BY MARCY STAMPER
After five years of public comment and environmental review, the PUD has received a federal license to restart Enloe Dam for the first time in more than half a century.
There are at least two issues that must be resolved before the Okanogan County Public Utility District can start construction at the dam near Oroville. The utility needs easements from the U.S. Bureau of Land Management, which owns the land where the dam and access areas are.
There is also a pending challenge by a coalition of environmental groups that claim the PUD would be diverting so much water from the Similkameen River to produce power that it would leave a mere trickle running over the waterfall adjacent to the dam, adversely affecting aesthetics, recreation and vegetation at the site.
“What we’re doing right now is going through the license to understand everything FERC [the Federal Energy Regulatory Commission] will require us to do,” said PUD General Manager John Grubich. “Now we have certainty about the terms and conditions, so we can define our costs.”
The PUD’s staff and Washington, D.C.-based attorneys will review the terms of the license and update their economic analysis of the Enloe over the next month, said Grubich.
The license, which covers a period of 50 years (longer than the typical license, because of the extensive construction and mitigation associated with the project, according to FERC), was issued July 9. There is a 30-day period for the PUD or intervenors to request a reconsideration of all or part of the license.
Total Enloe project costs, including engineering and construction, were estimated at $31 million in the license application submitted by the PUD in 2008. The project involves a new powerhouse, turbines and transmission line, and would incorporate the existing reservoir and spillway.
The PUD’s income from sales of surplus power was at its height in 2008, when the utility earned $12 million, but that figure has fallen 75 percent, to just $3 million annually, according to PUD Director of Finance and Auditor Don Coppock. The drop in wholesale power prices and slower growth in the county have contributed to the PUD’s annual shortfall of almost $5 million, he said.
In addition to the changes in the cost of power, interest rates have fallen considerably since the PUD submitted its application, which based cost estimates on earning 4.5 percent interest on invested capital.
“We will update the economic analysis – 2008 was a while ago and things do change,” said Grubich. He said upcoming trends in the industry are encouraging.
Enloe is projected to produce 44,400 megawatt hours annually, at a cost of $3.2 million. FERC calculated that the annual revenue from power generation would exceed the cost of producing it (or acquiring it elsewhere) by $1.70 per megawatt hour.
PUD ratepayers objecting to a proposed increase in electric rates have criticized Enloe and other capital projects and asked the utility to find ways to economize. Deliberations about the rate increase are ongoing and the PUD is holding three public meetings this week and next to get wider input from its ratepayers.
The value of the Enloe project goes beyond the basic economics because it, like the Pateros-Twisp transmission line, would provide additional load stability and reliability, allowing the utility to provide power to parts of the county via an alternate route in an emergency, said Grubich.
The outcome of the environmental groups’ appeal before the state Pollution Control Hearings Board (PCHB) could affect the economic viability of generating power at Enloe, according to Rich Bowers, Pacific Northwest Coordinator for the Hydropower Reform Coalition.
If the PCHB requires the PUD to reserve more water for the river and falls, it would reduce the amount of power that can be generated and the potential revenue from the project. The appellants are all members of the coalition.
An economic analysis of the dam commissioned by the environmental coalition and released last January concluded that the PUD would lose $26 for every megawatt hour produced at the dam.
The PCHB heard testimony in May from the five environmental groups, the PUD and the Washington Department of Ecology, which issued the permit allowing the PUD to divert a majority of the river flow for power generation during the summer and fall. The Board has not issued a decision and a resolution could be further delayed by appeals.
The FERC license addresses aesthetics at the dam, stipulating that the PUD must use colors and textures compatible with the environment and revegetate the area, but does not address the effect on the falls. The license also requires the PUD to conduct a survey to monitor recreational use at the site and on the nearby Similkameen Trail to determine if higher flows may be necessary to avoid a negative impact on future recreation.
As part of its process for granting a right-of-way to the PUD, the Bureau of Land Management has begun reviewing the terms of the license. The agency has been in conversation with the PUD since the beginning of the year about natural and cultural resources at the site, according to Linda Coates-Markle, the BLM field manager in Wenatchee.
Coates-Markle said this is a standard process and she does not anticipate any problems with negotiating the right-of-way. She expects the review can be completed within a year.
Alternatives to dam?
The Hydropower Reform Coalition is hopeful about starting discussions with the PUD about alternatives to rebuilding Enloe Dam, including removal of the dam to restore the Similkameen River to its natural flows, said Bowers. Grubich said he is not at liberty to comment at this point on the possibility of removing the old dam.
“That dam is more than 100 years old – it’s time to take it out,” said Bowers, who said his organization is interested in working with the PUD to explore technical issues connected with breaching or removing the dam. “We would like to see an assessment of the costs and benefits of taking out the dam versus building Enloe,” he said.
One unknown factor in dam removal is dealing with the extensive build-up of sediment behind the dam, said Bowers. The content of the sediment has not been analyzed, but there is a history of mining upstream of the dam.
If the license is accepted, the PUD would have to start construction on Enloe within two years and complete it within five. The PUD can apply for extensions of up to two years if necessary, said Grubich. There is also a process for surrendering the license if conditions change after the license has been finalized, he said.