Klamath Hydroelectric Project Relicensing Proceeding FERC Project No. 2082

1. Klamath Hydroelectric ProjectRelicensing ProceedingFERC Project No. 2082 Public Meeting on Agreement in Principle

2. Meeting Agenda • Introductions • Purpose of Meeting • Commission’s Policy on Settlements • Our Understanding of the AIP • Options for Relicensing Proceeding

3. Purpose of Meeting • To discuss the Agreement in Principle within the context of the Commission’s relicensing proceeding for the Klamath Hydroelectric Project

4. Commission Policy on Settlements • Commission’s Policy Statement on Hydropower Licensing Settlements, issued September 21, 2006 • Chairman Kelliher’s December 19th statement on settlements

5. Commission’s Policy Statement • The Commission favors settlements but cannot automatically accept all settlements, or all provisions of settlements • The Commission must make a public interest determination based on the entire record

6. Commission’s Policy Statement Settlement measures must be: • supported by substantial evidence • consistent with law and enforceable (within Commission jurisdiction) • related to project effects or purposes • reserve Commission’s compliance authority • within Commission jurisdiction

7. Commission’s Policy Statement Areas of Concern: • damages • cost sharing • cost caps • funds/funding • Commission approval can’t be ceded

8. Chairman Kelliher’s Statement • On December 19, 2008 Chairman Kelliher stated that settling parties should involve Commission staff so that settlements do not contain provisions that are contrary to our policy and that can not be incorporated into a license

9. Commission’s Policy on Settlements • Questions?

10. Our Understanding of the AIP • Agreement in Principle for the “continued operation and potential future removal of PacifiCorp's Klamath River dams” • “Establishes a framework for resolution of the relicensing proceeding, as well as other litigation and controversies related to the project”

11. Our Understanding of the AIP Parties • PacifiCorp • United States • Department of the Interior • Department of Agriculture • Department of Commerce • State of California • State of Oregon

12. Agreement in Principle • Dams potentially removed: • Iron Gate Dam • Copco No. 1 Dam • Copco No. 2 Dam • J.C. Boyle Dam • Remaining dams: • Keno Dam – transferred to United States • Fall Creek Diversions – to be determined • East Side and West Side decommissioned

13. Agreement in Principle, cont. • Timeline: • Final Agreement – June 29, 2009 • Feasibility Studies – 2009 to 2012 • “U.S. Determination” (decision) on removal – by 2012 • Interim Operating Conditions – 2009 to removal • Transfer to Non-Federal “Dam Removal Entity” – 2020 • Begin Dam Removal – 2020 - 2025

14. Agreement in Principle, cont. • Final Agreement: • The parties would execute a Final Agreement (FA), by June 29, 2009. The FA would detail procedures, schedules, agency and legislative actions, and interim operating and conservation measures that intend to result in the removal, beginning as soon as 2020, of Klamath Project mainstem dams.

15. Agreement in Principle, cont. • Interim Operating Conditions: • PacifiCorp would file a license amendment application in order to implement interim operation and conservation measures at the project, including: • Changes in flows below project dams • Restrictions on generation • Install/test turbine venting • Gravel placement below Iron Gate Dam • Increased fall flow variability • Creation of funds and funding of various programs

16. Agreement in Principle, cont. • Necessary related actions: • The AIP and/or the FA would be null and void and the project returned to the Commission proceeding under a number of circumstances, including: • Failure to execute the Final Agreement • Failure of passage of necessary federal and state legislation • Failure of state Public Utility Commissions to act per the AIP • U.S. determination that costs exceed benefits • Costs exceed limits established in the AIP and FA • State Water Boards require additional studies • Litigation

17. Our Understanding of AIP • Are we correct? • Did we miss something?

18. Options for Licensing Proceeding under the Federal Power Act • License issuance • License denial • License surrender • License transfer • Non-power license • Federal takeover

19. Options for Licensing Proceeding under the Federal Power Act License Issuance • The project would continue to operate under an annual license until a new license is issued License Denial • If license is denied, a surrender proceeding would be initiated

20. Options for Licensing Proceeding under the Federal Power Act License Surrender • The licensee would file an application to surrender the project • Could include dam removal • Record supplemented as needed • Project operation under annual license could continue for a set period of time

21. Options for Licensing Proceeding under the Federal Power Act License Transfer • The licensee would file an application to transfer the project • Similar licensing options would be available to transferee

22. Options for Licensing Proceeding under the Federal Power Act Non-power license A non-power license is a temporary license that the Commission terminates when it determines that another governmental agency will assume regulatory and supervision over the project.

23. Options for Licensing Proceeding under the Federal Power Act Federal takeover Federal takeover and operation of the project would require Congressional approval. No agency has recommended federal takeover.

24. Questions for Moving Forward • What is interaction between AIP and licensing options we discussed? • Designate separated staff? • Others?

25. Further Comment All correspondence must clearly show at the top of the first page “Klamath Hydroelectric Project, FERC No. 2082-027.” Submit all comments to: Kimberly D. Bose, Secretary Federal Energy Regulatory Commission 888 First Street, N.E. Washington, DC 20426

26. ProjectLocation