A ruling from the Federal Energy Regulatory Commission today requires PacifiCorp to remain a co-licensee on four Klamath dams, perhaps throwing a wrench into long-laid plans to remove them.

A ruling last week from the Federal Energy Regulatory Commission requires PacifiCorp to remain a co-licensee on four Klamath dams, perhaps throwing a wrench into long-laid plans to remove them.

FERC said it’s prepared to approve ownership transfer of the dams to the Klamath River Renewal Corporation – an organization formed to decommission and remove the dams, and restore the area afterward – but only if current owner PacifiCorp remains a part of the project.

“We are pleased that FERC has identified a pathway for the project to move forward," said KRRC in a statement Friday morning, sent by spokesperson Betsey Hodges. "There is more work to be done, and we are working with our settlement partners on how to ensure a successful project. Our partners have indicated they remain committed to identifying a path to move forward."

PacifiCorp said it will continue to examine the order but noted the plan was for KRRC to take ownership of the dams in order to protect PacifiCorp customers from cost and liability of the massive project, which would be the largest dam removal project in U.S. history. If KRRC can’t become the sole licensee, those protections would no longer apply.

In its press release, PacfiCorp said it, too, will consult with its settlement partners “to assess (the order’s) impact on continued implementation of the Klamath Hydroelectric Settlement Agreement.”

Local tribes, fisherman’s associations and organizations dedicated to preserving natural resources are hopeful that this hurdle can be jumped and that dam removal will proceed. The commission's decision could be devastating for tribes that rely on salmon if it blows up the long-negotiated deal to tear down the dams that block the migration of fish along miles of the Klamath River.

“We can work with this,” said Karuk Chairman Buster Attebery of FERC’s ruling. “We understand that we will need to reconvene settlement parties and make adjustments as needed to reflect PacifiCorp’s goals. We remain committed to our partnership with PacifiCorp as we remain committed to Klamath dam removal.”

In the 31-page ruling, FERC said it realizes the intent was for PacifiCorp to “wholly relinquish its interest” in the dams. However, because of the magnitude of the project and uncertainties on final design, as well as potential impacts of dam removal on public safety and the environment, “it would not be in the public interest for the entire burden of these efforts to rest with” KRRC.

FERC goes on to say that KRRC has gone a long way in showing they have the funding to complete the project – $450 million – but “there is a significant degree of uncertainty associated with the project” to remove Copco No. 1, Copco No. 2, J.C. Boyle and the largest, Iron Gate. PacifiCorp concluded the dams no longer make financial sense, saying they produce little power and relicensing them would likely be more costly than removal because fish mitigation would be required.

FERC said KRRC has adequately responded to their requests for information regarding contingency reserves, insurance and risk mitigation, although they said transferring a project to a newly formed entity for the sole purpose of decommissioning and dam removal “raises unique public interest concerns” and said it would apply more scrutiny to the project.

KRRC has three sources of funding for the project, including $184 million from PacifiCorp’s Oregon customer surcharge, $16 million from the California customer surcharge and $250 million from a California bond measure. The KHSA states the $450 million State Cost Cap is the maximum amount California and Oregon will provide.

In a Feb. 28 FERC filing, KRRC provided updated cost estimates that showed the updated total project cost of the project, including contingencies, is estimated at $445,575,000 – under the State Cost Cap.

Costs could escalate and technical issues could arise, FERC noted in its ruling, and if KRRC were the sole licensee, “it might ultimately be faced with matters that it is not equipped to handle.”

FERC said KRRC has “limited resources” and no experience with hydropower or dam removal, while PacifiCorp has additional resources and experience operating the dams for the past 32 years.

“Accordingly, we believe that the public interest requires that PacifiCorp remain a co-licensee, and we condition our approval of the transfer upon it doing so. If PacifiCorp and the Renewal Corporation accept their status as co-licensees, we will deem the surrender application to be jointly filed and will process it accordingly.”

FERC noted that some public commenters referred to KRRC as “a shell corporation” created only to shield PacifiCorp and the States of Oregon and California from liability associated with dam removal.

“We are approving the transfer application, contingent on PacifiCorp remaining on as a co-licensee; thus, PacifiCorp will not be shielded. ... Moreover, as a matter of policy, we find that it would be inappropriate for PacifiCorp, which has been the licensee for the Klamath Project since 1988, to relieve itself of all liability associated with the proposed decommissioning, should it be approved.”

The project, estimated at nearly $450 million, would reshape California's second-largest river and empty giant reservoirs. It could also revive plummeting salmon populations by reopening hundreds of miles of potential habitat that has been blocked for more than a century, bringing relief to a half-dozen tribes that rely on salmon fishing that are spread across hundreds of miles in southern Oregon and northern California.

The transfer of PacifiCorp's hydroelectric license was seen as the first major hurdle to getting the dams removed on the lower reaches of the Klamath River. Federal regulators must also approve a request to decommission the dams before work can begin, possibly as early as 2022.

Richard Marshall, a representative of the Siskiyou Water Users Association, pointed out that FERC’s Thursday ruling deals with the transfer of the hydroelectric license and does’t authorize dam removal. He said when that time comes, there will be public hearings and additional environmental studies that will require substantial analysis with no certainty that the dams would be authorized to be removed.”

FERC’s ruling went on to deny a motion by the Siskiyou County Water Users to dismiss the transfer application, as well as a motion for clarification from Siskiyou County.

Siskiyou County’s latest request for a delay in FERC’s decision cited the COVID-19 pandemic. The county filed a request on April 8 asking FERC to delay action until after the pandemic, arguing “now is not the time to make a hasty decision.”

FERC said its decision is “far from hasty,” adding that dam removal proceedings have been ongoing since September of 2016.

In a Thursday afternoon statement, Congressman Doug LaMalfa hailed FERC’s decision as a win for those who are fighting to keep the dams. He said it “clears the way to stop this terrible project without wasting more of California taxpayer funds or Oregon ratepayer dollars.”

LaMalfa said in his opinion, PacifiCorp should instead pursue relicensing of all four Klamath dams, “ensuring the Basin continues to receive ample carbon free, clean power for years to come.”

In contrast to LaMalfa’s remarks, California Trout Executive Director Curtis Knight cast FERC’s ruling in a positive light.

“As we’ve seen time after time on rivers across the country, dam removal works. Thanks to FERC’s decision today, the Klamath River is on the way to rebounding back to life. With ongoing cooperation from PacifiCorp and federal regulators, our children and future generations will know a healthy, free-flowing Klamath River.”

Editor's note: This story has been updated to include an updated statement from KRRC and a statement from the Siskiyou Water Users Association.