In this issue:
- Department of the Interior Issues Updated Legal Guidance
- Evaluating Renewable Energy Opportunities
- Is Third Time the Charm for Klamath Dam Removal?
- Washington DC Report
- Announcing KWUA’s Sponsorship Drive
- What has KWUA been working on . . .
- KWUA Executive Director Report
- KWUA Deputy Director Report
- In The Know
DEPARTMENT OF THE INTERIOR ISSUES UPDATED LEGAL GUIDANCE
The United States Department of the Interior has issued a legal analysis that will change the U.S. Bureau of Reclamation’s (Reclamation) approach to compliance with the Endangered Species Act (ESA) at the Klamath Project (Project). Interior Department Solicitor Daniel Jorjani approved the opinion on October 29, 2020. Secretary of the Interior David Bernhardt transmitted the opinion to water users on November 12.
The new opinion updates and replaces 25-year-old guidance that did not take into account more recent decisions of the United States Supreme Court and the Ninth Circuit Court of Appeals, or the 2013/2014 Amended and Corrected Findings of Fact and Order of Determination issued in the Klamath Basin water rights adjudication. The new opinion is consistent with the approach to ESA compliance that Reclamation and the Corps of Engineers have taken over the past several years at other water projects, including in California and New Mexico.
Section 7 of the ESA requires that federal agencies ensure that certain actions do not jeopardize the continued existence of ESA-listed species. The updated Solicitor’s analysis explains, consistent with recent case law, that this obligation pertains only to discretionary activities as to which Reclamation has authority and discretion to adopt or require conditions to benefit protected species. Non-discretionary activities are part of the “environment baseline” and not an action subject to the mandates of section 7.
Reclamation has contracts with irrigation districts for the delivery of water to irrigated land. In the Klamath Project, all those contracts were signed decades before the ESA became law. The new Solicitor’s opinion requires that a contract-by-contract analysis be undertaken, and lays out the legal framework for that analysis. This analysis will determine whether, under current law, diversion and delivery of water to each contractor is subject to the requirements of section 7 of the ESA.
“This updated guidance is long overdue and very welcome,” said Klamath Water Users Association (KWUA) Executive Director and Counsel Paul Simmons. “It is solid, mainstream work that should help bring the Klamath Project current with other Western water projects.”
Authorized in 1905, the Klamath Project provides water from the Klamath and Lost River systems to approximately 200,000 acres of irrigated land, as well as two national wildlife refuges that are critical to the Pacific Flyway.
Simmons said that KWUA would coordinate with Reclamation to ensure future Project operations are consistent with the new guidance. He emphasized that additional work and basin-wide collaboration remains a priority. “Proper application of the ESA is critical, but not the only issue. We will continue to work with our neighbors, basin tribes, counties and others to reach the long-term stability that all of our communities need.”
KWUA and irrigation districts in the Klamath Project continue to work with other organizations to identify and implement energy development opportunities. Sustainable Northwest and other entities recently toured the Project area to assess projects that were identified by the districts as potential locations with renewable energy potential or infrastructure upgrades. This tour brought people on-site who have expertise in designing, acquiring funding, and implementing these projects.
Evaluating Renewable Energy Opportunities
On October 28, a representative from Emrgy toured the districts with managers and KWUA to assess the potential for in-canal hydropower. Several locations were identified as suitable for further analysis. Sites under consideration are: Station 48, Anderson-Rose Dam, and the C-G Drop. The districts have provided additional information to Emrgy for further review.
For KWUA, a major objective is to ensure the coordination of various overlapping efforts related to Project infrastructure, power generation opportunities, water management, and system modernization. These undertakings include work by Farmers Conservation Alliance, conservation organizations, and waterfowl groups focused on Lower Klamath and Tule Lake National Wildlife Refuges. While the specific goals of each of the efforts is distinct, there is overlap and a need to maximize efficiency and avoid conflicts.
Is Third Time the Charm for Klamath Dam Removal Project?
Written by Ellen M. Simmons
On November 17, California, Oregon, PacifiCorp, and the Yurok and Karuk Tribes announced a new agreement with the Klamath River Renewal Corporation (KRRC) to reaffirm KRRC’s status as dam removal entity and provide additional funding for the removal of four hydroelectric dams on the Klamath River. The Memorandum of Agreement (Agreement) is the latest development in a decade-long effort to remove the J.C. Boyle, Copco I, Copco II, and Iron Gate Dams, long-advocated by Agreement proponents as a means to increase salmon populations.
Note: Klamath Water Users Association has not taken a position on the Agreement, and will discuss the Agreement at its December board meeting.
PacifiCorp, a subsidiary of Berkshire Hathaway and owner of the dams, agreed in the 2010 Klamath Hydroelectric Settlement Agreement (KHSA) that the dams could be removed in exchange for specific conditions intended to protect its customers’ financial interests. The first major roadblock towards completing the project occurred in 2015, when the United States Congress failed to pass authorizing legislation required by the KHSA. As a result, the KHSA was significantly overhauled in 2016 (Amended KHSA), such that it would not require new federal legislation for its implementation. The Amended KHSA provided that, when certain conditions were met, PacifiCorp would transfer the Federal Energy Regulatory Commission (FERC) license for the dams to KRRC. KRRC would then obtain the necessary permits to remove the dams, surrender the license, and remove the dams. The original and Amended KHSA provided the plan for funding the dam removal effort, with PacifiCorp in Oregon and California providing $200 million, and funds from the 2014 California water bond – Proposition 1 – available for financing the remainder of the cost, up to $450 million.
The project encountered a second obstacle on July 16, 2020. FERC responded to the request to transfer the license with an order conditioning approval of the transfer on PacifiCorp remaining as co-licensee with KRRC. Per both versions of the KHSA, PacifiCorp’s participation in the project is contingent on its transfer of the FERC license, property interests, and indemnification of liability to protect its shareholders. Although FERC’s order acknowledged KRRC’s technical ability to remove the dams and the Amended KHSA’s considerable budget, the agency thought it appropriate for PacifiCorp to remain involved in the event unexpected costs exceeded the budget.
The Agreement entered this week attempts to address PacifiCorp and FERC’s concerns by requesting the removal of PacifiCorp from the FERC license, and adding the States of California and Oregon as co-licensees with KRRC. Additionally, the Agreement increases the contingency fund available for unexpected costs while seeking to maintain the core liability protections assured for PacifiCorp in the Amended KHSA. The signatories assert that this ensures adequate financial support for the project while complying with the sections of the KHSA that provide that PacifiCorp will not be a co-licensee.
The likelihood of success of the Agreement will be better known once FERC acts on the prospective Amended License Surrender Application. The parties have committed to submit the application to FERC by January 16, 2021. PacifiCorp will concurrently seek approval of its property interest transfers from the California Public Utilities Commission. The parties will immediately resume planning and permitting processes with a goal of obtaining final regulatory approvals to begin the project in 2022 and remove the dams in 2023.
Opponents of dam removal are concerned with loss of energy, effects on recreation and aesthetics including landowners around the current reservoirs, potential effects on landowners immediately downstream of the dams, loss of water sources for wildfire fighting, and other factors that the Agreement parties believe have been addressed or are acceptable trade-offs. Notably, the Agreement, like the Amended KHSA, does not address other critical issues in the Klamath basin such as water allocation. The original KHSA was paired, legally and politically, with other settlements that provided water reliability for irrigation and national wildlife refuges, and regulatory and cost protections to mitigate consequences of dam removal on Upper Klamath basin agriculture. The bond between the various settlements was severed when the other settlements terminated due to lack of the same legislation needed for the original KHSA. The 2016 Amended KHSA contained a promise to engage in good faith efforts to enter into agreements pertaining to water, fisheries, land, agriculture, refuge, and economic sustainability issues in the Klamath Basin, within one year. This commitment has not received serious attention from Amended KHSA parties and the Agreement does not address this issue.
Note: Klamath Water Users Association has not taken a position on the Agreement, and will discuss the Agreement at its December board meeting.
Ellen Simmons is an associate attorney in the Sacramento office of Somach, Simmons & Dunn, P.C.
Washington D.C. Report
The Senate Appropriations Committee has released its 12 annual government funding bills, without holding any markups, to serve as opening negotiations with the House, which has passed all but two of their FY 2021 appropriations bills. Congress will need to move quickly on an FY 2021 deal, with current funding set to expire on December 11. Congress may need to pass yet another continuing resolution (CR) by then and could leave difficult final spending decisions into calendar year 2021 and the next Congress.
The Senate FY 2021 Energy and Water Development spending bill would provide additional funding for various ongoing work for the Corps of Engineers (Corps) and the Bureau of Reclamation (BOR) much like the House bills did, but the Senate version does not include the approximately $20 billion in emergency spending for the Corps and Reclamation provided in the House bill.
Regarding the upcoming “Lame Duck” session, other action Congress might take includes passage of bills to reauthorize the Corps’ programs and projects (WRDA) – which may also include provisions related to BOR’s operations, including address the maintenance backlog — as well as the reauthorization of many national defense oriented programs (NDAA).
On executive branch matters, the Biden-Harris team has released a list of “agency review teams” membership – expected to spend the coming weeks learning about Federal agency operations and how to effectively implement Mr. Biden’s policies if he is inaugurated on January 20. Currently, the teams cannot access buildings, meet with agency employees or access sensitive information, because the General Services Administration (GSA) has not formally acknowledged former Vice President Biden’s victory.
The teams assigned to environmental and energy agencies have the task of helping Mr. Biden deliver on one of his highest priority campaign promises – a $2 trillion plan to fight climate change. Also, the teams will help assess which policies and executive actions a President Biden would want to overturn on day one of a new administration. Numerous volunteers from academia, non-governmental organizations (NGOs), and former Obama Administration officials were appointed to begin the transition to a Biden-Harris Administration. The list of team members can be found here.
Announcing KWUA’s 2021 Sponsorship Drive
Our second event is targeted more toward the general public: the KWUA Fall Harvest Tour showcases Basin agriculture and gives participants a glimpse of the important relationship between agriculture and local businesses. Our past tours have been well attended and are quite popular. Community leaders, businesses, local FFA groups, state and federal agency personnel, and elected officials take the tour.
KWUA hosts two public events each year. Prior to the irrigation season starting, KWUA hosts an Annual Meeting. This event hosts approximately 150 participants, including community leaders, businesses, state and federal agency personnel, elected officials, and Klamath Basin farming and ranching operators. Historically, during this meeting, KWUA has announced the Klamath Reclamation Project’s yearly water supply and provided presentations from informed leaders related to issues facing patrons of the Klamath Project.
This tour provides first-hand exposure to a variety of activities and processes related to irrigated agriculture, including the history and mechanics of the Klamath reclamation’s infrastructure, issues related to the Basin’s water quality and quantity, the relationship between agriculture and wildlife, and the production and harvesting of crops such as beef cattle, wheat, mint, horseradish, alfalfa, strawberry plants, and much more. Again, a common theme in these tours is the economic importance that irrigated agriculture plays.
This year KWUA is offering donors with a variety of sponsorship levels that fit any budget to give a wide exposure to your business during both events and throughout the year. We hope that you will consider partnering with us and making KWUA’s Annual Meeting and Fall Harvest Tour as good as, or better than, years past.
Considering the beneficial impacts that the KWUA Annual Meeting and Fall Harvest Tour have had on the community and the positive feedback we receive each year, KWUA believes that both are vitally important events that bring participants from divergent backgrounds to a better understanding of the importance of agriculture within the Klamath Basin.
If you are interested in becoming a 2021 sponsor, please contact Chelsea in our office for more details.
541-883-6100 or Chelsea@kwua.org
What has KWUA been working on…
KWUA’s Board of Directors strives to keep member districts and their patrons, and other interested parties, informed. Board members help with the dissemination of information received at our monthly Board meetings, and staff produces a monthly newsletter. The KWUA Board convened on October 14, 2020. Below is a recap of ongoing activities. If you would like more in-depth information, we encourage you to contact your respective district board member, on our website.
Overall Project Supply /Operations
KID Manager Gene Souza reported that the November 18 Upper Klamath Lake inflow was the lowest at this time of year in 31 years. Lake surface elevations are increasing, but slowly. Current projections are that lake elevations will not be above the “central tendency” identified in the 2020 biological opinion for suckers until mid-February.
According to Reclamation’s reporting and accounting, diversions from Upper Klamath Lake has reached nearly 155,000 acre-feet, although an “offset” or “payback” is in progress from east side Klamath Project reservoirs. The 155,000 acre-feet diversions include water tracked as operationally borrowed from east side project reservoirs. Actual 2020 diversions of Project Supply are 147,000 acre feet. District managers discussed the proper method of accounting for this water and will follow-up with Reclamation.
The board established KWUA’s 2021 assessment at $7.00 per acre, the same level as 2020. The board also reviewed and approved the proposed 2021 budget presented by the administrative committee. Adjustments within the total budget amount can occur based on feedback and information as the year progresses. Assessment letters will go out within the next week. Included in the letter will be a percentage pie chart reflecting the 2021 budget. In the past, a concern of members or their patrons that has been voiced to KWUA has related to knowing how KWUA plans to spend assessment dollars. The board and staff hope that including the breakdown will provide transparency.
Cost Allocation/ Flood Control
Reclamation intends to employ a new method for allocating costs to non-reimbursable flood control purposes in the Klamath Project based on recent legal guidance from the Office of the Solicitor. The work on describing and explaining the new allocation will be complete by November 30. The consequences of the anticipated new method are modest except in Klamath Drainage District (KDD, which is expected to face major increases associated with Klamath Straits Drain operation. Although KDD and Reclamation are still in discussions about whether Reclamation’s conclusions are appropriate, KDD is considering means to offset part of the increased cost, possibly by taking on direct responsibility for some of the Straits Drain operation and maintenance, if some other liability issues can be resolved.
Klamath Project Drought Response Agency (DRA) Report
Currently, MBK Engineers and districts are working on verifying acres that were idled under the DRA 2020 non-irrigation programs. The DRA board is continuing to work on the allocation of funds, recognizing that there is a significant shortfall compared to what the need was for 2020. There is continued effort to secure these funds through Congress.
Ultimately, there were no realistic opportunities before this month’s election, but the opportunity could arise during the upcoming “lame duck” session of Congress.
KWUA Executive Director Report and Action Items
Oregon General Rate Case
In February of 2020, PacifiCorp proposed a significant increase in the irrigation tariff for Oregon’s retail customers. KWUA, joined by Oregon Farm Bureau Federation, intervened in the Oregon Public Utility Commission (OPUC) proceeding considering the proposed increase. Paul Simmons reported that many disputed issues have been settled. However, there are still unresolved issues that the OPUC must decide. Based on what is known, the actual expected change in Oregon irrigation rates on January 1, 2021, is essentially zero, with the possibility of a small decrease.
At its October 2020 meeting, the KWUA board directed staff to gather information regarding rumored transfers of water rights from Upper Klamath Lake tributaries to Lower Klamath National Wildlife Refuge, and to arrange meetings among various parties, including the Oregon Water Resources Department. Paul Simmons stated that he had made inquiries but received little information as of the date of the board meeting.
Litigation and Related Policy Issues
In the executive session, the board discussed the status and issues presented in various pending lawsuits and related policy activities, and gave staff direction.
KWUA Deputy Director Report
Additional Science Expertise
The KWUA science committee recently interviewed three consulting firms to provide additional technical assistance on various issues relating to the Klamath River and Klamath Lake. The committee will reconvene and prioritize needs to recommend a path forward.
Chinook Genetics – New Science
Mark Johnson discussed a recently published study indicating that spring and fall-run Chinook are the same species, and the difference is little more than that of eye color in humans. This study may have implications for the management of the Chinook stocks in the Klamath River and throughout the Northwest.
Klamath Falls National Fish Hatchery Tour
KWUA board members toured the U.S. Fish and Wildlife Service (USFWS) Klamath Falls National Fish Hatchery earlier this week. Biologists provided an update on the assisted rearing program and the planned expansion of the facility in the next few years. The tour was well-received and a great platform to engage with USFWS biologists to discuss recovery efforts for the Lost River and shortnose suckers. We look forward to more collaboration with the USFWS on this project and these efforts.
Mark Johnson described a conceptual project that he understands to be under consideration for restoration activities on Barnes and Agency Ranches and adjacent properties. He has developed and submitted a draft of comments to provide early input to the USFWS.
IN THE KNOW
- KWUA offers notary services. Chelsea Shearer is a certified Notary Public and KWUA offers her notary services free to all members and patrons of member districts. To schedule an appointment with Chelsea, call the office at 541-883-6100.
- KWUA offers meeting room facilities for member districts, Monday–Friday 8am- 5pm based on availability. There will be two meeting room spaces available. To schedule a meeting, call the office at 541-883-6100.
- Due to the Governors newest stay home order for COVID, KWUA has moved to working remotely until Dec 2, 2020. While KWUA DOES NOT have any confirmed cases of COVID, we are being diligent and overly cautious to protect our employees and community.