Feds, PacifiCorp reach accord to remove 4 Klamath River dams

GRANTS PASS, Ore. — The Bush administration today announced a nonbinding agreement with PacifiCorp that details how the utility can turn over control of four Klamath River hydroelectric dams so they can be removed to help struggling salmon.

While not a final answer, the deal reached in Sacramento, Calif., represents a milestone toward what would become the biggest dam removal project in U.S. history.

It also helps resolve issues at the root of the 2001 shut-off of irrigation to thousands of acres of farmland under enforcement by U.S. marshals and the 2002 deaths of 70,000 adult salmon in the river after irrigation water was restored.

The agreement in principle was to be signed Thursday by the U.S. Department of Interior, PacifiCorp and the governors of Oregon and California.

Though the Bush administration has opposed removing hydroelectric dams in the Columbia Basin, Interior Department Counselor Michael Bogert said it recognized that removing the four Klamath dams was a key to resolving the Klamath Basin's long-standing problems balancing water between farms and fish.

"The president and the secretary (of Interior) were determined in the aftermath of 2001 and 2002 to come up with a comprehensive approach to deal with the issues and images we saw in the Klamath Basin," Bogert said. "This represents our best effort to negotiate what is a business decision for the company."

Pressure has been building for years on PacifiCorp to make a deal. California and Oregon's governors pressed for dam removal after commercial salmon fisheries collapsed in 2006.

Federal biologists mandated that fish ladders and other improvements costing $300 million be added to the dams before a federal operating license could be renewed.

California water authorities have been taking a hard look at the dams' role in toxic algae plaguing the river, and river advocates have sued PacifiCorp to fix that the algae problem.

Dean Brockbank, vice president and general council for PacifiCorp Energy, said though the agreement was nonbinding, the utility was committed to seeing it through.

He added the company's four key concerns were all met: PacifiCorp is protected from liability; there is a $200 million cap on removal costs to be born by ratepayers; dam removal is far enough in the future to avoid a scramble for replacement power; and PacifiCorp's capital expenditures were held to a minimum.

According to a copy obtained by The Associated Press, the agreement is a road map for turning the dams over to a nonfederal entity and starting to remove them by 2020.

Deadline for a binding agreement is June 30, and farmers, Indian tribes and other parties that endorse the agreement in principle get a place at the table.

Then the federal government undertakes studies to be sure dam removal is feasible and cost-effective. Operations continue without having to clean up toxic algae blooms that are a roadblock to renewal of a federal operating license.

The deal embraces a $1 billion environmental-restoration blueprint for the Klamath Basin that has been endorsed by farmers, tribes, fishermen and conservation groups.

Besides restoring fish habitat, it guarantees water and cheap electricity for farmers, as well as continued access to federal wildlife refuges for farming.

Besides the $200 million in removal costs to be born by ratepayers, the state of California will ask voters to approve a $250 million bond. Surcharges would be about $15 to $20 a year to PacifiCorp's 500,000 customers in Oregon and 45,000 customers in California.

Any dam removal costs over $450 million must be worked out later.

PacifiCorp also committed to paying California $500,000 a year for fish-habitat improvements until the dams are removed.

"The health of the Klamath River is critical to the livelihood of numerous Northern California communities, and with this groundbreaking agreement we have established a framework for restoring an important natural resource for future generations," Gov. Arnold Schwarzenegger said in a statement.

The Karuk Tribe had led demonstrations at PacifiCorp stockholder meetings demanding dam removal, but spokesman Craig Tucker said the agreement represented a new working relationship with the utility "and we are looking forward to working with them as partners in the future."

Glen Spain, of the Pacific Coast Federation of Fishermen's Associations, which represents California commercial salmon fishermen, also voiced support.

"It is a break out of gridlock into a dam removal pathway that shows great promise."

Oregon Wild, a Portland conservation group kicked out of basin restoration talks, blasted the deal, saying the Bush administration was imposing a lot of conditions favorable to PacifiCorp and punting a problem it had failed to resolve in eight years.

Built between 1908 and 1962, the four dams block salmon from 300 miles of spawning habitat while producing enough electricity to power about 70,000 homes.

MidAmerican Energy Holdings, a subsidiary of billionaire investor Warren Buffett's Berkshire Hathaway, owns PacifiCorp, which serves 1.6 million customers in six Western states.