Order Code RS22498
Updated February 22, 2007
Issues in Klamath River Dam Relicensing
Nic Lane
Analyst in Environment and Resources Management
Resources, Science, and Industry Division
Summary
PacifiCorp, a large utility in the western United States, owns and operates seven
hydroelectric dams in the Klamath River basin. The dams produce 151 megawatts of
electricity but they have blocked fish passage in the river, which has led environmental
and fishing interests to oppose the dams.
The dams’ operating license expired on March 1, 2006. As part of the new license
application, under the Federal Power Act (16 U.S.C. §811) the Departments of Interior
and Commerce submitted preliminary prescriptions on dam operations and fishway
construction to allow upstream and downstream fish passage at four of the dams.
However, as allowed by §241 of the Energy Policy Act of 2005 (P.L. 109-58),
PacifiCorp has proposed alternatives to the federal fishway preliminary prescriptions
that include trapping and transporting fish around the dams. FERC will base its final
licensing decision on the result of the §241 hearing and comments received on its draft
environmental impact statement. This case was the first to go through the new hearing
process under P.L. 109-58, §241. A judge ruled that the government’s preliminary
prescriptions would benefit species in the basin. The Departments of Commerce and the
Interior have since issued final mandatory conditions requiring fishways at the Klamath
dams. The 110th Congress may examine the results of this case, and might consider
legislation on the §241 process and on Klamath River basin management.
Background
The Klamath River basin (see Figure 1) has garnered national attention due to a
series of complex natural resource issues that are related to water allocation, water quality,
and threatened and endangered species.1 At one time, the Klamath River was the third-
largest producer of salmon on the West Coast of the United States, along with the
Sacramento and Columbia Rivers. Over time, increased human activity in the region —
including hydropower development, irrigated agriculture, and commercial and
1 See CRS Report RL33098, Klamath River Basin Issues and Activities: An Overview, by Kyna
Powers, Pamela Baldwin, Eugene H. Buck, and Betsy A. Cody.

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CRS-2
recreational fishing — have reduced fish populations. In 2002, a die-off of more than
33,000 adult salmon on the Klamath River brought renewed attention to this area.2
Figure 1. Klamath River Basin
Source: [http://www.usbr.gov/mp/kbao/maps/1_basin.jpg].
Federal agencies with interest in the Klamath include the Bureau of Reclamation
(BOR), which administers irrigation contracts; the Fish and Wildlife Service (FWS) and
the National Marine Fisheries Service (NMFS), which oversee threatened and endangered
species in the basin; the Federal Energy Regulatory Commission (FERC), which is
responsible for hydropower licenses on the river; and the Bureau of Land Management
(BLM) and Forest Service, which oversee much of the federal land in the region. The
110th Congress may consider several legislative issues related to the Klamath River, such
as assistance to mitigate the economic losses caused by declining salmon populations in
the basin — including agricultural and energy losses as well as impacts from restricted
fishing opportunities — or a research and recovery plan for Klamath River salmon. In the
past, fishing has been curtailed in the region to protect Klamath River salmon.
2 See [http://www.epa.gov/region9/water/watershed/klamath.html].

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CRS-3
PacifiCorp, a utility in the western United States and subsidiary of MidAmerican
Energy Holdings Company, owns and operates seven hydroelectric dams in the Klamath
River basin, known collectively as the Klamath River Hydroelectric Project. The dams
(FERC license #2082) were built between 1908 and 1962 and produce 151 megawatts of
electricity.3 The BOR operates Link River Dam, which PacifiCorp operates in
coordination with the company’s projects. The Link River Dam, located upstream of
PacifiCorp’s projects, forms Upper Klamath Lake, the largest freshwater lake in Oregon.
In addition to providing water for PacifiCorp hydroelectric generation, water releases
through Link River Dam from Upper Klamath Lake fulfill other objectives, including
irrigation, flood control, and in-stream flows for anadromous fish.4
The Klamath River Project’s FERC license expired on March 1, 2006. Until a new
license (typically valid for 30-50 years) is approved, the project will operate under
annually renewed temporary licenses. As part of the FERC licensing process, regulatory
agencies may prescribe actions to improve conditions for fish and wildlife.

Some environmental, tribal, and fishing interests are concerned that the dams are a
barrier to fish passage, a concern shared by the federal agencies responsible for fish in
the Klamath River. NMFS, FWS, BOR, and BLM have issued preliminary conditions for
the dams’ license renewal. BOR’s and BLM’s conditions focus on operation and
maintenance of Keno and Link River Dams, water rights, consultation for actions on
federal land, river corridor management, recreation, and cultural sites near the dams.5
PacifiCorp has requested hearings on issues of material fact associated with the each
agency’s prescriptions. (See “FERC Licensing Proceedings and Settlement,” below.)
Fish Prescriptions
As part of the license renewal under the Federal Power Act (16 U.S.C. §811), the
FWS and NMFS have prescribed the construction of fishways to allow upstream and
downstream fish passage at the dams. An analysis by the California Energy Commission
has estimated that the cost of implementing the NMFS and FWS preliminary license
prescriptions may reach $300 million.6 PacifiCorp has concerns that this expense may still
not resolve the basin’s fishery issues due to poor water quality upstream of the PacifiCorp
dams.7
The federal agencies state that the fishway prescriptions would restore access to 58
miles of habitat for chinook salmon, steelhead trout, and lamprey while improving
connectivity for resident fish, such as trout. This would include 46 miles of habitat for
3 PacifiCorp indicated that 151 megawatts is enough energy to supply 70,000 customers. See
[http://www.klamathforestalliance.org/Newsarticles/newsarticle20060408.html].
4 See [http://www.pacificorp.com/Article/Article1152.html].
5 Available at [http://www.fws.gov/yreka/DOIFiling.htm].
6 M. Cubed for California Energy Commission, Economic Modeling of Relicensing and
Decommissioning Options for the Klamath Basin Hydroelectric Project, Report Number CEC-
700-2006-010 (Nov. 2006), p. 35. See [http://www.energy.ca.gov/2006publications/
CEC-700-2006-010/CEC-700-2006-010.PDF].
7 See [http://www.klamathforestalliance.org/Newsarticles/newsarticle20060408.html].

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coho salmon, which are listed as threatened under the Endangered Species Act (P.L. 93-
205; 16 U.S.C. §§1531, et seq.). They also state that fish passage would create the
opportunity for returning salmon, steelhead, and lamprey to occupy more than 300 miles
of historic habitat above the dams.8
Because some environmental and tribal stakeholders see the Klamath River dams as
responsible for the decline of fish populations in the basin, they are pushing for dam
removal to improve habitat and river flows for fish, even though PacifiCorp has not
considered dam removal in its license renewal application.9 In this case, dam removal
might cost half as much as installing fish ladders.10 However, in addition to PacifiCorp,
some members of the academic community are concerned that expected benefits of dam
removal may be too high, citing poor water quality in the upper basin due to phosphorus
in agricultural runoff, as well as other pollution.11 The issues at play in the region
r e g a r d i n g n a t u r a l
resources — such as
endangered salmon, tribal
PacifiCorp Removal of the Condit Dam
fishing rights, and the
human benefits from the
Although PacifiCorp did not address removal of its
power provided by the
Klamath River dams in its license renewal application for
d a m s — a n d t h e
the projects, the company has considered removing dams
potentially high cost of
in the past. It decided to remove its 14.7 megawatt Condit
modifying the dams
Dam on the White Salmon River (WA) because the cost
should the preliminary
of environmental upgrades to the structure outweighed the
prescriptions be adopted
value of the power. In 1991, the company applied to
in the final license, are
renew the dam’s operating license. FERC issued its final
typical of the complex
EIS for the project in 1996, recommending fish passage
problems to be weighed
facilities with an estimated $30 to $50 million cost.
when considering river
Rather than continue with relicensing, and invest that
management choices.
amount of money in the project, PacifiCorp agreed to
consider dam removal, since the estimated cost was $17
In recent years, dam
million. The company reached a settlement agreement
removal has come to be
with interested parties, and plans to begin removing the
seen as one of several
dam in 2008.
choices that may be made
about the river systems,
Sources: [http://www.pacificorp.com/Article/Article54814.html],
a n d i s s o m e t i m e s
[http://www.pacificorp.com/Article/Article46835.html], and
considered a reasonable
[http://www.pacificorp.com/File/File54880.pdf].
a n d c o s t - e f f e c t i v e
choice.12 In some cases,
dam removal may provide greater benefits than the maintenance, modification, and
8 [http://news.fws.gov/newsreleases/showNews.cfm?newsId=6C01A8E7-91EC-AD92-7D2BC
18A63DB61DD].
9 Available at [http://www.klamathforestalliance.org/Newsarticles/newsarticle20060408.html].
10 “U.S. Acts to Help Wild Salmon in Klamath River,” Los Angeles Times, Mar. 30, 2006 (Sect.:
California, Metro, Metro Desk), p. B1.
11 Ibid., citing Peter Moyle, Univ. of Calfornia, Davis.
12 See [http://www.americanrivers.org/site/PageServer?pagename=AMR_content_997d].

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upkeep of an existing dam (see box).13 However, removal may also have results that
society deems unacceptable, such as the loss of flood protection for critical areas, the
destruction of wetlands created by the dam, or the loss of energy from a hydropower
project.
FERC Licensing Proceedings and Settlement
Energy Policy Act of 2005 (P.L. 109-58) §241 allows applicants to propose
alternatives to federal agencies’ preliminary licensing conditions. An applicant for a
FERC license, or any other party to the proceedings, may formally dispute issues that arise
in the relicensing process. Specifically, applicants or other involved parties have the right
to request a hearing to resolve disputes regarding fishways and issues of material fact
relating to adequate resource protection on federal lands. These hearings are conducted
by the agency responsible for the resource in question. Additionally, whenever the
relevant management agencies indicate specific conditions that are required for resource
protection (e.g., fishways), license applicants or other parties involved may propose
alternatives that cost less to implement or improve hydropower production. As long as
proposed alternatives provide adequate resource protection — such as providing benefits
equal to fishways — the management agencies must accept them.
The hearing process granted by §241 places significant demands on all parties. The
schedule requires the case to be concluded and a decision issued within 90 days of case
referral; this short timeframe requires expedited proceedings. Within the 90-day window,
parties must file any motions, complete discovery, submit direct and rebuttal testimony,
and submit witness and exhibit lists, as well as any stipulations or objections to witnesses.
FERC will issue a final license based in part on the outcome of the trial-type hearings
under §241. A final FERC licence for hydropower project operation may be the subject
of litigation.
This case was the first to go through the new hearing process permitted by §241 of
P.L. 109-58. On April 25, 2006, PacifiCorp submitted requests to the Departments of
Commerce and the Interior pursuant to §241 for a hearing on matters of material fact in
the relicensing proceedings. PacifiCorp proposed alternatives to the federal government’s
fishway provisions that include trapping and transporting fish around the dams.14 The
administrative law judge found that the prescriptions of the Departments of the Interior
and Commerce would benefit salmon, steelhead, and lamprey by providing access to an
estimated 58 miles of habitat between PacifiCorp dams.15 Tribal and environmental
interest groups in the region see this as a positive development with the potential to make
dam removal a viable alternative to expensive fishway construction.
13 See CRS Report RL33480, Dam Removal: Issues, Considerations, and Controversies, by Nic
Lane.
14 PacifiCorp requests for hearings and alternative proposals are available at [http://ferris.ferc.
gov/idmws/common/OpenNat.asp?fileID=11016830], [http://ferris.ferc.gov/idmws/common/
OpenNat.asp?fileID=11016831], [http://ferris.ferc.gov/idmws/common/OpenNat.asp?fileID=
11016769], and [http://ferris.ferc.gov/idmws/common/OpenNat.asp?fileID=11016770].
15 Decision of administrative law judge in the matter of Klamath Hydroelectric Project, Docket
Number 2006-NMFS-0001 (Sept. 27, 2006). See [http://www.fws.gov/yreka/P2082/20060927/
2Klamath_DNO_Final.pdf].

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Although PacifiCorp did not consider dam removal in its relicensing application, the
company issued a press release on August 2, 2006, stating that it:16
continues to believe that the settlement process is the right place to work on and
resolve the complex issues in the Klamath Basin. Thus, PacifiCorp does not oppose
settlement opportunities, including dam removal, as long as any settlement safeguards
the economic interests of our customers and respects the company’s ownership rights
in the project facilities.
Tribal representatives reportedly have indicated that this position is a shift in the
message that they have received from PacifiCorp.17 The tribes are hopeful that the States
of California and Oregon will develop a package of grants and tax incentives to assist
with dam removal costs, because one of the issues of concern to PacifiCorp is its
customers’ power rates. If parties in the region agree on settlement terms that include
removal of four dams on the Klamath River, it would be the largest dam removal project
undertaken in the United States to date.18 In January 2007, the Departments of Commerce
and the Interior issued final mandatory terms and conditions for the relicensing of the
PacifiCorp dams that require fish passage.19 Environmental interests see this action as
paving the way for dam removal because the costs of fish passage structures at the dams
are estimated to be more expensive than removing them.20
Conclusion
As more FERC license applicants exercise the rights granted under §241 of P.L. 109-
58 by requesting hearings on issues of fact or proposing alternatives to preliminary
conditions, the scheduling constraints imposed by the law may give parties an incentive
to reach settlement agreements. The test case provided by PacifiCorp’s relicensing on the
Klamath River may be a bellwether of future outcomes under §241. The 110th Congress
may examine the results of this case, and might consider legislation on the §241 process
and on Klamath River basin management.
16 See [http://www.pacificorp.com/Press_Release/Press_Release67038.html].
17 “PacifiCorp Says it Could Agree to Removal of Klamath Dams,” Seattle Post-Intelligencer,
Aug. 2, 2006.
18 See [http://www.washingtonpost.com/wp-dyn/content/article/2006/04/01/AR2006040101112.
html].
19 FWS and NMFS, Section C: Modified Fishway Prescriptions of the Fish and Wildlife Service
and National Marine Fisheries Service pursuant to Section 18 of the Federal Power Act, (Jan.
26, 2007). See [http://www.fws.gov/yreka/P2082/20070126/070126DOIMOD_Sectionc.pdf].
20 “U.S. Acts to Help Wild Salmon in Klamath River,” Los Angeles Times, Mar. 30, 2006 (Sect.:
California, Metro, Metro Desk), p. B1.

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