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February 2001
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Crisis Could Short Rivers

"Our heads are kind of spinning," muses Nancy Ryan of Environmental Defense, one of the many groups that have been watching the rapidly unfolding developments in California's energy crisis closely, and evaluating its possible effects on the state's rivers.

It's a situation that has been changing quickly, as one possible solution after another is proposed, examined and then either rejected or put into the legislative hopper. Early on, Assembly Speaker Robert Hertzberg proposed a state take-over of all or part of PG&E's hydropower-generating dam and facilities system. In exchange, the state would issue revenue bonds which would be used to pay down the company's huge debts. That idea drew cautious interest from environmentalists, who thought there might be a chance to build in safeguards for the rivers under the legislation. However, consumer groups, agriculture and the utilties themselves objected, and while the idea isn't officially dead, it appears to have been moved off the table for the forseeable future.

Under deregulation, PG&E had been expected to sell its hydro facilities, and environmental studies had been underway for more than a year. But in January Governor Davis signed legislation prohibiting any such sale for at least five years. Also, Republicans have pushed for legislation to increase the state's electrical generating capacity, which could include the construction of more dams and hydro facilities. Directing more water through dams' turbines to generate more electricity could damage the downstream ecology, but Ryan worries more about the long term consequences of the energy crunch. She notes that many dams will be due for federal (FERC) relicensing in upcoming decades, and that regulators could be reluctant to impose any conditions on them that might restrict their ability to generate power.

Environmentalists are also concerned about PG&E's 140,000 acres of watershed lands. Before deregulation, the utility generally managed its lands conservatively, at least in part because it could pass along its costs to ratepayers. But starting in the mid 90s, it sold approximately 20,000 acres, some to developers and about 4,000 acres to Sierra Pacific Industries for timber harvesting. Development of about 50,000 acres is restricted by FERC, but Steve Wald of the California Hydropower Reform Coalition points out that cash strapped PG&E will be under increasing pressure to maximize the financial returns on the rest of its watershed lands. That could mean more logging, or construction of new vacation homes along its streams and rivers, which could affect water quality.

Farmers have their own worries. State officials have promised that their water needs won't be sacrificed to those of electricity producers, but Dave Kranz of the California Farm Bureau notes that farmers will have to share the increasingly scarce resource with hydropower, environmental interests and urban users. Above all, says Ryan, legislators should be careful not to rush into a quick fix without considering all the long term implications. "We're looking at the consequences of this crisis stretching out into the middle of the century."

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