Gov. Kitzhaber won't stop Nestle' water swap in Cascade Locks

Julie Raefield-Gobbo

April 30, 2012

While legal and public protests have been raised against Oregon's Department of Fish and Wildlife on water access issues for a proposed Nestlé bottling plant, Governor John Kitzhaber has been called upon by environmental groups to stop ODFW in its tracks. Kitzhaber's Regional Solutions team arrived at the Cascade Locks Joint Committee for Economic Development meeting on April 25 for a discussion on the status of the proposal from Nestlé to build the plant in Cascade Locks.The team leader, Annette Liebe, also brought a critical message from the Governor.

Liebe, RS regional coordinator for Hood River County, confirmed earlier in the day during an interview with the News that Kitzhaber has decided not to take a position on a pending legal protest pertaining to the water rights exchange involving the Oregon Department of Fish and Wildlife. The plant would ultimately tap both state-controlled spring water and city-controlled ground water.

Amy Wojcicki of the governor's office confirmed his position on the water rights and exchange negotiations: "The governor will not be intervening and will let the process play out like it is intended."

The RS team included representatives from ODOT, Oregon Water Resources Board, Oregon Department of Fish and Wildlife and the Oregon Business Development Office. They spoke before the mayor, two city council members, two port commissioners and port and city staff.

Each RS team member confirmed their agency's commitment to execute the steps necessary to support the city's negotiations with Nestlé and to solve challenges that arise across agencies along the way. The first and foremost challenge involving state agencies would be a required water rights exchange.

To proceed, the Nestlé project would require two procedural steps involving ODFW, the state agency that currently holds the water right to Oxbow Springs - one of the two water sources of interest to Nestlé. The city of Cascade Locks holds the right to the second source of Nestlé's interest, city ground water.

ODFW transfer applications to the Oregon Water Resources Department requested two additional "points of diversion" on their existing water rights which will enable a split of their 10 cubic feet per second water right into two portions - one at 9.5 cfs and one at .5 cfs. The applications also made correction to the location of ODFW's current water source draw-point - which protestors allege does not currently match documents on file with the OWRD.

Step two would require an approval of an exchange of the smaller of the now-divided portions of the ODFW water right (equating to 0.5 cfs) with the city of Cascade Locks, ultimately leading to an availability of both watersoruces to the city, thereby enabling a sale to Nestlé.

A preliminary determination was issued by OWRD to correct the draw-point location and allow the additional points of diversion (splitting the right). Two legal challenges were then filed on March 29 against that determination on behalf of the non-profit organizations Bark and Food and Water Watch.

The first protest addresses alleged damages to "other water users" if the diversion-split is allowed - focusing on the public nature of ODFW waters and public-user claims to that water.

The second, and more serious allegation, contends that ODFW has forfeited its rights altogether for Oxbow Springs water based on the mismatch between its actual in-use draw-point and the documented, legally authorized draw-point allocated to the ODFW hatchery.

Michael Ladd, regional manager for the Oregon Water Resources Department and Regional Solutions team member, spoke first after Liebe's introductions.

According to Ladd, OWRD is analyzing the data filed in the protest.

"If their claim proves to be true," said Ladd, ODFW "water rights could be forfeited and lost."

When asked by JCED members if this might mean a closure for the hatchery, Ladd confirmed that would be a possible consequence, stating, "This is a very serious allegation."

Ladd went on to state that OWRD has "quite a bit of experience dealing with these types of protests."

If ultimately permitted, the water rights exchange between ODFW and the City of Cascade Locks would enable the city to sell water - originating from both sources and projected to be approximately 100 million gallons per year - to Nestlé.

Curt Melcher, deputy director for Oregon Fish and Wildlife, spoke next. He stated, "I think we will have water."

He went on to say that ODFW "looks at the Nestlé proposal as a win-win" allowing improvements to the hatchery (through a water source redundancy during low-flow periods) and economic development for the community.

Oregon Business Department Director Carolyn Meece stated, "None of us are saying 'Hey, let's not work through the process ... I'm treating this as a straight recruitment process."

Meece, in response to a reporter's question on possible available resources for city use in preparing for a contract, said that if gaps arose in the city's project funding the state might "be able to take a look at" ways to assist.

Port Commissioner and meeting chair Jessie Groves responded by asking around the room, "Does anyone here feel we are not doing due diligence?"

In later discussion, Paul Koch, interim city administrator for Cascade Locks, offered encouragement for the JCED team to seek additional volunteers to serve on a fact-finding, due diligence sub-committee. He confirmed that neither he, nor Port General Manager Chuck Daughtry had sufficient staff time available to fulfill the requirements of due diligence research.

He and Daughtry later suggested that JCED, which opted not to recruit sub-committee volunteers, consider seeking a paid, contractual relationship with Mid-Columbia Economic Development District, who could conduct research on their behalf.

In the final report of the RS team, ODOT's Brad DeHart, Region 4 operations engineer, spoke at length about traffic control issues related to Nestlé trucks transporting product from the industrial site.

He advised the group that truck length restrictions exist on WaNaPa Street, the preferred route through town and would have to be addressed. Additional concerns were focused on impacts to road infrastructure, entrance and exit ramps to I-84, safety issues at a railroad crossing, and constricted turn lanes.

Following DeHart's presentation and the RS team's departure, the JCED meeting continued on with a presentation from Cascade Locks City Light Superintendent Tracy Hupp.

Hupp reviewed several concerns related to power consumption for the Nestlé site and the potential impacts on rates. He advised that Cascade Locks receives all of its power from Bonneville Power Administration and currently pays preferred rates.

Hupp confirmed that the utility is using about one-third of its capacity. He then added that servicing Nestlé or any large industrial user will push the utility into Tier 2 rate levels. He voiced concerns about charging rates that would cause the utility to "go into the hole." He also warned: "We have no control over" market costs for power.

Additional discussion followed on options for the city to self-generate power and whether the BPA contract would preclude that. Some discussion followed on purchasing the substation now owned by BPA or encouraging Nestlé to install a wind turbine.

As the meeting progressed, JCED members received operational guidance from Port Attorney Jerry Jaques and City Attorney Rueben Cleaveland. The group learned it must comply with public meeting and documents laws and must avoid forming a quorum of either city or port officials without advance public notice.

The next JCED meeting will be held May 24, 7 p.m. at Cascade Locks City Hall.