Warren Buffett controls dams in Northern California. Why Gov. Newsom wants them torn down

Desperate to complete a historic but complicated dam removal on the California-Oregon border, Gov. Gavin Newsom has appealed to one of the world’s wealthiest men to keep the project on track: financier Warren Buffett.

Newsom dispatched a letter to Buffett and two of his executives Wednesday urging them to support the removal of four hydroelectric dams on the lower Klamath River, where the dams have hurt salmon populations. The dams are owned by PacifiCorp, an Oregon-based electric utility that’s part of Buffett’s Berkshire Hathaway Inc. conglomerate.

The $450 million project has been in the works for years and would constitute the largest dam removal in American history, in an area of the West where conflicts over water have sparked large protests and, in 2002, a controversial intervention at the highest levels of the George W. Bush administration.

The dams block the progress of salmon that enter the Klamath River on the North Coast in Del Norte County and swim upstream to spawn. For decades, the Karuk, the Hoopa Valley and the Yurok — three of the state’s largest Native American tribes — have been pushing to have the dams demolished in the hopes that it will restore salmon populations that sustain the tribes’ livelihoods and cultures.

After congressional Republicans torpedoed an earlier dam removal plan, the Obama administration brokered an agreement in 2016 under which PacifiCorp would surrender the dams to a nonprofit, the Klamath River Renewal Corp., which would oversee their destruction.

The deal appeared to be sailing along until July 16. The Federal Energy Regulatory Corp., which oversees hydro projects, said it would allow the transfer of the dams’ licenses to the nonprofit — but only if PacifiCorp remained a co-licensee. FERC said the nonprofit “has limited finances and no experience with hydropower dam operation or dam removal.”

That could be a deal-breaker. After years of negotiation with the tribes over upgrades to the dams to protect salmon, PacifiCorp concluded that it was time to let the facilities go. The utility decided that keeping the aging dams — the oldest dates to 1918 — was more expensive than letting them go.

Being told it has to remain a co-licensee didn’t sit well with the utility.

“Our concern is that if PacifiCorp remains ‘on the hook’ for dam removal, that the costs of that could spiral well in excess of what the cost would have been to simply relicense the dam,” PacifiCorp spokesman Bob Gravely told the Herald and News in Klamath Falls, Ore.

Tearing down the dams would cost $450 million. PacifiCorp customers in Oregon and Northern California have contributed $200 million to the project, through surcharges on their bills, while the state of California pledged $250 million in funds from Proposition 1, a voter-approved 2014 water bond.

In his letter to Buffett and others at Berkshire Hathaway, Newsom made an impassioned case for keeping the project going.

“The river is sick, and the Klamath Basin tribes are suffering,” Newsom wrote. “The Klamath River dam removal project is a shining example of what we can accomplish when we act according to our values. ... We have never been closer to removing these now-obsolete dams to restore the river on which the Klamath Basin tribes so directly depend.”

The tribes and the Klamath River Renewal nonprofit have been scrambling to keep the project alive. “The groups are continuing to have discussions,” the nonprofit’s spokeswoman Betsey Hodges said Wednesday.

“We can work with this,” said Russell Attebery, chairman of the Karuk Tribe, in a statement released shortly after FERC’s decision. “We understand that we will need to reconvene settlement parties and make adjustments as needed to reflect PacifiCorp’s goals.”

A two-decade fight over the Klamath

The dam removal issue has been controversial. Congressional Republicans succeeded in halting the process in 2015, arguing that it was outrageous to remove dams that provide electricity.

Residents of Siskiyou County, where three of the four dams are located, have also argued that dam demolition would harm the values of properties that sit on reservoirs formed by the dams. They also argue that the process of demolishing the dams will harm the river.

Farmers, tribes and others have been fighting over the Klamath for years. In 2001, federal regulators shut off the water on the federal Klamath Project, a series of canals that deliver water to farms on both sides of the border. The regulators said they had to act to protect coho salmon and two other endangered fish species.

Nearly 10,000 farmers and their allies carried out a series of “bucket brigade” protests. At one point, a small group of activists took a blowtorch and saw to a closed irrigation-canal headgate.

The next year, the Bush administration reversed course and let farmers irrigate after Vice President Dick Cheney personally intervened. Tribes, environmental groups and fishing associations were outraged after tens of thousands of migrating salmon died in the low flows that followed the water diversions.

The four dams that could face the wrecking ball are downstream from the Klamath Project — the spot where Cheney intervened. The PacifiCorp dams provide no irrigation water to the farmers and very little flood control.

But the 2002 fish kill spawned years of litigation and helped set in motion the negotiations that led to the agreement to demolish the PacifiCorp dams.

This story was originally published July 30, 2020 at 5:00 AM.