Tuesday, January 31, 2012
PacifiCorp is a very large, very successful corporation that is a subsidiary of MidAmerican Energy Holdings Company, itself a subsidiary of Warren Buffett’s Berkshire Hathaway Inc. holding company, and which operates power generation facilities on behalf of 1.7 million customers in six western states, including Washington and Oregon. In 2010, PacifiCorp reported net income of $566 million. In the Pacific Northwest, for many, many years its shareholders and ratepayers have profited and benefitted from the cheap hydro power produced by its dams on a number of major and minor rivers.
In recent years PacifiCorp removed its Powerdale Dam from the Hood River. It now is in the process of completing the decommissioning of its Condit Hydroelectric Project on the lower White Salmon River. The area formerly known as Northwestern Lake is now an environment undergoing constant change. Supporters of a free White Salmon River rejoiced on Oct. 26, 2011, when PacifiCorp blew a hole in the dam that finally freed the river after years of delay. However, the environment in the upper reservoir — the natural and the developed — began changing in August when PacifiCorp lowered the level of the reservoir behind the dam. The breaching of the dam accelerated the changing of the environment. Soon people were reporting a drop in the static level of the groundwater replenishing their wells. Others lost their wells altogether. Everybody — affected residents, regulators and PacifiCorp officials — agrees these events are directly attributable to the breaching of Condit Dam. PacifiCorp, which holds to the line that, as senior water rights holder on that part of the river, it has no liability for its actions. Late last year, though, PacifiCorp decided to be neighborly and offer those impacted a cost-share deal that would cover up to $5,500 of the cost of deepening a well, drilling a new well or hooking up to a public water source. In exchange for the financial aid, PacifiCorp wanted a guarantee from the recipient that it would hold the company harmless for any further damages that might arise as a result of the breaching of Condit Dam. Some folks have taken advantage of PacifiCorp’s offer, but others are holding out — and rightfully so. They shouldn’t be expected to sign away their legal rights, but especially not for such a paltry offer that some have referred to as “adding insult to injury.”
It appears to this impartial observer that the people running PacifiCorp have decided to follow the playbook for dealing with public relations disasters in the aftermath of a man-made disaster that BP tried out on the Gulf Coast after its Deepwater Horizon oil rig in the Gulf of Mexico blew out and caused the biggest, most costly oil spill in U.S. history. It didn’t work for BP then, and it ain’t working for PacifiCorp now. And only those kidding themselves don’t recognize this as a full-on human relations disaster that isn’t going to go away until PacifiCorp’s executives give this matter serious attention. It’s too bad one of them didn’t attend last Wednesday’s community meeting at the Pioneer Center to hear first-hand the frustration and hardship residents around the former lake have experienced because of PacifiCorp’s mishandling of this aspect of its mitigation program. The people running PacifiCorp aren’t idiots, but the way they’ve responded to this ongoing travesty sure makes them look like idiots. Nobody knows what it would cost PacifiCorp to cover 100 percent of the damages its dam breaching caused. But that’s because PacifiCorp hasn’t made the effort to find out.
After every significant disaster an assessment typically is made of the damages incurred to figure out what it’s going to cost to replace or repair damaged items. What’s troublesome here is that these impacts were foreseen. A mitigation plan could have been developed before the breaching of the dam. A truly responsible corporation would have done this through outreach to those it knew would be impacted and to those who suspected they might suffer adverse consequences. PacifiCorp has been afraid to go farther than it has in terms of offering compensation because it doesn’t want to set a costly precedent. Apparently it would rather be seen as a heartless corporation more interested in hiding behind its overblown concern for its ratepayers and shareholders. What rubbish. These damages caused by PacifiCorp exercising its senior water rights — blowing a hole in the dam and releasing the river after nearly a century of captivity — are costs of doing business in the matter of decommissioning Condit Dam. Somewhere in a $32-$35 million project budget there is money to fully compensate the folks PacifiCorp has injured. PacifiCorp’s executives should take immediate steps to set up a true public outreach and mitigation program, put boots on the ground to talk to people and assess the extent of the damage, then open up the checkbook and start writing checks for whatever the costs may be. It worked for BP after it figured out stonewalling wasn’t going to work, and it’ll definitely work for PacifiCorp, which could use some good PR right now. SB