Going, Going Gone: Reflections on the Retirement of the Bull Run Hydroelectric Project

by John Esler

A few minutes after noon, on July 24th, 2007, with a loud boom, a cloud of gray smoke, and a cheer from the audience, Marmot Dam was on its way out. Two-hundred spectators pushed forward from the blasting safety zone to watch the choreographed march of the massive excavators and dump trucks move into the river channel to start removing the concrete and tangled rebar. The reality of what they were witnessing settled in – after 94 years of diverting water to Portland General Electric's (PGE's) powerhouse on the banks of the Bull Run River, the Marmot Dam was actually being removed.

The Bull Run Hydroelectric Project was a masterfully engineered facility. Located on the west side of Mt. Hood, about 35 miles east of Portland, it was created in a time before large concrete dams were being constructed. Marmot was a timber crib dam until it was replaced in 1989 by a concrete dam. The project included more than three miles of canals and tunnels, dams on two separate rivers, and a nearly three mile wooden box flume to transport water to Roslyn Lake. Projects of this vintage are evidence of a historical campaign to electrify the West as utilities scrambled to generate and deliver this new type of energy to their new customers.

It Wasn't Expected to End This Way

The FERC license for PGE's Bull Run Hydroelectric Project was scheduled to expire in November 2004. In 1998, PGE started relicensing the Project. The federal process of relicensing a hydroelectric project usually results in a new operating license, albeit with additional requirements, which allows the licensee to operate for an additional 30-50 years.

The process of obtaining a new operating license from the Federal Energy Regulatory Commission (FERC) can be long, tedious and expensive. More importantly, it requires the licensee to revisit the decisions previously made in the operations of the project and rebalance the impacts caused to fish, wildlife, recreation, and cultural resources. In the case of the Bull Run project, the costs of addressing the fish and wildlife resource issues – combined with anticipated maintenance expenses - proved to be too high to keep operating the project.

For example, PGE faced agency requirements to replace the existing juvenile fish screens and adult fish ladder at Marmot Dam. The Little Sandy Dam, which had no facilities for upstream or downstream fish passage, would need to provide passage. Furthermore, PGE anticipated a requirement to reduce the amount of water diverted at both the Marmot and Little Sandy dams. Since the project was constructed in the early 1900s, the company has been required to use the water from the Little Sandy River before using water from the Sandy River . Though this meant virtually drying up the Little Sandy River, early thinking considered this less disruptive then taking proportionate flows from both rivers. A new operating license would have certainly required PGE to reduce the volume of diverted flow, resulting in a reduction of electricity generation.

By May 1999, PGE concluded that the investments and ongoing expenses needed to upgrade the facility could not be recovered by the value of the electricity it would have produced. In a well-covered media event, highlighted by Governor John Kitzhaber reconfirming his commitment to salmon recovery, PGE announced that it would not relicense the project. The license to operate the facility would be allowed to expire in November 2004; the two dams, the generators and related facilities would be removed. The 22 MW of electricity would be provided from other sources.

Pulling Together the Settlement

PGE has successfully used multiparty negotiations in its hydropower licensing. Though laborious, they ensure that all the issues get fully explored and researched. By recognizing the interests of all the organizations at the negotiating table, the stakeholders can support implementation of these licenses. PGE decided to replicate this settlement negotiation approach for the decommissioning of the project. Over the first eight months of 2002, PGE and 22 organizations negotiated a comprehensive approach to removing the Bull Run project.

This negotiation had an interesting deadline that worked in the favor of crafting a successful resolution. If PGE could not file a surrender application and the accompanying decommissioning plan with the FERC by November 15, 2002, the project would be deemed “orphaned” and another entity could acquire and operate the project. The settlement parties generally felt that if PGE was not able to implement the fisheries improvements economically, it couldn't be done. This deadline, along with the very real potential of the project's future being punted back to the FERC for a solution, spurred the parties at the table to strive for an acceptable compromise.

Key Elements in the Settlement Agreement

The comprehensive settlement agreement was signed on October 24, 2002. It included numerous decommissioning details, but four key elements were central to the deal: a realistic schedule for removal, a plan for the permanent protection of PGE lands in the Sandy River basin, a conversion of PGE's water rights associated with the hydroelectric project to an instream water right, and a plan for dealing with the sediment behind Marmot dam that was both economically and environmentally acceptable.

The settlement provided that the Bull Run Hydroelectric Project would continue to generate electricity for five years after the settlement agreement was signed. This “extra” generating time, gave PGE an opportunity to recover the costs of decommissioning – estimated to be about $17 million – in customer rates. This five-year window also allowed the Oregon Department of Fish and Wildlife (ODFW) to retool the hatchery program in the Sandy River to use a local brood stock of Spring Chinook. This modification was critical to helping ODFW meet its Endangered Species Act (ESA) obligations for the hatchery program, after the Marmot dam was removed.

PGE will provide 1,500 acres of its land, to be secured permanently for public access and habitat protection. This land will be transferred to Western Rivers Conservancy when the decommissioning is completed. Eventually, most of this land will be held by the Bureau of Land Management ( BLM ) and is expected to be part of a 9,000-acre natural area that will incorporate the Sandy River Gorge. This rugged canyon, lined with massive cedars and fir trees, is spectacular. Its location within an hour of downtown Portland makes it even more remarkable. PGE's lands have always been open to the public for their enjoyment. Permanent protection for these lands, and assured access to anglers, boaters, and hikers, was a key element of the settlement and is a legacy that PGE wanted to leave behind in the basin.

One unfortunate casualty of the decommissioning will be the loss of the 160-acre Roslyn Lake. Its tranquil recreation was much appreciated by the local community. However, Roslyn Lake is the forebay to the powerhouse, fed by the water from the Sandy and Little Sandy rivers. With the removal of PGE's dams and conveyance system, the lake will disappear. Perched more than 300 feet above the Bull Run River and surrounded by houses and farms, the land on which the lake is located will not be part of the PGE land donation.

The issue of water rights was important to some of the settlement parties. Under Oregon statutes, conversion of the surface water rights for hydroelectric generation can be transferred to the State of Oregon, if the transfer will not result in injury to other existing water rights. This was successfully negotiated to allow PGE's Sandy and Little Sandy River water to remain in-stream for the benefit of the aquatic ecosystem. With the exception of a relatively small amount of water reserved for municipal and private water right holders these water rights will be transferred upon completion of the decommissioning.

The other key issue that required significant efforts by the settlement parties to resolve was the disposition of the roughly 800,000 cubic yards of sediment behind Marmot Dam. The Sandy River, as its name implies, is rich in alluvial material. Episodic erosion of volcanic deposits of sands and gravels has occurred at least since the 1790s, when Mt Hood last erupted. The reservoir behind the Marmot Dam is filled with this material. The issue that faced the settlement parties was how much of this material could be allowed to continue to migrate downstream without having an unacceptable impact on the aquatic community.

After much analysis, the settlement parties decided that almost all this material would remain in the river. The consensus of the group was that the environmental impacts of working in the river for many months over two construction seasons with heavy equipment to excavate the material had its own environmental consequences. The fish in the Sandy River are already exposed to periodic deposits of sediment moving downstream and are expected to successfully weather this short-term impact. PGE agreed to implement contingency measures if this eroding sediment blocks fish migration or access to key habitats. PGE will remain responsible for these measures until the river has effectively transported this material through the affected downstream reaches of the river, or there is no longer a threat of fish passage being blocked from this sediment.

What This Dam Removal Means (and Doesn't Mean)

The removal of a dam has different meanings to different people. This is especially true in the Northwest where all-things-salmon helps define our cultural and recreational sense of place. Working for a utility that has hydroelectric projects, I am often challenged by people to deny that “dams harm salmon” I don't. But I remind them that virtually every resource-using activity undertaken by humans has an impact on salmon survival. Dams are a very visible manifestation of this human impact, and their owners tend to have the resources necessary to make changes to these structures. But the increasing human population throughout the Northwest will ultimately prove to be the bigger challenge to recovering salmon populations in our rivers.

The Marmot Dam removal was not intended to be a political statement about dams or salmon. PGE made the decision to remove this facility because it could not make the economic case to justify the investments necessary to bring it into compliance with current criteria for resource protection. Faced with that reality, PGE aggressively worked to take the dam out, because it was the right thing to do for its customers and for the river's aquatic resources.

PGE remains committed to its other hydroelectric resources. Indeed, the decommissioning of the Bull Run project has made it easier to protect the future of its other hydroelectric projects because PGE has demonstrated that it will take appropriate action when a project is no longer viable. Working with virtually the same settlement parties as this decommissioning effort, we have successfully made the case that PGE's other projects should be supported with new licenses. The company has a successful track record in this area. PGE is proud to have its Deschutes River project, co-owned with the Confederated Tribes of the Warm Springs, be the first utility-sponsored hydropower project in Oregon certified as “low-impact, environmentally responsible hydropower,” by the Low Impact Hydropower Institute.

The removal of PGE's dams will have long term benefits for the fish in the Sandy River basin. However, it will be difficult to quantify this contribution to salmon and steelhead populations. Marmot Dam historically had a successful fish passage program for upstream and downstream migrating fish so the effects on fish populations above the Marmot Dam site may not be apparent. The effect on the Little Sandy River will be more pronounced, as PGE's operations were blocking up to 8 miles of stream habitat. Fish production from the Little Sandy River will be a quantifiable benefit after the dam is removed and flows are re-established but this is a comparatively small part of the basin.

I don't believe the removal of the Bull Run Hydroelectric Project is at the forefront of a general trend. Yes, a few other hydroelectric projects of this vintage, including a project on the Hood River in Oregon, are slated for removal in the near future. But the evolving economics of electricity generation, a rapidly growing human population, and our region's appetite for low-carbon emitting energy will make dam removals a rare event.

Is this bad news for salmon? I don't think so. Many older hydroelectric projects have enough economic value to allow the necessary investments in fish and wildlife protection. It will take hard work and a commitment by the utilities, the agencies that regulate them, and the public they serve to ensure that the natural resources that make Oregon a special place get the attention they deserve.