(CN) — A federal regulator has thrown a wrench into a plan to remove four hydroelectric dams on the Klamath River, a project that is expected to revive dwindling salmon populations in the massive river system on the California-Oregon border.
As part of a landmark 2016 settlement agreement, PacifiCorp, the energy company that has managed the Klamath Project since 1988, sought to transfer its operating license to a public benefit corporation formed by a coalition of tribes, environmentalists and fishing interest groups.
By ceding its license, PacifiCorp would be shielded from all liability related to the $450 million dam removal project while continuing to operate and maintain the hydropower system prior to the dams’ destruction.
In a decision issued Thursday, the Federal Energy Regulatory Commission refused to let PacifiCorp completely surrender its license, opting instead to grant a partial transfer to the Klamath River Renewal Corporation, the entity that will oversee the destruction of the century-old dams.
The commission concluded the Klamath River Renewal Corporation had no experience in dam operations or removal, but PacifiCorp does and could provide additional funding if the costs of dam removal rise unexpectedly. The commission further found it would be “inappropriate” to let a corporation that has managed the dams for more than 30 years “relieve itself of all liability” associated with the project.
That decision could spell trouble for the project because it does not protect PacifiCorp’s ratepayers from possible higher rates related to the cost of dam removals, a stipulation that was considered essential to win the approval of public utility commissions in California and Oregon.
PacifiCorp said in a statement that protecting its customers from dam removal costs was a “bedrock principle” from the beginning, and FERC’s decision denies its customers the protections it negotiated on their behalf in a 2016 settlement agreement.
“We expect to reconvene with our settlement parties to determine next steps for continued agreement implementation,” the company said in a statement.
FERC noted in its 32-page decision that PacifiCorp could renegotiate its arrangement to require Klamath River Renewal to reimburse it for any expenses it might incur as a co-licensee.
Klamath River Renewal said it was pleased the commission identified a path forward for the project, despite concerns about financing and its own lack of experience in dam removal.
“There is more work to be done, and we are working with our settlement partners on how to ensure a successful project,” the corporation said. “Our partners have indicated they remain committed to identifying a path to move forward.”
In its decision, FERC rejected requests for environmental reviews and conditions to improve or maintain recreational opportunities, finding those issues will be addressed in a future decision on an application to decommission the dams. If approved, the dam removals could begin as early as 2022.
The destruction of four Klamath River dams would be the largest dam demolition project in U.S. history, made possible by a landmark settlement in 2016.
The $450 million project will be funded by $184 million in surcharges for PacifiCorp utility customers in Oregon, $16 million from PacifiCorp customers in California and $250 million from the California water bond Proposition 1, approved by voters in 2014.
The project would remake California’s second largest river and drain massive reservoirs, opening hundreds of miles of habitat previously closed to salmon and steelhead for the last 100 years. Half a dozen Native American tribes that rely on those fish for their cultural traditions and livelihood will benefit.
One of those tribes is the Yurok, which occupies a 44-mile stretch of the Klamath River in Del Norte and Humboldt counties in Northern California. In a statement issued Thursday, Yurok Tribe vice chairman Frankie Myers said all rural communities, including tribes, stand to gain from the dam removals.
“At its heart, Klamath Dam removal is a fish restoration project that will benefit all communities in the Klamath Basin including agricultural interests throughout the basin,” Myers said.
Glen Spain, regional director of the Pacific Coast Federation of Fishermen’s Associations, said commercial salmon fisheries from San Francisco to Coos Bay, Oregon, have been hit hard with catch restrictions due to plummeting salmon populations on the Klamath River.
“Salmon fishing families are eager to restore the river and get back to helping feed America,” Spain said in a statement.
Richard Marshall, president of the Siskiyou Water Users Association, a group of farmers and ranchers who get irrigation water from the Klamath Project and opposed the request to transfer PacifiCorp’s operating license, could not be reached for comment. A Facebook message to the group, which has no listed phone number or email address, was not returned.