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Economic and dam related articles

Fish Programs Fatten Power Bills

by Michael Milstein
The Oregonian, December 11, 2005

Hydropower - Households pay $10 a month on average
and will shell out more to mitigate the damage dams do

Fish may take a bigger bite out of your power bill than you think.

Wildlife programs -- mainly salmon recovery -- add about $10 a month to the bill of the average household that gets electricity from Columbia and Snake River dams and other sources under the Bonneville Power Administration.

The government today spends far more money to offset the harm the federal dams do to salmon than it does to run the dams themselves. Most of that cost is passed on to those who draw power from the dams.

It amounts to about a third of the wholesale price of electricity flowing from their giant turbines, the BPA says. But few are likely to swear off hydroelectric power from the dams because even with the fish costs tacked on, it remains cheaper than most other electricity and keeps Northwest rates low.

"Dams don't cost much except for what they do to fish," said Steven Weiss of the Northwest Energy Coalition, a coalition of environmental groups, utilities and others that pushes for renewable energy, and fish and wildlife restoration.

The per-household cost of wildlife measures emerged last month in a court battle over the government's faltering strategy to help salmon imperiled by the dams. It's the first time federal agencies have calculated how much private households pay toward saving the region's troubled salmon runs and other wildlife, said Ed Mosey, a BPA spokesman.

It provides a hard measure of the increasing costs of a federal salmon recovery effort that has consumed billions of dollars but has yet to undo the damage of dams that block salmon migrations.

Among the costs are lost revenue the BPA chalks up to salmon. Less electricity is generated when dams are operated to assist salmon, and that's money out of the agency's pocket.

But the Endangered Species Act requires the dams to be operated that way, and it's wrong to count such a cost against salmon, Weiss said.

A trucking company might make more money by not obtaining required licenses and insurance, he said, but it would not be legal.

"To say, 'How much money could I make if I didn't have to follow the law' is a little strange," he said. "They do not own the river. They can't do whatever they want."

Not all households in the Northwest pay the full $10 a month for fish and wildlife because local utilities draw different amounts of power from the dams. But many share the bill because the BPA, which markets power from 31 federal dams, including those on the Columbia and Snake rivers, supplies about 40 percent of the Northwest's electricity.

The BPA's role

The BPA pays fish and wildlife costs related to power generation at the dams, and folds them into power rates. The fish and wildlife tab in fiscal 2007 will total $695 million, the highest ever -- except for 2001, when the power crisis drove power rates sky-high. About $75 million will be reimbursed by credits from the federal treasury.

Operating and maintaining the dams over the same period will cost about $378 million.

Cities from Ashland to much of Salem get almost all their power from the BPA, so their households pay close to the $10-a-month cost for fish and wildlife. Environmental groups calculate the household cost slightly lower -- about $7 a month, Weiss said.

Portland General Electric, which powers most of the Portland area, gets about 10 percent of its electricity from the BPA but also has its own fish costs because it operates hydroelectric dams itself.

Neither Portland General Electric nor PacifiCorp, another regional power supplier with dams, has determined how much their customers pay toward fish and wildlife, spokesmen said.

But BPA leaders contend that power consumers in the region already pay plenty for fish and wildlife.

Court battles

The point is an issue in the court battle over dams, now before U.S. District Judge James A. Redden of Portland. Environmental and fisheries groups want the government to take further steps for fish, but federal agencies say that would drive costs even higher.

Redden repeatedly has reprimanded federal officials for skirting the Endangered Species Act and wasting precious time in the struggle to recover salmon.

The environmental and fisheries groups want extra water held in reservoirs this winter and flushed downriver for salmon next year, and more spilled over dams to help salmon avoid turbines next spring and summer.

Both steps would leave less water to generate power, especially in winter when prices are highest. That means BPA officials would earn less money from power sales and may spend more buying power to make up for reduced power from the dams.

They predict the steps would drive up the BPA's overall costs $347 million if it turns out to be an average water year. About $45 million would be covered by credits from the U.S. Treasury, with the rest charged to ratepayers.

Annual fish and wildlife costs associated with power production at the dams would increase close to $1 billion, adding about $5 to the $10 a month to household electric bills that already goes toward fish and wildlife, officials said.

Low-income households

Much of the extra cost would fall on families who can least afford it, because a larger share of low-income households rely on electricity for heat, they argued. The regional economy also would suffer because it has long hinged on low power rates, they said.

But the groups pressing for the changes in dam operations say the federal agencies are overestimating the costs.

An analysis by Weiss of the Northwest Energy Coalition found the water for salmon would cost about $165 million, boosting rates $2 a month for homes that depend entirely on power from the dams and about 44 cents a month for homes in Portland.

But even so, hydroelectric power is so inexpensive it keeps rates for homes that get it lower than they'd otherwise be, Weiss said.

"They're still getting a heckuva deal," he said.

A court order forced the government to release more water for salmon this year, but the BPA ended up reducing its power rates slightly. Plentiful spring rainfall helped the dams generate more surplus power, which brought in extra revenue to offset any losses from the salmon measures, officials said.

The tradeoff for cheap power from the dams is the cost of helping the salmon the dams impede, Weiss said.

"There's fish costs -- yes -- but you get the benefits of hydropower, which is real cheap right now," he said. "If anyone's upset, they can go buy power somewhere else. But they don't"

Michael Milstein
Fish Programs Fatten Power Bills
The Oregonian, December 16, 2005

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