It’s Getting Hot in Hells Canyon

Posted on February 2, 2017 by Martha Pagel

The state of Oregon has turned up the heat in Hells Canyon.  The burning question, so to speak, is whether a state can require passage and reintroduction of anadromous fish as a condition of certification under Section 401 of the Clean Water Act for relicensing of an existing hydroelectric project.  The issue gets hotter because the particular project involved  -- the Hells Canyon Complex (“HCC”), owned by Idaho Power Company (“IPC”) -- is located on the Snake River, which forms the border between Oregon and Idaho.  The State of Oregon has issued a draft 401 certification with detailed conditions for passage and reintroduction of anadromous fish into a tributary on the “Oregon side” of the river.  Idaho is opposed to reintroduction of any fish species above Hells Canyon Dam, leaving IPC in the middle.

Making a very long and complicated story short, for more than 13 years IPC has been working with state and federal agencies and stakeholders toward relicensing of the HCC.  The project consists of three developments, each with a dam, reservoir, and powerhouse.  In 1955, FERC issued a 50-year license with recognition that construction of the project would block fish passage and eventually lead to extirpation of anadromous fish above the dams.  As a result, the initial FERC license included mitigation conditions to offset fish impacts, and additional mitigation was provided under a subsequent settlement agreement. 

After more than a decade of studies, meetings, and negotiations, it looked like IPC and the states were on track for general agreement as to the terms and conditions of compatible, but separate 401 certifications to be issued by Oregon and Idaho – except as to the issue of fish passage and reintroduction. Despite Idaho’s objections, the Oregon Department of Environmental Quality (ODEQ) issued its draft 401 certification for public comment on December 13, 2016.  The draft relies on a number of existing state water quality standards as the legal basis for requiring fish passage and reintroduction, though none of the standards is directly on point. ‎

Public comments on the proposed 401 certification are due February 13.  Objections relating to the fish passage and reintroduction conditions are likely to focus on whether such conditions are generally within the scope of 401 certification for FERC-licensed hydroelectric projects, and, if so, whether Oregon’s specific water quality standards provide a sufficient regulatory basis for the proposed ODEQ action.  ‎The comments may also raise questions about the baseline for mitigation and whether impacts to fish due to construction of the project – as opposed to on-going operations -- have already been fully mitigated.  And then there’s the question of Idaho’s opposition. 

ODEQ will consider the comments before issuing a final 401 certification decision.  If the states are unable to resolve their differences over the passage and reintroduction issue, it’s likely to get a lot hotter in Hells Canyon. 

And finally, a disclosure that the HCC relicensing issues hit close to home for ACOEL:  I am part of a team representing IPC, and other College members are very much involved on both sides of the issue.  There’s a lot we won’t be able to talk about at the next annual meeting! 

CSK Tribes to Acquire Kerr Dam in Montana

Posted on May 5, 2014 by Irma S. Russell

Last month, after 30 years of negotiations between the parties, an arbitration decision set the price to be paid by the Confederated Salish Kootenai Tribes (CSK) to PPL Montana to acquire the Kerr Dam.  The tribes expect the dam -- the first major hydroelectric facility owned by a tribal entity -- will serve as a driver for economic development for tribal members, residents of the Flathead Reservation, and the surrounding area.  The dam will operate under the same licensing requirements applicable to PPL Montana and will sell energy generated by the dam on the open market.  The dam has the generating capacity of 194 megawatts, standing at 205 feet high and 541 feet long.

After considering arguments by the tribes and PPL Montana, a panel of the American Arbitration Association set $18,289,798 as the price to be paid by the CSK to acquire the dam.  This price includes $16.5 million for the existing plant and $1.7 million for required environmental mitigation and was the original price agreed to by the parties in a negotiated deal in 1985.  The tribes had argued to the panel that $14.7 million would be a fair price while PPL Montana maintained the tribes should pay close to $50 million for the dam. 

The arbitration decision is a culmination of a long history of the construction and operation of the dam.  Negotiation for purchase has been going on since 1984 when the 50-year lease terminated.  Understanding the debates surrounding the dam requires some explanation.  In 1934 a subsidiary of the Montana Power Company began construction on the Kerr Dam on tribal lands on the Flathead River despite opposition from members of the Flathead Indian Reservation.  In 1938 the construction was completed and named after the then CEO of Montana Power Co., Frank Kerr.  The construction financing for the project included a 50-year term lease that provided for lease payments to the tribes for the dam, which is located on tribal lands and uses tribal resources.  

The arbitration decision indicated that the purchase can occur after September 5, 2015.  Energy Keepers, a federally chartered corporation owned by the tribes is expected to tender the purchase money early in September 2015.  The CSK Tribes hopes to develop the dam as a self-sustaining energy source for the tribes as well as a revenue source.  The Tribal Council is expected to choose a new name for the dam after the transfer.  

In 2011 the tribes competed for and received a federal grant, which was available for energy projects. The grant money funded a feasibility study to assess energy efficiency improvement projects and to implement energy conservation measures in existing tribal facilities.  The grant funding also supported the development of an organizational structure to acquire the dam. 

Not all tribal members supported acquisition of the dam.  The arbitration process ran from February 3 to March 3, and some tribal members have objected that lack of notice means that public comment should be allowed at this time.  Additionally, some tribal members have noted in the media the need for caution in going forward.  For example, some have emphasized that, after the purchase, the dam will no longer be a taxable asset and tax support for schools in the area will be lost or will need to be funded from other sources.  Preparation for the transition to tribal ownership has begun, and the tribes are working with current employees at the dam who are tribal members and searching for engineers and information technology employees.