Dammed up

Oroville is ready to move ahead, but the county is putting on the brakes.

The issue is the 50-year licensing renewal of Oroville Dam and its facilities, which include the dam and associated hydroelectric facilities, the Feather River Fish Hatchery, Thermalito Diversion Dam, Thermalito Forebay and Afterbay, the Oroville Wildlife Area and recreational lands and facilities.

After several years of negotiations among some 35 stakeholders, Oroville and Butte County being the largest, pressure is mounting to reach settlement, as the state Department of Water Resources, operator of the facilities, must file for a new license with the Federal Energy Regulatory Commission by Jan. 31, 2005.

In a press release issued Nov. 30, the city of Oroville notes that it is “optimistic that a fair and equitable settlement can be reached” with the DWR. It points out that a draft relicensing settlement provides more than $440 million in recreational development over the next 50 years.

But Butte County officials, speaking at the regular supervisors’ meeting on the same day, were less sanguine about the settlement, which would give the county $50 million, or $1 million a year, to offset costs associated with the facilities. The amount is too inflexible and too small, especially with inflation, they say.

County CAO Paul McIntosh told the supervisors that the DWR was operating under false assumptions when considering economic impacts to the county. In fact, he said, the state has refused to compensate the county for the financial impacts noted in one of its own reports, choosing instead to bring in a consultant to discredit that report.

Butte County is simply not getting enough out of the deal, McIntosh said. Other locales with dams have negotiated lower electricity rates for residents and more money for recreational facilities. The county is “not asking for anything that hasn’t been done in other relicensing settlements around the country,” McIntosh said.

The county is prepared to pursue legal action to get what it considers a fair contract. It has brought in a Washington, D.C.-based attorney, Carol Smoots, with extensive experience helping to negotiate relicensing settlements in the FERC realm.

Addressing the supervisors, Oroville resident Mike Kelly passionately argued that the DWR hasn’t kept its contract promises in the past and shouldn’t be trusted in the future. Kelly’s advice to the board was to go to Washington, D.C., and lobby there.

Paradise-area Supervisor Kim Yamaguchi agreed that the DWR was low-balling the county. “DWR is not being accommodating to a major stakeholder,” he said. “Local communities should get a break on electricity rates.”

Yamaguchi also noted that in 50 years’ time $1 million wouldn’t amount to much. He said he’d like to see an increase in the contract that is based on the consumer price index.

Meanwhile, Oroville city officials are concerned that the county’s objections will derail a negotiation process that to them has generated a good settlement offer.

City Councilman Bob Sharkey, who has been involved in the negotiating process for four years, said he feels very positive about the offer on the table and said the City Council, along with most of the stakeholders, is close to settlement.

The city estimates gaining $73 million in capital improvements plus $310 million in future operations and maintenance spending, according to its Nov. 30 press release.

Sharkey said the settlement might require some finessing, but he sees it as “a good deal that will work for everyone.” Money is going to be spent on “real things” like parks and facilities, he said. “This is what we have wanted for years.”

If Butte County presses the issue, some stakeholders worry that it could cause problems with the process and shoot them all in the foot.

Federal law requires that, in approving an application, FERC give equal consideration to power and nonpower uses of projects. The Oroville facilities’ operational impacts upon instream flows, water temperatures, recreation, fish hatchery operations, aesthetic values, and tribal lands and culture all will be examined.