We don’t expect Warren Buffett to keep tabs on the inner workings of all the companies he owns. But he needs to know what is going on right now with one of them: Portland-based PacifiCorp. That’s because Buffett and PacifiCorp have an opportunity to simultaneously do something extraordinary for one of the great rivers of the West while making a very prudent financial decision for ratepayers and shareholders.
After decades of controversy and campaigning by area tribes, fishing and environmental groups, what is likely the largest dam removal project to date worldwide is poised to commence on the Klamath River in far-Northern California and Southern Oregon. Four aging hydropower dams are on the brink of being removed, reconnecting hundreds of miles of habitat for salmon and other species blocked for more than a century by dams built without fish passage. In addition, the improvements to water quality and fisheries that will result from dam removal help reduce regulatory burdens on area farmers and ranchers.
But it isn’t only fish and tribes that will benefit from freeing the river. Removing the antiquated dams is in the financial interest of Buffet and his shareholders. That is because the state of California has written a check for $250 million to underwrite more than half the cost. PacifiCorp pledged $200 million, which has already been collected from its customers through a special surcharge. But the agreement that set the terms for dam removal included the idea that PacifiCorp could make its financial contribution to the project and then walk away with no liability. Two dozen parties — including numerous conservation organizations, tribes, federal agencies and two states — agreed to that demand in a settlement deal with PacifiCorp. Many conservation leaders had to swallow hard at giving a wealthy corporation such a sweet deal, but decided it was worth it just to get the dams down as fast as possible.
But the multiparty pact requires the approval of the Federal Energy Regulatory Commission (FERC), which in July signaled approval for the approach in general, but with a twist — PacifiCorp does not get to walk away completely from the project before the dams are removed. The public interest is not served by allowing a utility to make a fortune off an environmentally damaging project without seeing it through to the end, when these dams are removed.
So now PacifiCorp is balking. They want to study the issue. That is code language for delay, and crashing salmon runs don’t have time for corporate dithering.
What’s to study? The issue is crystal-clear.
The options are: 1) Accept a $250 million gift, enjoy layers of liability insurance paid for by the state of California and ratepayers, and restore salmon runs hovering on the brink of extinction, or 2) Walk away from a quarter billion dollars of public money, build new fish ladders and invest in other environmental fixes with costs likely to exceed $500 million, invite lawsuits and additional agency regulations related to endangered species and water quality violations, and perpetuate an injustice on native peoples whose livelihoods and cultures are being decimated by the dams. Talk about liability. And it would all be on PacifiCorp, their customers and their shareholders.
The clock is ticking. FERC wants an answer. California and Oregon want an answer. Tribes want an answer. The conservation community wants an answer. Every delay further endangers critically important salmon runs. PacifiCorp has to either accept the conditions laid down by FERC, or face the scrutiny of an America that is increasingly interested in justice for indigenous communities and other marginalized groups.
Warren Buffett and PacifiCorp, we need your decisive leadership. Please make the decision now that will get this done. This is the very definition of a win-win.
Bruce Shoemaker is a researcher on hydropower and rivers and lead editor of the 2018 book about the World Bank and hydropower, “Dead in the Water” (University of Wisconsin Press). Since 2019, through an affiliation with International Rivers, he has been focusing on dam removal in the Klamath Basin, where he lives.