The Economic and Regulatory Liability of Large Dam Removal- A 2008 Klamath Dam Study

This paper presents the results of a U.S. Department of the Interior liability study for the proposed removal of PacifiCorps Klamath River dams (J.C. Boyle, Copco No. 1, Copco No. 2, and Iron Gate); a key element in the Klamath Basin Restoration Agreement between the DOI, PacifiCorp, and stakeholders to restore fisheries on the upper Klamath River. Previously commissioned studies conducted by fisheries resource agencies and non-governmental organizations estimated costs for the Klamath dam removal program at $90 million. A 2008 DOI study reviewed the full spectrum of potential financial, economic, and litigation liabilities that a dam removal agent (DOI, California, Oregon) might reasonably be expected to incur. The study concluded that the potential financial exposure was significantly greater than earlier studies suggested. This paper presents the results of the study and the cost estimations and litigation risks of the action. Adequately understanding the Klamath dams removal liabilities and litigation risks are critical as the Federal government and the states of Oregon and California will assume responsibility for the action. As large dams begin to be proposed for removal across the nation, several factors including water quality compliance, real estate impacts, recreation changes, and lost power generation add significant real cost to a dam removal action. 13 pp, 9 figures, 3 tables, 10 references.