Klamath Basin Settlement Agreements

Congressional research reportOct 1, 2015

Ask Donna

What actually matters in this document.

Text

name redacted

Specialist in Natural Resources Policy

name redacted

Analyst in Natural Resources Policy

name redacted

Specialist in Natural Resources Policy

name redacted

Legislative Attorney

October 1, 2015

Congressional Research Service

7-....

www.crs.gov

R42158

Klamath Basin Settlement Agreements

Summary

The Klamath River Basin on the California-Oregon border is a focal point for local and national

discussions on water allocation and species protection. Previously, water and species management

issues have exacerbated competition and generated conflict among several interests—farmers;

Indian tribes; commercial and sport fishermen; federal water project and wildlife refuge

managers; environmental groups; hydropower facility operators; and state, local, and tribal

governments. Drought conditions and a call for water by senior water rights holders in 2013 have

again brought these issues to the forefront.

In 2010, the Secretary of the Interior and the governors of Oregon and California, along with

multiple interest groups, announced the results of a multiyear negotiation process to resolve longstanding issues in the basin: two interrelated agreements, supported by the federal government

and signed by the two states and numerous other parties. These agreements, known as the

Klamath Basin Restoration Agreement (KBRA) and the Klamath Hydroelectric Settlement

Agreement (KHSA), together aim to provide for water deliveries to irrigators and wildlife

refuges, fish habitat restoration, and numerous other related actions. Generally, the KBRA

provides for actions intended to restore Klamath fisheries and for assurances for water deliveries

to wildlife refuges and federal project irrigators under certain circumstances, among other things.

The KHSA lays out a process that could lead to the removal of four privately owned dams on the

Klamath River. This dam removal would be one of the largest and most complex projects of its

kind ever undertaken.

Some parts of the Klamath agreements are being carried out under existing authorities. Studies to

inform a determination on dam removal under the KHSA by the Secretary of the Interior are

complete, and some restoration actions have been initiated. However, congressional authorization

is required for the most significant components of the agreements to be implemented.

The KBRA and KHSA did not address all outstanding issues in the basin. A water rights

adjudication by the state of Oregon (in progress since the 1970s) is ongoing. In 2013, the

adjudication reaffirmed “time immemorial” tribal water rights in the upper part of the Klamath

Basin, confirming that tribal water rights are senior to those of other water rights holders. This

resulted in a “call” on water rights (i.e., notice by senior water rights holders that their demands

exceed available flows), and led to reductions to water supplies for some junior users during the

low water year of 2013. To resolve these issues and prevent such a scenario from occurring again,

a separate settlement agreement (the Upper Klamath Basin Settlement Agreement) was negotiated

by stakeholders and finalized in April 2014. To be implemented, the agreement would need to be

authorized along with the KBRA and KHSA.

The KBRA and KHSA were originally set to expire in 2012 if no authorizing legislation was

enacted, but they have since been extended (most recently through 2015). Parties may also

withdraw individually from the agreements, and several parties initiated this process of

withdrawal.

In the 114th Congress, S. 133 would authorize the Klamath agreements, including a suite of new

federal actions that have received support from disparate parties and are required for the

agreements to be implemented. Previous legislation in the 113th Congress (S. 2379) was ordered

to be reported out of the Senate Committee on Energy and Natural Resources on November 13,

2014.

Congressional Research Service

Klamath Basin Settlement Agreements

Contents

Introduction ..................................................................................................................................... 1

Background ..................................................................................................................................... 2

Previous Events ............................................................................................................................... 3

Klamath Settlement Agreements ..................................................................................................... 5

Klamath Basin Restoration Agreement ..................................................................................... 5

Klamath Hydroelectric Settlement Agreement ......................................................................... 7

Upper Klamath Basin Settlement Agreement ........................................................................... 7

Congressional Action ...................................................................................................................... 8

Issues for Congress .......................................................................................................................... 9

Role of the Federal Government ............................................................................................... 9

Cost of Implementation ........................................................................................................... 10

Dam Removal.......................................................................................................................... 13

Implementation of ESA........................................................................................................... 14

Stakeholder Views ......................................................................................................................... 14

Support for Agreements .......................................................................................................... 15

Opposition to Agreements ....................................................................................................... 16

Figures

Figure 1. Klamath River Basin ........................................................................................................ 2

Tables

Table 1. Water Allocations in the Klamath Basin Restoration Agreement (KBRA) ....................... 6

Table 2. Comparison of Estimated Costs to Implement the KBRA ............................................... 11

Contacts

Author Contact Information .......................................................................................................... 18

Congressional Research Service

Klamath Basin Settlement Agreements

Introduction

The Klamath River Basin, a region along the California-Oregon border, has been a focal point for

local and national discussions on water resources and species management. Water management

issues were brought to the forefront when severe drought conditions in 2001 exacerbated

competition for scarce water resources and generated conflict among several interests—farmers;

fishermen (commercial and sport); other recreationists; federal wildlife refuge managers;

environmental organizations; and state, local, and tribal governments. Subsequent problems with

Klamath Basin fisheries, in particular events in 2002 and 2006 (see “Previous Events,” below),

and conflict over the relicensing of the Klamath Hydropower Project, exacerbated these conflicts.

Low water conditions and a call for water by senior water rights holders in 2013 have again

brought these issues to the forefront.

Congress has oversight authority over federal activities in the Klamath Basin related to operation

of the Bureau of Reclamation’s (Reclamation’s) Klamath Project; management of federal lands

(including six national wildlife refuges, managed by the Fish and Wildlife Service); and

implementation of Endangered Species Act (ESA; P.L. 93-205) and other federal laws.1

Previously, Congress has held hearings and appropriated funding to address issues in the Klamath

Basin. Past congressional debate has generally focused on the ESA’s role in water management,

the operation of the Klamath Project, and other topics, such as supplemental support for parties

impacted by federal policies.

The Klamath Basin Restoration Agreement (KBRA) and the Klamath Hydroelectric Settlement

(KHSA), collectively referred to as the Klamath agreements in this report, were signed in 2010 by

a wide array of basin interests (although not all basin interests support the agreements). They aim

to address many of the ongoing conflicts in the Klamath Basin. The KBRA would, among other

things, set limits for water allocations for irrigators and wildlife refuges under a range of

conditions related to the amount of water forecast in a given year; attempt to make available

supplemental water and power supplies in the basin; and provide for restoration and monitoring

of certain fish species. It also includes other assurances to settle ongoing water conflicts between

basin tribes and other entities, although it would not settle all ongoing conflicts in the basin. The

KHSA lays out a process that could lead to removal of four nonfederal hydroelectric dams

currently owned and operated by a private entity, PacifiCorp. If carried out as envisioned, the

project would be one of the largest, most complex dam removals in history. Under the KHSA, the

Secretary of the Interior led a study process to determine whether removal of these dams is in the

public interest. Most of this study process has been completed, but the final step—a determination

by the Secretary—would require congressional authorization.

Although the Klamath agreements require congressional authorization to move forward on key

components, some activities under existing authorities have already been undertaken.

Consideration of the agreements could result in Congress revisiting previous issues in the

Klamath Basin, as well as considering new ones. This report focuses on congressional

consideration of the Klamath agreements. It assumes some familiarity with the basin on the part

of the reader.2

Two freshwater species (Lost River and shortnose suckers) and one anadromous species (Coho salmon) are listed as

endangered under the federal Endangered Species Act (ESA; P.L. 93-205).

For detailed background about the basin, see CRS Report R42157, Klamath River Basin: Background and Issues,

coordinated by (name redacted) .

Congressional Research Service

Klamath Basin Settlement Agreements

Figure 1. Klamath River Basin

Source: Bureau of Reclamation, adapted by the Congressional Research Service (CRS).

Background

The Klamath River Basin is a largely sparsely populated area on the Oregon and California

border with limited water resources (see Figure 1). Irrigated agriculture in the upper basin relies

in large part on water provided by the Bureau of Reclamation’s Klamath Project. Other farmers

and ranchers (known as off-project irrigators) also rely on basin water supplies for irrigation. The

area is home to six national wildlife refuges that rely on the same water supplies to sustain

migratory bird populations and several Native American tribes that were historically dependent

on lower and upper basin fish species. Two species of upper basin fish are currently listed as

endangered under the ESA (the Lost River and shortnose sucker), and one species of lower basin

fish is listed as threatened under the ESA (coho salmon, an anadromous fish).

Congressional Research Service

Klamath Basin Settlement Agreements

The basin also includes seven dams on the Klamath River and its tributaries, built between 1918

and 1962. Six of these dams are owned by PacifiCorp, a private company, and are known

collectively as the Klamath Hydroelectric Project (KHP). Historically, all but one of the dams

produced hydroelectric power for the basin, including low-cost power for Klamath Project

irrigators.3 The original Federal Energy Regulatory Commission (FERC) license to operate the

KHP expired in 2006, and PacifiCorp applied for relicensing of the project in 2004. To date, a

new long-term license has not been granted because of the lack of state certification under

Section 401 of the Clean Water Act (P.L. 92-500), as well as ongoing uncertainty related to fish

passage upgrades and the status of the Klamath agreements, discussed below. In the absence of a

new FERC license, the project continues to operate under a temporary annual license with the

same conditions of the expired FERC license.

Previous Events

While water and species management issues have been prevalent throughout the history of the

Klamath Project, recent congressional consideration related to Klamath Basin usually centers on

one or more of three seminal events that occurred in 2001, 2002, and 2006. These events resulted

in press coverage, legal conflicts, and studies that framed the negotiations and agreements

currently at issue. More recently, in the summer of 2013, a call on water rights under the newly

released Oregon water rights adjudication resulted in limitations on water deliveries for junior

water rights holders in the upper part of the basin.

Several events have put the Klamath region in the national spotlight. In 2001, as a result of

previous biological opinions by the federal Fish and Wildlife Service (FWS) and the National

Marine Fisheries Service (NMFS), the Bureau of Reclamation severely curtailed water deliveries

to the Klamath Project to provide more water for endangered fish in the basin and to prevent their

extinction.4 These allocations were met with protests by area irrigators, who threatened to open

irrigation head gates by force.5 Later, in 2002, irrigators received more water than had been

allocated in 2001, but thousands of fish (mainly Chinook salmon) died on the lower part of the

Klamath River, largely due to poor water conditions and fish health in that part of the basin. In

2006, the National Oceanic and Atmospheric Administration severely restricted ocean fishing for

salmon in the region due to low numbers of naturally spawning adults (due in part to residual

effects of the aforementioned 2002 event). This restriction resulted in a large decrease in that

year’s commercial and recreational salmon catch compared to previous years.

The federal government provided emergency funding in response to these and other events in the

Klamath Basin. The funding included at least $170 million in addition to regular programmatic

expenditures over the last decade. For instance, for the 2001 and 2006 events, the federal

government provided approximately $35 million and $60 million in emergency aid, respectively.6

Power costs for pumping are significant for area irrigators, who rely on the KHP for power. (Unlike other

Reclamation projects, there is no power component to the Klamath Project.) The low-cost rates for Klamath irrigators

expired with the original 50-year term of the project’s FERC license in 2006 and have thus increased.

Although Klamath Project irrigators have continued to face uncertainty since the 2001 curtailment, there has not been

another curtailment of water deliveries.

Due to changed water conditions and other supplemental measures, irrigators received partial water deliveries later

that year, however, near the end of the growing season.

Figures for 2001 are based on 2002 estimates by Oregon State University. See William S. Braunworth, Jr., Teresa

Welch, and Ron Hathaway, et al., Water Allocation in the Klamath Reclamation Project, 2001, Oregon State University

Agricultural Extension Service, Special Report 1037, 2002, p. 267, at http://extension.oregonstate.edu/catalog/html/sr/

sr1037-e/. This includes approximately $20 million in aid that was provided from USDA under the Supplemental

(continued...)

Congressional Research Service

Klamath Basin Settlement Agreements

Aid in addition to regular agency programs and appropriations was also provided in other years.

Between 2002 and 2007, Reclamation spent $14 million on a pilot water bank to alleviate water

shortages.7 Due to drought events in 2010, an additional $10 million in supplemental

appropriations was provided to the Klamath Basin in that year and $2 million was provided for a

Klamath Drought Initiative by the U.S. Department of Agriculture (USDA).8 The 2002 farm bill

provided $50 million to the Klamath Basin, and USDA funding was also provided under other

general authorities and programs authorized in the 2002 and 2008 farm bills.9

Klamath Water Rights Adjudication

Questions related to the quantification of tribal water rights are interconnected with the determination of water

rights in the Klamath Basin. The Klamath Basin is over-allocated, meaning claims to water exceed the amount available

in most years. This situation often leads to legal conflicts over the proper allocation of limited resources. Allocation of

water resources is largely determined by state law but may be affected by federal laws and activities. Western states

generally follow a system of prior appropriation under which certain quantities of water are allocated to water users

depending on the users’ relative seniority in acquiring water rights. State appropriative rights can be complicated by

federal water rights, such as those of tribes claiming water rights reserved by the creation of a tribal reservation. In

addition to tribal reserved water rights, other federal rights, such as those associated with federal land reservations

such as national forests and national wildlife refuges, also may not be quantified. The uncertainties resulting from the

lack of quantification of these rights have led to ongoing legal disputes within the Klamath Basin.

Oregon undertook a general adjudication of water rights in the Oregon portion of the Klamath Basin (known as the

Klamath Basin Adjudication, or KBA) to address these disputes. The KBA began in the mid-1970s to determine water

rights among various users in the basin. The general process of the adjudication is as follows: parties with claims or

contests must file with the Oregon Water Resources Department (OWRD); an administrative panel then hears the

contests and issues proposed orders based on the hearing; and the OWRD reviews the proposed orders and issues

its final findings and order, which is filed with a state court. The OWRD’s final findings and order were filed with the

state court in March 2013. The order generally upheld previous claims and determined that the most senior claims in

the basin are held by the United States in trust for the Klamath Tribes and carry a priority date of “time immemorial.”

Even with the conclusion of the administrative adjudication, parties that are dissatisfied with the outcome may pursue

judicial appeals. For example, following the OWRD’s final determinations, parties may file “exceptions to the

Determination” with the state court. Following the state trial court’s decision, litigants may appeal through the state’s

court of appeals, state supreme court, and possibly the U.S. Supreme Court. Thus, although the KBA has been

completed and announced, appeals could prolong the disputes over the allocation of the Klamath Basin’s water

resources. In the meantime, some parties are able to make “calls” on water rights that were determined under the

adjudication. During the summer of 2013, the Klamath Tribes and Reclamation made a call on basin water rights for

the first time under the adjudication.

Sources: Or. Rev. Stat. 539.010 et seq., United States v. Braren, 338 F.3d at 973-74. All documents related to the

adjudication are available at http://www.oregon.gov/owrd/Pages/adj/index.aspx.

In addition to these events, an Oregon state water rights adjudication in the basin that was first

initiated in the 1970s received added attention in 2013 (See box above, “Klamath Water Rights

(...continued)

Appropriations Act, 2001 (P.L. 107-20), $2.2 million provided from the Bureau of Reclamation for payments to

farmers for groundwater, and an additional $13 million in USDA funding provided under other emergency authorities,

including crop insurance. For the 2006 fishery disaster declaration, the full funding amount was provided through the

Commerce Department under the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability

Appropriations Act, 2007 (P.L. 110-28).

Personal correspondence, Bureau of Reclamation, June 6, 2012.

The 2010 funding was provided to Reclamation under the Supplemental Appropriations Act, 2010 (P.L. 111-212). For

more information on the USDA funding, see http://www.or.nrcs.usda.gov/programs/klamath/index.html.

$50 million to aid water conservation efforts in the Klamath Basin was provided in the 2002 farm bill (P.L. 107-171).

Additionally, funding under general authorities was provided under both the 2002 farm bill and the 2008 farm bill (P.L.

110-246), although exact amounts are not available.

Congressional Research Service

Klamath Basin Settlement Agreements

Adjudication”). At the conclusion of the adjudication’s administrative phase, the state of Oregon

upheld a number of previous water rights claims including, among other things, that the Klamath

Tribes have water rights with a date of “time immemorial.” These water rights are now protected

under Oregon law and were exercised over junior water rights holders in the basin for the first

time in the summer of 2013. The 2013 “call” on water rights (in which senior water rights holders

gave notice that their demands exceeded available flows) limited or shut off water deliveries to

some junior water rights holders (for the most part, off-project irrigators) in the upper basin.10

Klamath Settlement Agreements

In response to conflicts and other issues in the Klamath Basin, the federal government facilitated

talks among multiple groups between 2002 and 2010, including formal negotiations to reach two

major settlement agreements between 2006 and 2010.11 Participants in negotiations included state

governments, tribes, counties, irrigators, fishermen, conservation groups, and hydropower facility

owners and users. The goal of the negotiations was a long-term solution to the multiple water and

endangered species issues in the Klamath Basin, including the aforementioned issues associated

with irrigation deliveries and flows for fish, as well as potential issues associated with pending

water rights adjudications and relicensing of the basin’s hydroelectric dams. The two agreements

that resulted from the negotiations, the KBRA and the KHSA, are officially linked in that

signatories see them as complementary and do not support authorization of one agreement

without the other.12 Originally, both agreements were set to expire without congressional

authorization by 2012, but this deadline has been extended to 2014. In response to concerns and

outstanding issues in the upper basin, in 2013 a task force was convened to incorporate additional

issues not addressed by the KBRA and KHSA. Among other things, it resulted in an additional

settlement agreement in late 2013, the “Upper Klamath Basin Settlement Agreement,” discussed

below.

Klamath Basin Restoration Agreement

The KBRA was negotiated by stakeholders and other groups in the Klamath Basin. It was agreed

to by more than 40 signatories, or parties, although not all interests in the basin support it.

Broadly speaking, under certain conditions, parties to the KBRA promise to support diversions

for Klamath Project irrigators and federal wildlife refuges that correlate to a given year’s forecast

inflows into Upper Klamath Lake. Water that is surplus to these inflows and not subject to other

valid water rights (e.g., off-project diversions) would be allocated to other uses, including

instream flows (see Table 1 for an abbreviated summary of this arrangement). In exchange for

this support, environmental interests would gain additional federal and state funding for fisheries

restoration, some of the aforementioned surplus water supplies, and related assurances for dam

removal under the KHSA (which is expected to restore fisheries). Parties have also agreed that the

ESA will not be amended under the agreement. For their part, three of the four largest tribes in the

basin agreed to support the project and refuge diversions and not make a call on certain water

In contrast to the events of 2001, Klamath Project irrigators faced minimal curtailments to their irrigation supplies

resulting from the water rights call.

Although negotiations occurred throughout the early 2000s, many trace the current agreements to a series of

administrative hearings in 2006 related to the relicensing of the Klamath Hydroelectric Project under the Federal Power

Act (16 U.S.C. §797(e)).

The agreements, as well as other documents related to the Klamath restoration process, are available at

http://klamathrestoration.gov/.

Congressional Research Service

Klamath Basin Settlement Agreements

rights in exchange for the aforementioned restoration actions, federal actions to restore fisheries,

and economic aid.

Table 1. Water Allocations in the Klamath Basin Restoration Agreement (KBRA)

Water Forecasta

(in acre-feet of water)

Dry Yearb

Average Yearc

Wet Yeard

Klamath Reclamation

Project

March-Oct.: 340,000

Nov.-Feb.: 45,000

March-Oct. (formulabased): 340,000-385,000

Nov.-Feb.: 45,000

March-Oct.: 385,000

Nov.-Feb.: 45,000

Wildlife Refugee

March-Oct.: 48,000

Nov.-Feb.: 35,000

March-Oct. (formulabased): 48,000-60,000

Nov.-Feb.: 35,000

March-Oct.: 60,000

Nov.-Feb.: 35,000

Environmental/Otherf

Source: Klamath Basin Restoration Agreement, Appendix E-1, p. E-26.

Notes: Units in acre-feet (a/f). Columns indicate the water allocation under a given forecast scenario. Rows

indicate the diversion reserved for a specific location.

a. Forecast references the March 1 Natural Resources Conservation Service Forecast for Net Inflow into

Upper Klamath Lake for the period April 1-September 30.

b. Dry indicates inflows less than 287,000 a/f. Section 19.2.2.B.v of the KBRA provides that if an extreme

drought is declared by the Oregon Water Resources Department and voluntary water conservation

measures triggered under the KBRA are insufficient, diversions may be reduced below the levels specified in

the KBRA.

Medium indicates forecast inflows ranging from 287,000 a/f to 569,000 a/f.

High indicates forecast inflows of more than 569,000 a/f.

e. The wildlife refuge allocation is expected to provide for unmet refuge demand in Lower Klamath National

Wildlife Refuge. Other diversions to wildlife refuges that are provided pursuant to existing laws and

contracts would continue to be provided for out of the Reclamation Project allocation.

Additional allocations (including environmental flows for fish) are assumed in the KBRA but not provided

with a specific diversion limit or guarantee; thus, they are not displayed here.

The exact projections of the effects of the KBRA allocations on various water users are subject to

debate. However, compared to recent water years, the allocations are generally expected to result

in less water for Klamath Project irrigators in wet years but more certainty—and potentially

greater allocations than may have been the case otherwise—in dry years. Under the agreement,

area irrigators are also promised funding to develop low-cost power to replace hydropower

previously provided by the PacifiCorp dams, as well as funding to potentially make available

more water supplies through means yet to be determined.13 Irrigators who did not initially agree

to the KBRA, including some off-project irrigators in the upper basin, were not subject to the

KBRA’s assurances as they relate to tribal water rights. However, these irrigators have

subsequently come to an agreement with the Klamath tribes that may prevent future curtailment

of deliveries in exchange for promised retirement of some water rights and support for the KBRA

and KHSA.14

This may include, but not be limited to, lease or purchase of water.

See below section, “Upper Klamath Basin Settlement Agreement.”

Congressional Research Service

Klamath Basin Settlement Agreements

The federal government is not party to the KBRA until Congress enacts authorizing legislation.

Some of the actions envisioned by the KBRA have been interpreted as not being authorized and

would require significant federal appropriations to go forward. Initial estimates stated that total

federal costs to implement the Klamath agreements would be $798.5 million or $536 million over

15 years (depending on the assumptions used). A 2013 revision to these figures clarified that the

“new” appropriations needing to be authorized to implement the agreements would total

approximately $250 million over 15 years.15

Klamath Hydroelectric Settlement Agreement

The KHSA initiates a process that could lead to removal of four nonfederal hydroelectric dams

(J.C. Boyle, Iron Gate, Copco 1, and Copco 2) currently owned and operated by a private entity,

PacifiCorp. The agreement also provides related assurances. Most significantly, the KHSA lays

out a process for additional studies and environmental review by the Secretary of the Interior to

consider removal of the dams (known as the Secretarial Determination). Under the agreement,

the facilities’ removal would be paid for by ratepayers in California and Oregon ($200 million)

and an assumed California Water Bond ($250 million). The entity responsible for removal

(known as the Dam Removal Entity, or DRE) has yet to be defined.16 The KHSA also addresses

the interim operation of the dams as well as proceedings that could lead to transfer,

decommissioning and removal of the dams. The KHSA would transfer one dam (Keno Dam) to

the Bureau of Reclamation, and it would initiate a process to decommission other resources

associated with the project.

In contrast to the KBRA, the federal government was party to the KHSA. Reclamation has

interpreted some actions within the KHSA as not requiring an explicit authorization by Congress

(i.e., as being authorized under existing, more general, authorities), and these actions have been

completed. The central component of the KHSA, the dam removal study, was conducted under

Reclamation’s general authorities and finalized in October 2012.17 The Department of the Interior

(DOI) and most parties agree that congressional authorization is necessary to make a final

Secretarial Determination on dam removal and to move forward with that project.18 The

Secretarial Determination was originally expected by March 2012. However, since no authorizing

legislation has been enacted, the deadline (which was not binding) has passed.

Upper Klamath Basin Settlement Agreement

In July 2013, members of the Oregon congressional delegation requested that a separate task

force, the Klamath Basin Task Force, be convened to discuss several outstanding issues not

addressed in the Klamath agreements. These issues included (1) water rights conflicts in the

See below section, “Cost of Implementation.”

Recommendation of a Dam Removal Entity, or DRE, would be a part of the final Secretarial Determination, which

requires congressional authorization.

The dam removal study process included 50 different science, engineering, technical, and economic studies. See U.S.

Department of the Interior (DOI), U.S. Department of Commerce, National Marine Fisheries Service, Klamath Dam

Removal Overview: Report for the Secretary of the Interior, October 2012, at http://klamathrestoration.gov/sites/

klamathrestoration.gov/files/2013%20Updates/Final%20SDOR%20/

0.Final%20Accessible%20SDOR%2011.8.2012.pdf.

The settlement states that a final Secretarial Determination on dam removal may not be made until federal legislation

has been enacted. See, Klamath Hydroelectric Settlement Agreement, p. 20, at http://klamathrestoration.gov/sites/

klamathrestoration.gov/files/Klamath-Agreements/Klamath-Hydroelectric-Settlement-Agreement-2-18-10signed.pdf.

Accessed May 10, 2011.

Congressional Research Service

Klamath Basin Settlement Agreements

upper basin that were not addressed in the KBRA and that led to decreased irrigation deliveries in

summer 2013 (see above section, “Previous Events”);19 (2) power issues among both Klamath

Project and off-project irrigators; and (3) the perceived need to reduce the overall cost of the

Klamath agreements.

The task force released its report on December 3, 2013.20 It recommended support for authorizing

legislation with specific components in addition to the KBRA and KHSA, such as a new

settlement agreement among water rights holders in the Upper Klamath Basin (which was not

provided for in the original KBRA). It also recommended the inclusion of authority to serve offproject irrigators with the same low-cost power envisioned for Klamath Project irrigators under

the KBRA. Finally, it addressed cost concerns by recommending that any authorizing legislation

for the Klamath agreements include only new authorities and authorizations of appropriations

needed to execute the agreements at a total cost of $250 million over 15 years.21

The new settlement agreement recommended by the task force, the Upper Klamath Basin

Comprehensive Agreement (the Upper Basin Settlement) was circulated for public comments and

finalized in April 2014. It ostensibly would prevent a scenario such as the 2013 call on water

rights from occurring again in exchange for, among other things, an additional 30,000 acre-feet

per year in inflows into Upper Klamath Lake (resulting from reduced off-project agricultural uses

in the upper basin); it also would provide for certain riparian restoration actions and certain

regulatory assurances related to the ESA. In exchange, senior water rights holders have agreed to

not make a call on junior water rights similar to the one made in 2013. To be implemented, the

Upper Klamath Basin agreement would need to be ratified along with the KBRA in any future

authorizing legislation.

Congressional Action

The Klamath agreements require congressional authorization to be implemented. In the 114th

Congress, S. 133 would authorize the Klamath agreements, with certain changes. In the 113th

Congress, two bills were proposed to authorize the agreements: S. 2379 and S. 2727.22

S. 133 would provide congressional authorization of the actions described under the KBRA, the

KHSA, and the Upper Klamath Basin agreement. It would authorize approximately $250 million

in new federal activities envisioned under the KBRA and the Upper Basin Settlement for various

actions in the on-project plan.23 Some of the prominent activities from the agreements that would

be authorized (either directly or by reference) in the bill include a drought response plan, potential

water rights retirement for certain junior water rights holders, economic development payments

As stated above, the KBRA anticipated an off-project water agreement that was not included in the KBRA.

Klamath Basin Task Force, Report and Recommendations from the Klamath Basin Task Force to Senators Wyden

and Merkley, Congressman Walden, and Governor Kitzhaber, Final Review Draft, December 3, 2013, at

http://www.oregon.gov/gov/docs/KlamathBasinFinalDraftTaskForceReport2013-12-3.pdf.

This is less than previous estimates to implement the Klamath agreements and may be contingent on a number of

assumptions (see below section, “Cost of Implementation”).

The Senate Energy and Natural Resources Committee held a hearing on S. 2379 on June 3, 2014. The committee had

previously held a roundtable discussion on the Klamath agreements on June 20, 2013.

Previously, DOI determined in 2013 that 11 of the 113 line items in the KBRA require new federal authority.

Memorandum from John Bezdek, DOI, to Klamath Basin Task Force, November 20, 2013, at http://www.oregon.gov/

gov/GNRO/docs/

Exhibits%20to%20the%20Proposed%20Upper%20Klamath%20Basin%20Comprehensive%20Agreement/2013-1120%20Federal%20Authorities%20Memorandum.pdf. (Hereinafter “2013 Bezdek Memo.”)

Congressional Research Service

Klamath Basin Settlement Agreements

and activities for tribes, ecosystem restoration activities, and provision of low-cost power for

project and off-project irrigators. S. 133 would also provide congressional authorization for

certain steps under the KHSA that are important to the dam removal process moving forward. In

addition to authorization of new activities in the Klamath agreements, the bill also includes

assurances that certain preexisting rights and authorities (e.g., specific tribal claims/rights) would

not be affected.

Other significant changes to Klamath authorizing legislation have been made over time and are

included in S. 133. Among other things, the current legislation alters the proposed structure of the

dam removal arrangement so that the dam removal determination under the KHSA would be

made jointly by DOI and the states of Oregon and California (rather than being made solely by

DOI with concurrence by the states). Similar to legislation in the 113th Congress, S. 133 would

add new reporting requirements for dam removal (including a report on planned facilities removal

to be published one to two years prior to the removal of the dams) and ecosystem restoration, plus

several smaller alterations to individual provisions of the agreements. Among other things, it

would direct that dam removal costs include “reasonable compensation” for property owners

affected by dam removal and would alter the disposition of certain revenues from FWS lands in

the basin.

Issues for Congress

In considering legislation related to Klamath restoration, Congress may focus on a number of

issues, including the cost of implementing the legislation, its position on specific strategies and

actions in the two agreements versus the status quo, and the potential for future disruptions in

water supply deliveries in the basin. A brief discussion of some of these issues is provided below.

Role of the Federal Government

The role of the federal government in the Klamath Basin centers largely on operation of the

Bureau of Reclamation’s Klamath Project, management of several national wildlife refuges and

other fish and wildlife resources under the ESA, and tribal trust responsibilities.24 The federal role

has been contentious in the past and is a central question related to congressional consideration of

the Klamath agreements. Both agreements assume numerous actions by the federal government,

and, as noted earlier, a subset of these actions cannot go forward absent new congressional

authorization. In particular, the agreements envision an expanded federal role in the Klamath

Basin in regard to the dam removal process (i.e., a determination on dam removal), provision of

payments for water rights retirement, and pursuit of low-cost power for irrigators, among other

things. These actions are not currently authorized in the basin and have been proposed to alleviate

ongoing conflicts. Without authorization of these provisions, some supporters of the KBRA and

KHSA may withdraw their support for the agreements.

Supporters of the Klamath agreements argue that because of the federal government’s prominent

role in the basin, including its role in the area’s resource allocation conflicts, it has a

responsibility to help solve these issues. These groups note that federal involvement, including

operation of the Klamath Project, implementation of ESA, and management of fisheries and

federal lands, is central to conflicts in the basin. They argue that the agreements represent a

For example, in addition to its responsibilities under the federal ESA and Clean Water Act, as well as other federal

laws, DOI plays an important role in any potential call for administration of water rights under state law for project

irrigators, refuges, and the Klamath Tribes.

Congressional Research Service

Klamath Basin Settlement Agreements

consensus achieved by a majority of basin interests that are traditionally opposed to one another

and are the best opportunity to solve the region’s problems going forward. They also argue that

many of the expenses for these agreements are likely to be offset in the form of reduced future

federal expenditures for litigation and emergency financial support. Supporters also note that the

agreements will be a valuable source of jobs within the basin.25

Opponents of one or both of the agreements cite a number of reasons for their opposition. Some

note that the federal government has no clear obligation to authorize and implement the

agreements, and they contend that federal involvement in this case amounts to overreach that will

harm the local economy. These opponents have argued that the activities represented in both

agreements, such as dam removal and water quality improvements, could potentially occur

through preexisting processes and authorities.26 Some also generally oppose the removal of

operational dams and associated hydropower facilities, including those in the Klamath Basin, on

principle because of the dams’ status as an energy source. Finally, some argue against federal

authorization of the Klamath agreements because they believe that specific components of the

agreements will undermine existing federal laws (e.g., the ESA) or federal responsibilities (e.g.,

tribal trust responsibilities) or that they will fail to achieve their stated goals (e.g., fisheries

restoration).

Cost of Implementation

Some Members of Congress have expressed concerns about the cost to the federal government to

implement the agreements.27 Most have assumed that the majority of actions in the KBRA would

be federally funded, including the costs for the on-project plan, fisheries restoration, and tribal

components of the agreement. A detailed discussion of the estimated costs for the agreements (in

particular those for the KBRA) and how they have changed over time is provided below.

There have been multiple estimates of the cost to implement the Klamath agreements, and in

some cases these have contradicted one another or employed differing assumptions. The original

2010 KBRA estimated $970 million (in 2007 dollars) for the total cost to implement the KBRA

over a 10-year window. Most of these costs were assumed to be incurred by the federal

government, although the exact split was not specified.28 In 2011, this figure was revised to

estimate the federal government’s portion of expenses over a newly extended 15-year window.

This estimate indicated that the federal cost to implement the agreement over 15 years would be

$795 million (2007 dollars). Thus, there was a reduction in the estimated costs using constant

2007 dollars. The 2011 revision reflected increased state commitments for some activities and

altered assumptions in other areas.29 The 2011 estimate also included an estimate of “base”

DOI has estimated that dam removal itself will create approximately 1,400 jobs in the one-year timeframe for this

project, while other actions under the KBRA will create 4,600 jobs over 15 years, with additional gains to farming and

fisheries industries; See Klamath Regional Economics Fact Sheet, available at http://klamathrestoration.gov/sites/

klamathrestoration.gov/files/Econ.Fact.Sheet.Sept.21.pdf.

Thomas P. Schlosser, “Dewatering Trust Responsibility: the New Klamath River Hydroelectric and Restoration

Agreements,” Washington Journal of Environmental Law and Policy, vol. 1, no. 1 (July 2011), p. 60. Available at

http://digital.law.washington.edu/dspace-law/bitstream/handle/1773.1/1043/1WJELP042.pdf?sequence=1.

U.S. Congress, Senate Committee on Energy and Natural Resources, Water Resource Issues in the Klamath River

Basin, 113th Cong., 1st sess., June 20, 2013. Statement of Chairman Ron Wyden, http://www.energy.senate.gov/public/

index.cfm/files/serve?File_id=bf0f660b-1905-4515-9278-c26ddda53a21.

Cost estimates for the agreement were originally provided in the KBRA, Appendix C-2, p. C.6. Costs for the

agreement were estimated in 2007 dollars.

For a complete discussion of these changes, see Ed Sheets Consulting, “Klamath Basin Restoration Agreement

Revised Cost Estimates,” June 17, 2011, at http://216.119.96.156/Klamath/2011/06/RevisedCostEstimates.pdf.

Congressional Research Service

Klamath Basin Settlement Agreements

funding already being spent in the basin that could potentially reduce the “new” costs of the

agreements to the federal government, but it did not estimate the amount of budget authority

required for previously unauthorized activities.30 The first two estimates were most recently

revised in a December 2013 report by the Klamath Basin Task Force, which estimated that $923

million (in 2014 dollars) in federal funds would be required to implement the agreements and that

$250 million of this funding would come from newly authorized appropriations.31 The 2013

report also provided a retroactive estimate for the new authorizations of appropriations under the

2011 document. Table 2, below, provides a comparison of these costs, including estimates in

constant dollars.

Table 2. Comparison of Estimated Costs to Implement the KBRA

(dollars in millions)

2010 Initial KBRA

Estimate

(all costs)

2011 Revised

Estimate

(federal costs only)

2013 KTF Estimate

(federal costs only)

Estimated Costa

(nominal)

$970

$795

$923

Estimated Costa

(constant 2014 dollars)

$1,124

$926

$923

“New” Federal Budget

Authorityb

(nominal)

$215

$250

“New” Federal Budget

Authorityb

(constant 2014 dollars)

$247

$250

Sources: KBRA (2010), 2011 Revised Cost Estimates, and 2013 Klamath Task Force Report. Adjustments to

constant 2014 dollars are CRS estimates based on the FY2015 President’s budget request.

Notes: NA indicates the source did not include these estimates. KTF indicates Klamath Task Force. The KBRA

originally estimated that the agreements would be implemented over a 10-year window, but subsequent

revisions have provided estimated total costs over a 15-year window.

a. The 2010 KBRA was an estimate of all costs required to implement the KBRA (i.e., federal and nonfederal

costs) in 2007 dollars. The 2011 Revised Estimates estimated federal costs in 2007 dollars. The 2013

Klamath Task Force Estimate revised the 2011 federal cost estimates and used 2014 dollars.

b. The 2010 KBRA did not include an estimate for required “new” authorizations of appropriations. The

original 2011 Revised Cost Estimates provided an estimate of available “base” agency funding (i.e., ongoing

funding) that could further reduce the total estimated costs for the agreements, but it did not estimate new

budget authority required. The 2013 Klamath Task Force Report provided an estimate for new

authorizations of appropriations both for 2013 and for the 2011 document (retroactively), which are the

basis for the amounts shown here.

In contrast to the KBRA, cost estimates to implement the KHSA have not changed substantially

since the original agreement. They also have not garnered as much attention from Congress

because states are the primary entities responsible for funding dam removal under the KHSA.32

The 2011 revised estimates assumed that approximately $262 million in base or redirected federal funding would be

available in future years toward purposes outlined in the Klamath agreements.

See 2013 Bezdek Memo. The 2013 document also appeared to retroactively revise the 2011 assumption of $799

million for total federal funding down to $795 million.

The KHSA provides that the states of California and Oregon are responsible for up to $450 million of the costs for

dam removal, but it makes no provision for costs beyond this cap. If estimates conclude that costs are likely to exceed

$450 million, then the Secretary must put off a determination until a plan to address these costs is developed.

Congressional Research Service

Klamath Basin Settlement Agreements

Previous studies by DOI to inform the Secretarial Determination estimated potential costs of

approximately $290 million for dam removal, which is less than the combined amount anticipated

to be available from ratepayers ($200 million) and the state of California ($250 million).33 One

potential issue related to these costs is whether the dam removal determination will recommend

the federal government as the dam removal entity. If so, a major question may be how additional

costs for dam removal, such as cost overruns and costs resulting from potential lawsuits, would

be handled.

There is no formal estimate of potential future savings to state and federal governments

associated with the agreements. Supporters point to previous costs to federal and state

governments that would be unlikely to occur if the agreements are implemented, including at

least $170 million in supplemental aid for irrigators and fisheries that has been provided since

2001.34 Advocates also point to decreased costs for litigation as a result of agreements. Although

the agreements would not prevent future litigation, supporters argue that, if authorized, they

would obligate parties to pursue other dispute resolution mechanisms that are expected to be less

costly and would thus render future litigation costs less likely.35 Opponents note that none of

these savings are guaranteed under the agreements and that supplemental appropriations and

expenditures for litigation may still be necessary.

In addition to savings, supporters also argue that the KBRA and KHSA could create economic

benefits, both in terms of traditional and “non-use” benefits. Studies commissioned to advise

DOI’s secretarial determination on dam removal estimated that the total potential value of

restoration, including non-use values, could total $16 billion-$84 billion, depending on the

assumptions and methodology used.36 Some dispute these estimates and argue that they are

unrealistically large or derived from questionable methodologies.

Obtaining authorization and appropriations for these activities from Congress may be difficult. In

the 113th and 114th Congresses, authorization of new programs and projects by both chambers has

been limited. Beyond authorization of new funds, some observers also note that it is unlikely that

federal agencies will obtain the new appropriations envisioned for the KBRA in a constrained

budgetary environment. Hypothetically, a lack of discretionary appropriations or overall progress

associated with future actions assumed in the KBRA or KHSA could affect the status of support

for either agreement among the parties and thus cause additional conflicts among the agreement’s

supporters. Supporters have for the most part acknowledged these difficulties, but they argue that

initial authorization of the agreements is an important first step and that the basin’s issues are

important enough to warrant congressional authorization and funding.

DOI, “Final Secretarial Determination Overview Report,” October 2012. p. 28, at http://klamathrestoration.gov/keepme-informed/secretarial-determination/role-of-science/secretarial-determination-studies.

See “Previous Events” section for a breakdown of this funding.

This includes potential forgone costs for litigation that would have been pursued absent the Upper Klamath Basin

Agreement in Principle, whose execution is connected to the Klamath agreements.

DOI, Secretarial Overview Report for the Secretary of the Interior: An Assessment of Science and Technical

Information, January 23, 2012, p.364, at http://klamathrestoration.gov/sites/klamathrestoration.gov/files/

2013%20Updates/Final%20SDOR%20/0.Final%20Accessible%20SDOR%2011.8.2012.pdf. Non-use values were

calculated based on regional and national surveys that asked respondents to estimate their willingness to pay for

different restoration scenarios.

Congressional Research Service

Klamath Basin Settlement Agreements

Dam Removal

Some believe that congressional authorization of the agreements (in particular the KHSA) would

be an implicit endorsement of dam removal. Since authority for the Secretary of the Interior to

make a final determination on dam removal is a key step in the KHSA, some argue that

authorization of the agreements is the primary opportunity for Congress to weigh in for or against

this decision. Although it did not formally recommend dam removal, the study findings intended

to inform the Secretary’s dam removal determination did not find major drawbacks associated

with this course of action. Thus, some have concluded that if Congress authorizes the dam

removal determination to go forward, a finding that dam removal would be in the public interest

is likely. While many in Congress support dam removal as a means to restore rivers, others see it

as an unnecessary and expensive step that decreases the availability of renewable energy.

Additionally, while the KHSA anticipates that ratepayers and the state of California will be the

primary entities funding dam removal, the extent to which the federal government will be

involved in this process remains unclear.

Science and the Klamath Agreements

The science underpinning water allocation and other decisions in the Klamath Basin has been contentious. Most

prominently, the biological opinions by the Fish and Wildlife Service (FWS) and the National Marine Fisheries Service

(NMFS) that led to the 2001 decision to not make deliveries available to the Klamath Project were extremely

controversial. Reclamation’s 2002 decision to reject the NMFS and FWS opinions was similarly controversial. This

decision was the subject of a 2004 National Research Council review, which concluded that scientific data were

insufficient to support the FWS and NMFS management regimes that had been proposed for Upper Klamath Lake for

the 2001 growing season. However, the review found support for other measures in the biological opinions.37

The science underpinning the KBRA and the KHSA has also been criticized. The KHSA underwent lengthy peer

review and public comment processes but was the subject of a scientific integrity complaint by a Reclamation science

advisor who alleged that DOI violated a 2009 executive order by misrepresenting the effect of dam removal on

salmon in study summaries, among other things.38 On January 7, 2013, seven Reclamation biologists filed a separate

scientific integrity complaint, alleging that Reclamation officials violated DOI scientific integrity policies by threatening

to reassign or eliminate scientists within the Fisheries Resources Branch of the Klamath Basin Area Office.39 These

officials argue that they were targeted for retribution because their science contradicted that of other agencies, such

as FWS and NMFS. Finally, a complaint related to the scientific analysis underpinning dam removal was also filed with

DOI by the Siskiyou County Board of Supervisors in April 2013.40

Stakeholders disagree on whether dam removal would happen without the KHSA and the related

determination by the Secretary of the Interior. Opponents have noted that PacifiCorp-funded dam

removal would be likely under FERC relicensing conditions; however, PacifiCorp and other

supporters of the KHSA note that a different outcome (such as fish passage upgrades) could occur

under the FERC process for a number of reasons (for more information, see below section,

“Stakeholder Views”).

National Academy of Sciences, National Research Council, Endangered and Threatened Fishes in the Klamath River

Basin: Causes of Decline and Strategies for Recovery, (Washington, DC: National Academies Press, 2004), p. 81.

The complaint is available at http://prhouser.com/allegation.pdf.

This complaint is available at http://www.peer.org/assets/docs/noaa/

1_7_13_PEER_Scientific_Misconduct_Complaint.pdf.

The complaint is available at http://media.redding.com/media/static/Scientific_Integrity_Complaint_20130319.pdf.

Congressional Research Service

Klamath Basin Settlement Agreements

Implementation of ESA

The extent to which the Klamath agreements will alter implementation of the ESA and other

federal laws is a matter of disagreement. Previous biological opinions established minimum flows

on the Klamath River for coho salmon, as well as actions intended to aid the recovery of Lost

River and shortnose suckers. According to supporters, the Klamath agreements will be considered

to the maximum extent practicable under the ESA.41 At the same time, both agreements state that

implementation of the agreements shall not affect implementation of the ESA by DOI or the

NMFS.42 A perceived conflict between these two objectives, and a lack of clarity on how exactly

they will be interpreted and implemented, has resulted in ongoing disagreements among some

stakeholders.

While the agreements do not waive application of the ESA, some groups that were not signatories

argue that certain provisions—in particular the defined water allocations for irrigators—would

undermine the ESA. These groups note that the allocations for irrigators would provide more

water than irrigators received under ESA stipulations during recent low water years and would

thus decrease flows from amounts provided under recent biological opinions and provide less

water for fisheries. They note that while other processes under the ESA would technically go

forward, the assurances in the agreements, if adopted in legislation, could result in additional

pressure on regulatory agencies to adopt biological opinions that allow the flows set forth in the

proposed Water Resources Program.43

Supporters note that the Klamath agreements would provide for more resources and actions to

improve habitat for fish species, which they argue are just as important as the difference in flows

that could occur under some scenarios. Improvements under the KBRA, including new fish

habitat and improved water quality, are assumed to result in greater fish abundance, which would

in turn allow managers to forgo the previous restrictive flows that were provided under the ESA.

Furthermore, some believe that the KBRA could in the long term encourage more cooperative

actions, which could improve the likelihood of listed species’ recovery and are preferable to

previous “top-down” regulatory actions.

Stakeholder Views

While stakeholder views on the Klamath agreements can broadly be divided into those supporting

the agreements and those opposed to one or both of the agreements, such a simple

characterization may not do justice to the various motives, preferences, and specific interests of

many of these groups. Although a majority of interest groups involved in initial settlement

negotiations endorsed both agreements, reasons for support among these groups are varied and in

some cases are likely to be contingent on specific parts of the agreements (e.g., guarantees related

to water supplies, whether or not dam removal is provided for, etc.) going forward. Among those

opposed to the agreements, reasons for opposition also vary widely. They include reasons ranging

Klamath Basin Coordinating Council, “Summary of the Klamath Basin Settlement Agreements,” May 2010, at

http://216.119.96.156/Klamath/Summary%20of%20Klamath%20Settlement%20Agreements%204-5-10.pdf.

For example, see KBRA §§2.1, 19.1, 20.3.1, and 22.5.

The 2013 joint biological opinion for the operation of the Klamath Project concluded that the ongoing operation of

the project as proposed by Reclamation is not likely to jeopardize the existence of federally listed species. National

Marine Fisheries Service, U.S. Fish and Wildlife Service, Biological Opinions on the Effects of Proposed Klamath

Project Operations from May 31, 2013, through March 31, 2023, on Five Federally Listed Threatened and Endangered

Species, SWR-2012-9372, Klamath Falls, Oregon, May 2013, at http://www.usbr.gov/mp/kbao/docs/

Klamath_Project_Biological_Opinion.pdf.

Congressional Research Service

Klamath Basin Settlement Agreements

from perceived economic damages resulting from the agreements to the agreements’ overall lack

of environmental protections or effect on implementation of existing laws.

Support for Agreements

Among those supporting the Klamath agreements are all the parties listed as nonfederal parties

within both the KBRA and the KHSA. For the KBRA, this includes 5 state agencies in Oregon

and California, 3 tribes, 1 county (Humbolt County, in California), 25 parties related to the

Reclamation Project, some off-project interests, and several other groups (including

environmental interests). These same groups are also party to the KHSA.44

Other groups and individuals were not party to the agreements but have stated their support for

them. These include, most recently, off-project irrigators in the upper basin who have agreed to

support the Klamath agreements under the Upper Klamath Basin Agreement in Principle, signed

in April 2014. Notably, supporters have agreed to support authorizing legislation for both

agreements (e.g., KBRA signatories have backed enactment of the KHSA) and have generally

argued that the agreements themselves must be linked.

The states of California and Oregon, as well as the Obama Administration, support the

agreements because they represent a potential solution to the protracted resource conflicts in the

upper and lower basins. Government representatives also have pointed to the costs that resulted

from previous conflicts in the basin, including supplemental aid, crop insurance, mitigation

actions, and litigation costs.

Other groups have chosen to support the agreements not only for their potential to end conflicts in

the basin but also because they include specific provisions that are important to certain groups.45

For instance, environmental groups have pledged to support the allocations for irrigation absent a

similar allocation for fish in exchange for assurances of dam removal under the KHSA and other

promised fisheries restoration actions under the KBRA. Among irrigators, those on the Klamath

Project have pledged to support restoration provisions and less water in wet years in exchange for

benefits from water supplies in dry years that presumably would be higher than under the status

quo. Approximately half of the off-project irrigators in the upper basin support the agreements, in

some cases because the agreements offer potential alternatives that are preferable to losing water

deliveries outright due to their junior water rights status.46

For its part, PacifiCorp notes that it supports removal of its four dams under the KHSA because

retirement of the dams under the terms of the KHSA reportedly represents a more cost-effective

option for its ratepayers than FERC relicensing.47 Previously there have been disagreements over

which option the company would pursue in absence of the KHSA: FERC relicensing for ongoing

operations on all four dams (which would entail costly improvements for fish passage, and altered

See KHSA, pp 1-2.

General obligations for nonfederal parties to support the agreement are laid out in Part I of the KBRA.

While off-project irrigators are not provided with similar assurances to those of project users for water supplies, they

may stand to benefit from other programs in the agreement that would not otherwise be available to them, such as the

water rights retirement program.

As part of the approval process for the ratepayer surcharge for dam removal under the KHSA in Oregon and

California, PacifiCorp presented information and received concurrence from state regulatory agencies that its proposed

ratepayer increases under the KHSA were fair and reasonable for customers compared to likely costs under relicensing.

PacifiCorp estimated that relicensing actions such as construction of fish passage and water quality facilities, as well as

reduced flow conditions, would cost in excess of $460 million and would entail more costs to ratepayers than the

approximately $200 million ($172 million in 2010 dollars) pledged under the KHSA.

Congressional Research Service

Klamath Basin Settlement Agreements

operations for water quality) or a surrender of its license and related decommissioning of some or

all of the Klamath hydropower projects.48 Both options would likely be costly for PacifiCorp and

its ratepayers, and could potentially cost the company more than the arrangement under the

KHSA.49 The KHSA also has the added benefit of allowing the company to operate the dams

under the current management regime through 2019, through annual extensions to the project’s

FERC license.

Opposition to Agreements

Some groups and individuals oppose the Klamath agreements and their authorization. Some of

these parties were initially involved in settlement negotiations but dropped out for various

reasons, while others were not invited to participate in negotiations because they were not seen as

representing significant interests. Still others, including county officials in the areas of the

Reclamation project and dams, oppose the agreements in their elected capacities. Notable

opponents of the Klamath agreements include local officials in Klamath County in Oregon and

Siskiyou County in California, the Hoopa Valley and Resighini Rancheria and Quartz Valley

tribes, the Northcoast Environmental Center, Waterwatch of Oregon, Oregon Wild, and others. As

noted above, some groups that initially opposed the agreements, including approximately half of

the off-project irrigators in the upper basin, recently reached an agreement, the Upper Basin

Agreement, the effectiveness of which is tied to the authorization of the KBRA and KHSA. Other

opponents, including Klamath and Siskiyou County, have since stated their opposition to that

agreement for its ties to the KBRA and KHSA (which they also oppose).50

Some groups oppose the agreements because they believe the agreements will further damage the

region’s economy. Some off-project users continue to oppose the agreements (including the

Upper Basin Settlement) because of economic damages to farmers resulting from water rights

retirement and restoration requirements. Siskiyou County has opposed the agreements for a

number of reasons, including the assertion that the PacifiCorp dams provide flood protection and

economic benefits for downstream areas.51 Some residents and officials in these areas also oppose

dam removal because of an expected loss of property taxes associated with certain lands that will

lose lake frontage when the dams are removed.52

Others argue that the agreements do too little to benefit fisheries and give up too much to farmers

and other interests. For instance, the Hoopa Valley Tribe has been critical of the agreements

A previous study by the California Energy Commission and the Bureau of Reclamation found that removal of all

dams would be the most cost-effective action for PacifiCorp (i.e., less expensive than modification and ongoing

operation of the dams), and some have argued that without the KHSA, the dams would be removed. The final

environmental impact statement for FERC relicensing of the project (i.e., before the KHSA was signed) recommended

a new license with fish passage and other modifications (see http://www.ferc.gov/industries/hydropower/enviro/eis/

2007/11-16-07.asp for relicensing documents), which PacifiCorp has argued would be prohibitive (see above note).

While some have argued that these costs would eventually force PacifiCorp to surrender its license and fund dam

removal itself, PacifiCorp argues that it would pursue relicensing over license surrender and customer-funded dam

removal, which have no cap on expenses or liability protections such as those included in the KHSA.

As proposed, dam removal under the KHSA would be funded partially by ratepayers, with the other portion assumed

to be funded by the State of California. (The status of the latter funding is contingent on a water bond scheduled for a

statewide election in November 2014.)

Letter from Siskiyou County Board of Supervisors and Klamath County Board of Commissioners to the Honorable

Mary Landrieu, Chair, Committee on Energy and Natural Resources, May 30, 2014.

DOI has argued that these concerns are unfounded.

This is particularly the case in Siskiyou County, where a large majority of voters have previously expressed

opposition to removal of the three PacifiCorp dams in California.

Congressional Research Service

Klamath Basin Settlement Agreements

because it feels that the provisions of the KBRA have the potential to terminate the duty of the

United States to assert and protect tribal fishery rights when they conflict with operation of the

Klamath Reclamation Project. The tribe argues that the KBRA would subordinate its senior

priority water rights to the junior water rights of the irrigation project.

Some opponents have also focused on the uncertain nature of fisheries restoration in the Klamath

under the KBRA. Some contend that these uncertainties were highlighted in expert panels as a

part of the larger DOI dam removal study process but were not adequately acknowledged by DOI

in its final studies.53 Some of these groups favor dam removal but argue that removal could be

achieved through the existing FERC relicensing processes and does not need to be tied to the

KBRA. They note that by providing annual renewals of the FERC license for the Klamath

Hydroelectric Project, the KHSA allows the company to avoid project upgrades (or removal) that

would otherwise be paid for by the company and benefit fisheries in the short term.54 Combined

with a lack of performance metrics for fisheries restoration provisions and promises to not make a

call on project water rights holders under the KBRA, these opponents assert that the agreements

disproportionately benefit PacifiCorp and irrigators at the expense of fisheries.

Some environmental groups oppose other provisions of the Klamath agreements and dropped out

of negotiations as a result. Waterwatch of Oregon and Oregon Wild find fault with a number of

the provisions in the agreements, including the lack of water supplies for fish and the inclusion of

lease-land farming on wildlife refuges.55 Along with the Hoopa Valley Tribe, these groups have

called for voiding the KHSA and resuming water quality certification processes under the Clean

Water Act to force dam upgrades or removal through a separate process, which they argue will be

more expedient and less costly for state and federal taxpayers (i.e., a process to be funded by

PacifiCorp and potentially its ratepayers).56

The Yurok Tribe, which initially supported the Klamath agreements, issued a notice of withdrawal

from the agreements in September 2015. Among other things, the tribe cited inaction by Congress

and disagreements with the provisions of the Upper Klamath Settlement Agreement, in which it

was not invited to participate.

In particular, the expert panels associated with Chinook and Coho salmon pointed out uncertainties associated with

ongoing water quality issues that some believe were not properly reflected in summary documents. See, for example,

http://prhouser.com/allegation.pdf.

Thomas P. Schlosser, “Dewatering Trust Responsibility: The New Klamath River Hydroelectric and Restoration

Agreements,” Washington Journal of Environmental Law and Policy, vol. 1, no. 1 (July 2011), p. 42, at

http://digital.law.washington.edu/dspace-law/bitstream/handle/1773.1/1043/1WJELP042.pdf?sequence=1.

See KBRA, Section 15.4.3.

Ani Kame'enui and Alexander Borack, “Op-ed: Water Quality Suffers as Congress Dithers,” Redding Record

Searchlight, June 13, 2011.

Congressional Research Service

Klamath Basin Settlement Agreements

Author Contact Information

(name redacted)

Specialist in Natural Resources Policy

[redacted]@crs.loc.gov

, 7-....

(name redacted)

Specialist in Natural Resources Policy

[redacted]@crs.loc.gov

, 7-....

(name redacted)

Analyst in Natural Resources Policy

r[ edacted]@crs.loc.gov

, 7-....

(name redacted)

Legislative Attorney

[redacted]@crs.loc.gov , 7-....

Congressional Research Service

EveryCRSReport.com

The Congressional Research Service (CRS) is a federal legislative branch agency, housed inside the

Library of Congress, charged with providing the United States Congress non-partisan advice on

issues that may come before Congress.

EveryCRSReport.com republishes CRS reports that are available to all Congressional staff. The

reports are not classified, and Members of Congress routinely make individual reports available to

the public.

Prior to our republication, we redacted names, phone numbers and email addresses of analysts

who produced the reports. We also added this page to the report. We have not intentionally made

any other changes to any report published on EveryCRSReport.com.

CRS reports, as a work of the United States government, are not subject to copyright protection in

the United States. Any CRS report may be reproduced and distributed in its entirety without

permission from CRS. However, as a CRS report may include copyrighted images or material from a

third party, you may need to obtain permission of the copyright holder if you wish to copy or

otherwise use copyrighted material.

Information in a CRS report should not be relied upon for purposes other than public

understanding of information that has been provided by CRS to members of Congress in

connection with CRS' institutional role.

EveryCRSReport.com is not a government website and is not affiliated with CRS. We do not claim

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.