At Box Canyon Dam, there’s no holding back the paperwork

Almost since it was built in the early 1950s, Box Canyon Dam has generated just about as much paperwork as it has electricity. The cascade continued last week with the filing of a lawsuit against the U.S. Department of Interior by the Pend Oreille County Public Utility District, the project’s beleaguered owner.

Box Canyon, which stanches the flow of the Pend Oreille River a few miles below the tiny town of Ione, is the centerpiece of the PUD’s electricity generation and distribution system. The dam’s inexpensive power has allowed the utility to keep its rates among the lowest in the country but, as with so many hydroelectric projects, the tradeoff was the blocking of fish passage and the flooding of adjacent property.

In the case of Box Canyon, some of that land belonged to the Kalispel Indians, who are culturally sensitive to environmental degradation. The tribe sued the PUD in 1972 for damage caused when the dam was raised several years earlier. That case was not settled until 1995.

The paper started flowing again in 2000, when the PUD asked the Federal Energy Regulatory Commission to renew its license for Box Canyon. Relicensing has been a notoriously prickly process that has consumed the money and wits of utility executives all over the United States. It was no different for Pend Oreille PUD. When FERC finally granted a new license last July, the little utility had spent $1 million. If only that were the end of it.

The PUD estimates that mitigating the dam’s environmental and cultural impacts over the next 50 years could cost as much as $250 million. By comparison, Avista Utilities will spend about $140 million addressing many of the same issues at its recently relicensed Clark Fork River dams, which generate 10 times the electricity. And Avista can distribute those costs over more than 10 times the number of ratepayers.

Already, the PUD has increased its Box Canyon budget by 50 percent to cover some of the first phases of the proposed upgrades. In January, the utility imposed a rare mid-winter rate increase to cover the new expenditures. The average residential customer will pay an additional 15 percent — $9 per month — for power. Another, smaller increase is forecast for mid-2007. The bigger concern is the effect higher electricity costs will have on the Ponderay Newsprint Co., the county’s largest employer and the PUD’s biggest customer.

For their part, the Kalispels argue that the new license will finally begin the remediation of environmental harms ignored or unknown for more than half a century. Better the money spent generating still more paper be dedicated instead to restoring fish runs, fighting erosion and performing the many other tasks ahead as efficiently as possible.

The utility asserts that at least some spending could be reduced if the Department of Interior would apply relicensing standards contained in the Energy Policy Act, which President Bush signed less than a month after Box Canyon was relicensed. Though the license was in hand, the PUD says it continued to press for a hearing on some conditions, and so was entitled to relief under the new law, which gave utilities more flexibility to attain desired environmental objectives.

From FERC’s point of view, it’s all over. And Interior, along with the departments of Commerce and Agriculture, issued final rules under the new Energy law denying new hearings to anyone who had a dam license in hand as of November 17. Hence the PUD’s lawsuit.

Oddly enough, the PUD’s arguments get some support from environmental groups who have filed a separate complaint that argues the rules improperly give utilities with pending licenses access to the more flexible rules, which they oppose.

And so the paperwork continues to accumulate. In almost every respect, Box Canyon has been a miniature of the conflicts playing out as the owners of hydroelectric projects undertaken in a less environmentally sensitive era are compelled to make what amends they can. The dam’s importance to one of the most economically challenged areas in Washington, and to the area’s historical Native American stewards, has heightened the contrasts.

It’s all playing out in black and white, instead of blue and green.

On a slightly related topic, President Bush Wednesday nominated Washington’s Phillip Moeller and Nevada’s Jon Westerhoff to fill vacant seats at FERC. If approved, the two would give the West a majority on that body for perhaps the first time in its history. New Mexico’s Suedeen Kelly is already a member. Hallelujah!