Compared to most coastal river systems, the Klamath River is upside down. It starts slow and high among the farmlands of eastern Oregon; as it flows through Northern California toward the Pacific, its basin narrows and turns mountainous, eventually reaching the Pacific Ocean south of Crescent City. This twist of fate made the Lower Klamath River attractive for hydropower, and so four dams were built beginning in 1918 to supply power to customers in Northern California and Southern Oregon.
The river has been home to several Native American tribes for time immemorial including the Yurok, Karuk, and Hoopa Tribes, for whom the once-abundant salmon are an integral part of the tribe’s culture as well as their physical sustenance. The salmon runs on the Klamath River salmon were once the third-largest in the nation, but have fallen to just a fraction of their historic numbers after the dams were constructed, blocking salmon and steelhead from reaching hundreds of miles of upstream habitat.
So after years of lobbying and pressure, the four hydropower dams on the Lower Klamath River are set to be removed as soon as 2022 after their operator, PacifiCorp, concluded the dams no longer made economic sense as the relicensing procedure would likely result in fish mitigation being required. The Klamath Dam removal project is the largest dam removal project ever proposed in the United States – or anywhere else in the world.
The California Water Law Symposium is a collaborative student-run event where students from each law school organize a panel, bringing together a variety of interesting speakers to discuss some of California’s most critical water issues. Led this year by Golden Gate University School of Law, participant schools include USF School of Law; UC Hastings College of the Law; UC Berkeley School of Law; UC Davis School of Law; Stanford University Law School; and University of the Pacific, McGeorge School of Law. This panel was organized by students at Stanford Law School.
RICHARD ROOS COLLINS: Background on the Klamath Dam removal project
The history of the Klamath River and the dam removal project is a long and storied one, and one that would take a long time to tell, so for this panel presentation, the focus was on the removal of the four dams that comprise the Klamath Hydroelectric Project, which is owned by the investor-owned PacifiCorp utility. The four dams are the JC Boyle Dam, Copco 1, Copco 2, and Iron Gate Dam, with Iron Gate being the most downstream dam at river mile 195. The dams were constructed and eventually assembled into a package between 1918 and 1963.
Richard Roos-Collins began by presenting a map, noting that the project spans the California-Oregon border with Oregon shown in light gray and California shown in dark gray. The Klamath River watershed extends essentially from Crater Lake southwest through Oregon and into California. The four dams are located between river mile 243 and the JC Boyle Dam to river mile 195 where the most downstream dam, Iron Gate Dam is located.
“The salmon cannot get beyond river mile 195,” he said. “Iron Gate is too tall for passage and it can’t be retrofit, ‘trap and truck’ is monstrously expensive, and so the salmon are blocked from half of their historic watershed. Why does that matter? Because there are four federally recognized tribes who have time immemorial interest in these fisheries. These fisheries have decline roughly 95% from their historic condition. If you go back a century or more, the Klamath had the third largest salmon fishery on the west coast, behind Columbia, but arguably ahead of the Sacramento River.”
In the Klamath Basin, the hydroelectric project straddles the state line. Directly upstream is the Klamath Irrigation Project, the second Reclamation project in the West established under the 1902 Reclamation Act. It’s a productive agricultural area producing potatoes, mint, and other products. There are also individual irrigators upstream and downstream of the Reclamation project. Also in the area the National Wildlife Refuges and the remnant wetlands that are around the Klamath Reclamation Project.
There are four federally recognized tribes, the Klamath Tribes in Oregon, the Karuk Tribe below Iron Gate, then the Yurok Tribe, and the Hoopa Tribe at the mouth of the river.
It’s also important to note for context that the Trinity River is an important tributary to the Klamath River that is partly encompassed by the Hoopa Reservation. There is a federal dam upriver on the Trinity at Lewiston that diverts water into the Sacramento River and down to the Central Valley.
The Klamath Hydro Settlement Agreement is an agreement between the United States and Tribes in two states, several counties in the area with the exception of Siskiyou County, conservation groups, and commercial fishermen. The agreement was reached in 2010 and later amended in 2016.
In 2010, there was a celebration for the Klamath Hydroelectric Settlement Agreement in Salem, state capitol of Oregon, that was attended by several cabinet secretaries, both governors, and many other dignitaries.
“At the time, Governor Schwarzenegger was the Governor of California,” recalled Mr. Roos-Collins. “He kept on script for a few minutes, and then said something that I just think tells the whole story. He got that look that you see in the Terminator movies, and he said, ‘I can’t almost hear the salmon say, ‘I’ll be back.’ He got a big laugh. A few minutes later, he says, ‘I say to the dams, Hasta la Vista, baby!’”
Mr. Roos-Collins said the point of the story is that the effort has been bipartisan across multiple federal and state administrations, although he acknowledged it is not universally supported. The picture is from 2016 when the agreement was amended which was attended by then-Secretary of the Interior Sally Jewel, the chairman of the Yurok Tribe, the governors of both states, Congressman Jared Huffman and many others.
“Secretary Jewel said, ‘This is the first time in the history of the United States that an Interior Secretary has signed an agreement that benefits federally recognized tribes on an actual fishing table,’” he said. “That’s an actual fishing table at the little town of Requa at the mouth of the river.”
The agreement, in its amended 2016 form, is intended to restore passage for anadromous fish all the way to the foot of the Keno Dam, which is part of the Reclamation Project; the fish can get beyond Keno Dam into the upper basin, so removing the dam will restore fish passage into the entire basin for the benefit primarily of the salmon.
The project is funded by a $200 million surcharge on Pacific Corps customers in Oregon and California, which has now been fully collected, and a $250 million contribution from the state of California from Proposition 1; so the project has a total budget of $450 million.
PacifiCorp has been authorized to continue the status quo of power operations up until 2020. Dam removal will be implemented not by PacifiCorp but instead by a new company, the Klamath River Renewal Corporation, for which Mr. Roos-Collins is the general counsel.
“The Corporation must provide liability protection for both states and PacifiCorp, which is to say if damage claims are filed, then the Corporation must defend against them as well as be responsible for the effectiveness of dam removal,” he said. “For those of you who know the Federal Power Act, here’s the way it’s going to work. The Corporation has applied for a license transfer from Pacific Corps to itself before the Federal Energy Commission, which licenses non-federal hydropower projects. If that transfer is approved, then the Corporation will seek license surrender which means to remove the dams under conditions specified by FERC. We’re midway in those proceedings, and we have to make sure that the license surrender occurs in a way that protects the states and Pacific Corp from liability. Dam removal would occur by 2022. Dewatering will begin in January of 2022 and removal itself will be done by the end of that year.”
The Klamath River Renewal Corporation was stood up in 2016 shortly after the agreement was signed. It has engaged Kiewit, the largest construction company in water resources in the country, as the progressive design-build contractor. The Corporation is being advised on liability protection by Aeon, the world’s largest insurance advisory, and they’ve engaged Resource Environmental Solutions out of Houston, Texas to provide an indemnification package that will benefit the states and PacifiCorp, as well as affected counties and private property owners.
“If you compare this with what has been done before, this is not just larger by an order of magnitude, but we’re also pushing every envelope in terms of engineering and fiscal and legal techniques,” said Mr. Roos-Collins. “As far as we can tell, no dam removal has ever had an indemnification package before, and we think that if we do this successfully, it will benefit not just the people of this basin, but also show how to do this sort of thing right.”
MICHAEL BELCHIK: The Yurok Tribe’s perspective
Michael Belchik is a senior water policy analyst whose career has been dedicated to the efforts to get the dams off the Klamath River on behalf of the Yurok Tribe. He described his position as a policy and science advisor as one that exists on the line where law and science come together, while acknowledging that his primary training is science and not law. Although he himself is not a Yurok tribal member, in working with the Yurok Tribe over the past 25 years, he has a good sense of who they are and what their values are.
“Simply put, our mission is to put this river back together from the shattered, fractured pieces that is as it exists now, and part of that shattering is the dam severing the upper and lower river,” he said. “This works out in ways that are both biological and physical, but also cultural. The salmon would swim all the way up to the upper Klamath Basin and in that way, the upper river tribes and the Yurok Tribe reunited in a common interest. The Klamath Tribes, which are now three tribes mashed together on one reservation, fish for those fish, and there were spring-run chinook and fall-run chinook up in that area.”
In the year 2000, the Klamath relicensing process began, and PacifiCorp came to the tribes and introduced themselves, notifying them of their intention to relicense the dam under the Federal Power Act and through the Federal Energy Regulatory Commission. The Yurok and the Karuk Tribe then started saying that they needed to consider taking those dams out.
“We needed to at least take a look at it,” Mr. Belchik said. “We found FERC’s dam removal policy – they actually have one – and we wrote a letter them addressing the 18 different points that they needed look at to determine whether they would even going to investigate dam removal. Most of the time, FERC never even investigates dam removal. It ends up in the NEPA pile of alternatives which isn’t considered further because they’re not going to do that, or it’s infeasible. But we kept at it. We kept at it when PacifiCorp wouldn’t meet with us for over six years. We used every means that we could.”
The incentive and the goal of restoring the river is culturally driven and comes from the point of view of the Yurok’s duty to be stewards of the land and their duty to take care of the Klamath River, he said. The way the Yurok Tribe accomplished that was through many different means, including the development of science and information, the use of PR campaigns, and by filing the appropriate administrative actions with FERC and working with Fish and Wildlife and other federal agencies to ensure that the right administrative actions are taken.
In this case, the administrative action that needed to happen was that the fish passage had to be ordered; part of the Federal Power Act gave US Fish and Wildlife and National Marine Fisheries Service the ability to require fish passage and they did so.
“That completely changed the economics of the relicensing of this project,” said Mr. Belchik. “We knew that PacifiCorp was never going to do anything like this out of the goodness of their heart, but that if the economics were such, that they might entertain the idea.”
At that point when fish passage was required, PacifiCorp challenged it in court and lost, and suddenly they were on the hook for having to put in fish passage on the four dams, which was an unknown cost but potentially could have been as much as $500 million versus taking the dams out, which at the time, the estimates were around $150 million.
“This was an unacceptable risk to them, and understanding the power company and their motivations, most of which have to do with reducing risk, that was key to entering into the final negotiations,” Mr. Belchik said.
So it’s been a very long road, and it started out looking like impossible odds, but the determination and the tenacity that the Yurok Tribe along with their partners, the Karuk, and Hoopa Valley Tribe, was impressive.
“One of the things that changed the tide was direct action,” he said. “It was tribal members going to Omaha and even going to Scotland, because PacifiCorp was owned by Scotch Power at the time. I went on a trip to Scotland, and I know that it changed things. We monitored the media and it was the very first time they ever said that they might look at dam removal if it kept their shareholders whole. Right after the Scotland trip, we went to crash their shareholders meeting. Then PacifiCorp was being sold to Birtcher Hathaway, Warren Buffet’s company out of Omaha, and so the tribe kept going and went right back to Omaha, and they protested Warren Buffet’s shareholder meeting, and then they went back again. PacifiCorp came to the reservation and begged the Klamath Justice Coalition not to go back to Scotland because they were getting close to a deal, and nonetheless the tribe went right back.”
“It’s important to understand that this is, at its heart, a fish restoration project,” Mr. Belchik said. “The reason for taking these dams out is because it restores fish. I know fish science comes in for a lot of criticism and sometimes deservedly so, but I can say one of the projects that always works for fish restoration is when you remove passage barriers, whether it’s a culvert on a road and you open up a creek, or whether you’re going to open up over 400 miles of new habitat for multiple species of salmon and give them access to areas of cold water that will remain cold, even in the face of climate change. We’re removing the dams and that’s what we’re working for.”
PAUL WEILAND: The perspective from Siskiyou County
Paul Weiland works for Nossaman LLP which is located in Irvine, but he has been representing Siskiyou County for about 10 years with respect to principally the Lower Klamath Project. Siskiyou County is a small rural land-locked county in Northern California with less than 50,000 people. Three of the four dams are in Siskiyou County; the fourth one is in Oregon.
“Siskiyou County is in a David and Goliath situation because they’ve got tribes, the United States, the state of Oregon, the state of California, and PacifiCorp all on the same side of the ledger, and the people of the county of Siskiyou, in the most recent resolution where they voted on the issue, they voted a little over 80% against dam removal. Klamath County, where the other dam is, voted I think about 70% against dam removal a few years ago, so the local population is against dam removal. That is the context for us getting involved.”
Mr. Weiland then discussed four of the concerns that Siskiyou County has with removal of the Klamath Dams. He noted that they have been in discussions about these concerns but they are not yet resolved. He also noted he was hired after the original Klamath Hydroelectric Settlement Agreement was negotiated and so he doesn’t have a good understanding of what happened prior to 2010.
Benefit to salmonids is uncertain
“The sole justification for dam removal is to improve the lot of salmonids, and I would say that looking at the reports that were done by the Department of the Interior in 2010-12 timeframe, that we have hope that the salmonids will return, but we do not have good scientific basis for that hope,” said Mr. Weiland. “There were two independent science reports and the panelists said, ‘we are optimistic, we are hopeful, but this is highly uncertain.’ In fact , it may be the case that we could go through this effort, and other things could happen that we don’t anticipate, which is the history of environmental law in the United States. For example, predation could eclipse some of those benefits.”
He also pointed out that the concept for dam removal involves breaching all four of the dams during the winter to try and move as much sediment down and out of the system as possible during a time when there are high flows in the river.
“In the near term, this is going to decimate aquatic life in the system because you’re going to cover the whole floor of the river with sediment, and so there’s really little question that at least one year of salmon are going to be suffering as a consequence,” he said, noting that salmon spawn in the river and then go out into the ocean for three or so years, so while it wouldn’t wipe out all of the species, but it could potentially be around a third or a quarter of the population of salmon. If it’s two or three years, it’d be a lot more devastating.
“So we know that it will have short-term negative impacts and we’re hoping for long-term positive impacts, and so from the point of view of Siskiyou County, if all other things we’re equal, maybe we could live with that, but that doesn’t sound like the best reason to do it alone,” he said.
The project is inadequately capitalized
The project has $450 million in funding, but almost any big infrastructure project – think high speed rail – go far over whatever budget is set for the project.
“Right now, the corporation has estimated that the project could be done for about $435 million, so they think they’ve got a $15 million buffer, but that’s their kind of best-case scenario,” he said. “From the county’s perspective, this is concerning, because if they don’t make it, we don’t have someone to hold accountable, like we do if it’s PacifiCorp that was running this project or if it was the state of California that was running this project.”
Where does the ultimate responsibility and liability lie?
The Klamath River Renewal Corporation was established in 2016 for the sole purposes of taking the licenses, taking down the dams, and then dissolving in order to protect other entities from liability.
“This is an idea that the states and the United States have,” said Mr. Weiland. “It’s from a Grisham novel frankly, from my perspective, where you have a shell corporation set up, and one of the big concerns is that if that corporation isn’t adequately capitalized, they’re not going to be able to do what they need to later in the process and who is going to be left holding the bag? The county’s concerned that no one will want to hold the bag and who is going to bear the brunt of any consequences? It’s going to be the people of the county, a poor rural county in Northern California.”
There are several economic consequences for Siskiyou County because of the dam removal. Mr. Weiland gave the example that PacifiCorp now makes substantial payments on the facilities that are akin to property tax payments and those payments fund rural school districts in Siskiyou County. If the land is ultimately relinquished back to the state, the state won’t be paying property taxes on that to the County anymore.
“We have rural school districts that are already underfunded that will lose that permanent property tax stream that they now have, and that’s one of the consequences,” Mr. Weiland said. “There are obviously other consequences, such as the people who have recreational residences along the reservoirs that will now be along an area that is not a reservoir whose properties have already lost value as soon as the project was proposed and will lose further value. There are areas downstream of the dams that will fall into the flood zone after the dams are removed, so people’s houses will flood or they will have to be relocated. So the issue of the economic consequences is another one that the county is concerned about.”
Mr. Weiland acknowledged that these issues could all potentially be worked through, but so far haven’t at this point, and the corporation is hoping to be 18 months away from breaching the dams.
“How we got here is complicated and beyond me, and the county probably bears some blame for not being further along, but so do the other parties, and frankly the other parties have a lot more resources and ability to try and navigate through this than we do,” he said. “But I’m still hopeful that we might get to a place where there’s better alignment than there is currently, but that’s where we are right now.”
QUESTION: The first question was directed to Mike Belchik. The primary goal for the Lower Klamath Project is the recovery of native salmonids. How well do you think the agreement will meet this goal and what major hurdles are there?
Mr. Belchik acknowledged the uncertainties, but noted there were a lot less than when the report referenced in Paul Weiland’s comments was written, which was 2010. He also pointed out that there have been other large-scale dam removal projects that have happened such as the Elwha Dam and others.
“What we’ve seen in all these cases is that the rivers healed faster and the fishes returned faster than the scientists predicted,” he said. “There have also been other smaller dam removals on the Rogue River and the fish and the river have both recovered faster than predicted by the scientists. Speaking as a scientist, we tend to want to be conservative. We don’t want to go out on a limb and say, ‘it’s all going to be great here’, but when I look at Klamath Dam removal, I see it as an important part of rebuilding the river, but it’s not everything. We’re still working on issues on the Shasta River, we’re still working on the Trinity, we’re still working on the big water issues for the Klamath Project and how much is diverted for the project versus how much is let go down the river. It all has to be part of a big package.”
“One of the things that has really motivated the Yurok Tribe in seeking dam removal is uncertainty associated with climate change as we move forward,” Mr. Belchik said. “It’s an alarming but true fact that we’re losing our snowpack on the Klamath River. We’re not as high as the Sierras; the Trinity Alps top out around 9000 feet and not 14,000 feet like the Sierra. The areas where those fish used to go to above the dams have very large and stable cold water springs, and there have been studies saying, yes, those will remain in some form even when climate change takes hold. My job working for the Yurok Tribe and the Yurok Tribe’s goal here is to promote this long-term stability of the fish, so what we’ve been doing and what dam removal accomplishes is both geographic diversity, genetic diversity, and access to those stable areas of cold water.”
Paul Weiland said he largely agreed. “I think you’re right that the panels may have been conservative on long-term, but I think on near-term impacts, I’m not so sure that we have a good handle on those. The project hasn’t yet gone through consultation under Section 7 of the Endangered Species Act and there is some case law in the 9th Circuit about the need with salmonids to look at both near-term and long-term impacts. You can’t be in a situation where you’re putting a species in near-term jeopardy and say ‘we’re going to make up for it later.’ That’s the Pacific Fishermen’s case. That’s one the issues that I don’t have a good handle on and we’ll have to see what the consultation process says about that.”
Richard Roos-Collins said that the Klamath River Renewal Corporation will propose as conditions of license surrender that conditions downstream that contribute to the recovery of the fish be maintained to the extent that they are within our control. One example is sediment. “There’s a hundred years of sediment upstream of these dams and we’re going to try to move basically 30 years downstream the first winter. Some of it is going to end up at the mouth of the tributaries that are important for salmon for rearing habitat. We are proposing as a license surrender condition that we maintain passage into those tributaries, and if we fail at it because the prediction is off, we’ll go in and we’ll clear it out. So we are proposing to the ESA agencies as well as FERC that we have conditions that are consistent with the recovery of the fisheries.”
QUESTION: The next question was directed to Richard Roos-Collins. “When trying to undertake a project of this massive scope, you have so much data to deal with. How do you deal with that much data and the underlying scientific uncertainty – so much you have to deal with in such a short amount of time?”
Richard Roos-Collins pointed out that there’s no such thing as a controlled experiment in Western water. “There is no such thing as cause and effect where you can certainly say that x as a cause will have y effect. It’s correlation. And so we rely on models that have been validated in actual experience to evaluate probabilities. So to take sediment as an example, there is an entire science developed at UC Berkeley called geomorphology that now has resulted in models that allow you to correlate flow with sediment movement based on the composition of the sediment and the form of the river. So we can predict that 30 years of sediment will almost certainly move if the winter flow in 2022 is above a particular level.”
“Beyond using validated models is to use multiple models and to compare results is that we rely on scientists, engineers, and other technical advisors who have experience,” Mr. Roos-Collins continued. “It’s really that simple. We use Aon, one of the largest insurance advisors in the world. The real point is we’re being advised by insurance advisors who have covered every type of construction project and deconstruction project you can imagine and dealt with insurance to cover the risk. So we have picked a team of consultants, both biological, engineering, fiscal, legal who have been through similar experiences who can apply the models and give us reasonably reliable expectations, which are then the basis for the permit applications that we have pending before FERC.”
QUESTION: The moderator then asked Paul Weiland to elaborate on the collateral environmental consequences of the dam removal.
Mr. Weiland said that one he had not yet mentioned has to do with the endangered sucker fish native to Klamath Lake, which are also found in the reservoirs. “Of course, the reservoirs weren’t on the river historically; the sucker fish cannot survive in the running river, they survive in standing water environments, but nevertheless they are there. They are endangered and have been doing poorly in the Klamath for years; they were in fact part of the cause of the big fight in the early 2000s when the farmers broke the gate and decided they were going to take some water. One of the things that we’re concerned about is the sucker fish in these reservoirs are not well understood and that they and their will be wiped out. There is a plan to relocate them that the corporation and the other entities have but I don’t think it’s a well developed plan, frankly. It involves having to catch them as well and nonetheless eventually getting rid of this habitat for them. The state ended up having to amend state law, the fully protected species act to allow for the ones in the reservoirs to be lost in order to allow for the project to go forward.”
“This morning, there was discussion of progressive federalism which I haven’t been reading the legal literature lately so it’s a concept I wasn’t aware of, but I would say that the state isn’t always consistent about it,” continued Mr. Weiland. “I think the state and the Corporation have been talking about the Federal Power Act as a tool to displace state and local law because it doesn’t benefit them in this circumstance, and so that’s a tangent to the principle. There is a tradeoff and the sucker fish and the salmonids that’s being made here, and at the end of the day, it is what it is. It’s part of the reason the county is uncomfortable because you have a state that’s so invested in this process and also is supposed to be acting as a regulatory entity to review the project through the State Board, through DFW, etc.”
“Cooperative federalism is an obvious principle that is applied so differently across different circumstances, but what does it mean?” said Richard Roos-Collins. “In the context of the Federal Power Act, two Supreme Court cases have said, across 50 years, that the Federal Power Act preempts state and local law except where a federal law specifically reserves jurisdiction – the Clean Water Act, for example. Is the corporation taking advantage of that? No, not quite as directly as you might imagine. We are instead attempting to reach a Memorandum of Understanding with each of the affected counties where we agree to the measures they would have required if their authority had not been preempted. We have such an agreement, such an MOU with Klamath County; we expect to have one shortly with Del Norte County at the mouth; and we hope to reach an MOU with Siskiyou County so that preemption is not an issue between us and Siskiyou County because we’ve agreed on the measures to protect local interests.”
“This is a large scale fisheries restoration project and every fisheries restoration project has environmental consequences,” added Mike Belchik. “If I’m going to dig a pond for coho, I’m going to add new sediment to river. To use short-term degradation as a reason to not undergo restoration actions, I say it’s a recipe for paralysis. In this case here, we’ve really lucked out with the circumstances on the dams. The estimates are that there is between 5 and 20 million cubic yards of sediment behind the dams – it sounds like a lot and it is, but it’s nowhere near what that size would carry ordinarily. The river starts under Klamath Lake with zero sediment load because there was a natural sediment trap upriver from there. Upper Klamath Lake is a natural lake. In this case, almost all the sediment that’s caught behind the dams is very fine grained and the models are saying most of it is going to go out the river that first winter.”
“It’s also worth noting that it’s not going to wipe out an entire year class of fish,” Mr. Belchik continued. “There are a certain amount of them that use that upper part of the river that will be affected, but there’s a lot of them in the tributaries that are going to be able to find refuge. We’ve seen this in other cases, such as when the tank car full of herbicide spilled into the upper Sacramento River. The fish came back a lot faster as the fish were able to find refuges in tributaries until the main stem river was able to clean itself out, and then they survived. The coho are doing this, they’re rearing in tributaries other than where they were born as they have all kinds of ways to deal with this. When you look at the long-term evolutionary history of a river like the Klamath, things like this have happened over and over again. Copco 2 is built on a lava dyke that blocked that entire river for a while. In geological times, these are the kinds of catastrophes that salmon are evolutionarily adapted to overcome. I don’t think it means that we should just give ourselves a pass to affect it in any way we want, but I also don’t think we should let it stop us from undertaking visionary and large scale restoration actions either.”
QUESTION: What about the effect on the regional agricultural economy? How does the project of this scope affect the water use in the agricultural community and how do you approach those issues?
Richard Roos-Collins pointed out that the four Klamath dams slated for removal are hydropower only and do not provide any water for agricultural use. “In 2010, the Klamath Hydro Settlement Agreement was supported by all 21 of the water districts that are federal contractors for the reclamation project, and to this day, President Trump’s counselor on western water says that our dam removal is the last best hope for Reclamation’s Klamath project. Why is that if there’s no water supply? It’s because our project is likely to bring the fish back and reduce the constant ESA compliance or non-compliance project that the Reclamation project has just upstream. There are different views on farms but I think most farmers who are active in this tend to view us as a rescue mission, even though the hydro project doesn’t provide any water supply.”
Paul Weiland noted that agricultural impacts are more of an Oregon issue and not a Siskiyou County issue, and Reclamation will continue to operate the Upper Klamath Project. “Because of the size of the county, it’s the kind of place where you don’t have to impact a huge number of people to be impacting a meaningful proportion of the county, and so impacts to the property tax base or having a relatively small number of people who are going to have residences in the flood zone, it is an important deal.”
Mr. Weiland said one of Siskiyou County’s concern are the impacts to roads and bridges that weren’t made for heavy equipment and don’t normally get a lot of traffic. “Those are questions the county has had and is concerned about in part because they look at those together with the issue of whether there’s adequate capitalization, and so those two are really linked from the County’s perspective.”
Another concern for Siskiyou County is the quality of the sediment behind the dams, which undoubtedly has contaminants, such as pesticides and metals, Mr. Weiland continued. “We don’t know if we’re dealing with a circumstance where at some future point, there may be Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) claims and who is going to be on the hook for those? What if the sediment ends up on county land? We have to work those out, and anyone who knows anything about CERCLA is that it’s joint and several liability and it’s fairly broad, so there could be a lot of people on the hook.”
QUESTION: Hundreds of dams will be up for relicensing in the next couple of years, and many might not be relicensed and therefore might also be removed in the coming years. What kind of implications and lessons do you think people can take away from the planned settlement agreement, especially in light of all the bargaining that had happened in the shadow of the patchwork of jurisdictional issues that are introduced by having so many layers of government and so many interests implicated for managing of the water basin?
“From Siskiyou County’s perspective, the implication is to bring in the local guys early and try to keep them in the fold, and I think there was an effort undoubtedly to do that,” said Paul Weiland. “But it fell apart at some point. There’s always a point in the negotiation – whether here or with the Bay Delta Conservation Plan on the Lower Colorado River, the Missouri, and other places I’ve worked – where you have to make those tough decisions. Are we going to keep moving ahead without these folks or not? I think that the local residents matter and can hopefully have a voice in the plan. I don’t know how it was lost to the degree it was here but it went too far where the decision was made that these guys weren’t worth working with. Some of these issues Richard and I believe are definitely issues we can work out, and that should have happened already, I think.”
“The Klamath River Renewal Corporation exists for a single purpose which is to take out these dams in compliance with all applicable law and then we will sunset,” said Richard Roos-Collins. “So we aren’t attempting to create lessons for others, although I do believe that will be the consequence if we succeed or for that matter, fail. When you think of a public works project, you think of the Big Dig in Boston or pick your project that went over budget by a factor of whatever; I think Big Dig was over budget by a factor of 5. For the attorneys in the room, this is traceable back to a Supreme Court decision in 1911 where basically a prime contractor is not responsible for their subs so when something goes wrong, they sue each other; that drives the cost up and delays everything. We are using a procurement method called progressive design-build that has been used maybe 5% of the time in California, where the contractor is in privity with their subs and if anything goes wrong, the prime is responsible, so we don’t have the cost escalator and the delays associated with a conventional public works project.”
“We’re doing the same thing with insurance,” Mr. Roos-Collins continued. “Ordinarily individual insurance coverage is by risk, but we’re going to do something called consolidated insurance program where one insurer is responsible for covering all risks so if something goes wrong, you don’t Insurer X suing Insurer Y suing Insurer Z – you have one insurer who is responsible. If that procurement model works, I think its relevant to other public works projects including restoration projects, and for that matter, dam removal projects. But here, we’re doing it because it’s the right way to complete this job within our budget.”
“When we started on this project, we weren’t looking to be a role model or looking to thinking about the entire North America or the world policy on dam removals, but our dams are getting old, and we’re going to have to think about which ones are worth keeping and upgrading and which ones do we need to take out,” said Mike Belchik. “The 2010 agreement, in its original go around, needed Congressional authorization. We learned that there’s a certain ideology that’s just dead set against dam removal. Everything could be literally falling apart and they’d be against taking it out. What happened at Oroville a couple of years ago was a huge wakeup call. These dams are not as safe as they appear, and one failure can take these things out.”
“Copco Reservoir was built in 1918; Elwha Dam was built in 1913,” continued Mr. Beldchik. “They just took that dam out and they estimated it was going to take them 3 years, and they got it out in four months. Why? The concrete was rotten, the dam was ready to fall down anyway. So as a country, we have to be able to take a look at these dams and dam removal is just going to have to be on the table a lot more than it has been. Just being ideologically against it is just asking for large scale failure and disaster. We’re going to have to be taking a look at which ones we want and which ones we don’t. I’m not saying we need to take them all out. Every case is unique. On the Klamath, we believe it added up to towards taking it out. I didn’t mention the toxic algae problem and what’s brewing behind those dams on that. Other dams, it may make sense to upgrade and keep them in. It’s a decision we’re just going to have to take a look at case by case.”
QUESTION: You’re planning to take the dam down in 2022, but you also said you were in the process of for transfer of ownership and maybe concurrently with surrender. Do you have to achieve that full surrender before you can take down the dam? If so and if that pushes out the process beyond 2022, is there a plan for what happens?
“Under the Klamath Hydro Settlement Agreement, license transfer must occur before license surrender, and that’s because PacifiCorp bargained for not being jointly and severally liable for license surrender if things go wrong,” said Mr. Roos-Collins. “The license surrender order must be issued by FERC before we can proceed; that’s because the licensee has an obligation to comply with the license, and until FERC amends the license to permit license surrender, we can’t do that. If we fail to get a license surrender order in 2021, then the budget margin gets thinner. But we do have a Plan B and a Plan C, which is not public yet, but we will disclose that to FERC in the course of 2020 so they will understand what we will do if we get into that spot.”
QUESTION: Were the counties included in the indemnity group? What about inverse condemnation?
Paul Weiland said that at the moment, there is no such arrangement. “We’ve had discussions about Siskiyou County’s desire anyway to not be on the hook for any consequences associated with this, and we’ll see where those might lead.”
“The County will be an insured under our policy,” said Mr. Roos-Collins. “With respect to inverse condemnation, there’s no property right in the renewal of a federal license which is owned by a utility and paid for by the utility’s customers, so as far as we know, based on case law across the west, there is no inverse condemnation associated with loss of reservoir property which will become riverfront property. With respect to flooding, we will increase the 100-year flood stage, meaning the height of the water, by 6” to 2 feet depending upon the location, and we are proposing to address those damages through payments to the affected property owners versus wait for the courts to determine whether inverse condemnation has occurred.”
QUESTION: At what point in the negotiations did you start talking with the contractors?
“The budget was set in February of 2010,” said Richard Roos-Collins. “It was set on the basis of studies by Reclamation and specifically by their technical services center in Denver which advises across the federal fleet of dams; they looked out 5 or 10 years and said $450M was about right … So the Corporation inherited a negotiated price. We went through an RFP process in late 2018 where we had multiple bids, and we picked Kiewit on the basis of that. Essentially our instruction to the bidders was that they had to solve to this price. Don’t tell us it’s low, don’t tell us it’s high, solve to this price because it is what it is. So Kiewit will deliver to the corporation a guaranteed maximum price in two weeks which we will file with FERC at the end of the month, and that will be the first market test, if you will, of the negotiated price because Kiewit will basically stake its corporate reputation on being able to perform for that guaranteed maximum price.”