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Assumptions Fuel Dam Cost Differences

by Rocky Barker
Idaho Statesman, March 20, 2007

Whether the Pacific Northwest can afford to replace the power produced by four salmon-killing dams on the Snake River depends on the assumptions you make.

Three groups with three very different viewpoints have presented estimates ranging from an annual cost of $79 million to $500 million to replace the power produced at the four dams between Lewiston and Pasco, Wash. Predictably, those that want the dams removed predict the lowest costs and those who want them to stay predict the highest costs.

Impacts on irrigation, shipping and benefits from fishing and recreation are also a part of the economic debate over dam breaching. But the power cost is key, said Joel Hamilton, a professor emeritus at the University of Idaho.

"The replacement power is always the biggest issue in any study," Hamilton said.

The economic debate is only one part of the region's struggle over how to balance human needs and values against the needs of endangered salmon. But now that salmon advocates are pushing Congress to approve new economic and science studies, the power issue has returned to center stage.

Because even though the idea of removing a dam is politically controversial, it could end up being the easiest route out of a legal battle over the future of the fish. More than 12 stocks of salmon and steelhead are threatened or endangered across the region.

A wide variety of human activities from overfishing, to habitat destruction to hindering or cutting off salmon migration with dams threatens sea-going fish from the Puget Sound to the entire Columbia River Basin, an area larger than France.

But a growing cadre of biologists say the four dams are the major factor in preventing the recovery of the salmon and steelhead that spawn and rear in Idaho's pristine wilderness and rural watersheds.

If federal managers and fisheries officials don't write a plan that satisfies U.S. District Judge James Redden of Oregon, he could order a series of limitations on hydroelectric dams aimed at saving salmon that could exceed the cost of breaching the four dams.

Removing the four dams would reduce electricity and barge shipping far less than removing one of the four dams on the Columbia River, such as John Day near Hermiston, Ore. that impede salmon migration as much or more than the four Snake dam. Even drawing down Columbia reservoirs and spilling additional water over their spillways and away from hydropower turbines to improve migration could cost the region hundreds of millions of dollars annually.

Bonneville's scenario

The Bonneville Power Administration, which markets the power from the four dams and 26 others, assumes it must to replace the full capacity of the dams, more than three times the electricity they annually produce. Its managers say they need the full capacity to ensure there is enough power for the rare but critical event that requires all the power the system currently has.

They predict the annual cost range from $400 million to $500 million.

They assume they would have to replace the dams with 3,400 megawatts by building natural gas turbine generators. They could use wind power to offset some of their power but the capital costs would be the same since they need the gas turbines to back them up when the wind doesn't blow, said Kieran Connolly, BPA regional power manager. BPA also assumes it would be able to offset some of the power needed with conservation.

A major different from their analysis done earlier in the decade is that it no longer has as many big, industrial customers who they could shut off, including aluminum plants. In the rare but serious emergencies, when the power system's full capacity is needed, they would have less flexibility.

"We think capacity needs to be on the table," Connelly said.

The energy conservation scenario

Salmon advocates say they can replace the average annual production of the four Washington dams with energy conservation and new wind power.

To visualize their assumptions, imagine the Pacific Northwest's 15 million people changing every incandescent light bulb to a energy efficient compact fluorescent bulb.

If each person changed 10 light bulbs, they would offset about a fourth of the average power generated by four dams on the Snake River in Washington salmon advocates say must be removed to save Idaho's salmon.

Add in energy efficient refrigerators, water heaters and washers. Include additional insulation of homes and businesses, increased efficiencies for industrial processes and 40 wind turbines and you get to their 895 megawatts of conservation and 107 megawatts of wind power. They estimate their plan will cost Bonneville Power $79 to $179 million a year.

The energy conservation needed is available said Steve Weiss, a power analyst with the Northwest Energy Coalition.

"Every time the (Northwest Power and Conservation Council), has made an estimate of energy conservation available the region has exceeded it," Weiss said.

Independent economists' scenario

An independent group of economists under contract to the Northwest Power and Conservation Council, a four-state panel that writes Pacific Northwest energy plans, used the results of a 2002 U.S. Army Corps of Engineers study, recommended building two natural gas turbine plants that produce one and half times the dams' average annual production. In 2002, the Corps estimated the annual cost at $271 million.

But the cost of natural gas has gone up and the cost would be much higher today, said Hamilton, who speaks for the independent economists. They were skeptical the region could come up with enough energy conservation to meeting rising demand and offset the loss of the dams.

Enough has changed since 2002 that a new study is warranted, Hamilton said. But whoever does a new economic study must be done in an open and transparent process where all the stakeholders are involved in developing the assumptions.

He wouldn't comment on whether that would fit under salmon-advocate backed legislation calling for a science and economic study of salmon recovery. But he does believe the U.S. Army Corps of Engineers could build on the economic and science studies it did in 2002.

"I don't think we need to repeat the whole Corps environmental impact statement," Hamilton said.

Related Sites:
Independent Economics Advisory Board report
BPA fact sheet on the cost of breaching the dams
Salmon advocates Revenue Stream report

Rocky Barker
Assumptions Fuel Dam Cost Differences
Idaho Statesman, March 20, 2007

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