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Summary, comments end Camp, Dresser and McKee report

by David Smith, Siskiyou Daily News 2/24/09
Klamath River - In closing the Camp, Dresser and McKee report regarding potential liabilities and the estimated costs for mitigation, the report’s authors summarize their findings.

The report states, “The Klamath Dam Decommissioning Project Team identified approximately 130 physical, biological and socioeconomic liabilities associated with the decommissioning action,” explaining that the liabilities were then ranked according to their liability level. “The top 28 liabilities ranked ‘high’ would represent a very large percentage of the decommissioning cost,” the report claims.

The summary also contains the estimated cost range for total decommissioning liabilities, assuming all liabilities exist and require mitigation. This range is presented as $466 million to $837 million, “with removal of structures representing approximately 11 percent of the total cost for the high estimate and approximately 20 percent of the total cost for the low estimate.”

The report also states that there are potential liabilities that were unquantifiable at the time of the writing, which may add to the final cost of decommissioning.
The report states that the North Coast Regional Water Quality Control Board of California prohibits the discharge of sediments from construction projects, and dam decommissioning is included in that category.

“Different approaches to sediment management would be required to meet the NCRWQCB’s Basin Plan sediment measures and action plan guidelines and the California Ocean Plan,” the report states.

The report also explains that authority to impose mitigation and restoration measures related to the dam decommissioning would largely fall to the Federal Energy Regulatory Committee (FERC) as granted by the Federal Power Act. The report’s authors suggest obtaining a FERC order “stating the conditions that would be imposed upon decommissioning of the project” to mitigate Federal Power Act liabilities that may arise with the open–ended nature of the decisions regarding dam decommissioning liabilities.

Also discussed in the summary is the “high potential for litigation with a dam removal program that proposes to pass large volumes of sediment due to the damage to downstream fisheries and the aquatic ecosystem.”

The report mentions the use of Clean Water Act 401 Water Quality Certification to impede dam removal, as well as the potential for litigation relating to various potential socioeconomic losses, such as real estate diminution and the loss of renewable power.
The report also mentions that the Siskiyou County Board of Supervisors has “started investigation on a litigation budget to challenge removing the dams.”

The final part of the summary discusses the possible future of Keno Dam, including water quality compliance and transfer of ownership.

The report also contains two appendices, which contain comments from reviewers within the Department of the Interior and from a variety of other sources.

The first commenter states, “Clean Water Act Certification: Processes do exist for State and Regional Water Board(s) to issue the approvals necessary for dam removal. There is no basis for the assumption that Certification by California under the Clean Water Act would require 50 percent of the total sediment volume (10 million cubic yards!) in the project reservoirs to be removed and disposed of at great expense.”

The report’s authors are allowed to respond to comments and alter their report accordingly, and the authors responded, “Removal of 50 percent of the sediment was included as a point of reference to characterize the potential risk generated by the uncertainty surrounding sediment discharge permitting.”

The authors also explain that an earlier study stated that there may be a need to explore “full or partial dredging” of the sediments behind the dams.

Another commenter said, “Cost Only: While reclamation recommends benefit–cost analysis, CDM focuses only on costs, and provides no analysis of off–setting benefits.”

The author’s responded, “CDM’s scope of work was to identify the potential liabilities associated with removal of the four dams and to identify the potential costs associated with those liabilties. CDM left the assignment of responsibility for these liabilities to Reclamation, the Department of the Interior and other stakeholder groups party to the Settlement Agreement.”

Other concerns addressed in the appendices include questions about how the costs were obtained, the relevance of some of the potential liabilities, the mix of different, seemingly unrelated costs and also what some commenters believe is a large level of assumption required to reach the total dam decommissioning estimates.

Other comments include:

• “The draft report assumes that, with removal of the four mainstem Klamath dams, Keno Dam will be transferred to and operated by a new entity who would incur fish passage and water quality liabilities. CDM Report pp.3–4, 4–2. This might or might not be true, but is not a liability associated with dam removal. The report nonetheless adds $40 million to $60 million for Keno to its calculation of dam removal costs.”

• “PacifiCorp currently owns the land and the rights associated with the facilities, and carries it on its books at a total value of $597,979. [1] Although CDM does not provide a clear explanation, it asserts a potential liability and assumes a Government purchase in the range of $5.9–$15.8 million–a factor of between 10 and 26 times the book value. CDM’s assertion of a Government purchase in this amount is further inexplicable since, if the Government wished to take over the project, it has the right to do so for the “net investment of the licensee in the project.”

• “Interpretation of the compilation of different types of costs is further hampered due to the lack of distinction as to where the costs accrue (individuals, organizations, regions, the nation). Metaphorically speaking the list includes apples, oranges, and even bananas and pears. Some are the engineering costs of the agent, some are the replacement power costs of the utility, some are the dispersed social costs that may result from this landscape level change.

“My recommendation is that for simplicity of interpretation, the focus of any revision to the draft report should be on liabilities that would accrue to a dam removal agent.”
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