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Oroville Crisis Points to Need to Privatize Dams

February 13, 2017

Little wonder the state did not prioritize maintenance of the main spillway. Rather than treat the state of California harshly, all I will say is that government is not the easy button for tough problems.

Oroville Dam

The Oroville Dam is a part of California's water system. It's located at the red lines on the map below, between Sacramento and Redding. As water is released by the dam, it travels down the Feather River and then into the Sacramento River. At a later point, the water is pulled out of the Sacramento RIver to feed into the state's main aqueduct, shown in red.

[Click to see image.]

Like many dams, this one has three potentially conflicting missions: (1) flood control, (2) hydropower, and (3) irrigation. Actually, a fourth mission - recreation - might be mentioned. The man-made lake behind the dam provides boating and fishing opportunities.

For flood control, you'd like the reservoir behind the dam to be empty, to maximize the capacity to absorb excess rain and runoff. For hydropower, you'd like the reservoir to be full, to maximize the water pressure on the turbines at the base of the dam. For irrigation, you'd like a steady flow of water through the system.

If rainfall and runoff merely followed a simple annual pattern, managing a dam would be relatively easy. The problem is that there are complex multi-year patterns and lots of random variation to boot. In much of the world, there is a thirty-year water cycle, driven by El Nino and La Nina, making water management very challenging, and possibly beyond current technology in certain places.

During the past few years, California was hit by drought. The lake behind the Oroville Dam dropped very low. Water was rationed to downstream users. Now, The lake threatens the dam, and the state has little alternative but to release water from it.

Complicating the picture is that the first of two spillways built into the dam - the main spillway - has partially collapsed. The spillways are supposed to dummy-proof the dam. Instead of facing a catastrophic collapse of the dam, the spillway allows a potential overflow of water to spill out of the reservoir, harmless to the dam, and less harmful to those downstream than a wall of water and debris such as follows the collapse of a dam. You can see the big hole that opened up in the main spillway in the following picture.

[Click to see image.]

In the next picture, you can see the water spilling out of the reservoir, descending the main spillway until it gets to the hole in it, and then continuing down to the Feather River in two streams.

[Click to see image.]

Cracks in the main spillway were observed as early as 2013. State authorities satisfied themselves that there was no real problem with a fly-by inspection in 2015. At the time, the lake behind the dam was nearly empty, and the state was dealing with a drought along with its never-ending budget crisis.

Even with above average rainfall, with the snowpack at 180 percent of normal, and all the reservoirs of the state near capacity, the US Geological Survey is still not sure that the drought has been ended.

[Click to see image.]

Little wonder, then, that the state did not prioritize maintenance of the main spillway. Rather than treat the state of California harshly, all I will say is that government is not the easy button for tough problems. Some problems inherently involve contradictory considerations and everybody, at some point, has to deal with limited budgets.

At this point, I will just say a things about the so-called auxiliary spillway. The auxiliary spillway is to simply allow water to spill over the hill, to the left side of the main spillway in the above picture. This should only be done as a last resort to save the dam. First, this route will bring more debris into the Feather River, worsening conditions for those who are downstream. Second, it will quickly erode the hill and undermine the integrity of the main spillway. Plans should be made to affect emergency repairs to the main spillway as soon as it is safe to do so.

Longer run, dams should be privatized at least in the following ways: their budgets should be removed from the general budget. Dams generate enormous revenues in terms of sales of hydropower, as well as water rights and fees for recreation. These revenues should be devoted to retire the bonds issued for dam construction and for maintenance. Water rights should be priced so as to bring supply and demand into equilibrium. And, dams should be inspected by third-party, private insurance companies who are sharply focused, by potential liability, on safety.

Clifford F. Thies is the Eldon R. Lindsay Professor of Economics and Finance at Shenandoah University. He received his Ph.D. in economics from Boston College.

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