SocraticGadfly: End of the line for Klamath dams?

November 17, 2008

End of the line for Klamath dams?

Pacific salmon, Indian tribes, fishermen and environmentalists can only hope that a new working framework for removal spells the end of the line for four Klamath River dams.

The Bush Administration, the states of California and Oregon, and PacifiCorp, which runs four aging hydroelectric dams on the Klamath River, which rises in southwest Oregon and goes through northwest California to the Pacific, have agreed to a non-binding framework for eventually removing the dams. Here’s the details:
The new agreement, which is expected to be final by June 2009, provides specifics on financing the dam removal. PacifiCorp, which is a subsidiary of the MidAmerican Energy Holding Company and operates as Pacific Power on the West Coast — would add a 2 percent annual surcharge, amounting to about $15 on average, for its 550,000 customers in Oregon and 45,000 in California.

In addition to the $200 million generated in part by these surcharges, $250 million would be raised by a bond issued by California. The dams would also be transferred to a new federal agency set up for the purpose, relieving PacifiCorp of liability during the actual removal.

Even though the agreement is non-binding, it’s hard for PacifiCorp to walk away. It’s being adequately compensated, yet while not being able to fleece customers for stranded costs, and it’s able to let go of liability.

Update, Nov. 18: I may have had too much initial praise for this.

Among other contraindications to the deal:

1. Not all the affected Indian tribes are jumping with joy;
2. Many people are wondering why the wait is until 2020 to potentially take action;
3. Irrigators would get a first-in-line legislative degree for water rights in dry years;
4. A required cost-benefit analysis could allow PacifiCorp (held by Warren Buffett) to permanently avoid an actual tear-down;
5. Schwarzenegger may have some dam California reasons for pushing this.

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