Bill may raise power
Governor’s proposal is part of Klamath water settlement
by Ty Beaver, Herald and News 2/3/09
A state legislative committee is scheduled to consider a bill
today that will increase power rates for PacifiCorp’s Oregon
customers. The increase is aimed at paying for the removal of four
hydroelectric dams on the Klamath River.
Dam removal is a key component of the proposed Klamath Basin
Restoration Agreement that seeks to resolve disputes about water
in the Basin. If passed, Senate Bill 76 would raise up to $180
million a year to pay for the dam removal.
Opponents criticize the bill for being too open-ended, allowing
PacifiCorp to raise rates at will for its half-million Oregon
customers, potentially as much as $35 to $65 more per month.
“The big fallacy of it is, they don’t even know what the dam
removal cost is,” said Tom Mallams, an irrigator off the Klamath
Reclamation Project and head of the Klamath Off-Project Water
Proponents say the bill is critical for moving the restoration
agreement forward and that it limits liability to the Portland
based utility’s customers, limiting any rate increase to about
$1.50 per month.
“That’s the reason we negotiated the deal we did,” said Art Sasse,
A group of stakeholders, state and federal officials and
representatives from PacifiCorp reached a tentative dam removal
agreement in November. They have until July 1 to hammer out a
final agreement, with dam removal beginning no later than the year
Gov. Ted Kulongoski promised he’d bring about the legislation
during the current session that would direct the state’s Public
Utility Commission to raise PacifiCorp’s rates to pay for dam
removal. He submitted the bill for consideration.
The $180 million, along with $20 million from PacifiCorp’s
ratepayers in other states, would be combined with $250 million in
voter-approved bonds from the state of California.
Returned to customers
If dam removal does not take place, money collected through rates
to pay for it would be returned to ratepayers.
The Senate Environment and Natural Resources Committee hearing on
the bill will be the first opportunity for state lawmakers to
weigh in on dam removal and the broader restoration agreement.
“We definitely have an interest in seeing it passing,” said
Jillian Schoene, Kulongoski’s spokeswoman.
Greg Addington, executive director of Klamath Water Users
Association, said his board supports the bill because it would
push the restoration agreement closer to implementation. “This is
an element of the bigger package to bring stability to a place
that hasn’t seen a lot of it,” he said.
Sen. Whitsett objects
But state Sen. Doug Whitsett, R -Klamath Falls, said in a press
release that the bill would “establish an open ended financial
liability of near biblical proportions” for PacifiCorp’s
The state lawmaker wrote that sections of the bill allow the
utility to collect additional money to cover any unforeseen costs,
such as the removal of an estimated 9,000 acre-feet of sediment
behind the dams.
A study from the Federal Energy Regulatory Commission indicates
removal of that sediment could cost up to $500,000 per acre-foot,
or up to $4.5 billion.
Other sections allow the company to charge customers for finding
new power sources and other liabilities, many of which there are
no cost estimates available.
$35-65 a month
The result would be an increase of up to $35 to $65 a month for
the average PacifiCorp customer, Whitsett wrote.
Mallams said studies should have been conducted on the feasibility
of dam removal before introducing any legislation.
“They’ve put the cart way before the horse,” he said.
Sasse refuted the allegation the legislation will give PacifiCorp
carte blanche to raise rates, saying it effectively caps the
contribution from Oregon ratepayers at $180 million. Any cost
overruns for dam removal would have to be paid from some other
A request by the Herald and News for further comment from Whitsett
was not returned. State Sen. Jason Atkinson, R-Central Point, and
vice chairman of the Senate Environment and Natural Resources
Committee also did not return a request for comment.
How much of a rate increase?
A bill in the state Senate would increase PacifiCorp’s Oregon
customers’ rates to help pay for removal of four hydroelectric
dams on the Klamath River.
PacifiCorp officials have said the proposed increase would raise
the average Oregon customer’s bill by about $1.50 a month.
Agricultural power users would see about a 2 percent increase in
Art Sasse, spokesman for the Portland-based utility, said the bill
represents the best-case scenario for customers, as the maximum
they pay with dam removal is the minimum they’d pay if the dams
are relicensed with federal government’s requirements for
continued operation, such as installing fish ladders.
“This caps costs and eliminates the risk of relicensing,” he said.