Enloe Dam Remains an Economic Loser (WA)
Posted: 11/18/2014
By: Thomas O'Keefe
Today, Conservation Groups release an updated review of the economics of restoring hydropower at Enloe Dam on the Similkameen River. The original economic review was completed in 2011, and the most recent review addresses how mandated and potentially increased minimum flows through the bypass reach would further impact the Public Utility District No. 1 of Okanogan County’s (OPUD) 2008 projections. This 2014 analysis, prepared by Rocky Mountain Econometrics of Boise, Idaho, concludes:
• Construction costs continue to increase. RME estimates that inflation will drive
Enloe’s cost to about $40 million and above in subsequent years.
• Enloe dam will, depending on the amount of water dedicated to minimum instream flows over
the falls, lose between $1.1 million and $1.5 million for each year the project operates. A
loss of $25 to $41 on every MWh of electricity it produces.
• OPUD will see operating income of only $2.1 million each year. With operating costs
totaling $3,193,696 it will cost OPUD $1.1 million more each year to operate the Enloe Project
than it would cost to purchase the power on the open market.
The report also addressed OPUD statements regarding potential premium pricing for power generated
at Enloe Dam, Enloe’s ability to back up wind and solar energy, and that OPUD can run the
project at a long term loss (40+ years) and then see a profit once construction debt has been
retired. The report found:
• Enloe does not qualify as green power. In the unlikely event that regulations are
amended that would include Enloe, the premium would not be enough to cover Enloe’s losses.
• As a run-of-river project, Enloe’s generation cannot effectively back up
intermittent wind and solar projects.
• At the end of year 40, when the original loan for the project is paid off, accumulated
losses plus interest will have grown to nearly $170 million, more than four times the original
construction cost. At that time, Enloe will be losing about $10 million per year and the
net present value will never generate a profit.
“To avoid this monumental loss, OPUD has no choice but to pass the costs along to the
ratepayers,” said Jere Gillespie of the Columbia River Bioregional Education Project.
“If Enloe proceeds, it would increase electrical costs by $50 for each ratepayer, each
year, in perpetuity.”
On July 9, 2013, OPUD received its Order approving a new license from the Federal Energy
Regulatory Commission. Today, notwithstanding evidence of project monetary losses, greatly
increased debt, and other uncertainties, OPUD continues to pursue repowering the project.
The Enloe Dam project has long been controversial for both environmental and economic reasons.
Of particular concern is the current proposal to bypass virtually all of the river
flow into the new turbines, de-watering Similkameen Falls for most of the year.
Conservation Groups would prefer to remove the dam abandoned in 1958 and to restore more than 200
miles of free-flowing river on the Similkameen and its upstream tributaries.
“There is great uncertainly associated with the Enloe Project, including how much water
must remain in the river to protect Similkameen Falls,” says Rachael Osborn with the Center
for Environmental Law & Policy. “As the RME report shows, this could make the bad
economic picture even worse, something the Okanogan PUD has failed to consider.”
“OPUD has repeatedly said, given the money already sunk in the project, that repowering is
the only way to provide a return to its ratepayers,” said Thomas O’Keefe with
American Whitewater. “At some point, they need to stop digging the hole deeper. And
with this level of loss, that time is today.”
Thomas O'Keefe
3537 NE 87th St.
Seattle, WA 98115
E-mail: okeefe@americanwhitewater.org
Phone: 425-417-9012
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