By Marcy Stamper
With the unanimous decision by a state panel to authorize a streamlined design/build process for Enloe Dam, the PUD’s 9-megawatt hydroelectric project on the Similkameen River is closer to becoming a reality.
The eight-person panel with the Washington Department of Enterprise Services approved the design/build process at a hearing on April 27, which allows the Okanogan County Public Utility District (PUD) to work with a single team. The traditional process requires going out for construction bids after a design is completed. The panel looks only at the narrow design/build process, not the project as a whole.
“Design/build makes sense to us, and the project-review committee said it made sense,” PUD General Manager John Grubich said a day after presenting the case to the panel.
It’s desirable to include the construction company during the design phase to take into account impacts on water flows, water quality and fish, said Grubich. Agencies such as the U.S. Army Corps of Engineers, the Washington Department of Ecology, and tribal fisheries groups would all provide input during that phase, he said.
“The process tends to be more iterative, and it typically shortens the time frame and lowers the cost,” said Grubich.
After an initial approval of the design/build process last year, the PUD received proposals from nine firms. The utility selected four and asked them to provide details of how they would build the project, said Grubich.
The PUD still has those proposals in hand, but they were put on hold because the Department of Enterprise Services agreed to redo the hearing in April after members of the public said legal notice had been inadequate.
With the recent approval, the PUD can go back and review the four applicants’ proposals, said Grubich.
Looming deadline
The PUD is up against a tight deadline, since the federal license to build Enloe requires the utililty to start construction by this July 9. That date was set when the PUD received a two-year extension from the Federal Energy Regulatory Commission (FERC).
The PUD is pursuing several options to ensure it meets that deadline, which FERC is not authorized to extend again. One is to ask Congress to pass a law allowing longer extensions. A bill introduced by Sen. Lisa Murkowski (R-Alaska) would grant eight more years, instead of two, for any utility receiving an extension from FERC.
Grubich said the PUD has been lobbying for that bill and is also working with Rep. Dan Newhouse (R-Washington) to grant more time specifically for Enloe. “We’re doing that just in case,” he said.
Because all the firms that submitted proposals have considerable experience with hydropower projects and are familiar with Enloe, they should be able to furnish design plans quickly, said Grubich.
Starting construction by July 9 “is very aggressive, but it could be,” said Grubich. FERC determines what constitutes starting construction — it could mean building access roads or ordering turbines, he said.
The Enloe design plans will include an updated cost estimate with a guaranteed maximum price. “Then the board [the PUD commissioners] will decide if Enloe is still worth it,” said Grubich.
The estimate for construction in the application the PUD submitted to FERC is $31 million. The licensing process has cost $14.6 million, according to the PUD.
Previous projections for Enloe show that the project would break even after the construction bond is paid off in 30 years. After retiring the principal and interest, the cost of producing hydropower typically drops below the price of power on the open market and becomes very economical, said Grubich. “Between year 30 and 35, the financial situation flip-flops,” he said.
Grubich said the PUD would finance Enloe with a 30-year bond because turbines typically last 30 years before they have to be rebuilt. He predicted that construction on Enloe would take three years. The PUD would own Enloe but, depending on the approach it chooses, the utility could operate it or simply purchase the power output if another entity wants to run it, said Grubich.
Ongoing opposition
A coalition of about 10 clean-water and environmental groups that have been opposing power generation at Enloe — and instead urging the PUD to remove the dam remnants that have sat in the Similkameen River for almost a century — has been tracking the design/build application and the upcoming FERC deadline.
Thomas O’Keefe, Pacific Northwest stewardship director with American Whitewater, attended the design/build hearing. The coalition is concerned that the PUD hasn’t filed half-a-dozen required plans that must be submitted to FERC — and approved — 90 days before the July deadline.
The license requires FERC’s regional engineer to review the plans and determine that all preconstruction requirements have been satisfied before construction can begin. That includes documentation of financing, construction drawings, spill-prevention controls, and a wildlife management plan, according to the FERC license.
“They have kind of run out the clock on this thing,” said O’Keefe.
Other lingering issues could ultimately affect Enloe. For example, Ecology must assess the aesthetic impact of the amount of water spilling over Similkameen Falls once power is generated, which could conceivably change the viability of the project, said O’Keefe. “No one would build a project without knowing how much water you have to work with,” he said.
The coalition is still confident it can find an entity that would assume complete liability for dam removal, said O’Keefe. The PUD has made assumption of liability a condition of dam removal, and has said none of the parties interested in removal have provided sufficient guarantee to protect the PUD.
“Pretty much every organization in Washington that deals with river issues” is part of the coalition seeking alternatives to re-energizing Enloe, said O’Keefe.
“We certainly see pathways to dam removal. The coalition is still very interested in a removal that would not put the burden on the ratepayers,” said O’Keefe. “We have successfully done that around the country, and certainly that’s possible here.”
The PUD has looked at both removal and re-energizing Enloe. “To be honest, the main consideration is the cost of removal and the impact on our ratepayers, versus the additional power generation and the impact of that on ratepayers,” said Grubich. “It’s better to generate power, because at least you get something out of it.”
The PUD began the current license-application process with FERC a dozen years ago. The utility previously considered re-energizing the dam in the 1980s and 1990s, but the PUD rescinded those licenses because of economic conditions and uncertainty over fish passage.
The design/build decision can be appealed within seven days of being posted online, according to a spokesperson with Enterprise Services. The approval letter was posted on May 4.
