The operator of the 161.338-MW Klamath project has released an independent analysis finding a California state study is full of errors that skew cost estimates in favor of removing Klamath River dams.
Oregon utility PacifiCorp, operator of the Klamath project in Oregon and California, said key problems with the California Energy Commission report are errors and inconsistencies in pricing of replacement power, failure to include carbon emission taxes as part of replacement energy costs, and an inappropriate discount rate for financing.
In the midst of a controversial relicensing process for four dams in the Klamath project, the California Energy Commission issued a report in December that said decommissioning the project would be $101 million less costly than relicensing the project and installing fish ladders and other water quality improvement measures.
PacifiCorp commissioned independent firm Christensen Associates Energy Consulting LLC of Madison, Wis., to review the CEC model and results. PacifiCorp noted CA Energy Consulting is respected in the energy industry and has been employed by the CEC itself.
ï¿½CA Energy Consulting’s evaluation found that the CEC’s model is riddled with errors in the inputs, methodology, and key assumptions, and that these errors inappropriately bias the results of the model toward decommissioning,ï¿½ PacifiCorp said. ï¿½Overall, the study is so flawed that CA Energy Consulting was left to conclude that the CEC model, which formed the basis of the report and its conclusions, was not capable of providing an adequate economic assessment of whether the Klamath project should be relicensed.ï¿½
Project size makes removal ï¿½unprecedentedï¿½
PacifiCorp pursued the analysis because the CEC report was made part of the record in the relicensing proceeding before the Federal Energy Regulatory Commission and often is cited by dam removal advocates.
ï¿½Removal of a project the size of Klamath would be unprecedented in North America and, to our knowledge, in the world,ï¿½ PacifiCorp Energy President Bill Fehrman said. ï¿½This is complex. It’s not a simple matter of removing some concrete slabs. This is low-cost power now used by our customers with virtually zero emissions. Taking the dams out will certainly cost money. Replacing the power will necessarily cost our customers more money, and potentially a lot more money.ï¿½
To make a decision of that magnitude, Fehrman said everyone should agree on basic costs, how much customers will pay for replacement power, what the environmental risks are, and how they will be mitigated.
ï¿½These are basic things that were not covered in the CEC study, and we are very concerned about that,ï¿½ Fehrman said.
Resource agencies mandate fish passage at four dams
In January, the Interior and Commerce departments issued final fishway prescriptions, mandating multi-million-dollar upstream and downstream fish passage at the project’s 18-MW Iron Gate, 20-MW Copco 1, 27-MW Copco 2, and 90.338-MW J.C. Boyle developments. (HNN 2/2/07) The fishway prescriptions, which must be included in any FERC relicense (No. 2082), are intended to restore hundreds of miles of historic salmon and steelhead habitat.
In October, FERC staff issued a draft environmental impact statement that rejected the resource agencies’ original proposals to mandate fishway construction at the four dams. Despite that opinion, FERC itself has no authority to reject Commerce and Interior’s final prescriptions.