Uncertain Future For Older Dams -- Tacoma City Light, Facing Increased Competition And Pressure To Restore Fish Runs, Considers Unprecedented Step Of Abandoning Cushman Dams

HOODSPORT, Mason County - Tacoma's hydroelectric power plant on Lake Cushman contains a pair of notable features - one a source of pride, the other of notoriety.

Its elegant powerhouses, built in the neo-Classical style, are listed on the National Register of Historic Places. And the lower dam, by diverting water down hillside chutes into one of the powerhouses, for 60 years completely dried up a 2-mile stretch of the Skokomish River and its once-rich salmon runs.

The embattled Cushman dams could soon earn a new distinction as the first major hydroelectric project of its size in the country abandoned or decommissioned by its owner.

The Federal Energy Resource Commission (FERC), after a 23-year permit review that is among the longest-running and stormiest in the nation, is expected in June to offer Tacoma City Light a new license for the Cushman dams. But the license, which requires steps toward restoring fish runs and lost habitat on the Skokomish, doesn't look like much of a bargain to Tacoma officials.

According to the FERC's own projections, Tacoma City Light would lose at least $2.5 million a year operating the dams under the license.

The Skokomish Tribal Council and the federal Environmental Protection Agency are arguing that the commission isn't making tough enough demands for restoration of the river. State wildlife officials want Tacoma to buy and set aside 800 acres nearby to revive an endangered elk herd. Other state officials, along with the tribe, are even questioning whether Tacoma has valid water rights for the project.

Simultaneously, increased competition created by deregulation of the electric industry has sent power prices plunging in recent years. That makes it more difficult for dam owners to pass the bill for saving salmon on to customers.

Tacoma City Light says it will simply shut down the powerhouses - or sue the federal government for an "illegal taking" - rather than accept the proposed terms for a federal license. They produce about 5 percent of the power sold by the utility.

Whether Tacoma City Light makes good on its threat or not, observers say the fight is emblematic of an uncertain future facing several of the region's older hydropower dams, part of what once was touted as the nation's cleanest, cheapest source of electricity.

"Over time, these dams have accrued a huge unpaid debt to fish and wildlife. And those costs now have to be recovered in a very unforgiving market," said Bob Turner, special assistant in the National Marine Fisheries Service's regional office.

"What's not clear to me is what happens, and who gets stuck with the tab, when an operator walks away from a dam."

In the Northwest, that question may soon be more than theoretical.

The proposed demolition of two dams on the Elwha River in the Olympic National Park would cost taxpayers more than $100 million. As part of the effort to revive the historic Columbia River salmon runs, policy-makers are for the first time debating breaching or dramatically reducing the generating capacity of massive federal dams on the Snake and Columbia rivers.

In a mirror of the Lake Cushman situation, operators of the Condit Dam on the White Salmon River in Southwestern Washington have threatened to walk away from that 83-year-old facility. The reason: The FERC is requiring $30 million in improvements to revive fish runs.

The two Cushman dams were finished in the late 1920s, an advertisement for man's ability to harness nature. Their arch-shaped, 100-foot-thick concrete walls were poured straight into the canyon's rock outcroppings. Some of the maintenance wrenches are so big that they must be mounted on cranes.

The very feature that has turned the lower dam into an ecological villain in the minds of critics is what made it so valuable in the first place. The dam diverted virtually the entire flow of the North Fork into giant pipes, pushing the water through turbines with such velocity that the lower powerhouse creates twice as much electricity as its companion upriver. From that point, the river then flows into Hood Canal.

"There are very few dams that divert a stretch of river directly into saltwater. It was considered an eloquent engineering product in its day," said Garth Jackson, who oversees licensing issues for Tacoma City Light.

"It would certainly be environmentally passe today," he added, with obvious understatement.

The Skokomish valley, where the narrow river knifes through a leafy canyon before flowing into Hood Canal, is one of the state's most troubled watersheds. Only faint memories remain of once-thriving salmon and steelhead runs that fed Hood Canal. The Skokomish tribe says its sole commercial season last year was a six-week session for chum salmon.

The river is choked with silt and gravel shoals, creating a narrower and narrower channel that spills over its banks regularly. Repeated heavy flooding has forced the abandonment of 16 home sites and destroyed one-fifth of the salable timber on the Skokomish reservation, tribal officials say. Much of the estuary has eroded, silting up shellfish beds.

Denny Hurtado, the tribe's vice chairman, blames logging on steep hillsides and the building of dikes on private farms for worsening the floods. But the biggest culprit, he argues, is the dams. Once the North Fork of the Skokomish was dried up, Hurtado and other critics contend, the river lacked the power to scrub itself clean.

The tribe has hewed a tough line with Tacoma City Light through years of legal wrangling and negotiations, insisting on restoring about 70 percent of the river's original flows. The tribe has even applied to the FERC, unsuccessfully so far, for a permit to run a smaller, less damaging power plant on the river.

"The river sustained our whole culture and existence," Hurtado said. "We want our river back."

Jackson argues that the dam is hardly the sole villain. Overfishing caused closures of the salmon-fishing season on Hood Canal even before the dam was built. Those same salmon runs made a comeback in the 1950s and 1960s, long after the dams were in place.

Since 1988, Tacoma City Light has been spilling some water back into the North Fork. It has proposed putting back roughly half as much water as the FERC recommends and about one-third of what the tribe is seeking. Jackson said those demands would leave too little water to run the turbines economically, if at all.

Neither side is talking about physically removing the dam.

If Tacoma City Light stops generating power, though, Jackson said the dams would likely be maintained for flood control. But who would pick up the cost for decommissioning is an open question, company officials say.

"What do you gain by playing `Let's turn the clock back to purity?' " said Steve Klein, Tacoma City Light superintendent. "If we refuse the license, then everybody is stuck with this dam."

Operators of aging dams like Lake Cushman are also up against a radical realignment of the power industry.

Most of the region's bigger dams will continue producing some of the cheapest power on the globe, experts say. But Portland energy consultant Robert McCullough, echoing many dam critics, argues that deregulation should force re-evaluation of the most controversial projects.

"We're already seeing some of these dams become economic dinosaurs," McCullough said. "In a world in which electric prices are at an all-time low, this is the time to seriously discuss putting some of them out of business."

Since the 1992 Electric Deregulation Act, big industrial users can buy power that originates anywhere, from the natural-gas fields in Alberta, Canada to oil-fired plants in California. Some Northwest aluminum companies, which require massive amounts of electricity for their smelters, now buy power directly on the spot market rather than on long-term contracts with the Bonneville Power Administration or local utilities.

Some industrial users can now buy power on the open market for about one-third of what it cost just four years ago, said McCullough. Those low prices are fueled, in part, by a glut of natural gas on the market and a new generation of super-efficient, natural-gas turbines.

The Cushman dams currently produce electricity for about 1.1 cents per kilowatt/hour. Jackson said the improvements required under the FERC's license proposal would nearly quadruple that cost.

By contrast, utilities could purchase five-year contracts for power last month for about 1.5 cents per kilowatt/hour.

A series of bills moving through Congress would extend deregulation to the residential market, eventually allowing homeowners to shop for electrical suppliers in the same fashion as they now shop among long-distance telephone companies.

For environmentalists, deregulation could be a two-edged sword.

They hope it will force the decommissioning of some the worst-offending dams. But they also worry that bottom-line pressure will make Bonneville and Northwest utilities more resistant to footing the bill for fish and river restoration.