Government funds buyout of Naches Dam for dam removal due to environmental group's petition

3/20/03

from Gary Wiggins
ESAInfo.org

ESAinfo has learned of a very real, story that demonstrates our concern about the future certainty of energy production (and other land use) in this country. This is a story of how the Endangered Species Act (ESA) is
affecting our economy and national security. Please don t take you eye off the ball on this one!

ESAinfo did a story on February 5th this year about how the Washington State Department of
Ecology is assisting the U.S. Bureau of Reclamation (Bureau) to buy water rights from Pacificorp, for $1.2M, and then the ultimate buyout of the Naches Hydropower Plant near Yakima, WA. Pacificorp is a large power producer in the western United States and this useful power plant has been in operation since 1904. Total cost to Washington State is $1.2M, and the Bureau is about $7.3M, total public expense of about $8.5M. The dam power facility is old, but not worn out. Facilities such as this are constantly maintained unless the certainty of future operation becomes clouded.

Here is what we didn't know in February: The plant is being removed due to a petition from an environmental group called American Rivers (based in Washington D.C.) to the Federal Energy Regulatory Commission (FERC) Records and Information Management System (RIMS). The main reason is that about every two decades FERC permits are required for hydropower plants along navigatable rivers . The Naches project was never required to
get FERC approval due to the small size of the Naches River. American Rivers won their petition to FERC to change the legal definition of what navigitable rivers are, and then they sued Pacificorp, winning the definitions battle. This loss in court now requires Pacificorp to complete a FERC application which will be impossible to ever approve. The environmental sections of the FERC permit have become more and more onerous in recent years due to the environmental lobby/regulations (varied interpretations of the ESA, NW Power Act, etc.). Few hydropower plants can now spend enough money to assure over 90% fish passage downstream of dams to make the FERC bar . All this is happening this year when huge numbers of salmon are returning to tributaries such as the Naches River in the Columbia River Basin and the national economy is suffering. Please see specifics of Pacificorp s financial reasoning to sell the power plant testimony before the Public Utility Commission of the State of Oregon in August.

This testimony reveals that Pacificorp would not be able to afford to keep the Naches Project open with the new FERC permit required by American River's petition.

Here is what an inside source reveals to ESAinfo: The real tragedy of this entire thing is that the Bureau of Reclamation has agreed to pay PacifiCorp approximately $8.5 million for the Naches plant (Wapatox). Most of the
money will come through the Yakima Basin Enhancement Project in the guise of improving instream flows by removing the power generation. The Washington State Department of Ecology is contributing $1.2 million to the
Bureau to help fund the buyout. Ecology press release dated January 28, 2003.

So here we have Federal and State Funds being utilized for the deal. The negotiations between PacifiCorp and the Bureau have all been behind closed doors with both sides signing a confidentiality agreement.

An interesting twist is that the Yakima Nation really wanted this buyout to happen. They had filed with Bonneville Power Administration (BPA) for up to $4 million to assist in the buyout and BPA denied funding for the request. This happened last summer. The Bureau and the state came up with the money anyway. When I heard about the proposed buyout I did a bit of research myself by looking into the FERC website and found that American Rivers has petitioned FERC that they had jurisdiction over the Project and that it needed to be licensed. ESA and Ecosystem restoration are part of the drivers.

ESAinfo Summary: In closing we are amazed that public money is being released so secretly. It was only January 28th that the public was informed of the deal in the newspaper. We checked this last (March 10th) at Pacificorp, and discovered to our surprise, that Pacificorp has already been paid the majority of $8.5M just last week! Like they say in the Majors, In ain't over till its over !