Tuesday, November 29, 2022

Media fails to report the #1 reason Warren Buffett's Klamath River Dams are coming down

The recent formal decision by the Federal Energy Commission to order removal of four of Warren Buffett's Klamath River Dams has, predictably, resulted in a new raft of media reports about "the largest removal of dams ever."    

"Tribes celebrate plan to remove dams on Klamath" in Indian Time is the best of the lot which I've seen so far because it acknowledges that:

  • Dam removal was at its core a business decision to off-load a money losing asset, that is, Warren Buffett's Klamath hydro dams. 

  • It was Indigenous Native Activists and the Lower Klamath River Tribes, the Yurok, Hoopa and Karuk Tribes, which led the twenty year effort.
  • Dam removal will not restore the River and Klamath Salmon; that much more is needed. As Hoopa Chair Joe Davis put it: “Now we must keep the momentum going and we are looking forward to working with all of our neighbors and partners in that effort.”
However, like all the other articles on dam removal, this one does not report the real reason the dams became uneconomical. The order for fish ladders did not doom the dams; like all capital costs that cost would have been passed on PacifiCopr's customers, the ratepayers, via the California and Oregon Public Utility Commissions. It was the prohibition on radically ramping River flows up and down between the dams which rendered the Hydro Project a money loser.

Ramping, which means turning flows up and down, is critical to the Klamath Hydro Project's profitability because power can be made when it is worth a bit more on the wholesale power market, for example, in the evening. The California Energy Commission estimated that restrictions on ramping meant a relicensed Klamath Hydro Project would generate an operating loss of $24 million each and every year. 

Map of the Upper Klamath River with dams to be removed and dams to remain
The prohibition on radical ramping that was ordered by the Administrative Law Judge durng FERC relicensing proceedings was the critical factor because it rendered the dams money looser each and every year if they were relicensed. Once the decision on ramping took place, the dams were doomed and the only question was who would pay for their removal.
As is usual in America, the corporate owner got bailed out; taxpayers and ratepayers only will pay for removal, not a penny from Warren Buffett and other stockholders. In addition, PacifiCorp and its investors got over ten extra years of profits without making any changes in operations to help salmon. 
Media's Reporting Failure

As explained above, while 20 years of tribal involvement and continuous activism by Lower Klamath River Indigenous Natives played a large part, it was not the critical factor that guaranteed dam removal. One would not know that, however, if one watches the short film American Rivers made about Klamath Dam removal or if one reads and listen too almost every other media report. The film and all the reports I've seen don't even mention the ramping issue. Most also mistakenly state or imply that PacifiCop's Klamath Dams control flows in the Klamath River. In reality, the US Bureau of Reclamation controls Klamath River flows, not the dam operators. 

The Klamath reporting failures of our media are, sadly, a consequence of radical cuts in reporting and editing staffs that have degraded reporting across the media landscape. But why did American Rivers, whose staff were closely involved with the Klamath Dams every step of the way, decide to make a film that fails to identify the key reason the dams are coming down? And why did Berkshire-Hathaway, owner of PacifiCorp and the dams, go to great expense to promote the role of Indigensous Native activists and to obscure the fact that dam removal was, at heart, a business decision? 

How will historians write about dam removal? With so many media reports obscuring the key economic factor, will historians also miss the crux?

Twenty years of thanks

There are many to thank for over 20 years of dam removal activism. I have been there for the whole time and know what was done and by whom. It was and is an amazing effort of heart that has spanned generations. But those who, in my opinion, deserve the most thanks are the unnamed biologists with Oregon Department of Fish and Wildlife. Those biolgists championed better flows for Redband trout during the dam relicensing process. It was their science and their advocacy that resulted in ramping restrictions which made the Klamath Hydro Project a money looser and convinced PacifiCorp to get rid of the money loosing Klamath River dams.
Activists and allies protest poor water quality discharges to the River.

I sure wish reporters and editors would tell the whole story.



Spreck Rosekrans said...

Interesting, hadn't heard this but was involved with ramping issues below Glen Canyon in the 1990s.

Is there a link to a not too technical discussion of the criteria?

Richard McCann said...

Unfortunately, your claim about ramping restrictions is incorrect. I conducted the CEC study in 2006 comparing the economics of relicensing versus decommissioning. Even using the high cost of renewables at the time (solar was upwards of 10 cents per kWh; its now less than 5 cents per kWh), the two options were projected to cost about the same. If the same analysis was run today, the decision to decommission would have been supported overwhelmingly by this economic analysis.

Felice Pace said...


Methinks your memory does not serve. The following excerpts are from "CALIFORNIA ENERGY COMMISSION October 29, 2007 Letter To:
Mr. Paul Clanon
Executive Director
California Public Utilities Commission
505 Van Ness Avenue
San Francisco, CA 94102

RE: PacifiCorp’s Klamath Hydroelectric Project. Transmittal of Economic and
Energy Information from the California Energy Commission to Assist Public
Utilities Commissions in Identifying the Least-Cost Project Alternative for

"The scientific information provided in the administrative record coupled with the Energy
Commission’s own energy and economic analyses demonstrate that decommissioning
with replacement power is the least-cost and biologically superior project option for
PacifiCorp’s ratepayers."

"Final results from KPAAM2 show that decommissioning with replacement power is
less costly than relicensing with mitigation across a wide range of assumptions and
replacement power cost estimates. Economic benefits to PacifiCorp ratepayers from
the decommissioning option would range from $32 million to $286 million. For the
midline case using PacifiCorp’s own replacement power forecast, it would be $114
million less costly to decommission the facilities, restore the fisheries, and procure
replacement power for thirty years rather than relicense the Klamath Hydro Project
and install the extensive array of mitigation measures likely to be required by FERC
and the other environmental regulatory agencies."

In addition the letter states: "The operational mitigation measures would reduce power production by 23 percent to 563 GWh and further constrain peaking dispatch flexibility."

It is the loss of revenue due to constraint on "peaking dispatch flexibility" to which I referred.

Richard McCann said...

The report states that it is $32M-$286M less costly to decommission, and that's before the tremendous reduction in renewable power costs. The reduction on power output under relicensing wasn't due to less peaking dispatch flexibility, but rather in reduced output to maintain higher fish flows. The relicensing costs included all of the proposed mitigation measures required by the federal agencies. So I remember correctly. I don't know where you get the $24 million per year for reduced peaking flexibility. I think you might be misreading the causation in the report.

Felice Pace said...


the idea of "reduced output to maintain higher fish flows" makes no sense to me. Doesn't higher fish flows means more water going through the generators and therefore more power being generated and more revenue?