing efforts to remove the dams, as agreed to in the Klamath Hydroelectric Settlement Agreement. It keeps the project on track to begin site preparations in 2020, and actual removal work in 2021, if state and federal regulatory approvals are granted.

According to the plan's description, "The project involves the physical removal of each of the four dam developments (Iron Gate, Copco No. 1 and No. 2, and J.C. Boyle) to achieve at minimum a free-flowing condition and volitional fish passage, site remediation and restoration, including previously inundated lands, measures to avoid or minimize adverse downstream impacts, and all associated permitting for such actions."

Now that the Definite Plan is filed, FERC and an independent Board of Consultants--chosen by KRRC and approved by FERC--will review it and may offer suggestions or questions that could modify the plan, Bransom said. "We view this as a significant milestone, but we don't think this is the last word with regard to our proposal," he said. Details in the plan itself and the cost estimate will likely be refined after the federal agency and the consultants review it, he said.

The plan includes deconstruction and restoration blueprints and costs for both the preferred alternative for a full removal, which would tear out all structures associated with the four dams, and a partial removal that would remove all structures in the river and return it to a free-flowing state, but defer the removal of some structures that are not in the river such as powerhouses, foundations, tunnels and pipes.

The $397.7 million cost estimate for full removal includes $68 million in contingency funds--or 30 percent of the construction total--to account for uncertainties in design and construction. It also includes a "most probable high" estimate of $507.1 million, including $129.7 million in contingency funds. Bransom said the high estimate is calculated by identifying possible problems or changes that could arise and assigning them a likelihood of occurrence and associated cost. In the high estimate, 90 percent of those risks would occur, compared with the most likely estimate, in which 40 percent of them occur.

Costs estimates were also calculated for partial removal, at $352.2 million, with a most probable high estimate of $467.8 million.

In addition to the detailed plan, KRRC also filed a letter with answers to questions that FERC posed in a previous order to determine whether KRRC has the technical, legal and financial capabilities to take over the license for the lower Klamath River dams.

In answering the commission's question about how KRRC would obtain funds to operate the project if surrender is not approved before funding is in place, KRRC noted that PacifiCorp has a contractual agreement requiring it to pay all costs of operating and maintaining the facilities from the time the license is transferred until decommissioning.

KRRC also explained how it would respond if costs exceed funds from surcharges and the bond. Bransom noted those options include turning to partial removal instead of full removal. "We could save a significant amount by deferring removal of the out-of-water structures," he said, adding, "Either of the two would result in removal of all four dams and in water structures, so fish would be able to move up and down the river."

He said other options include raising additional funds; bringing the two states, PacifiCorp and KRRC together to discuss a solution; and terminating the project, "But that's not on anyone's mind. We have a high level of confidence that we have sufficient funds," he said.

Bransom said with the filing, FERC should have most if not all of the information it needs to make a determination on KRRC and PacifiCorp's joint application to transfer the license for the four dams to KRRC. Once a transfer is granted, KRRC would seek to surrender that license through FERC before decommissioning and removal can begin.

The settlement agreement calling for removing the four dams came about after PacifiCorp initially tried to relicense its eight dams in the Klamath Project with FERC before it expired in 2006, but found that the lower dams would operate at a loss with the new requirements set by FERC. The four dams have a total combined capacity of 163 MW, and average generation of 686 MWh annually.

PacifiCorp spokesman Bob Gravely said the company has supported the settlement agreement from the start, as long as it includes four things for PacifiCorp: a cost cap, liability protection from the removal phase, a third party to remove the dams, and the ability to generate power and operate the dams until the license is surrendered and decommissioning begins.

He said the loss of generation will not be an issue for the investor-owned utility. "It's kind of like having 70 hoses filling a bathtub. If you take one hose out, it's not like you're going to have trouble filling the bathtub," he said. "We're constantly adjusting to match our demand with our generation." -K.C. Mehaffey

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Publisher/Editor-in-Chief: Mark Ohrenschall, Editor: K.C. Mehaffey
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