Wednesday, February 13, 2002
Reading over some of the correspondence between the Klickitat Public Utility District and Dublin, Calif.-based Calpine Corp. (see story on Page 1) raises a lot of troubling questions.
It seems pretty clear that the contract between the primary players in the construction of the Goldendale Energy Center did not effectively nail down some key details. What jumps out from the letters is that PUD officials and Calpine officials are trying to pass off responsibility for securing the easement across Goldendale Aluminum Co. property for the needed transmission line.
Each side is saying, in effect, `this is your responsibility, and if you don't get it done, you lose.' The letters are almost comical, as each side uses legalisms to try to protect their backsides.
It would be a good joke if millions of dollars -- including PUD ratepayer money -- weren't potentially on the line.
It doesn't help to find out that the Enron collapse is at least indirectly related to the situation with the project in Goldendale: NEPCO, the general contractor building the plant, was an Enron subsidiary. Following the Enron catastrophe, NEPCO saw its contract to build the Goldendale Energy plant terminated, with Calpine taking over management of the project. But far from being reassuring, that only hints that there was a serious problem with the Enron connection.
Another question: Did the PUD let itself get talked into signing an agreement that left issues unresolved?
On July 27, 2001, a memo from Brian Skeahan, general manager of the Klickitat Public Utility District, indicated that two major issues were not finalized. The outstanding issues were these: 1) Acquisition of the transmission line easement across property belonging to the Goldendale Aluminum Co. was not completed; and 2) Concluding an agreement for modifications at the end point that would allow interconnection of the transmission line from the Goldendale Energy Plant to the Bonneville Power Administration transmission system was not concluded.
The memo puts it in black and white, and it's not a pleasant story: "On July 24, 2001, Mr. Robert Moore of Calpine asked KPUD to proceed with construction and award bids for procurement of materials and construction services, notwithstanding two unresolved issues."
In the PUD's defense, remember the climate at the time. The so-called "energy crisis" was in full bloom in summer 2001, and utilities and energy firms were scrambling to swiftly build new generating facilities. Many environmental and bureaucratic regulations were at least temporarily suspended to allow fast-tracking of energy projects.
Remember also the general feeling in the county at the time, which was something akin to this: This plant is needed to protect jobs at the aluminum plant and elsewhere. The whole economy is at risk, and everyone is depending on this plant getting built ASAP, so anyone who gets in the way of the project is a threat to all of our livelihoods.
It was an emotional atmosphere, frankly, and that makes it more difficult for people to think pragmatically. Maybe the PUD got caught up in that. That's no excuse for the PUD, however. They have to stay above the fray and maintain absolute fiscal responsibility. But this is the kind of thing that happens when everyone gets in a rush.
Right now, there is little but uncertainty surrounding the project. Will it be completed? Despite assurances from Calpine officials, no one can really be sure. Will the PUD get stuck with a horribly huge cost that it needs to pay off? Will the PUD be allowed to condemn Goldendale Aluminum Co. property to put up the transmission line? Will the aluminum plant jobs return, with or without the new facility?
Like the project itself, we'll just have to wait and see what happens. But it'll sure be too bad if the courts and lawyers have to get involved in deciding the outcome.