The Relicensing Process and Decommissioning

In December 1991 PacifiCorp filed an application with the Federal Energy Regulatory Commission (FERC) for renewal of the operating license for Condit Dam that was scheduled to expire at the end of 1993.  The project has been operating under annual licenses since that time ( detailed chronology).

In October 1996 FERC issued their final Environmental Impact Statement (EIS) for the project. Based on recommendations in the EIS, PacifiCorp expected to receive a new license for Condit that contained terms and conditions that would render the project grossly uneconomic primarily due to mandatory prescriptions issued by the National Marine Fisheries Service for installation of state-of-the-art fish passage facilities. Such facilities, along with higher instream flows and other requirements, were expected to result in a license costing from $30 million to $50 million.

In January 1997, the company petitioned the FERC to halt the licensing proceedings for Condit. Rather than reject the FERC license and face years of litigation, the company decided to initiate settlement discussions with the intervenors involved in the licensing process. The other participating parties supported only two primary interests: (1) the installation of the fish passage facilities as reflected in the EIS or (2) dam removal. Although removing the dam was not the company's preferred choice, PacifiCorp agreed to consider dam removal if it could be accomplished for significantly less than the cost of accepting the new operating license.

After nearly three years of negotiations a settlement agreement calling for dam removal was signed on September 22, 1999 by most of the intervenors. The agreement provided for the continued operation, under current license conditions, of the project for seven years (until October 2006) at which time the project would be removed. In addition, the agreement caps the monetary exposure that PacifiCorp could incur for dam removal at $17,150,000 (1999 dollars).

On February 25, 2005, parties to the settlement agreement signed an amendment whereby Condit project operations will be extended from October 2006 to October 2008 to provide additional time for project-removal permitting.  In addition to extending operations, the amendment increases the monetary cap for dam removal to $20,450,000 (1999 Dollars).  The amendment does not make any further changes to the settlement agreement.

Section 4.4 of the settlement agreement (as amended in 2005) calls for PacifiCorp to cease generation and commence project removal in October 2008.  However, Section 2.2 of the agreement clarifies that PacifiCorp is not required to cease generation or to begin removal of the project until PacifiCorp has received all applicable permits in final form.

PacifiCorp continues to seek all necessary permits and intends to remove the Condit project once all applicable permits have been obtained in final form and any other preconditions of the agreement or of the FERC's surrender order have been satisfied.  PacifiCorp is hopeful that it can obtain final permits in time to allow dam removal to commence in October 2009.  All participating parties concur with PacifiCorp's conclusion that the agreement provides for continued operations and generation while PacifiCorp awaits final permits.