As early as the 1920s, the dam at Iron Gate was conceived as part of the Federal Power Commission’s requirement for the California Oregon Power Company (Copco) to develop and utilize ALL of the power resources of the Klamath. Water was to be used, and if not for electric generation, certainly for irrigation. If there was "extra" it was fair game to be taken and used elsewhere. For the Klamath, this meant the possibility of diversion to the Sacramento Valley.
Complications from shifting water rights and priories for irrigation under Oregon's Hydroelectric Act of January 22, 1931, lead Copco to shift resources to California where it had powerhouses in Ward’s Canyon and Fall Creek. Iron Gate was in a good position, but disagreements over irrigation water rights persisted and Copco postponed the building of Iron Gate indefinitely. Water politics are always complicated, and crossing state lines especially so. Physically building dams and removing them could take a year or two, but only after decades of paperwork.
Iron Gate was eventually built in 1960 - 1962. In addition to hydroelectric power generation, Iron Gate, with no fish ladder, put a hard stop to anadromous fish migration upstream of the dam; salmonid lifecycles depend on cool side streams of both the upper and lower Klamath.
According to John C. Boyle, the threat of water being diverted to the Sacramento Valley was only prevented by the unanimous agreement that Klamath water was for the Klamath Basin, and diversion to the Sacramento River would be disastrous for everyone. The value added by the dams built by Boyle prevented diversion, thus saving Klamath River water for the Klamath region, rather than for California's Central Valley hundreds of miles away.
References
Boyle, John C. 50 Years on the Klamath. Self-published 1976-1982. Pages 50-51, 57.
