Under pressure

Past a gated entrance, through a steel-shuttered door and down a curving, concrete tunnel sits an enormous chamber big enough to hold a fleet of vehicles and maybe one or two small aircraft. In that chamber, the lower levels of which reach some 700 feet beneath Lake Oroville, is a monstrous machine.

In essence a six-cylinder, water-powered dynamo, the Hyatt power plant, when operating at full capacity in conjunction with the two other power plants it is linked to, has the ability to pump almost 800 megawatts of crackling electricity into California’s power grid.

Upstairs, in a control room that looks like a NASA set-up from the 1960s, a huge display board of red LEDs informs us that the power output is only about 186 megawatts (enough to power more than 100,000 homes) at the present moment. The system’s operators could increase the output by opening up a system of gates that would allow more water to flow through the system, but there’s not much need on this gloomy, winter afternoon.

The amount of power the dam complex produces is based on how much demand there is for it, how much water is available, what the price of electricity is at any given moment and a slew of other factors too numerous and complicated to go into.

Down below the lake, in the vast structure that houses the Hyatt power plant, workers are calmly going about the task of switching out one of the mammoth steel water wheels that each turn a one-million-pound, 70-foot-tall solid-steel shaft at 200 rpms. Each shaft—there are six in all—is linked to a turbine that floats on a platform of sealed ball bearings, spinning fast enough to create a truly awesome 161,000 horsepower.

The physics of the project are mind-boggling. Clouds form over the ocean, bringing rain and snow to the mountains. The snow melts in the Sierra and runs downhill into the Feather River Canyon, which since 1968 has been stopped up just above Oroville by the tallest earthen dam in the country, a half-submerged pyramid of rock and earth as wide as it is tall. The collected water is fed by gravity into the intakes of the power plant, rushing at an average rate of about 4,000 cubic feet per second through six 12-foot pipes, past the spinning water wheels, out the other side of the dam and into a canal that splits in Thermalito, with part of the water going into a warming basin and power plant complex and the rest flowing back into the so-called “low-flow” section of the Feather River, where a fish hatchery helps maintain local fish populations.

After that, the water continues downstream. Some of it flushes into the San Francisco Bay Delta, and some gets pumped as far south as Riverside. Along the way, it creates habitat for thousands of riparian species, sustains the Central Valley farms that grow close to half of America’s fresh produce, and provides drinking and washing water to millions of homes and businesses.

From Antelope Lake in the north to Lake Perris in the south, through 600 miles of pipe, 28 lakes and reservoirs, 17 pumping plants and eight power-generating facilities, the State Water Project delivers the universal solvent to some 20 million thirsty customers, and Lake Oroville is its most important link.

The fact that Oroville is home to the jewel of the State Water Project is not something that everybody around here cares to know. But they should care, because at this very moment plans are being set in motion that will decide how the Oroville Dam project will be managed for the next 50 years. The impact of the project on the region’s economy and culture has been and will continue to be one of those factors that seem easy to ignore but often prove hard to get away from.

In essence, the deal is as follows: The dam project is owned and operated by the state’s Department of Water Resources (DWR). Its operations are funded by the 29 state water contractors, a politically well-connected group of water-rights-holders that find, buy and sell water throughout the state. Because it generates power, the dam complex is licensed every 50 years by the Federal Energy Regulatory Commission, which is tasked with deciding not just whether DWR is competently and safely running the operation, but also how those operations affect the environmental, economic and cultural resources of the community it is in.

When the dam was built, folks in Oroville knew they would be losing the wild and scenic Feather River that for so long had been the very soul and identity of their town, but they also believed they would be gaining a lake that would bring in truckloads of tourists who would spend bundles of cash, creating thousands of jobs and scores of new opportunities for local businesspeople.

The problem is, this never happened, and locals have blamed DWR ever since. Orovillians in particular have long accused DWR of breaking promises to build recreational facilities, sabotaging tourist seasons by keeping too little water in the lake and charging too much for boating and camping fees. DWR maintains it has done its best to provide recreation at the lake and has little control over how much water is in it, owing chiefly to the weather, but also to a myriad of competing mandates from federal, state and local agencies.

Now, with the license up for renewal, Oroville and the surrounding community have a chance to force DWR and the water contractors to pony up some funds to help make up for the mistakes of the past and hopefully provide some gains for the community’s future. For some civic leaders, the relicensing process has come to represent the best—maybe even the only—hope for Oroville and Butte County to retrieve some of the value they feel is lost when the water and power that flow through the dam get shipped to the rest of California. To others, the process looks more like the frenzied rush of a mob descending on an overturned Brinks truck.

When the relicensing process began in earnest about two years ago, there was a lot of David vs. Goliath talk about how the locals were going to stick together to fight off the giant water and power brokers. But that isn’t exactly how it’s turning out. The major development in relicensing has been the emergence of Oroville as a negotiating force in the ongoing settlement talks and the fierce opposition to DWR being staged by the county.

One would think, based on Oroville’s combative stance toward DWR in the past, that its negotiators would have come into the relicensing talks with guns blazing, but the town surprised everybody and took a different approach. It hired a consultant to set up meetings among local residents, environmentalists, recreators and landowners and tried to figure out what specifically the city wanted to get out of the process. Instead of focusing on the lake itself, Oroville looked toward the riverfront, hoping to tie development there to projects it was already pursuing in the nearby downtown area.

In the view of Oroville’s negotiators, that shift accomplished what 50 years of complaining never could: It allowed a way for both sides to save face, put concrete plans on the table and, perhaps most important, enabled future complaints to be heard in court as a matter of contract law rather than as memos to a fairly unresponsive board of commissioners in Washington, D.C.

“What’s good about the package this time around is that there will be total involvement by the locals as well as other jurisdictionals,” noted Oroville City Councilman Bob Sharkey. “So it won’t be like [in the past, where] you have no onramps, no way to talk about it, you’ve got a 50-year license and you’ve got to hope that it happens. That’s pretty critical.”

Sharkey, parks superintendent for the Feather River Recreation and Parks District, has been active in local water politics for around 25 years. After working long hours as a volunteer DWR-watcher and relicensing negotiator, Sharkey beams with pride as he describes the deal Oroville has carved out with DWR and the state water contractors.

In addition to agreeing to build and maintain some $440 million worth of recreation facilities at the lake (the actual sum is still undetermined), Oroville negotiators got DWR to include in their license application a “Special Benefits Fund” that would funnel $50 million into projects already planned for the Oroville riverfront. It also promises help in securing $58 million in grants for related projects.

“The people who went to the table and negotiated and really heralded their cause … did very well,” Sharkey said, describing a slew of projects planned for the area, including a new park and visitors’ center, a whitewater rafting course, an equestrian center and a business park that would include a hotel and conference center. Almost all the projects are tied in some way to Oroville’s ailing downtown, which would benefit hugely from the deal.

Critics of the Special Benefit Fund deal say Oroville negotiators are being naïve if they think the state water contractors will actually come through with the money, but Sharkey has faith.

“If there has been one good thing that has come out of this process, it’s that we have built a relationship, and we know it’s not like it was 50 years ago,” he said. “I think [the water contractors] are going to be entwined in this as they never have been before because they’re paying the bill, and they want to see real things built as well. I see that happening in five to 10 years.”

With Oroville satisfied, one might think the county would be happy too. Not quite. The county, led in its relicensing effort by its top lawyer, Bruce Alpert, thinks Oroville is selling itself—and the rest of the region—short.

“Oroville decided to cut their own deal,” Alpert said. “We kept negotiating at the table, and Oroville chose to negotiate off-line with the contractors. That’s their decision. … But for them to turn around and say we have to give up what we want because they think it might jeopardize their deal is hard for our board to agree to.”

Alpert, who gives periodic public reports to the county supervisors on relicensing, has been highly critical of DWR from the very beginning of the settlement talks. When the DWR proposed its first settlement package, he called it a “lowball” offer. Since then, the money proposed for Oroville has gone up, but the funds proposed for recreation at the lake are about the same. Alpert thinks that’s because DWR and the water contractors have been pursuing a “divide and conquer” strategy from the very start, showering Oroville with much-welcomed crumbs while leaving the rest of the county high and dry.

“DWR had a strategy in mind from the very beginning, and they’ve implemented that,” Alpert said.

The county, meanwhile, seems to have a strategy of its own—whatever DWR offers, the county asks for more. At public meetings, in memos stuffed in county employee payroll check envelopes and in the press, county spokespeople have leveraged DWR’s reputation for deep pockets and broken promises, accusing the department of being stingy, negotiating in bad faith and exaggerating its offers to the community.

To gain better leverage with FERC, Butte County used its scarce resources to hire a high-powered D.C. lawyer at the rate of $425 an hour, then sent a four-man delegation to D.C. to meet with her and the FERC commissioners. (The next week, Oroville sent a two-person team to D.C.)

The CN&R has also recently confirmed that the Butte County Grand Jury has been secretly investigating the relicensing process, although it’s unclear to what end. Oroville negotiators say they have yet to be called in to testify, sparking rumors that the jury is calling only people who support the county’s position. Alpert said any suggestion that county administrators had somehow orchestrated the jury’s investigation would be “wholly inaccurate.”

While the county hasn’t put its cards completely on the table, it has hinted that what it wants from DWR is quite a bit more than a few boat ramps or picnic tables around the lake. County memos indicate a longing for “a power allocation” from the dam and “payments in lieu of taxes.” Alpert wouldn’t put a number on what the county wants but said, “What we’re after is very, very substantial—numbers certainly that haven’t been talked about. The potential’s tremendous.

"[The dam] is a project that produces billions of dollars downstream. … This is an engine that drives the economy of Southern California in terms of allowing them to continue to develop. You need water to develop, and it comes out of our back yard. Why shouldn’t we benefit to some degree?”

Local environmentalists are also siding with the county because, as the Butte Environmental Council’s Jim Brobeck wrote in a recent statement, “Allowing DWR to dictate the terms of a settlement will force Butte County into a position of serfdom, economic depression and environmental degradation.”

Whether the county’s hardline approach will work is unknowable at this point, but the cost of its effort has certainly been steep, at least in terms of the amount of time county staffers have spent trying to hammer out a deal. While Alpert said recently such an approach shows “[the county] can’t be buffaloed,” others at the negotiating table seem to think the county, which is admittedly going through tough economic times, is desperately grasping for money to shore up its shrinking general fund.

“I’m not supposed to bad-mouth the county, but to me it has been a bit disingenuous in the fact that their issue is that they want money,” said Sharkey, who worries that the county’s stance will be seen as belligerent by DWR. If the entire settlement package is held up by county demands, Oroville’s plans for a new downtown will likely be held up too.

Then there is the bogeyman. A few years ago, if you asked any informed Oroville resident to describe a state water contractor or DWR executive, the resulting description would be of a vaguely humanoid creature of reddish hue with glowing, cat-like eyes, cloven hooves and leathery bat-wings who, on a moonless night, might decide to swoop down from the clouds to steal a sleeping baby or drain the water out of Lake Oroville.

That image was borne partly out of disappointment with DWR’s management of the lake and also out of a sense of resentment toward those in the rest of the state—specifically in Southern California—who have profited from the use of the Northstate’s water. It is no secret that historically the political and economic power in the state has been in the south and the water has been in the north. So while Los Angeles has jobs, stars and Disneyland, we’ve got dams, rusting canneries and Oroville.

The water contractors and DWR have both chafed at such local sentiment for years. Rick Ramirez, program manager for DWR’s Lake Oroville relicensing effort, described his reception at a meeting of the Oroville Recreation Advisory Committee a few years back.

“I was called not only a liar, I was called a damned liar. Then the unkindest cut of all: I was called a damned government liar,” he recalled. Since then, local anger toward DWR and the contractors has faded, Ramirez said. “Since that time I’ve made a lot of friends in the Oroville community. I don’t hear that kind of thing any more.

“We want to be a good neighbor, and much of what we’ve done here during our collaborative process has been trying to reassure folks that we want to do that. We’re not going to pack our bags and leave town. We’re the state of California. We’ve got a huge presence in Butte County, and we want folks to be comfortable with that.”

Ramirez said the department has listened to locals’ concerns and has tried to accommodate them as best it can, but he also said the expectations of some negotiators may need to be lowered.

“Since [relicensing] is a federally mandated, federally defined process, it’s got its own set of rules, its own parameters,” he said. “It’s not a catch-all or a process that everything that’s of interest to them is going to be addressed.”

Both DWR and the water contractors have seen in the relicensing talks a chance to update their respective images, and to some extent it has worked. Oroville’s Sharkey, who used to routinely blast DWR, said recently, “I was a DWR-disliker for a long time, and I’ve come out of this process seeing these folks are human. They mean well, they’re real people. I can’t go around hating them; they’re trying to do their job.”

Of course Sharkey would think that—Oroville is, at least on paper, getting exactly what it wanted out of the relicensing process, while the county is for the most part getting shut down.

Timothy Quinn, vice president of L.A.'s Metropolitan Water District, said that’s because the city chose to use honey while the county applied vinegar. Quinn denies the county’s claim that DWR and the contractors applied a divide-and-conquer strategy.

“It’s not true. The county is still giving the broken-promises speech, and the city decided to stop giving that speech and said, ‘Let’s sit down and work something out,'” he said. “The city was asking for things that made sense to us as part of this package. I can’t lead my organization in a direction that says, ‘Just ask us for money and we’ll send you a check.’ I would be the ex-vice president of the Metropolitan Water District if that were the attitude.

“Everything [Oroville] wanted was recreation- and river-related. It’s well thought out and it’s tangible … and I could very comfortably go down and report to my board, and they understood why that made sense as part of a FERC relicensing strategy. Much that the county has asked for, I can’t sell. There was absolutely no divide-and-conquer strategy, although I will tell you that we’ll stand by our partnership we have with the city, and we’ll make it work.”

Both DWR and Metropolitan Water claim they went into relicensing talks looking for little more than reliable, affordable access to water. But both have other entities they have to answer to.

DWR, for example, has to maintain enough water in Lake Oroville to keep boaters happy, but it also has to release enough in the wet months to provide flood protection for the valley. It has to provide cold water for the river’s fish but warm water to rice farmers. The water contractors have to keep their investors satisfied, keep water flowing to their customers and keep costs down as much as possible.

While locals are probably right to seek some form of payment for all the water the region provides, the cold, hard fact is that if the price of water were to rise, it could eventually mean higher prices for everything else.

These are just a few of the concerns FERC will look at over the two years it is expected to spend reviewing DWR’s license application, a 22,000-page document that cost at least $70 million to produce.

While the application is in, settlement talks are still going on. DWR cancelled the last two formal negotiation meetings, much to the county’s irritation. DWR’s Ramirez said he hoped to be done with settlement negotiations within two months, but that doesn’t mean the issues the county has brought up will go away. Until the application is actually approved, there will be plenty of time for any stakeholder to launch an appeal, something that the county looks likely to pursue.

“We’re continuing to meet and continuing to exchange views," Alpert said. "We only get one chance at this. We’re being cautious but positive. We think we have a chance to do something that will have an impact on Butte County for the next 50 years."