A historic agreement between the federal government, two states, and a private power company means that four dams on the Klamath River are potentially slated for decommissioning and removal. The Klamath River flows from Oregon through California before finally emptying into the Pacific Ocean. The amended Klamath Hydroelectric Settlement Agreement (“KHSA”), signed on April 6th, 2016, may bring unexpected success to a decade-long negotiation involving big energy, tribal water rights, historic wildlife habitat preservation, and the intermingling of state and federal government regulatory agencies.

The first Klamath agreement was formally executed in 2010, and brought together the federal government, the state governments of Oregon and California, PacifiCorp, a large electric cooperative, and over forty additional signatories, including the Yurok and Karuk Tribes. Repeated congressional inaction halted the prior agreement’s implementation after Congress again failed to act before adjourning for the year on December 31, 2015.  On February 2, 2016, the Department of Interior, together with the Department of Commerce, California, Oregon, and PacifiCorp announced they agreed to amend the KHSA, which the parties eventually signed in April. The amended KHSA is the culmination of the Klamath Basin Restoration Agreement executed in 2010 and the Upper Klamath Basin Comprehensive Agreement signed in 2014.

In September, PacificCorp submitted the revised KHSA to the Federal Energy Regulatory Commission (“FERC”) for public review. On October 17, 2016, Interior Secretary Sally Jewell issued a letter to the Commission backing the dam removal.

Initially, the disputes in the Klamath Basin emerged as environmental and conservation groups (such as the Nature Conservancy, American Rivers, and Trout Unlimited) sought to restore 420 miles of historic salmon runs and riparian habitat. Moreover, these groups sought to eliminate the toxic algae blooms proliferating in the idle backwaters above the dams.

The most significant barrier to restoration of the river has been a dispute over the cost of retrofitting the aging infrastructure using modern technology and, alternatively, the cost of dismantling and removing the century-old structures and preparing the land to return to its original state.  According to several studies, the retrofit option would not only result in reduced electricity generation, but would also cost millions of dollars more than the removal.  However, the economic impacts extend beyond the estimated 450 million dollar cost of removal. A group of nearly one hundred, individual property owners have voiced opposition over the impact that dam removal would have on their lakefront property values adjacent to the reservoirs created by the dams.  Thus, a decrease in private property values could also accompany the dam removals.

Under the revised agreement, the states of California and Oregon will create a nonprofit entity, the Klamath River Renewal Corporation, which will take over Pacificorp’s current ownership of the dams.  This new owner will decommission and eventually remove the dams using existing federal authority. Both PacifiCorp ratepayers and a 2014 voter-approved water bond from the State of California has already generated funding for the decommission.

Notably, the most recent amendment lacks many government participation requirements from the original KHSA agreement.  The original agreement required Congress to pass legislation opening up significant funding, as well as the formal release of PacifiCorp from virtually any liability associated with the dam removal process. Congress’s inaction prompted the parties to exclude the Congressional participation requirement from the revised agreement.

In her recent letter of support to the FERC, Secretary Jewell called the plan a “unique opportunity to restore [a] magnificent [r]iver,” which  could help “re-write a painful chapter in our history” but still “[protect] the many interests in the Basin.” Secretary Jewell cited four key reasons for the Interior Department’s support: 1) the likely cost of removal is well below the funds that have already been obtained, 2) reservoir bottom sediment testing showed that chemical concentration levels were safe for release downstream, 3) the removal will result in the reopening of more than four hundred miles of salmon habitat, nearly doubling Chinook salmon production, and 4) the removal would improve water quality.

Although the agreement facilitates the removal of the dams, critics believe it fails to solve many of the problems it originally intended to fix, including resolving disputes over water rights, as well as effectively addressing specific allocations to farmers, wildlife refuges, and Native American tribes.  Notably, the Hoopa Valley Tribe did not sign the KHSA agreement amid concerns regarding certain provisions.  Further, the Klamath Tribes of Oregon did not sign the agreement, because its tribal members had yet to approve it through a popular vote.

While some issues may remain unresolved, the agreement represents an example of multiple entities and interests cooperating to effectuate the removal of the dams.  This agreement, if successful, may be an example and model for future change in the realm of water agreements. Curtis Knight, executive director of non-profit group California Trout expressed cautious optimism about the agreement, “[d]am removal is an essential first step, but certainly not the only step, in this process. California Trout remains committed to the comprehensive vision behind the hard-won Klamath Agreements, which identified a balanced approach to water use, environmental restoration, and community sustainability throughout the basin.”

DeWitt Patrick Mayfield

Image: PacifiCorp’s John C. Boyle Dam in Oregon, one of four dams slatted for decommission under the Agreement. Wikimedia user Bobjgalindo, Creative Commons.

Sources:

Bettina Boxall, Klamath River Dams Moving Toward Removal Despite Congressional Barriers, L.A. Times (Feb. 3, 2016), http://www.latimes.com/local/lanow/la-me-klamath-river-dams-20160203-story.html.

Thadeus Greenson, Feds Announce New Klamath Accord to Remove Dams by 2020, North Coast Journal (Feb. 2, 2016), http://www.northcoastjournal.com/NewsBlog/archives/2016/02/02/feds-announce-new-klamath-accord-to-remove-dams-by-2020.

Paige Blankenbuehler, On The Klamath, A Surprising Win For River Advocates, HIGH COUNTRY NEWS (Feb. 5, 2016), https://www.hcn.org/articles/how-conservatives-handed-environmentalists-what-they-wanted-klamath-dam-removal-without-concessions.

Peter Firmite, Remove 4 Dams on Klamath, Study Urges, S.F. Chronicle (Apr. 4, 2013), http://www.sfgate.com/science/article/Remove-4-dams-on-Klamath-study-urges-4411365.php.

Press Release, Dep’t. of Interior, Parties Agree to New Path to Advance Klamath Agreement (Feb. 2, 2016), available at https://www.doi.gov/pressreleases/parties-agree-new-path-advance-klamath-agreement.

Thadeus Greenson, UPDATED: California, Oregon Governors to Make ‘Major Announcement’ on Klamath, NORTH COAST JOURNAL (Apr. 4, 2016, 11:10 AM),  http://www.northcoastjournal.com/NewsBlog/archives/2016/04/04/california-oregon-governors-to-make-major-announcement-on-klamath.

Press Release, PacifiCorp, Parties Agree to New Path to Advance Klamath Agreement, (Feb. 2, 2016), http://www.pacificorp.com/about/newsroom/2016nrl/klamath-agreement.html.

Jonathan J. Cooper, Officials Sign Unusual Pact to Tear Down Hydroelectric Dams, ASSOCIATED PRESS (Apr. 6, 2016, 6:45 PM), http://bigstory.ap.org/article/235ba2f92ded43f3a8af971a52da17f2/officials-sign-unusual-pact-tear-down-klamath-dams.

Press Release, Dep’t. of Interior, Two New Klamath Basin Agreements Carve out Path for Dam Removal and Provide Key Benefits to Irrigators (last updated Apr. 14, 2016), available at https://www.doi.gov/pressreleases/two-new-klamath-basin-agreements-carve-out-path-dam-removal-and-provide-key-benefits.

Dan Bacher, Tribes, State and Feds Sign Klamath Dam Removal Agreement, DAILY KOS (Apr. 7, 2016, 1:36 AM), http://www.dailykos.com/stories/2016/4/7/1511799/-Tribes-State-and-Feds-Sign-Klamath-Dam-Removal-Agreement.

Will Houston, ‘Milestone’ moment: Klamath River dam removal plan submitted to feds, TIMES STANDARD NEWS (Sept. 23, 2016, 10:41 PM), http://www.times-standard.com/article/NJ/20160923/NEWS/160929892.

David Smith, Jewell supports dam removal in FERC letter, THE SISKIYOU DAILY NEWS (Oct. 16, 2016 8:59 AM)  http://www.siskiyoudaily.com/article/20161019/NEWS/161019616.

Letter from Sally Jewell, Secretary, U.S. Department of the Interior, to Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission (Oct. 17, 2016), available at https://bloximages.chicago2.vip.townnews.com/heraldandnews.com/content/tncms/assets/v3/editorial/3/2f/32f4ad9f-9d5d-5656-a7c4-3a4d5d4eacc2/5806b3b857502.pdf.pdf.


Brown v. City of Eugene, 250 Or. App. 132 (2012) (holding that the term “water service” in a city charter granted a city council control over extensions of water service to end users but not over wholesale transfers of water).

In April 2010, the Eugene Water and Electric Board (“EWEB”) contracted with the City of Veneta (“Veneta”) for Veneta to purchase water from EWEB. The contract further specified that EWEB would not provide service directly to customers in Veneta, the sale would be characterized as wholesale, and the point of delivery would be within Eugene city limits. In accordance with Oregon statute, EWEB petitioned for judicial validation of the contract. The trial court subsequently granted motions to intervene by the City of Eugene (“Eugene”) and other interested parties (collectively “intervenors”).

Intervenors moved for summary judgment, arguing that the proposed contract between EWEB and Veneta violated section 44(3) of the Eugene Charter (“Charter”) that gives only the Eugene City Council the authority to approve sales of water. EWEB also moved for summary judgment. EWEB argued that other than the city council’s control over the extension of water service, the same provision of the Charter grants the EWEB full authority over the water utility, including wholesale transactions. The trial court granted EWEB’s motion for summary judgment and the intervenors appealed to the Court of Appeals of Oregon.

On appeal, intervenors contended that the term “water service” encompasses the wholesale sale of water to other entities, regardless of what entity distributes that water to end users. Thus, the Court of Appeals of Oregon sought to interpret the meaning of section 44(3) of the Charter.

First, the court established that section 44(3) provides EWEB with authority over wholesale water sales unless those sales constitute an extension of water service. The parties agreed on the meaning of extension, but the disagreement centered on the meaning of water service.

Second, the court determined the meaning of water service. The court discounted the varied and numerous dictionary meanings of service, and instead relied on what voters understood water service to mean when they voted for section 44(3) in 1976. From the voters’ perspective, the court stated, water service would have connoted the provision of water to the end user, consistent with EWEB’s argument. The court thought it unlikely that voters would have understood water service to encompass the wholesale transfer of water from one utility or entity to another.

Third, the court looked to the Charter provision’s context to discern a meaning of extension of water service. To do this, the court reviewed the statutory framework that existed at the time of the Charter vote. The court found that in 1969 the Oregon state legislature created three local government boundary commissions and used the word “service” in a way that enforced EWEB’s definition and understanding of service. Therefore statutory references to service in the 1969 legislation reflected the general understanding of service to individuals and entities, not to wholesale utilities and municipalities.

Fourth, the court reviewed the charter’s enactment history, which included a statement in the voters’ guide that the city council’s authority over the extension of water service provided it with a tool in land use planning and control of urban sprawl. The court stated that its meaning of water service would still provide the city council with some measure of control over land use and urban sprawl.

Accordingly, the court held that EWEB had authority to enter into the contract with Veneta without first obtaining approval from the Eugene City Council and that the trial court properly validated the contract.