US, Berkshire's PacifiCorp discuss dams issue

By JEFF BARNARD 06.11.08, 12:13 PM ET

PacifiCorp, the federal government and the states of Oregon and California are in talks over how to resolve a proposal to remove four hydroelectric dams on the Klamath River to help struggling salmon runs.

U.S. Fish and Wildlife Service spokeswoman Alex Pitts confirmed Tuesday that federal agencies and the utility are in continuing "conversations" about a hydropower agreement, but would not characterize that agreement as a way to remove the dams.

PacifiCorp (amex: PPW.PR - news - people ) spokesman Art Sasse would say only that the utility company is in talks with "key stakeholders" surrounding its application to relicense the dams.

The utility is owned by MidAmerican Energy Holdings Co. (otcbb: MDPWL.OB - news - people ), based in Des Moines, Iowa, and controlled by Berkshire Hathaway (nyse: BRK - news - people ) of Omaha, Neb., the investment vehicle of billionaire Warren Buffett.

Last January, federal agencies, the states of Oregon and California, and Indian tribes, fishermen, farmers and conservation groups agreed on a $1 billion plan for restoring salmon in the river and sharing scare water between fish and farms once the dams are removed.

But PacifiCorp, which owns the dams, has yet to sign on and terms of the hydropower agreement were left blank.

The utility has consistently maintained its desire to keep the dams as a source of carbon-free energy, even if it means spending $300 million on federally mandated fish ladders and other measures to help salmon, but would not object to removing them if their ratepayers are protected. The dams produce enough electricity for about 70,000 customers.

Craig Tucker, Klamath campaign director for the Karuk Tribe, said he had no information about the talks, but it would make sense if PacifiCorp were seeking to transfer ownership of the dams to the federal government.

"One of PacifiCorp's demands all along has been if the dams get removed, they don't want to be in the position of holding all the liability for any potential negative consequences," he said. "All I can do is speculate they are entertaining a variety of options to try to achieve that. I haven't seen any specific plans for that."

Greg Addington, executive director of the Klamath Water Users Association, a key farm group, said he had heard from state and federal agencies involved in the talks, and was encouraged they were continuing.

"As long as they're talking, there's a chance we can get this thing done," he said.

If the dams are removed, perhaps as soon as 2015, it would allow salmon to return to 300 miles of river blocked for the past century and restore 60 miles of reservoir to free-flowing river. Removal also depends on some $400 million in new spending on salmon restoration, primarily from Congress, for a total of $1 billion over 10 years.

PacifiCorp serves 1.7 million customers in six Western states.