Facing up to dam removal

In 1993 Terry Flores, director of hydro power relicensing at US utility PacifiCorp, would not have even contemplated the situation she finds herself in today. With only seven years left in the life of one of its hydro power schemes, PacifiCorp is waiting for approval of a dam removal agreement. ‘Believe me,’ Flores says, ‘this is certainly not where we thought we would end up at the beginning.’

Located in Oregon, PacifiCorp has 6500MW of coal-fired plants under its remit, but its 1000MW of hydro power has an important role to fulfil in the company. ‘Hydro is an important part of our company resource portfolio,’ Flores says. ‘Traditionally it is low cost and beneficial to our customers. We realise that we have to preserve this.’

The dam at the centre of the company’s removal agreement is the Condit facility on the White Salmon river. Built in 1913, the 14MW, 38m high hydro power dam’s operating licence needed renewing in 1993. As PacifiCorp headed into the relicensing process, which has become renown for its cumbersome nature, it realised that things were not going in a positive direction.

The Federal Energy Regulatory Commission (FERC) is responsible for licensing non federal hydro power facilities in the US. And it was FERC’s draft environmental impact statement (EIS) which bore the bad news about Condit dam. ‘After initial studies in the first stages of relicensing, FERC made it clear that the federal agencies required fish ladders and screens to be installed at the facility,’ says Flores. ‘And this was to be a costly proposition for us.’

In fact the US$30M of fish requirements specified by FERC would render Condit’s operating licence uneconomical. ‘We needed to spend US$18-20M on fish ladders and screens,’ Flores adds, ‘but there were also other major requirements such as increasing instream flows throughout the project. The combination of these measures left us with a US$30M package for a small project. It just meant that we couldn’t sustain our investment.’

Flores explains how federal state agencies and the local Yakama tribe have made it their clear intention to restore salmon numbers on the White Salmon river. In the early 1900s there were a few fish runs but these were affected by logging activities and then the construction of Condit in 1913. The agencies are keen to look to the future and want to restore the natural habitat in the river basin, increasing salmon and steelhead numbers.

When it realised that FERC’s require-ments would give it an uneconomical operating licence, PacifiCorp abandoned the traditional relicensing procedure and entered into discussions with other stakeholders in the project. Flores went to the federal state agencies, the Yakama tribe and environmental groups such as American Rivers. ‘We asked them if we could talk. We had to do this,’ she says, ‘as we were at the stage where we would make our project uneconomical.’

Flores tried to bring the issue of off-site mitigation to the fore of discussions. The company offered to invest in listed species and fishes in the surrounding river basins but the stakeholders’ minds were resolved. The predominant thinking was that they wanted fish ladders and screens — or dam removal.

‘We had to go back and really talk amongst ourselves then,’ she says. ‘We had to ask ourselves some tough questions. We were not comfortable with the dam removal scenario. Dam removal is a difficult issue and it is an extreme measure.’

PacifiCorp’s discussions centred around the fact that the company knew the fish requirements were set in stone. Federal fish agencies had requested them and under section 18 of the Federal Power Act FERC could not reject them in its final EIS. So more discussion followed. Faced with only two options, PacifiCorp realised that no matter how much it disliked the idea, it needed more information about dam removal. Was it really feasible to remove the 38m high Condit dam, which is set in a steep canyon? How would it be carried out? What would the impacts and costs be? And, most importantly, who would pay?

Keen that information about dam removal should be available for all stake-holders in the Condit project, the Yakama tribe and PacifiCorp jointly financed a study into dam removal. They formed a consensus of opinion about which con-sultant would conduct the study and the whole procedure was very collaborative.

The dam removal study looked at three variations of removing the structure. Detailed analysis of sediment transportation was also carried out to give a better understanding of potential downstream impacts.

All stakeholders agreed on the removal method which was considered to be the most cost-effective with the least environmental impact. Dismantling the dam piece by piece was not considered the best option. Although this lets the sediment flow slowly downstream and will have less of an environmental impact, it will obviously occur over a prolonged period. ‘What we all agreed on,’ Flores says, ‘is to take the dam out quickly. We will drill a hole in the base of the dam so that the sediment is released quickly. This will obviously have an impact on fish and the habitat but will only have an effect for a couple of months. We will ensure that this takes place when the salmon aren’t there. Then the dam will be taken apart and the pieces removed.’

As discussions progressed PacifiCorp realised that dam removal was its only option. ‘Our motivation through this all was that as a company we wanted to reach a collaborative agreement,’ says Flores. ‘We could have rejected the FERC licence but this would mean we would have to tread the long path to litigation. It could take years and would not do too much in meeting our goals or maintaining our natural resources.’ Flores also added that even during litigation FERC could stipulate certain environmental measures such as increased intake flows.

There were tough moments in the negotiations between all stakeholders but Flores believes that this has shown how the collaborative approach can work. Even though the end result — a dam removal agreement — was not what PacifiCorp wanted, it met the needs of all concerned.

‘We obviously would have preferred an economic licence,’ PacifiCorp’s director of relicensing says, ‘but Condit presented us with some unique circumstances. We were faced with difficult choices and had to come up with an agreement which works well for our company and also meets the needs of others in the process.’

In December 1999 FERC was presented with a dam removal agreement for Condit dam. At a cost of US$17.15M the 38m high dam, the surge tank, the flow line to the power house and penstocks will be removed. However the power house, which is listed as a historic site, will remain. The dam removal package is broken down into:

•Project removal costs = US$13.65M.

•Permitting and mitigation = US$2M. (Over the next two years permits will be required for various aspects of dam removal, such as water quality. By releasing sediment into the river PacifiCorp will be compromising state-set water quality standards. An exemption permit will be required.)

•Tribal restoration fund (administered by the Yakama tribe) = US$1M.

•Funds for restoring traditional Indian fishing sites = US$0.5M.

One important consideration for PacifiCorp in the agreement was to cap the cost of dam removal. ‘We could not enter this agreement with an open cheque book,’ says Flores. If constructors’ bids for removal exceed US$13.65M PacifiCorp can return to the discussion tables. Other stakeholders will be required to fund or seek alternative sources of funding to cover the excess costs. In addition, if there is any remaining money from the US$2M set aside for permitting and mitigation, this can also be used. But if the extra finance cannot be raised, PacifiCorp is free to walk away from the agreement.

‘This was a difficult point for the others in the agreement,’ Flores said. ‘It obviously gives us more certainty but it was tough for those who wanted the certainty that the dam will be removed.’

Perhaps the most unusual aspect of the removal agreement is that PacifiCorp is allowed to continue operating the plant for seven years after FERC gives its approval. Generation revenue will then be used to defray the cost of dam removal and no fish requirements will be needed in the interim.

‘It’s quite unusual to use dam operation to help pay for removal. We certainly had thought about it but in the middle of negotiations American Rivers actually raised the concept and said they would be willing to look at it. This helped make the idea more acceptable to the others.’

Although the stakeholders have all agreed on dam removal FERC still has to approve. It has just recently sent the agreement out for public consultation, which usually lasts for 30 or 60 days. Then after analysing comments the Commission will have to amend its final EIS if it accepts the agreement. ‘We do not know how long this will take,’ Flores says. ‘But we all hope that FERC will act fairly expeditiously.’

As PacifiCorp waits for FERC approval it is looking to its other hydro power facilities — all of which require relicensing over the next ten years. Flores says that from its experiences at Condit the utility has valued the importance of collaboration and will definitely use this approach to relicensing in future. But, she is also keen to point out, the dam removal experience at Condit is unique to that project. ‘We cannot emphasise enough that this will not be the outcome for our other projects,’ she says. She gives the example of Powerdale project on the Hood river which is run in connection with tribal fisheries programmes. As the dam serves its purpose the federal agencies and local tribes want it to remain.

‘In essence,’ Flores reflects, ‘the Condit dam removal resulted directly from the relicensing process. It was not a case of certain interest targeting it. We just had to appreciate this fact and enter into discussions with stakeholders to develop a creative solution for all concerned. We still want to preserve our hydro resources but this was the best agreement for Condit, for our company and everyone concerned.’

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