New cost estimate sinks re-electrification plans
By Marcy Stamper
After 13 years of planning, permitting and number-crunching for Enloe Dam, a new estimate that puts the cost of rebuilding the dam at more than twice the original amount has sunk the project.
Two weeks after receiving a price of $70.4 million to rebuild Enloe, the Okanogan County Public Utility District (PUD) commissioners decided Enloe “is not competitive and no longer feasible” and voted not to pursue re-electrification.
The unanimous decision, based on a staff recommendation, came at the PUD’s Nov. 19 board meeting. The staff made the recommendation “in light of this new evidence as to the cost impact to ratepayers,” according to a press release about the decision.
While the guaranteed maximum price provided by design-build contractor Max J. Kuney Company was $70.4 million, that doesn’t include $5.7 million in tax nor the PUD’s costs during construction, which together bring the total to $87.4 million. That’s nearly three times the $31 million the PUD has used in planning for Enloe over the years. The additional PUD costs during construction include contract oversight, quality control, and permitting and regulatory-compliance fees.
Beyond that, Enloe could incur additional expenses for unforeseen matters such as environmental mitigation, archaeological concerns and geological circumstances, according to the PUD. The projected annual operation and maintenance costs for Enloe also increased, to $1.3 million.
“Given the complexity, controversy, risk, and considerable cost involved in restoring power generation at the dam, it is the staff’s recommendation that the project is not competitive and no longer feasible,” the PUD staff said in a slide presentation at the meeting.
The cost of producing power at the dam is estimated at $150 per megawatt hour (Mwh), which is markedly higher than other sources that supply power to the PUD. The Wells Hydroelectric Project costs $12 per Mwh, the Nine Canyon Wind Project costs $69 per Mwh, and power from the Bonneville Power Administration costs $33 per Mwh, according to the PUD.
The commissioners gave staff 120 days to consider other options for Enloe Dam and to “explore the legal, political, environmental and financial issues related to the site.” They will evaluate all alternatives, with a focus on dam safety and on minimizing the PUD’s liability.
The process started in 2005
The PUD started the most-recent investigation of the feasibility of re-energizing Enloe in 2005. That includes applying for and obtaining a license from the Federal Energy Regulatory Commission (FERC), conducting numerous studies, and obtaining permits concerning everything from stormwater to archaeological resources. The PUD has received – and rescinded – two previous licenses from FERC since the 1980s.
The PUD has defended Enloe against numerous lawsuits since 2012, including challenges concerning the amount of water that would flow over Similkameen Falls, water rights, and the state’s water-quality certification. The utility also has been sued over the legality of the FERC extensions and the suitability of the design-build process itself. Some lawsuits are still pending. The PUD has spent at least $3 million on litigation.
Two years ago, the PUD got permission to use the expedited design-build process and contracted with Kuney to produce final engineering designs and schematics. “The District has been working toward developing this project for 13 years, continually pausing at each step of the process to ensure that electrification is in the District’s financial interests and can be accomplished consistent with its legal, political, and environmental obligations,” the PUD said in the press release.
Enloe Dam was built as a wooden crib dam in 1906 on the Similkameen River near Oroville and rebuilt with concrete in the early 1920s. It produced power from about 1920 to 1959. The PUD acquired the dam in 1945 and, when cheaper power became available in 1959, ceased operations. It hasn’t produced power since.
Some PUD ratepayers have opposed re-energizing Enloe Dam for years. Opponents contended that producing energy at Enloe was not financially viable.
Many ratepayers and environmental groups have pressed the PUD to remove the dam to restore a free-flowing river and to create the potential of hundreds of miles of salmon habitat. A former board of PUD commissioners looked for an entity that would assume liability for removing the dam, but none of the proposals assumed complete liability, making that approach unacceptable to the commissioners.
The commissioners have expressed concern that sediment backed up behind the dam could be contaminated from historic mining activities in the area. If the dam were removed, the PUD was concerned that the costs of environmental remediation could be astronomical.