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Darvin Fales of Columbia Basin Hydropower: Prospects for the Banks Lake Pumped Storage Project

Columbia Basin Hydropower was established in the 1980s to allow the three Columbia Basin Project irrigation districts to develop hydroelectric power stations on their facilities. Today, its seven generating stations have a nameplate capacity of 146 megawatts (MW). In addition to maintaining and operating its existing facilities, Columbia Basin Hydropower is working to build an immense pumped storage project at Banks Lake—in effect, a huge liquid battery that would allow the Pacific Northwest as a whole to make more efficient use of the electrical power it generates. In this interview, Columbia Basin Hydropower Secretary-Manager Darvin Fales speaks with Hydro Leader about the proposed project and the complexities of the federal permitting process. 

Hydro Leader: Please tell us about your background and how you came to be in your current position at Columbia Basin Hydropower. 

Darvin Fales: My career on the Columbia Basin Project started in 1985. I graduated from the University of Wyoming as an engineer, and my first job was district engineer at the South Columbia Basin Irrigation District (SCBID) in Pasco, Washington. During my 18 years at the SCBID, I was promoted to chief engineer and assistant manager. In 2002–2003, I went through the AgForestry Leadership Program as part of class 24. In 2004, I was offered the secretary-manager position at the Quincy– Columbia Basin Irrigation District (QCBID) in Quincy, Washington. I was the manager there for 15 years. One year ago, I accepted the position of secretary-manager of Columbia Basin Hydropower. 

In my current position, I report to a six-member board of directors. My responsibility is primarily to implement the board’s policies and directives in the administration and management of seven hydroelectric projects. My duties also include developing asset management plans for the plants and transmission lines; developing the yearly budget; carrying out contract negotiations; negotiating power-purchase contracts; and negotiating contracts with our operators, who belong to the International Brotherhood of Electrical Workers. Then there is the day-to-day operations and maintenance work that comes with operating seven generating plants. With the retirement of Tim Culbertson, the previous project development manager, I picked up the future development portion of the job as well. Now I’m overseeing the development of small hydro projects as well as that of a large hydro project, the Banks Lake Pumped Storage Project. 

Hydro Leader: Please tell us about the history of Columbia Basin Hydropower. 

Darvin Fales: The Columbia Basin Project comprises three irrigation districts: The SCBID, the QCBID, and the East Columbia Basin Irrigation District. In 1980, the three districts made an agreement that provided for their cooperation in the development, operation, maintenance, and ownership of any hydro generation facilities that might be developed on their irrigation delivery systems. Later that year, the districts secured the passage of state legislation that authorized irrigation districts to develop hydropower on irrigation systems. In 1982, Columbia Basin Hydropower was created, originally under the name Grand Coulee Project Hydroelectric Authority (it acquired its current name in 2015). From 1980 to 1987 the districts engaged in developing seven hydro sites. These sites are located across the project, from Coulee City, which is up north on the south end of Banks Lake, all the way down south of Pasco, Washington. These seven plants range in output from 2.2 MW to 92 MW and today have a total nameplate capacity of 146 MW. 

Hydro Leader: Please tell us about the proposed Banks Lake Pumped Storage Project. 

Darvin Fales: The Banks Lake Pumped Storage Project is proposed to be built between two existing reservoirs: Franklin D. Roosevelt Lake, which is behind Grand Coulee Dam, and Banks Lake. The proposed size of the project will be determined in collaboration with potential offtakers to meet the needs of the region. We expect the completed project to be within the range of 500–1,000 MW. 

The concept of a pumped storage project is relatively simple. It uses two reservoirs—an upper one and a lower one—to transfer and store water that can then be used to generate electricity at the times when it is most needed. When excess energy is being produced by wind or solar facilities, it can be used to pump water from the lower reservoir to the upper reservoir at relatively low costs. During times of higher power demand, water is sent back down to the lower reservoir, generating electricity. The proposed location is ideal for this kind of facility. The two large reservoirs already exist, so we don’t have to build any new dams or reservoirs. That’s a big advantage over most proposed pumped storage projects. 

Hydro Leader: How would this project bring balance to the region? 

A cross-section of the proposed Banks Lake Project.

Darvin Fales: Last year, the Washington State Legislature passed the Clean Energy Transformation Act, known as CETA, which commits the state of Washington to an electrical supply that is 80 percent free of greenhouse gas emissions by 2030 and 100 percent free of greenhouse gas emissions by 2045. To achieve that, we will have to retire multiple existing coal- and gas-fired power plants. Coal- and gas-fired electrical generation units are reliable, and as they’re phased out and taken offline, they will have to be replaced by other reliable sources. Hydropower is clean and reliable, so many power utilities are looking at it as a replacement for lost capacity. Batteries are another option for replacing these power sources, but at this point, hydropower typically has a higher capacity and much longer operational life than batteries do. Other large-scale renewables are wind and solar, which are efficient at producing energy but provide little firm capacity to the system. 

Hydro Leader: What is the estimated cost of the Banks Lake Project, and how long is construction expected to take?

Darvin Fales: The final cost will depend on what the nameplate capacity is going to be. There is a big difference between the costs of a 500 MW station and a 1,000 MW station. In any case, it’s going to be an expensive project, probably north of a billion dollars. The amount of time required for construction will depend largely on the geophysical conditions that we find upon further investigation. Tunnels will need to be bored through basalt and granite, and there are a lot of variables that could affect how long that will take. Our current aim is to have the plant ready for commercial generation in 2026 or 2027, which would line up with the phasing out of the coal plants. 

Hydro Leader: What is the current status of the project? 

Darvin Fales: This project was conceived by Ron Rodewald, who preceded Tim Culbertson as Columbia Basin Hydropower’s secretary-manager. When Tim Culbertson came on as secretary-manager in 2014, he started getting things lined up for this project. He brought together engineers, financial advisors, and potential power purchasers. When I came in, his work came together and it started to pick up speed. We’re continuing to work with our consultants, our engineering firms, our financial advisors, our legal counsel, our stakeholders, and all the government agencies that are involved to get us to a point where we can get our federal license and a lease. Essentially, we’re working toward a 30 percent design in engineering. We are also working through all our regulatory and environmental compliance processes and are actively seeking investors to partner in this project. 

We’re working to get a lease of power privilege (LOPP) from the Bureau of Reclamation and will submit our application shortly. If we’re successful, we will receive our preliminary lease in January 2021. At this time, we also need a license from the Federal Energy Regulatory Commission (FERC). We need both a lease and a license because while the two reservoirs are both Reclamation reservoirs, Reclamation has only authorized the power development of Franklin D. Roosevelt Lake at this point, not Banks Lake, and FERC has authority over the north dam portion of Banks Lake. A LOPP with Reclamation lasts 40 years, while a FERC license can be issued for up to 50 years. FERC is willing to shorten its term to 40 years so that we can put our regulatory requirements on a single timeline. That said, we have been working with Congress on a nonpartisan bill that would give authority over both dams and reservoirs to Reclamation, eliminating the need for a second process with FERC and all the time and money it would require. However, Congress has been tied up with a number of other issues. While we have our amendments in both the Senate and the House of Representatives ready to go, we haven’t been successful in getting them attached to bills that could move them through. We’re hopeful that our bill will be picked up by the Senate in its upcoming energy bill. 

Hydro Leader: What is your message to Congress and potential partners in your project? 

Darvin Fales: Everybody needs electricity, which means they need a reliable electrical power source. The grid here in the Northwest is going to be in much need of this resource, and it may benefit regions as far south as California. The Banks Lake Pumped Storage Project is a great and worthy project that is attracting a lot of support. Our request to Congress is to get us into a single application process and a single licensing process. That would represent a significant improvement in the financial outlook for this project and help us find a partner. To potential partners, I would say that our engineering team has done a lot of work over the last 5–6 years on operational modeling, design, and cost estimates that prove that this is a worthy project. 

Hydro Leader: What are Columbia Basin Hydropower’s other top issues and projects? 

Darvin Fales: As with everybody else in the irrigation and electrical fields, repairing and modernizing aging infrastructure is our number 1 issue. The modernization of our hydro generating plants will require millions of dollars. The FERC licenses for our existing assets have a 50‑year term and our power purchase contracts have a 40‑year term. The renegotiation of our power purchase contracts will begin soon. Our first plant went into commercial generation in 1982, so our contract needs to be renewed in 2022. When it comes to renewing our FERC licenses, there is a further issue. Reclamation has jurisdiction over the authorization of all hydropower development on Reclamation-owned facilities, which it manages through the LOPP program. We need to decide whether we’re going to pursue FERC relicensing for our seven small plants as we’ve done in the past or whether we are going to shift them over to Reclamation’s LOPP. FERC is part of the U.S. Department of Energy, while Reclamation is part of the U.S. Department of the Interior. The irrigation districts, which are the owners of these projects, are regulated by Interior, so it may make sense to shift all our existing licenses over to leases with Reclamation. 

Darvin Fales is the secretary-manager of Columbia Basin Hydropower. He can be contacted at dfales@cbhydropower.org.