Senate OKs surcharge for Klamath dam removal

Senate OKs surcharge for Klamath dam removal

By Matt Preusch and Ted Sickinger
February 17, 2009


The Oregon Senate passed a bill Tuesday to pay for removing four Klamath River dams with a 2 percent surcharge on the Oregon ratepayers of Pacific Power.

Senate Bill 76 was approved 18-12 on largely partisan lines with Sen. Jason Atkinson of Central Point the only Republican voting aye.

Gov. Ted Kulongoski, PacifiCorp and other advocates of the bill maintain that it’s the best way to accomplish the trifecta of improving fish passage, capping ratepayers’ liability for ripping out the dams and protecting them from the potentially higher costs of upgrading the dams to win a new federal license.

“This bill and the dam removal will save money for Oregon ratepayers,” said Sen. Jackie Dingfelder, D-Portland.

Opponents, including Republican legislators, environmental groups and advocates for industrial ratepayers, suggest that the bill is being rushed through the Legislature without sufficient protections for ratepayers or controls on the use of the money.

Senate Bill 76 was brought by Kulongoski, the legislative result of a dam removal pact the governor signed last fall with California, the federal government and PacifiCorp, which owns the dams in question.

Under the terms of the deal, PacifiCorp’s Oregon ratepayers would cover the first $180 million of dam removal costs, while California would cover $20 million. Voters in California would also be asked to approve up to $250 million in general obligation bonds to pay any additional costs.

PacifiCorp estimates that the average residential customer in Oregon would pay an extra $1.50 a month.

Dam removal could begin by 2020, but there are many other steps that could derail it, including required legislation in Washington, D.C., and California.

The Industrial Customers of Northwest Utilities has long argued that Oregon’s share of the dam removal costs is too high. Utility costs are usually shared among customers in all six states where PacifiCorp does business, with Oregon ratepayers bearing about a 26 percent share.

In this case, only Oregon and California would be charged for dam removal since that’s where the bulk of the benefits are expected to flow. Oregon would bear 90 percent of the first $200 million.

ICNU hasn’t gotten any traction with that argument. But it is now pushing to insert language in the bill that would impose a hard cap on Oregon ratepayers’ costs and give regulators the authority to deny rate recovery for costs they deem imprudent. The cap would protect ratepayers from environmental costs that occurred after the dams were ripped out, such as silt removal or other remediation.

“If we’re going to pay a disproportionate share of dam removal costs, I’d like to get meaningful protection from other costs, and I haven’t got that,” said ICNU Executive Director Michael Early.

Liability questioned
Sens. Jeff Kruse, R-Roseburg, and Rick Metsger, D-Welches, agreed with Early during Tuesday’s debate. “I don’t see anywhere in the bill where we are protected from liability for that,” Kruse said.

Mike Carrier, the governor’s natural resources policy adviser, insists that the original dam removal agreement contained adequate protections against additional liabilities for Oregon ratepayers and that he hadn’t seen any viable amendments from ICNU. He maintains that the best way to protect Oregon ratepayers is to pass Senate Bill 76, a mantra repeated by PacifiCorp in its advocacy for the bill.

Atkinson, a fourth-generation Klamath River landowner, said Tuesday that he agonized over his decision to support the bill and recognized he would alienate longtime friends and allies with a yes vote, but he decided it was what’s best for the river.

A conflict
Atkinson, a self-employed business consultant, previously declared a conflict on the bill because he has done consulting work for PacifiCorp.

The bill must still be approved by the House and signed by the governor before becoming law.

Lisa Brown, staff attorney for Waterwatch of Oregon, said her organization is pushing for the House to insert language to ensure that if any of the dams isn’t removed, the money collected from ratepayers is refunded, not used for relicensing the dam, which is an option in the bill.

“We want to make sure we’re not (encouraging) relicensing over dam removal,” she said.

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