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Settlement Success Stories The Lewis River Relicensing Settlement Holly Harwood, Director of Licensing and Implementation The Mighty Columbia Conference November 15, 2005 Slide 2 One of the lowest-cost electricity producers in the United States Providing more than 1.6 million customers with reliable, efficient energy The company works to meet growing energy demand while protecting and enhancing the environment More than 8,400 megawatts of generation capacity from coal, hydro, renewable wind power, gas-fired combustion turbines and geothermal Operates as Pacific Power in Oregon, Washington, Wyoming and California; and as Utah Power in Utah and Idaho Became subsidiary of Scottish Power in 1999 Sale to Mid-America Energy Holdings Company pending Slide 3 Hydro portfolio 1100 megawatts, 51 facilities located in six states 18 individual FERC licenses Nine projects through relicensing process in last 10 years, some with multiple licenses Four settlements resulting in three licenses and one surrender order Three settlements awaiting FERC action Two ongoing license processes Seven out of Nine Settlements Slide 4 Merwin, Yale & Swift No. 1 510 MW -Owned by PacifiCorp Swift No. 2 70 MW Owned by Cowlitz County PUD All four projects are operated in a coordinated fashion All are high head projects with no fish passage facilities Each project licensed separately, but consolidated into a single, collaborative relicensing process Lewis River Projectoverview Slide 5 Completed in 1932, 314 feet (96m) tall concrete dam, Reservoir: 4,000 acres 14.5 miles long 263,000 ac-ft. of storage Lewis River Project overview overview Merwin Slide 6 Lewis River Project overview overview Yale Completed in 1953, 323 feet tall concrete dam, Reservoir: 3,800 acres, 10.5 miles long, 190,000 ac-ft of storage Slide 7 Lewis River Project overview overview Swift No. 1 Completed in 1958 512 feet tall earthen dam, Reservoir: 4,680 acres 11.5 miles long, 447,000ac-ft of storage Slide 8 Lewis River Project overview overview Swift No. 2 Completed in 1958 3.2 mile (5.2 km) earthen power canal connects to Swift No. 1 tail race Cowlitz County Public Utility Districts Project Slide 9 So why settle? Slide 10 Hydro Licensing Federal Power Act requires FERC to balance power and non-power issues Other federal and state agencies can place mandatory conditions in licenses: Processoverview Federal fish agencies prescribe fishways Federal agencies prescribe measures if project area includes reservation lands 401 Certification by the state Slide 11 Other laws and agency policies come into play Non-agency stakeholders have influence Conflicting demands and mandates that make finding solutions difficult Over time the role of Agency conditioning authority has and eroded FERCs role as arbiter Hydro Licensing Processoverview Slide 12 So how are settlements even possible in that environment? If agencies hold all the cards, why would they want to settle? If agencies hold all the cards, why would they want to settle? If licensees are powerless, then arent settlement negotiations pointless?If licensees are powerless, then arent settlement negotiations pointless? Slide 13 Lewis River Settlement A Success story? Key Issues for Settlement Reintroduction of Anadromous fish above Merwin Fish passage methods Flows in by-passed reach Our Key Interests Operational flexibility Cost effectiveness / Prudent / Total cost to implement Certainty re: obligations, feasible timing of capital Slide 14 More than 20 parties Lewis River Settlement A Success story? Negotiations began in March 2002 Neutral mediation team hired Our Fearless Mediation Team Slide 15 Lewis River Settlement A Success story? Established ground rules, Trained everyone in interest based negotiations Declared interests, not positions Slide 16 Lewis River Settlement A Success story? Negotiations proceeded by resource area: Recreation measures / Park Fees Terrestrial Flood Management Cultural / Socioeconomic As measures were agreed, referred to legal group to draft often where the real work began! Slide 17 Lewis River Settlement A Success story? Established momentum but, L eft the hardest for last! Aquatics Everyone wants to rely on good science to make decisions. Not always common agreement on what that is! Parties dont trust each other! Studies / Reports were not complete Slide 18 Thousands of man hours by all parties! Over two years of intense negotiations. Some anger, some frustration, some laughter too! Creative solutions just when you lose hope! Slide 19 November 30, 2004 Settlement Agreement is Signed by 26 Parties! Lewis River Settlement A Success story? Slide 20 For Outdoor Recreation Lewis River Citizen at-Large Washington Department of Fish and Wildlife Settlement Parties 26 Diverse Parties! National Park Service Yakama Nation Chamber of Commerce Lewis River Community Council Cowlitz Indian Tribe US Dept. of Interior Bureau of Land Management Cowlitz-Skamania Fire District No. 7 Lower Columbia Fish Recovery Board Slide 21 Lewis River Settlement A Success story? Key Issues for Settlement Reintroduction of Anadromous fish above Merwin Fish passage methods Flows in by-passed reach Our Key Interests Operational flexibility Cost effectiveness / Prudent / Total cost to implement Certainty re: obligations, feasible timing of capital Slide 22 Lewis River Settlement A Success story? Long-term Outcome Goal: Genetically viable, self-sustaining, naturally reproducing, harvestable populations above Merwin dam Slide 23 Lewis River Settlement A Success story? Staged approach to reintroduction /fish passage Hatchery production/ supplementation Habitat enhancement funding Water Quality Slide 24 Summary of Reintroduction MerwinMerwin YaleYale S w if t Lewis River Settlement A Success story? 4.5 years after license Merwin upstream collection (First to Swift then Yale and Merwin) Swift downstream collection to below Merwin Via Trap and Haul Adaptive Management: Adjustments and modifications to fish passage facilities if aggressive performance standards are not met Slide 25 Summary of Reintroduction MerwinMerwin YaleYale S w if t Lewis River Settlement A Success story? 13 years after license Yale downstream collection to below Merwin Via Trap and Haul Adaptive Management: Review of new information regarding reintroduction at Yale $10 million in-lieu fund if decision made not to reintroduce to Yale Slide 26 Summary of Reintroduction MerwinMerwin YaleYale S w if t Lewis River Settlement A Success story? Adaptive Management: Conversion to trams for upstream transport Review of new information / In-Lieu Funding - $20 million 17 years after license Full upstream collection to all reservoirs Full downstream collection to below Merwin Slide 27 Flows in the by-passed reach Set aside minimum quantity of water for flows Adaptive management to determine distribution of water by month and location Constructed channel to optimize biological value of flows Lewis River Settlement A Success story? Slide 28 Better solutions than agencies have authority to mandate Problem solving leads to innovative approaches Adaptive management possible Avoids contentious and costly litigation Better certainty of outcome (for both the utility and the resources) Hydro Licensing Benefits of settlements Slide 29 Accelerates on the ground mitigation and enhancement projects Developed important relationships spirit of collaboration Benefits customers by keeping costs lower Provides more predictability re: timing of capital investment Hydro Licensing Benefits of settlements Slide 30 Implementation of some measures underway Consultation and planning underway for other measures Spirit of collaboration continues License application in process with FERC Lewis River Settlement A Success story? Slide 31 Lewis River Settlement A Success story? We firmly believe the SA will prove very successful For PacifiCorp and its customers For the natural resources effected by the project For the people who live and play in the project area Good things are happening in the basin NOW! Our customers continue to benefit from low cost power and system flexibility for next 50 years YES! A Success story?