John C. Boyle Dam

John C. Boyle Dam.

PacifiCorp would transfer the operating license of the four hydroelectric projects on the lower Klamath River to the states of Oregon and California, along with the Klamath River Renewal Corporation, but would continue to pay for nearly half the costs of removing the dams, according to a deal announced Nov. 17 that could put the largest dam removal project in the world back on track.

A decades-long effort to remove the four dams was derailed July 16 when FERC ruled that rather than surrender its operating license to the Klamath River Renewal Corporation, PacifiCorp must remain a co-license holder to lend its "expertise" and "operational experience" to the dam removal project.

The plan to transfer the operating license to the states and KRRC was laid out in a memorandum of agreement signed by those entities, along with the utility and the Yurok and Karuk tribes.

Under the plan, PacifiCorp would continue to pay $200 million of the estimated $452 million of removal costs, and California would pick up the remainder, as agreed upon in an earlier settlement. The utility has already collected its share of costs from a rate surcharge, and California's costs have been covered by a bond issued in 2014.

PacifiCorp and the two states have also agreed to add $45 million ($15 million each) to the $50 million contingency fund for the project. Any cost overruns not covered by the contingency fund would be split among the utility and the states, according to the new MOA.

The agreement also maintains liability protection for PacifiCorp's customers.

The parties submitted an Amended License Surrender Application to FERC on Nov. 17 reflecting terms of the agreement. If approved, removal of the dams could begin in 2022 and be completed in 2023.

The agreement calls for implementing the Klamath Hydroelectric Settlement Agreement, which sets the terms of the removal of the four dams and demonstrates the five parties' commitment to dam removal, Charlton Bonham, director of the California Department of Fish and Wildlife, said during a virtual press conference on Nov. 17.

"We are taking an incredibly important step forward on the path toward restorative justice for the people of the Klamath Basin, and towards restoring the health of the river as well as everyone and everything that depends on it," Oregon Gov. Kate Brown said in the virtual press conference on Nov. 17.

In July, FERC rejected the Klamath settlement because "it would not be in the public interest for the entire burden of the project to rest with KRRC" given 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.

CDFW's Bonham said that adding the states and KRRC as co-license holders assures sufficient financial backing to remove the dams.

"The Klamath River is a centerpiece of tribal community, culture and sustenance and a national ecological treasure," California Gov. Gavin Newsom said during the news conference. "With this agreement, we are closer than ever to restoring access to 400 miles of salmon habitat which will be a boon to the local economy."

The agreement was criticized by U.S. Rep. Doug LaMalfa of California and a leading Republican in the Oregon Legislature.

"California's quest to remove these perfectly good dams continues," LaMalfa said in a prepared statement.

He continued, "Now the taxpayers of California and Oregon will be on the hook due to this agreement to pick up a multi-billion dollar expense for the cost and liability of the inevitable environmental damage this project will cause. Removing these dams will do nothing to help fish, but will destroy water storage needed for firefighting and will bankrupt Siskiyou County," he said.

Oregon Rep. Christine Drazan (R-Canby), Republican leader in the Oregon House of Representatives, said the MOA has no protections against cost overruns and is being entered into within an uncertain litigious and regulatory environment, which will impact state budgets for years to come.

"Any executive branch agreement must include protections for tax dollars currently dedicated to funding our safety net," she said.

For the Karuk Tribe, the MOA puts back in motion what could result in freeing up 400 miles of river for steelhead and salmon runs that have been blocked since the first hydroelectric facility was built on the river in 1903.

Russell Attebery, a three-term chairman of the Karuk Tribe, said his worst days were the many times he had to tell tribal members there were no fish available to harvest.

"I'm looking forward very much now to having the best days with the Karuk Tribe, saying we have restored those fish and can enjoy those bonding times with our children, when we can go together to the river and put food on the table together," Attebery said during the virtual news conference.

Editor - Clearing Up

Steve began covering energy policy and resource development in the Pacific Northwest in 1999. He’s been editor of Clearing Up since 2003, and has been a fellow at the Institute for Journalism and Natural Resource and University of Texas.