PGE nears deal on dams

PGE nears deal on dams

By Jim Kadera
November 28, 2005


ESTACADA –Under an agreement nearing completion after years of study and negotiation, Oregon’s largest utility would spend an estimated $200 million on environmental improvements in exchange for a 45-year relicensing of four dams on the Clackamas River.

The spending would rival amounts that PacifiCorp will pay for similar work under relicensing of its hydro systems on the North Umpqua River near Roseburg and on the Lewis River in Southwest Washington. Portland General Electric expects all 21 parties in the negotiations to sign the agreement by mid-December, said Julie Keil, PGE hydro licensing director. It would then be filed by year’s end with the Federal Energy Regulatory Commission. The existing 30-year license expires in August.

Although the agreement is not final, the company disclosed improvements it has agreed to make –and in some cases is already making –to protect populations of salmon, steelhead and other migratory fish. The improvements include building and maintaining better fishways and rehabilitating spawning and rearing habitat.

PGE’s Keil said new rules on hydro relicensing from the Bush administration will not affect the Clackamas negotiations and agreement.

Many of the parties involved –including state and federal fish agencies, treaty tribes and sport fishing groups –declined to comment until the agreement is signed.

Keil, an attorney, estimated that the improvements would cost $200 million over 45 years and reduce electricity generation on the Clackamas by about 7 percent. Most of the power loss would come from tapping water from Harriet Lake to increase spawning and rearing habitat for salmon and cutthroat trout.

“Hundreds of dams in Oregon and Washington are up for relicensing in the next decade, and we will look for ways they can operate profitably while also improving fish passage and habitat,” said Brian Gorman, regional spokesman for the National Marine Fisheries Service in Seattle.

In addition to the relicensing agreements, next year the fisheries service will begin releasing for public comment a series of recovery plans for fish runs listed as threatened or endangered, Gorman said. But unlike the relicensing pacts, the recovery plans will be voluntary, he said.

Minimal rate increases

Even with the cost of improvements and the diversion of some river water, the dams will remain “a low-cost resource for ratepayers,” said Bob McNamee, an economist with the Oregon Public Utility Commission in Salem.

McNamee said PGE can’t begin charging customers for environmental improvements until they are completed. The company expects to include the cost of the first work in rate requests to the PUC in 2007. He estimated that customer bills would increase an average of 1.5 percent annually over the 45 years of the new license.

“Relicensing any hydro project with FERC (Federal Energy Regulatory Commission) is more expensive than it used to be,” McNamee said. “Many were built 50 years ago when environmental standards weren’t as strict as today.”

PGE supplies electricity to about 767,000 customers in the Portland-Salem area. The company’s Clackamas River dams generate enough electricity for about 52,500 homes.

About 60 percent of PGE power comes from its hydroelectric facilities, including Willamette Falls and Deschutes River generators, and coal or natural gas-fired plants. The company buys 40 percent of its power from other suppliers.

“Society expects us to minimize our footprint on the landscape,” Keil said. But at the same time “we have to strike a balance in doing the right thing with what our customers will pay for,” she said. A new fish ladder

PGE began Clackamas basin work before completing the negotiations. The spillway at River Mill Dam, which flushes young fish downstream during high flows, was upgraded this summer, and a new fish ladder will be ready next fall at the dam near Estacada.

The steps in the old ladder –built in 1911 and upgraded twice –are too steep and narrow for adult fish to bypass the dam easily. The ladder is the oldest and least efficient among those at the Clackamas dams. The new version will be less steep and have resting pools and better flow to attract fish to the ladder.

Keil said fish agencies put upgrades to River Mill high on their priority list, and all parties agreed it was “out of line” with modern fishways, she said. “It didn’t make sense to hold out when we knew we had to build a new ladder.”

The most unusual improvement planned by PGE is experimental. John Esler, PGE project manager, said 7,000 tons of rock will be put into the river for seven or eight miles downstream of River Mill.

The dam prevents rock from being replenished downstream, so a gravel bar will be formed to restore the river bottom to a state that promotes the growth of the aquatic insects fish eat, he said. The gravel bar also will allow more vegetation to grow streamside. However, no one knows whether 7,000 tons of rock will be enough to withstand intense flood flows. If the gravel bar is devastated, more rock will be used to form a more durable one, Esler said.

A helpful precedent

PGE went into negotiations pushing for a 50-year license, the same as it received from federal regulators for its Pelton and Round Butte dams on the Deschutes River. Fish agencies and some other parties favored limiting the term to 30 years. The company and other parties agreed to a compromise of 45 years, PGE said.

Oregon Department of Fish and Wildlife and the Association of Northwest Steelheaders were among the negotiating parties declining to comment until an agreement is reached.

However, others involved said the agreement would be helpful in a series of hydro dam relicensings in Oregon and Washington. That includes PacifiCorp’s expecting to pay $290 million for improvements at three Lewis River dams and $67 million at its hydro project on the North Umpqua River east of Roseburg.

PGE and the Confederated Tribes of Warm Springs agreed last year to spend about $135 million to make the Pelton-Round Butte dam complex they jointly own in Central Oregon safer for fish. Pelton-Round Butte produces enough power to supply about 45,000 homes.

“Relicensing provides a once-in-a-lifetime opportunity to bring outdated hydro projects in compliance with environmental laws,” said Brett Swift, deputy director at the Portland regional office of American Rivers, a conservation organization. Better technology to improve water quality and fish passage allows utilities “to do what is necessary to protect public resources,” she said.

The Confederated Tribes of Warm Springs, and the Grand Ronde and Siletz tribes are three of the parties in the PGE/Clackamas talks. Clay Penhollow, hydropower review coordinator, who represents the Warm Springs tribes, said they want both resident and migratory fish protected. Their interest includes lamprey eels, which are harvested by few if any of the other parties in the negotiations.

“We’ve found PGE willing to discuss things with the other parties,” he said in comparing the company with other hydropower utilities he has negotiated with. “They are tough negotiators, but one of the better ones. They’re willing to consider what you have to say.”

The negotiations over the Clackamas River dams have been much more complicated than during relicensing 30 years ago. Back then, Native American tribes had no legal standing to participate, and many of the conservation advocates, such as WaterWatch of Oregon and the Clackamas River Basin Council, didn’t exist. And the Clean Water and Endangered Species acts hadn’t been passed by Congress.

“We’re proud that our projects don’t end up in billion-dollar lawsuits,” PGE project manager Esler said. “We work hard to balance customer energy issues with fish issues.”