Posted By: kbirrigator On: 8/1/2011

Title: opinions, everyone has them

Mr. Spain is entitled to his opinion on all these counts, but , once again the fact is, the only reason retrofiting the dams would cost more than destroying them is because of the burdensome, heavy handed, plain outright threats of endless litigation against PacifiCorp, if they tried to reliscense and retrofit. Everything else Mr. Spain has stated is simply his opinion, and we ALL are allowed to have one, even if it makes absoutely no sense.

Report Inappropriate Content

Posted By: Glen Spain On: 7/18/2011

Title: Mallams Mistaken -- No Cost-Free Options on Klamath Dams

In this most recent Tom Mallams post, more than any other, he shows his ignorance of both how public utilities like PacifiCorp actually work, and of the two (and there are ONLY two) choices that PacifiCorp must chose from -- neither of them cheap. Unfortunately, doing nothing is not a legal option, as the 50 year FERC license for this dams has now expired. If PacifiCorp only operates them now on temporary annual extensions while a FERC relicensing application is pending, but that annual extension could come to an end at any time. All PacifiCorp is trying to do is find the best and cheapest route out of this dilemma for its customers.
Here are facts that Mr. Mallams is not telling us in his posting, and apparently does not understand:
First: Public utilities must ALWAYS divvy up the costs of their operations, whether it be building powerplants, operating them or replacing them -- in this case dam removal -- among the revenues they receive from their customer-ratepayers. It is the only source of revenues that such companies have! So whatever choice PacifiCorp makes for the future of the Klamath Dams, the PacifiCorp ratepayers -- the people who benefited from the power from the Klamath Dams -- must pay the costs through an increase in rates. This is how every public utilitiy works. Even irrigation districts, which are also public utilities of a sort, work this way. The customers always pay the bills for the service they get. Why is Mr. Mallams surprise by this?
Second: There are ONLY two legal choices for the company that it (and its ratepayers) must now face: (1) relicence the dams through FERC, which means a lot of expensive retrofits to bring dams dating back to 1916 up to modern safety, operational and environmental standards, or alternatively; (2) decommission and remove the dams and replace their power somewhere else, for less money if possible.
Differences in Costs: Relicensing the dams, PacifiCorp calculates, will cost its ratepayers AT LEAST $460 million dollars, and potentially a lot more, costs which all must be paid for in much higher power rates. And at the end of relicensing, according to FERC's own calculations, the Klamath dams would then run at a new loss of about $20 million/year, costing the company's ratepayers even more. And FERC, as the federal agency that licenses tens of thousands of US dams, does know a thing or two about them.
Compare that $460 million plus tab to the only other legal option, which is to decomission and remove the dams, replacing their power elsewhere -- total cost, under the Klamath Restoration Settlement Agreement, of this other option is a much cheaper $200 million, a fund which is already now being collected over a 10 year time frame to keep the rate impact under 2%.
So which is your preference as a PacifiCorp's customer, Tom? Keep the dams by paying more than TWICE what they are worth, and still generating power at a $20 miilion/year net loss for the next 50 years? Or admitting that they are old dams that are no longer economically viable, and thus backing PacifiCorp is taking a good deal by paying less than half the relicensing costs to replace them with renewable energy from new facilities elsewhere -- power plants that are much more modern, much more reliable and much cheaper in the long run?
And that is all the choices the company has. Those are the only two legal options. There IS no "status quo" or cost free option in the real world in which PacifiCorp has to live -- but apparently you do not.
And finally, you should also know that PacifiCorp is already committed, by law, to bring on board at least 1,400 MW of additional renewable "green" power by the year 2015. That is part of the deal that resulted in the purchase of the company by MidAmerica Energy Corporation some years ago. This is 17 TIMES the very small amount of power all four Klamath dams together have actually generated over the past 50 years on average, i.e., about 82 MW. Adding that additional renewable power to its grid, cost effectively and competitively priced, is part of what PacifiCorp is doing as a responsible power company. Adding just a little bit more to replace all the power the Klamath dams provide will be relatively simple in that mix.
As was once said, Mr. Mallams, "You are entitled to your own opinions, but NOT to your own facts." None of the facts say the Klamath dams should be kept for any economic reasons. Quite the reverse -- it is simply going to be far cheaper to PacifiCorp's customers and ratepayers to abandon them and replace their power more cost effectively elsewhere.
-- Glen Spain, Pacific Coast Federation of Fishermen's Associations (PCFFA)

Report Inappropriate Content