Setting the stage for a knockdown fight over the fate of four towering Klamath River dams accused of hammering salmon stocks and the West Coast fishing industry, a new government study released Friday has found that decommissioning the dams could cost $100 million less than operating them for another generation.
The economic analysis, ordered by the California Energy Commission in cooperation with the U.S. Department of the Interior, should provide ammunition for Indian tribes, environmentalists and commercial fishermen eager to see the hydropower dams demolished to reopen more than 300 miles of river that have been blocked to migrating salmon for more than half a century.
"It's now official: The Klamath hydro project is an economic loser," said Steve Rothert of the group American Rivers.
But officials with the owner of the dams, billionaire Warren E. Buffett's Portland-based PacifiCorp, say they will seek dam license renewal from the Federal Energy Regulatory Commission, which is scheduled to rule on a new permit early next year. On Friday, the firm released its own plan, listing several ways the dams could be modified to ease concerns about salmon.
Bill Fehrman, president of PacifiCorp Energy, said in a statement that the company's proposal probably wouldn't mollify its critics, but that it would prove the firm's desire to be "environmental stewards" while allowing the dams to continue generating "clean, reliable power."
That goal stands in contrast to the conclusion of the 92-page study that California officials released Friday.
The report, produced by a private consulting firm and the U.S. Bureau of Reclamation's Technical Services Center, found that the cost of demolishing the dams and buying market-rate electricity to offset the lost hydropower over the next three decades would be far less than installing the vast infrastructure and improvements expected to be needed for the dams to win license renewal.
Though the hydro project historically has been able to cheaply deliver enough power for about 70,000 homes, new environmental rules would limit the project's unfettered operation, reducing electricity generation by 23%, the study found.
The cost of erecting fish ladders and other projects to help salmon get past the dams and cure water-quality problems would boost the 30-year cost of the project to between $230 million and $470 million, according to the report.
Removing the dams and buying replacement electricity over the next three decades would cost between $152 million and $277 million, the report said. Depending on the price of power in the future, dam removal could save PacifiCorp ratepayers up to $285 million during that period, with a "midline scenario" forecasting a savings of $101 million.
Decommissioning the dams "would create net economic benefits for PacifiCorp's ratepayers" while also offering the potential for "restoring salmon runs to one of the most important remaining salmon rivers on the West Coast," the study concluded.
Howard McConnell, chairman of the Yurok Tribe, concluded that the dams represent "weapons of genocide," hurting the fish that the tribe for generations has depended on for food and spiritual health.
Officials with PacifiCorp objected to several of the study's findings, most notably the cost of removing the dams and the potential negative effects of releasing the huge load of sediment trapped behind them.
Dave Kvamme, a company spokesman, said nobody really knows what it would cost to remove the dams, and added that efforts by PacifiCorp to demolish a far smaller dam on Washington state's White Salmon River had run into numerous roadblocks that have delayed removal for more than six years and driven up the price.
"We're generally skeptical of these sorts of assumptions on complicated matters," Kvamme said of the new study. "There are tremendous risks in taking out dams, and those haven't been factored into any of the costs for that alternative."
In addition, removal of the dams could expose the river to even poorer-quality water pouring out of Upper Klamath Lake, Kvamme said. The lake is loaded with nutrients that can pose problems for fish, and the dams act as settling ponds before releasing water downriver, he said.
But the company left open the possibility of a negotiated solution with dam critics. For more than a year, PacifiCorp representatives have been meeting with dam opponents and government officials. Fehrman said they continue to believe "a better, long-term solution" to the river's salmon woes can be achieved through those talks.
This year, troubles with salmon stocks prompted federal officials to dramatically limit commercial fishing on the West Coast.
Efforts to win more than $60 million in disaster funding for troubled fishing fleets have run aground this year -- and time is running out. Republicans have balked despite a plea by U.S. Commerce Secretary Carlos Gutierrez.