Groups Push Plan for Hells Canyon Damsby Ken Dey
Idaho Statesman, August 13, 2004
Nez Perce Tribe, conservationists want to aid fish
The Federal Energy Regulatory Commission will ultimately decide what Idaho Power Co. needs to do at its three Hells Canyon dams to help endangered and threatened salmon and steelhead.
But on Thursday Idaho's Nez Perce Tribe, Idaho Rivers United and American Rivers made another pitch for two projects they believe would help the fish.
The tribe and the groups released an economic study that says it would cost Idaho Power Co. about $12 million a year to do fish passage and install a temperature control device on Idaho Power's Brownlee Dam. The study concluded Idaho Power could cover the cost of the projects through existing profits or by charging customers about $1 extra a month on their bills.
"Idaho Power has made enormous profits by operating the Hells Canyon complex on the Snake River," said Anthony Johnson, chairman of the Nez Perce tribal executive committee. "The time has come for the company to spend some of those profits on real solutions to problems they created."
The three groups, which shared the cost of the study, said they hope it will help persuade FERC to require the two projects as part of a relicensing agreement giving Idaho Power the right to continue operating the three dams.
The improvements, they argue, would allow fish to return to historic habitat above Hells Canyon dams and allow for the regulation of water temperature to improve salmon spawning downstream of Hells Canyon.
Jon H. Goldstein, a former natural resource economist with the U.S. Department of Interior who completed the study, based the costs of the temperature control structure on a similar structure already installed on an Army Corps of Engineers dam on the McKenzie River in Oregon. The cost for fish passage was determined using estimates Idaho Power included in its current application to FERC to relicense the three dams.
But Idaho Power Co. and an analyst who covers the company were quick to question the conclusions in Goldstein's study.
Goldstein said he analyzed the company's annual financial reports for 1999 through 2002 and found that Idaho Power's net income averaged $101 million a year, and about $75 million of that was devoted to dividends for shareholders, which left the company more than $25 million in net income.
If that trend were to continue, Goldstein concluded, the company could easily cover the fish passage and temperature control costs at the company's three Hells Canyon dams.
"When I look at the income statement, I don't see those kinds of revenues or profits from the company," said Jim Bellessa, an analyst with D.A. Davidson Co. in Great Falls, Mont.
Goldstein's analysis failed to include any data from 2003, a year where IdaCorp Inc. had to cut its dividend to shareholders from $1.86 a share to $1.20 a share because the company failed to earn enough in 2002 to cover the dividend.
In 2003, the company only earned $46.5 million, or $1.22 a share, just two cents above the dividend.
Jim Miller, Idaho Power's senior vice president for power supply, said Thursday company officials hadn't had time to look at the numbers in detail to determine whether they were accurate.
Sara Eddie, an attorney representing Idaho Rivers United, said the financial data was only meant to be a "snapshot" of the company's financial performance and the group wouldn't expect the company to pay for all the mitigation costs from earnings.
"We understand companies use earnings for other projects," Eddie said.
Eddie said the group expects costs would be passed on to ratepayers, and it wanted to give them an idea of what it would cost if such improvements were implemented.
"Idaho Power has been widely speculating about how much it would cost in an effort to scare ratepayers," Eddie said.
Miller said the company is concerned about spending money on improvements it believes aren't likely to help fish.
"It isn't a matter of whether we're capable of spending that kind of money," Miller said. "But is it effective and is it necessary and what does it buy you?"
The company has already spent more than $400 million on relicensing that will likely be recouped from ratepayers, Miller said.
Craig Jones, Idaho Power's Hells Canyon relicensing manager, said studies show the historic habitat for fish above the Hells Canyon projects is no longer able to support fish, so the costs of passage and a temperature control structure aren't warranted.
FERC has asked Idaho Power to complete a study determining how much installing a temperature-control structure on Brownlee Dam would cost, but the company is currently appealing that request.
Copy of Nez Perce Study in PDF format
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