Klamath Falls Still Fighting For Its Hydroelectric Plant -- Scenic River Pitted Against City's Economic Recovery

The eight-year battle over the Salt Caves hydroelectric project is a Western showdown reminiscent of free-range cattlemen and fence-building homesteaders.

But this fight is between a city (Klamath Falls) and a state (Oregon), the state and a federal agency, the local congressman and out-of-town congressmen, fishermen and developers.

At issue is an 11-mile stretch of the Klamath River about 27 miles southwest of Klamath Falls in south central Oregon.

After three design changes and countless wranglings with state agencies, the fate of the project rests in two sets of hands.

Congress is considering a bill that would block the project by including the Upper Klamath River in the federal wild and scenic river system.

The Federal Energy Regulatory Commission could sweep aside most of the objections raised by state agencies simply by granting a license for the project.

To Salt Caves opponents, the project is a vampire, poised to suck the water from the last free-flowing stretch of a waterway that has been shackled by four dams already.

They say the best way to protect the river and its wild rainbow trout is to leave it alone. There is no buyer for the power, enough to light a small city, and energy is at a surplus.

Supporters see it as a working river that can generate electricity and millions of dollars to help Klamath Falls get back on its feet after a decade of economic decline.

``We think it's a classic conflict between the federal government over the traditional state jurisdiction over water resources,'' said Chris Orsinger, spokesman for the Oregon Rivers Council, and environmental group.

But Michael Hartfield, spokesman for the Salt Caves project, sees the opposition as an example of environmentalism gone wild. He said the project actually will improve trout habitat by taking away the periodic surges of water released from a dam upstream, leaving a constant flow.

``People are geared to think in terms of white hats and black hats,'' he said. ``The environmentalists have worn the white hats for a long time. People don't understand what is going on in the environmental community.''

The conflict goes back to 1982, when the Federal Energy Regulatory Commission let the city study the feasibility of building a dam at Salt Caves, holes in a rock cliff named for white mineral deposits at their mouths.

The city was unable to garner public support until it swung a deal to finance the project without costing the taxpayers a dime.

In 1985, the city sold $250 million worth of bonds, then reinvested the money at a higher rate of return than the discounted interest it had to pay as a municipality.

That year, the city applied to the regulatory commission for a permit to build a $117 million, 130-foot-tall dam that would generate 140 megawatts of electricity.

The original dam design came under intense criticism from the Oregon Department of Fish and Wildlife, which pointed out that the impoundment behind the dam would flood one of the state's premier wild trout streams. Rafters didn't like it either, because it would dry up a top summer white water run.

Faced with a wall of opposition from a variety of state agencies, the city scaled down the dam in 1986.

In 1987, Gov. Neil Goldschmidt weighed in against the dam. He said Oregon's environment, which could be enjoyed by all, shouldn't be sacrificed to economic development for one city.

Two weeks later, the state Department of Environmental Quality denied the city a crucial water-quality permit for the project. The state Department of Energy questioned the need for the power.

And Reps. Peter DeFazio, Ron Wyden, and Les AuCoin, all Oregon Democrats from the other side of the Cascade Range, introduced the first bill to grant federal protection to the river. The bill failed.

The next year, the Northwest Power Planning Council included the upper Klamath River among 40,000 miles of Northwest waterways where hydroelectric development would be banned to protect wild fish.

Oregon voters also approved an initiative putting the upper Klamath River on the state scenic waterways list.

Throughout it all, the city held out hope that the Federal Energy Regulatory Commission would ride to the rescue.

Last year, the commission suggested taking the dam out of the project, thereby eliminating any objections about the water impoundment, and Klamath Falls complied.

The new design would draw water directly from the tailrace of the J.C. Boyle Dam, carry it 10 miles downstream through canals and conduits built into the canyon wall, to a powerhouse, where it would be returned to the river.

The Federal Energy Regulatory Commission's environmental impact study on the no-dam design, released last June, found it would fill a need for new sources of electricity that would otherwise be produced by coal and nuclear energy, and be profitable.

City Manager Jim Keller crowed that the state's opposition meant nothing if the federal commission granted a license. A Supreme Court decision this year backed their claim.

Meanwhile, DeFazio, Wyden and AuCoin had introduced another bill to give federal protection to the Klamath River. The U.S. Bureau of Land Management, with jurisdiction over the river, found it met criteria for scenic designation.

The Federal Energy Regulatory Commission has said it will await the bill's fate in Congress before acting on the Salt Caves license.

``If the agency is going to crush state and regional decisions, we think that is another reason wild and scenic legislation should be passed to protect this river and protect the broad range of people opposed to this project,'' Orsinger said.

DeFazio said he is optimistic the bill will clear the House, but its fate in the Senate remains uncertain. Neither Sen. Mark Hatfield nor Sen. Bob Packwood, Oregon Republicans, has wanted to jump into the fray.

After so many years of trying to win support with technical arguments, the city will see its fate decided in an arena where the specifics of fish counts and water temperatures will mean next to nothing.

``It's up to Congress,'' said Orsinger.