Utility Offers Updates on Dams, Forest Fires
This article was in Monday’s (April 22nd, 2019) Herald and News
Written By: Gerry O’Brien
Pacific Power admits that Klamath Falls was not at the top of its priorities a few years ago when the issue of a city-operated Municipal Utility District came to the forefront.
Scott Bolton, Senior Vice President for external affairs and customer solutions, admitted that the utility should have been doing more in the Basin, especially since it had removed its community liaison.
“It caused us to renew our vows to the community,” he said last week during a wide ranging interview with the Herald and News Editorial Board.
Because of the inattention — and a desire to curb energy costs — a proposed municipal utility district started to form — to be run by the city. But when it came before the city council for a final vote, it was ultimately tabled.
Since then, Pacific Power brought back the community liaison — who is now Todd Andres — and has been completing a multi-million-dollar upgrade of the Snow Goose substation just south of the city. Further, it has been upgrading all electric meters to homes to be digital and upgrading substations.
During his talk, Bolton updated where the company stands on a raft of issues, including the transfer of ownership of its four hydroelectric dams on the Klamath River, the proposed Cap and Trade legislation before state lawmakers, and safety issues of potential forest fires under its powerlines, which may include rolling blackouts in extreme emergency situations.
The utility is planning to off-load its dams to the Klamath River Renewal Corporation (KRRC) by transferring the operating licenses and, with the Federal Energy Regulatory Commission’s (FERC) approval, decommission them for removal.
The biggest concern is the liability from the yards of sediment backed up behind the dams that will flow down the Klamath River to the sea.
Tim Hemstreet, Pacific Power Director of Renewable Energy Development, said the utility has done some limited testing of the sediment. “We haven’t seen anything that rises to say, a Superfund level, but there may be still some unknowns. It’s more of the volume of the sediment (that’s a concern) than its content.”
Also, the KRRC was to file detailed plans with FERC in late April. That has been pushed back to late July. The timeline for actual removal of the dams has been pushed back to 2021 at the earliest.
“What FERC has to decide is, is this in the public interest? Are they comfortable with how KRCC plans to proceed?” Bolton said.
It is ultimately KRRC’s plan for dam removal. And, KRRC has to prove it has the financial wherewithal to cover any liability.
Managing risk, protecting consumers
“One area that may be misunderstood is the protection of our customers,” Bolton said. “The purpose of the KRRC to create a liability sink, if you will, to oversee the dam removal, so that they are responsible, and not our customers. From hour one when dams are breached, it will be the responsibility of KRRC and forever more and not the customers of Pacific Power.”
Utility customers have paid a special 2 percent assessment on their bills for several years to help finance the dam removal, netting $182 million from Oregon ratepayers, and $18 million from California customers. That surcharge ends in 2020.
“That surcharge is, in effect, an insurance policy to protect those customers from liability, should sedimentation create problems, should flooding occur, should species that are supposed to recover don’t recover, should the best hopes for the recovery of the salmon doesn’t happen,” Bolton said. “There’s a legal liability attached to that, but it won’t come back on the company or its customers.”
Forest fires and outages
Pacific Power serves 47,000 customers spread out over a land mass the size of Massachusetts in Northern California.
Last year’s forest fires that destroyed the town of Paradise, killing 88 people, was an eye-opener for electric utilities. Pacific Gas and Electric of California is facing $30 billion in potential liability from the notorious Camp Fire and others in California, plus the potential for mudslides following a fire.
“We operate in California as well,” Bolton said, “and we are in a lot of wooded areas. There’s not a lot of customer density, but there is a lot of concern about fire prevention and recovery if there is a fire. The insurability of being a utility in California is starting to become out of reach.”
Pacific Power is a division of Berkshire Hathaway Energy, and can use that leverage to purchase insurance products in bulk to manager risk.
Nonetheless, the utility filed a new wildfire mitigation plan with the California last month. Much of it is common sense, such as not working on powerlines during red flag days. Another option may be to bury some powerlines. A similar plan for Oregon is in its infancy.
“We are working on a proactive, de-energization plan that could be enormously controversial,” Bolton said.
That means during an emergency, such as a forest fire, power will be shut off to certain sectors to prevent the spread of a fire. That will mean businesses and homes will be without power for an extended period; no air conditioning home, no power for irrigators to pump water.
“It may be a way to avoid a catastrophic fire,” Bolton said, “but you’re using your best judgment and that will disrupt a lot of lives. It’s a tough call, but when you look at something like the Paradise Fire, how do you not take extreme measures? It’s a moral issue.”
Other issues the utility is facing:
- Cap and Trade: Oregon may soon approve legislation telling industries that produce greenhouse gases to curb its output and use solar, hydro and wind power as an alternative. “We don’t make public policy, we don’t control government. We are a policy taker for the most part. We have committed to take coal out of rates, and doubling renewables in our system and it should count for something and not pass on any additional cost to our customers.”
- Coal reductions: Pacific Power is due to removed using coal from its rate base in Oregon by 2030. Washington State has a more restrictive plan coming. In light of a massive demand for power — as happened last February — utilities need access to supplemental power that it may not have under the legislation.
- Jordan Cove LNG (Liquified Natural Gas) plant at Coos Bay. Pacific Power supports the construction of the plant and will be the main supplier of electricity for its operation.
Just The Facts
Pacific Power serves 1.9 million customers corporate-wide. It’s average is 200 customers per line mile compared to Portland General Electric, which serves 2,000 per land mile.
- Customers: 35,377 in Klamath County; 2,262 in Lake County
- Property taxes: $23 million in Oregon; $1.6 million in Klamath County; $226,000 in Lake County.
- Franchise fees: $1.6 million in Klamath County; $180,000 Lake County.
- Recent investments: Snow Goose substation was $40 million-plus investment that came online in 2017 to improve reliability in the Klamath Basin.
- Charitable Contributions: Total in 2018, $87,600