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Deal afoot to alter Klamath for users

Dam removal - The program hinges on getting $1 billion and PacifiCorp's OK
The Oregonian by Peter Sleeth 1/16/08

A unique gathering of government agencies, Native Americans, farmers and fishermen Tuesday proposed removing four dams on the Klamath River, with a cornucopia of benefits running to river users ranging from $80 million to tribes to guaranteed irrigation water for farmers.

Yet the linchpin of the historic deal -- an agreement from Portland-based PacifiCorp to remove its four dams -- is missing.

Also absent are agreements from Oregon, California and Congress to pay nearly $1 billion in costs.

Without the utility's agreement, the proposal is only so much paper. A spokesman for PacifiCorp said Tuesday it was largely in the dark, having been kept out of the two-yearlong negotiations. PacifiCorp is owned by Warren Buffett's Mid American Holdings.

"We were a little surprised they decided to release this given that it is predicated on an agreement with us," said Toby Freeman, a spokesman for the utility in Klamath Falls.

A spokesman for the Klamath Settlement Group said the proposal would now go to PacifiCorp to be included in confidential talks over dam removal. If an agreement is reached, the dams could come out as soon as 2015, the group said.

In the past, the utility has said it would consider dam removal only if it did not mean charging the costs to its ratepayers.

"Calling something a comprehensive, basinwide settlement of all the issues without renewable hydro in the discussion is just a tad irresponsible," said Paul Vogel, a PacifiCorp spokesman in Portland. "What really needs to be restored is the presence of the license holder and hundreds of thousands of customers in the room."

The discussions began in 2004 when PacifiCorp applied for a new license to operate its dams for the next 30 to 50 years. Part of the relicensing is expected to cost the utility $300 million to build fish ladders.

PacifiCorp brought dozens of interest groups together in private settlement negotiations to discuss the relicensing -- discussions that would grow to include a possible deal for taking out some dams. PacifiCorp was asked to leave negotiations by the other groups while they crafted their own solution. Until Tuesday, a deal eluded negotiators as each group made more demands.

"It hasn't been easy; it was a tough several years putting this proposal together, but I've got new-found respect for all the communities involved from tribal to environmental and farming," said Chuck Bonham of Trout Unlimited. "I am also hopeful we can develop a good business deal that works for PacifiCorp and for the river too. We can and should do both."

Looking for money

The estimated cost to re-invigorate the Klamath Basin from its headwaters to the Pacific Ocean would be $985 million over 10 years.

Oregon would be asked to contribute lottery funds to help pay for the deal, according to the agreement. California and the U.S. Congress would have to chip in as much as $500 million in "new money" to the deal, with the remainder coming from money already being spent by the states and federal government on the basin.

Included in the agreement is a new 90,000-acre reservation for the Klamath Tribe in Klamath County, where the tribe once had ancestral lands. The tribe, like many other participants in the agreement, sought its own benefits in exchange for agreeing to the overall settlement.

Oregon Gov. Ted Kulongoski likes the settlement, a spokeswoman said, but no commitment of money will be made until after a deal to remove the dams has been struck. A summit between Oregon and California governors would follow any agreement, where budgets and timing would be discussed.

"The governor supports this agreement," said his spokeswoman, Anna Richter Taylor. "He is pleased the 26 parties have come together after many, many years of conflict. It's a solid first step towards a long-term solution."

Mike Carrier, natural resources adviser to Kulongoski, said staff members have been updating individual Oregon lawmakers on the agreement. "Our sense is the Legislature is very interested in partnering . . . in coming up with a solution for the Klamath Basin," he said.

If the agreement is eventually accepted by PacifiCorp and the federal government, it would be the largest dam removal and river restoration in the nation's history, and would bring an unlikely peace to the warring factions on the river. Once the third largest producer of salmon on the West Coast, the Klamath River now produces more environmental crises than fish.

Opposition to the deal is centered around the Hoopa Tribe of Northern California, Oregon Wild, a Portland-based conservation group and WaterWatch of Oregon. All three dropped out of settlement talks.

Steve Pedery of Oregon Wild said he doubted the deal could work for either fish or people.

"The Bush administration's settlement agreement is a billion dollar Christmas tree with money in it for every special interest in the Klamath Basin," said Pedery. "What began as an effort to help salmon and remove dams has turned into a plan to farm American taxpayers."

Steve Thompson of the U.S. Department of the Interior said the federal government is already spending $50 million to $60 million a year in the Klamath Basin. That money could help pay for new initiatives, he said.

The Bush Administration has not reviewed the new agreement, he said, but has supported the settlement talks as a way of finding answers for the Klamath.

Sen. Gordon Smith, R-Ore., and Rep. Greg Walden, R-Ore., applauded the agreement.

"I have long encouraged a locally developed solution that doesn't create winners and losers and doesn't leave out anyone who depends on water to make a living," Smith said. "I applaud all parties for their efforts. This is a complex and multifaceted plan and I look forward to feedback from farmers, tribes, fishermen and all stakeholders involved."

Janie Har of The Oregonian staff contributed to this report. Peter Sleeth: 503.294.5967; petersleeth@news.oregonian.com

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