[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
ELECTRICITY PRICES AND SALMON: FINDING A BALANCE
=======================================================================
OVERSIGHT FIELD HEARING
before the
SUBCOMMITTEE ON WATER AND POWER
of the
COMMITTEE ON RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
__________
Friday, July 7, 2006, in Pasco, Washington
__________
Serial No. 109-58
__________
Printed for the use of the Committee on Resources
Available via the World Wide Web: http://www.gpoaccess.gov/congress/
index.html
or
Committee address: http://resourcescommittee.house.gov
______
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28-557 WASHINGTON : 2006
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COMMITTEE ON RESOURCES
RICHARD W. POMBO, California, Chairman
NICK J. RAHALL II, West Virginia, Ranking Democrat Member
Don Young, Alaska Dale E. Kildee, Michigan
Jim Saxton, New Jersey Eni F.H. Faleomavaega, American
Elton Gallegly, California Samoa
John J. Duncan, Jr., Tennessee Neil Abercrombie, Hawaii
Wayne T. Gilchrest, Maryland Solomon P. Ortiz, Texas
Ken Calvert, California Frank Pallone, Jr., New Jersey
Barbara Cubin, Wyoming Donna M. Christensen, Virgin
Vice Chair Islands
George P. Radanovich, California Ron Kind, Wisconsin
Walter B. Jones, Jr., North Grace F. Napolitano, California
Carolina Tom Udall, New Mexico
Chris Cannon, Utah Raul M. Grijalva, Arizona
John E. Peterson, Pennsylvania Madeleine Z. Bordallo, Guam
Jim Gibbons, Nevada Jim Costa, California
Greg Walden, Oregon Charlie Melancon, Louisiana
Thomas G. Tancredo, Colorado Dan Boren, Oklahoma
J.D. Hayworth, Arizona George Miller, California
Jeff Flake, Arizona Edward J. Markey, Massachusetts
Rick Renzi, Arizona Peter A. DeFazio, Oregon
Stevan Pearce, New Mexico Jay Inslee, Washington
Henry Brown, Jr., South Carolina Mark Udall, Colorado
Thelma Drake, Virginia Dennis Cardoza, California
Luis G. Fortuno, Puerto Rico Stephanie Herseth, South Dakota
Cathy McMorris, Washington
Bobby Jindal, Louisiana
Louie Gohmert, Texas
Marilyn N. Musgrave, Colorado
Vacancy
Steven J. Ding, Chief of Staff
Lisa Pittman, Chief Counsel
James H. Zoia, Democrat Staff Director
Jeffrey P. Petrich, Democrat Chief Counsel
------
SUBCOMMITTEE ON WATER AND POWER
GEORGE P. RADANOVICH, California, Chairman
GRACE F. NAPOLITANO, California, Ranking Democrat Member
Ken Calvert, California Raul M. Grijalva, Arizona
Barbara Cubin, Wyoming Jim Costa, California
Greg Walden, Oregon George Miller, California
Thomas G. Tancredo, Colorado Mark Udall, Colorado
J.D. Hayworth, Arizona Dennis A. Cardoza, California
Stevan Pearce, New Mexico Vacancy
Cathy McMorris, Washington Vacancy
Vice Chair Nick J. Rahall II, West Virginia,
Louie Gohmert, Texas ex officio
Vacancy
Richard W. Pombo, California, ex
officio
------
C O N T E N T S
----------
Page
Hearing held on Friday, July 7, 2006............................. 1
Statement of Members:
Hastings, Hon. Doc, a Representative in Congress from the
State of Washington........................................ 5
Prepared statement of.................................... 6
McMorris, Hon. Cathy, a Representative in Congress from the
State of Washington........................................ 1
Prepared statement of.................................... 3
Statement of Witnesses:
Chandler, Gary, Vice President of Governmental Affairs,
Association of Washington Business, Olympia, Washington.... 73
Prepared statement of.................................... 74
Cooper, Scott, Director, Parish Social Ministries, Catholic
Charities, Spokane Parish, Spokane, Washington............. 14
Prepared statement of.................................... 16
Durham-Aguilera, Karen, Director of Programs, Northwestern
Division, U.S. Army Corps of Engineers..................... 33
Prepared statement of.................................... 34
Espinoza, Ricardo, President of the Board of Directors, Pasco
School District, Pasco, Washington......................... 11
Prepared statement of.................................... 12
Flores, Terry G., Executive Director, Northwest
RiverPartners, Portland, Oregon............................ 44
Prepared statement of.................................... 46
Hirsh, Nancy, Policy Director, Northwest Energy Coalition,
Seattle, Washington........................................ 38
Prepared statement of.................................... 40
Miles, Hon. Rebecca, Commissioner, Columbia River Inter-
Tribal Fish Commission, Portland, Oregon................... 48
Prepared statement of.................................... 50
Morrison, Hon. Sid, Chairman of the Board, Energy Northwest,
and Chairman of the Board, Yakima Basin Storage Alliance,
Zillah, Washington......................................... 17
Prepared statement of.................................... 19
Reimann, Ron, Owner/Operator, T & R Farms, Inc., Pasco,
Washington................................................. 8
Prepared statement of.................................... 9
Voigt, Chris, Executive Director, Washington State Potato
Commission, on behalf of the Family Farm Alliance, Moses
Lake, Washington........................................... 67
Prepared statement of.................................... 69
Wright, Stephen J., Administrator and Chief Executive
Officer, Bonneville Power Administration, U.S. Department
of Energy, Portland, Oregon................................ 21
Prepared statement of.................................... 23
Additional materials supplied:
Dawsey, Charles L., General Manager-EVP, Benton Rural
Electric Association, Statement submitted for the record... 83
OVERSIGHT HEARING ON ``ELECTRICITY PRICES AND SALMON: FINDING A
BALANCE''
----------
Friday, July 7, 2006
U.S. House of Representatives
Subcommittee on Water and Power
Committee on Resources
Pasco, Washington
----------
The Subcommittee met, pursuant to call, at 9:00 a.m., at
the Gjerde Multipurpose Room, Columbia Basin College, 2600
North 20th Avenue, Pasco, Washington, Hon. Cathy McMorris [Vice
Chairman of the Subcommittee] presiding.
Present: Representatives McMorris and Hastings.
STATEMENT OF THE HON. CATHY McMORRIS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WASHINGTON
Miss McMorris. The Subcommittee on Water and Power will
come to order. I thank everyone for coming and being a part of
this very timely and important Congressional hearing. I'd like
to welcome everyone to today's hearing.
I represent the neighboring 5th District in Eastern
Washington and serve as the Vice Chair of the House Water and
Power Subcommittee, and I want to thank my colleague, Doc
Hastings, for having me in his hometown.
Before we go to the opening statements and testimony, I
would like to turn to Representative Hastings to introduce some
of his citizens who will begin the hearing with the Invocation,
Presentation of the Colors, and the Pledge of Allegiance.
[Invocation, Presentation of the Colors, and the Pledge of
Allegiance.]
Miss McMorris. This field hearing is about finding a
balance between providing reliable and affordable electricity
for our consumers, while protecting endangered salmon. As we
sit here at the confluence of the Columbia and Snake River
systems, we admire the natural beauty of our Pacific Northwest
river systems.
These rivers have a major economic purpose as well. They
serve as the lifeblood of our economy, our customs, our
cultures, and our traditions. The multipurpose dams and
reservoirs on the rivers not only helped to win World War II
but, to this day, provide many benefits to those of us in the
Pacific Northwest. By using and protecting our natural
resources, people throughout the Northwest have a reliable and
renewable source of energy, while also being able to enjoy our
resources, as people have done for hundreds of years.
Low-cost, renewable hydropower forms the backbone of our
regional electricity supply. The promise of this long-term,
low-cost hydropower made the Pacific Northwest what it is
today. Yet this promise is being undermined by constant
litigation, activists who want to tear down the dams and our
hydropower systems, as well as bureaucrats 2600 miles away in
Washington, D.C., who want to balance the Federal budget on the
backs of ratepayers. I think there are other ways to balance
this budget, while still providing our customers with the
energy they rely upon.
Oftentimes, the Endangered Species Act is being used as a
tool to drive up cost for our electricity consumers. No one
disagrees with protecting truly endangered species, but the ESA
has been misinterpreted and stretched to put species before
people. Just ask the hardworking farmers of Klamath Falls,
Oregon, who were basically forced out of business when the
Federal Government shut off their water to protect endangered
suckerfish, only to have an independent science panel later say
the water shut-off may not have been necessary.
The Federal Government has spent billions of dollars,
reduced water deliveries to communities, made electricity more
expensive and, yet, the ESA still has a 1 percent rate of
success at best. In the world I grew up in, a 1 percent rate
does not meet the definition of success. We're trying to change
the way ESA is being carried out through a reasonable approach
that makes this process fair for all involved. We have passed a
reform bill in the House and are waiting for the Senate to act.
Meanwhile, the ESA is upfront and personal here in Eastern
Washington, and our farmers and electricity consumers are
paying for it. Opinions coming from a Federal judge have
severely curtailed our ability to appropriately manage our
hydropower and natural resources. According to the Washington
Post, Judge Redden's 2004 summer spill amounted to spending
$3.85 million for each protected Chinook salmon. That's an
expensive salmon. And, unfortunately, these costs are passed on
to electricity ratepayers. Judicial activism needs to stop, and
unbiased jurisprudence must take its place.
While the ESA has had its own impact on power within our
region, the Bonneville Power Administration, BPA, manages and
provides much of that power. Recent Administration budget
proposals regarding secondary revenue have come dangerously
close to increasing our power rates even more. This proposal
has been temporarily blocked by recent legislation enacted by
Congress. Representative Hastings, myself, and a bipartisan
group of members throughout the Northwest have and will
continue to fight this proposal.
No one can deny that the ESA has impacted recent Bonneville
power rates. Yet many consumers don't know how much they pay
for fish protection, why they pay, and whether they're paying
for them at all. A May 2005 poll found that 70 percent of
respondents either didn't know how much they paid for salmon
recovery or believed that less than 5 percent of their monthly
bills goes to salmon recovery.
Yet, in 2004 the ESA components of BPA's fish and wildlife
program comprised approximately 23 percent of the agency's
wholesale rates. Clearly, this disparity shows there's a
disconnect between what consumers know or have access to versus
what's real. Consumers need and deserve open access to
information on how these figures are affecting their
pocketbooks.
The Endangered Species Compliance and Transparency Act,
H.R. 4857, which I've introduced, would require BPA to estimate
and report the direct and indirect ESA costs to each wholesale
power customer on a monthly billing basis. Whether or not you
agree with how the ESA is being implemented is not the point.
The bill simply gives customers a right to know how much of the
Federal Government's ESA costs are being passed on to them.
In my district, Inland Power and Light already provides
customers on their monthly energy bill all the costs that are
passed on by BPA relating to the Endangered Species Act. This
is the kind of reporting we need and that every customer has a
right to know. Many customers at Inland were surprised at the
costs they pay each month.
And once they receive this information, they can make more
informed decisions. They may ask whether the salmon recovery
program is working or ask themselves if government can do
better. And those are the questions, exactly, why many are
afraid of this debate, but that's the question that we'd like
to have debated today.
I hope the Federal witnesses can tell us how they measure
success in salmon recovery or explain what standards and
benchmarks are being used to show progress.
I plan on using today's hearing as a basis to ask the
Government Accountability Office to answer these questions. Our
ratepayers and endangered salmon deserve those answers so that
the ESA can be made to work for both species and people.
We are privileged to have before us today a host of ``on-
the-ground'' experts who know what rising electricity bills
mean to them and to our economy, and I look forward to today's
hearing.
[The prepared statement of Ms. McMorris follows:]
Statement of The Honorable Cathy McMorris, Vice Chair,
Subcommittee on Water and Power
I would like to welcome everyone to today's hearing. I represent
the neighboring 5th District in Eastern Washington and serve as Vice
Chair of the House Water and Power Subcommittee. I want to thank my
colleague, Doc Hastings, for having me in his hometown.
This field hearing is about finding a balance between providing
reliable and affordable electricity for our consumers, while protecting
endangered salmon with a balanced and reasonable approach. As we sit
here at the confluence of the Columbia and Snake Rivers, we admire the
natural beauty of the Pacific Northwest's river systems. These rivers
have a major economic purpose as well. They serve as the lifeblood of
our economy, our customs, our cultures and our traditions. The
multipurpose dams and reservoirs on the rivers--as envisioned by
President Franklin Delano Roosevelt--not only helped win World War II,
but to this day, provide many benefits to those of us in the Pacific
Northwest. By using and protecting our natural resources, people
throughout the Northwest have a reliable and reasonable source of
energy while also being able to enjoy our resources, as people have
done for hundreds of years.
Low-cost, renewable hydropower forms the backbone of our regional
electricity supply. The promise of this long-term, low-cost hydropower
made the Pacific Northwest what it is today. Yet this promise is being
undermined by constant litigation, activists who want to tear down the
dams and our hydropower system, as well as bureaucrats 2,600 miles away
in Washington, DC who want to balance the federal budget on the backs
of our ratepayers. I think there are other ways to balance this budget
while still providing our constituents the energy they rely upon.
Oftentimes, the Endangered Species Act (ESA) is being used as a
tool to drive up costs for our electricity consumers. No one disagrees
with protecting truly endangered species, but the ESA has been
misinterpreted and stretched to put species before people at any cost.
Just ask the hardworking farmers in Klamath Falls, Oregon who were
basically forced out of business when the federal government shut off
their water to protect endangered suckerfish only to have an
independent science panel later say that the water shut-off may not
have been necessary.
The federal government has spent billions of dollars, reduced water
deliveries to communities, made electricity more expensive and lined
the pockets of many lawyers, yet the ESA still has a 1% rate of success
at best. In the world I grew up in, a 1% rate does not meet the
definition of success. We are trying to change the way ESA is being
carried out, through a reasonable approach that makes this process fair
for all involved. We have passed a reform bill in the House, and are
waiting for the Senate to act.
Meanwhile, the ESA is upfront and personal here in Eastern
Washington--and our farmers and electricity consumers are paying for
it. Biological opinions coming forth from a federal district judge have
severely curtailed our ability to appropriately manage our hydropower
and natural resources. As this chart shows, the costs are outrageous.
According to the Washington Post, Judge Redden's 2004 summer spill
amounted to spending $3.85 million for each protected Chinook salmon.
That's an expensive salmon and unfortunately, those costs are passed on
to electricity ratepayers. Judicial activism needs to stop, and
unbiased jurisprudence must take its place.
While the ESA has its own impact on power within our region, the
Bonneville Power Administration (BPA) manages and provides much of that
power. Recent Administration budget proposals regarding secondary
revenue have come dangerously close to increasing our power rates even
more. This proposal has been temporarily blocked by recent legislation
enacted by Congress. Representative Hastings, myself, and a bipartisan
group of Members throughout the Northwest have and will continue to
fight this proposal.
No one can deny that the ESA has impacted recent Bonneville power
rates. Yet, many consumers don't know how much they pay for fish
protection, why they pay, or whether they're paying for them at all. A
May 2005 poll found that 70 percent of respondents either didn't know
how much they paid for salmon recovery or believe that less than 5
percent of their monthly bills go to salmon recovery. Yet, in 2004, the
ESA components of BPA's fish and wildlife program comprised
approximately 23 percent of the agency's wholesale rates. Clearly, this
disparity shows there is a disconnect between what consumers know--or
have access to--versus what's real. Consumers need and deserve open
access to this information, and how these factors are affecting their
pocketbooks.
My legislation gives consumers that access. The Endangered Species
Compliance and Transparency Act, H.R. 4857, requires BPA to estimate
and report the direct and indirect ESA costs to each wholesale power
customer on a monthly billing basis. Whether or not you agree with how
the ESA is being implemented is not the point here. This bill simply
gives customers the right to know how much of the federal government's
ESA costs are being passed on to them. Already in my district, Inland
Power and Light provides customers on their monthly energy bill all the
costs that are passed on by BPA relating to ESA costs. This is exactly
the kind of reporting we need, and that every customer has a right to
know. Many customers of Inland were surprised at the cost they pay each
month, and many I have heard from have questions as to where those
costs are coming from and what they go towards.
Once consumers receive access to this information, they can make
informed decisions. They may question whether the salmon recovery
program is working or ask themselves if their government can do better.
And those questions are exactly why many are afraid of this debate--
because it leads to questions of whether the command-and-control,
judicially driven ESA decisions are working.
Some of those questions will be debated today. I hope the federal
witnesses can tell us how they measure success in salmon recovery or
can explain what standards and benchmarks are being used to show
progress. I plan on using today's hearing as a basis to ask the
Government Accountability Office to help answer these questions--our
ratepayers and endangered salmon deserve those answers so that the ESA
can be made to work for both species and people.
We are privileged to have before us today a host of ``on-the-
ground'' experts who know what rising electricity bills mean to them
and to our economy. I welcome them and look forward to today's hearing.
______
Miss McMorris. At this time I'd like to turn it over to
Representative Hastings.
STATEMENT OF THE HON. DOC HASTINGS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WASHINGTON
Mr. Hastings. Thank you very much. I appreciate your work
on getting this field hearing here. Cathy was a bit modest
because she serves on that committee. And while those of us in
the Northwest on a bipartisan basis work together a lot on this
issue as far as electrical rates, clearly, Cathy has a big
impact in that she serves on the committee, and that's the
reason the field hearing is here, and I want to thank her for
that.
This is an issue that affects all of us in the Northwest.
And I think it's especially significant that the Water and
Power Subcommittee decided to come here to see what the impacts
are.
For more than 70 years the Federal dams on the Columbia and
Snake River systems have been the cornerstone of our region's
economic development. This clean and relatively inexpensive
electricity generated by these facilities helps serve the
elements of the aerospace, aluminum, and now information
technology industries here in the Northwest.
These multipurpose dams provide the water and power needed
to run the irrigation systems that have turned this once arid
basin into one of the country's premier centers of high value
agriculture. The dam facility and river transportation in the
region must export products to distant markets. In addition,
they create new recreation opportunities and protect against
flooding.
These assets come with responsibilities, both financial and
environmental. Our region repays the Federal Treasury with
interest for the construction and maintenance of these
facilities. Let me repeat that. You ratepayers in our region
repay the Federal Treasury with interest for the construction
and maintenance of these facilities. We have consistently
repaid this debt and, in fact, we are ahead of schedule on the
Federal debt repayment by nearly $1 billion. These are our
dams, and the Northwest Congressional Delegation would never
allow any outside region or administration to take the benefits
of this system away from us.
On the environmental side, we have made substantial
investments, mainly paid for by ratepayers, all of you, to
better facilitate fish passage throughout the hydrosystem and
to greatly improve habitat. Due in part to our regional
commitment of salmon recovery, we have witnessed near record
salmon returns in most areas of the Columbia and the Snake
River regions.
For example, the number of spring and summer Chinook
passing over Bonneville Dam this year is the sixth strongest in
the past 20 years. We are all committed to seeing healthy
salmon runs and meeting our obligations under the Endangered
Species Act and our treaty obligations with Northwest Tribes.
And we can do this without the extreme step of tearing out the
dams.
I will restate for the record, unequivocally, that those
dams are not going to go anywhere as long as I have something
to say about that in Congress. And I know I'm not alone in that
regard.
Unfortunately, over the past ten years this has
increasingly become a litigation-driven process. We now have an
unelected and I believe unaccountable Federal judge in Portland
determined to run the river himself with little regard for the
impact of his decisions on this side of the mountains.
In a court hearing last fall, he referred to the Northwest
irrigation, transportation and power as ``subsidies'' and gave
great deference to proposals set forth by interests that have
an agenda to tear out the dams. As a result of his court
orders, a steady drip of expensive fish measures of
questionable value flows from his courtroom directly onto the
backs of ratepayers and river users.
One of the most obvious and egregious examples of this is
the summer spill program, where generators are bypassed during
the hottest and driest part of the summer at a cost last year
of $75 million on the theory that it aids an additional few
dozen endangered Snake River fish.
The question is, is spending upwards of $3.5 million per
listed fish, while ignoring more cost-effective approaches that
achieve the same or better results, really the most efficient
way to recover salmon? It clearly, in my view, is not. But this
is where we find ourselves, routinely spending nearly a billion
dollars a year on salmon recovery in our region and,
unfortunately, there is no end in sight.
There are real consequences of this policy to those of us
who pay the household electrical bill or have to manage the
overhead costs of a small business, a farm, a school, or a
hospital.
The Congresswoman's proposal, which I support, would shine
a necessary light on the reality of the increasing costs of the
Endangered Species Act. It is time to acknowledge that we have
long passed the point of diminishing returns with modifications
to the hydrosystem. If we truly want to aid salmon, let's look
at harvest policies, and utilizing hatcheries to supplement
naturally-spawning salmon, and the ongoing unchecked predation
of salmon by exploding populations of protected California sea
lions and Caspian terns.
So I look forward to hearing more from all of the witnesses
here today on this important topic. It is important to all of
us in the Northwest. And I want, again, to thank you for
sharing your support of the hearing today and look forward to
the testimony from the witnesses.
[The prepared statement of Mr. Hastings follows:]
Statement of The Honorable Doc Hastings, a Representative in Congress
from the State of Washington
Thank you for holding this important field hearing here in Pasco
today. This is an issue that affects all of us in the Northwest, and I
think it is especially significant that the Water and Power
Subcommittee decided to come here to get input about how fish costs and
electric rates are affecting our region directly from those who are
most impacted.
For more than seventy years the federal dams on the Columbia-Snake
River system have been the cornerstone of our region's economic
development. The clean and relatively inexpensive electricity generated
by these facilities helped spur the development of the aerospace,
aluminum, and now information technology industries here in the
Northwest. These multipurpose dams provide the water and the power
needed to run the irrigation systems that have turned this once arid
basin into one of the country's premier centers of high-value
agricultural production. The dams facilitate river transportation in a
region that must export its products to distant markets. In addition
they create new recreation opportunities and protect against flooding.
These assets come with responsibilities, both financial and
environmental. Our region repays the federal treasury with interest for
the construction and maintenance of these facilities. We have
consistently repaid this debt and, in fact, are ahead of schedule on
federal debt repayment by nearly one billion dollars. These are our
dams and the Northwest congressional delegation will never allow any
outside region or any Administration to steal the benefits of this
system from us.
On the environmental side, we have made substantial investments--
mainly paid for by ratepayers--to better facilitate fish passage
throughout the hydrosystem and to improve habitat. Due in part to our
regional commitment to salmon recovery, we have witnessed near record
salmon returns in most areas of the Columbia and Snake basins. For
example, the number of spring and summer chinook passing over the
Bonneville Dam this year is the sixth strongest in the past twenty
years.
We are all committed to seeing healthy salmon runs and meeting our
obligations under the Endangered Species Act and our treaty obligations
with Northwest tribes--and we can do this without the extreme step of
tearing out dams. I will restate for the record, unequivocally, that
those dams are never going anywhere as long I have something to say
about it.
Unfortunately, over the last ten years, this has increasingly
become a litigation-driven process. We now have an unelected, and I
believe unaccountable, federal judge in Portland who appears determined
to run the river himself with little regard for the impacts of his
decisions on this side of the mountains. At a court hearing last fall,
he referred to Northwest irrigation, transportation and power as
``subsidies'' and gave great deference to proposals set forth by
interests that have an agenda to tear out the dams. As a result of his
court orders, a steady drip of expensive fish measures of questionable
value flows from his courtroom directly onto the backs of ratepayers
and river users.
One of the most obvious and egregious examples of this is the
summer spill program, where the generators are bypassed during the
hottest and driest part of the summer at a cost of seventy five million
dollars or more on the theory that it aids an additional few dozen
Snake River Fall Chinook. Is spending upwards of three and half million
dollars per listed fish while ignoring more cost-effective approaches
that achieve the same or better results really the most efficient way
to aid the recovery of salmon? It clearly is not. But this is where we
find ourselves today: routinely spending nearly a billion dollars a
year on salmon recovery in our region with no end in sight.
There are real consequences of this policy to those of us who pay
the household electric bill, or have to manage the overhead costs of a
small business, a farm, a school or a hospital. Congresswoman McMorris'
proposal--which I support--would shine a necessary light on the reality
of the increasing costs of the Endangered Species Act placed on
Northwest ratepayers and hopefully, begin to shift the region's focus
more to accountability on ensuring every federal and ratepayer dollar
spent on salmon recovery is not squandered.
It is time to acknowledge that we have long passed the point of
diminishing returns with modifications to the hydrosystem. If we truly
want to aid salmon, let's look at harvest policies, and utilizing
hatcheries to supplement naturally-spawning salmon, and the ongoing
unchecked predation of salmon by exploding populations of protected
California sea lions and Caspian terns.
I look forward to hearing more from all of the witness here today
on this important topic. And thank you again for chairing this
important hearing today.
______
Miss McMorris. Thank you. I'd like to recognize our panel
this morning as quite an impressive panel that's assembled and
thank each one of you for taking time to be here.
By way of introduction, we have Mr. Ron Reimann. He is
Owner/Operator of T & R Farms in Pasco, Washington. Mr. Ricardo
Espinoza, President of the Board, Pasco School District. Mr.
Scott Cooper, Director of Parish Social Ministry, Catholic
Charities, Spokane. The Honorable Sid Morrison, Chairman of the
Executive Board, Energy Northwest, and Chairman of the Board,
Yakima Basin Storage Alliance out of Zillah.
Mr. Steven Wright, Administrator of the Bonneville Power
Administration, Portland, Oregon. And he's accompanied by Bill
Maslen, Manager, Fish and Wildlife, Bonneville Power
Administration. Steve is on a very tight time schedule today,
so I understand you're going to give your testimony and then go
with a round of questions. OK? I appreciate that.
Karen Durham-Aguilera, Director of Programs, Northwestern
Division, U.S. Army Corps of Engineers. Nancy Hirsh, Policy
Director, Northwest Energy Coalition, Seattle, Washington.
Terry Flores, Director, Northwest RiverPartners, Portland,
Oregon. The Honorable Rebecca Miles, Commissioner, Columbia
River Inter-Tribal Fish Commission, Portland, Oregon. And she's
accompanied by Mr. Ed Sheets.
Chris Voigt, Executive Director, Washington State Potato
Commission and member of the Family Farm Alliance out of Moses
Lake, Washington. And Mr. Gary Chandler, Vice President of
Government Affairs, Association of Washington Business.
Before we get started, I need to ask you to stand for the
oath. Please stand and raise your right hands and affirm after
me.
[Witnesses sworn.]
Miss McMorris. Before the witnesses testify, I would like
the members of the audience to know that we would welcome your
written testimony. There's forms in the back where you can
submit your written comments.
Now, we've asked each of those on the panel to speak for
five minutes, and then we'll open it up for questions. And I'll
ask you just to pay attention to the clock here. Some suggest
that it's very similar to a traffic light. Green means go.
Yellow means speed up. And red means stop. The clock is here
for you to use.
At this time Mr. Reimann will start and share with us.
STATEMENT OF RON REIMANN, OWNER/OPERATOR,
T & R FARMS, INC., PASCO, WASHINGTON
Mr. Reimann. I'd like to thank the Congressmen for bringing
this hearing here. It saves a trip to Washington, D.C. I'm an
owner/operator of a family owned diversified farm on the Snake
River. We bought our present land in '73 and planned to put
irrigation on it in '74. We put development on hold when a
water moratorium was put on the lower Snake River to study its
uses. We also ran into a little animal called the Kangaroo
Mouse and its habitat.
In 1975 irrigation development started. Pumps, pivots, main
line, were all paid for by T & R Farms with no use of any
government money. We started water and power savings in '79
using infrared photography, neutron probes. We also installed a
variable drive pump at a river station, which was the first of
its kind installed on either the Snake or the Columbia River.
We installed low pressure pivots at this time.
We use global positioning to fertilize, plant, and till our
ground. And this equipment gives us sub-inch accuracy and saves
up to 35 percent on fuel costs. Our entire fields are treated
this way. We monitor soil moisture, soil nutrients, and plant
nutrients on a bi-weekly and weekly basis. We use computers to
control our pumping and adjust our pressure and water use that
adjusts the total every eight minutes. We have used ethanol
since 1985. We have developed wildlife ponds and planted trees
and bushes to enhance the habitat. We have done this to enhance
our farm environment.
We have reduced our electrical power usage 46 percent per
acre since '79, and we have reduced our water usage 33 percent
per acre. From '75 to 2005 our electrical power rate has
increased 281 percent. 81 percent of this has come since 2001.
Because of this we are constantly looking at our power costs.
And in 2006 we removed the circle and the main line that
provides water to it. In its nine years of existence, it's
generated $1,601,700 on land that was previously cheat grass.
For tax purposes this land, under open spaces, was assessed
at $1,147 an acre. It is now reverted back to ground at an
assessed value of $8 an acre. This is money that is lost to the
state and local government.
Our other source of power, gas and diesel, has increased
356 percent and 625 percent since 1975. By comparison, our
commodities such as wheat has decreased 26 percent, potatoes
have increased only 4.5 percent. The fact that we are still
here is amazing to us, not to mention our banker. We have
survived because we have become more efficient and have
increased our crop yields.
The Snake River is the heart and blood of our farm. We are
truly fortunate to have a source of energy that is as efficient
as hydropower. Would somebody in this room please tell me of
another source of energy we have that has no emissions, no
waste, no hazardous cleanup, a renewable source that can be
used for recreation, food production, transportation, flood
control, and wildlife? In this day and age we no longer can
afford to jeopardize this amazing power source by courts and
judges that know nothing of this great natural resource.
Spilling water to flush fish down the river is senseless
and environmentally unsound. We need to put some common sense
into the Endangered Species Act. We cannot continue to leave
families such as mine out of the equation. I am just as
important as a fish, and I can damn well tell you that my
three-year-old granddaughter is much more important.
You can patch a roof using $20 bills but it's obviously too
costly and only a temporary fix. We have to approach this
problem practically, not just try to buy off the problem.
The Endangered Species Act is a tool no different than a
shovel. Put to common sense use, it can produce. But in the
wrong hands, it can just as easily destroy. Let's put our dams
back to use for the environment.
And I would like to thank you and I'd like to leave you
with four truths that after 63 years I have found to be self-
evident. First, nothing is ever as good as people say it is.
Second, nothing is ever as bad as people say it is. Third, any
justice that comes out of a courtroom, is an accident. And,
fourth and last but not least, any common sense that comes from
the government is truly a miracle.
[The prepared statement of Mr. Reimann follows:]
Statement of Ron Reimann, Owner/Operator,
T & R Farms, Inc., Pasco, Washington
MY NAME IS RON REIMANN, I AM ONE OF THE OWNERS OF T&R FARMS. WE ARE
A FAMILY OWNED AND OPERATED FARM. WE ARE A DIVERSE FARMING OPERATION OF
APPROXIMATELY 7600 ACRES OF WHICH 4600 IS IRRIGATED. OUR MAIN SOURCE OF
WATER IS THE SNAKE RIVER.
WE BOUGHT OUR FARM IN 1973 AND PLANNED TO PUT IRRIGATION ON IT IN
1974. WE PUT DEVELOPMENT ON HOLD WHEN A WATER MORATORIUM WAS PUT ON THE
LOWER SNAKE TO STUDY ITS BEST USES. WE ALSO RAN INTO A LITTLE ANIMAL
CALLED THE KANGAROO MOUSE AND ITS HABITAT.
1975 IRRIGATION DEVELOPMENT STARTED. PUMPS, PIVOTS AND MAINLINE
WERE ALL PAID FOR BY T&R FARMS WITH NO USE OF ANY GOVERNMENT MONEY.
WE STARTED WATER AND POWER SAVING METHOD IN 1979 USING AERIAL
INFRARED PHOTOGRAPHY AND NEUTRON PROBES TO MEASURE MOISTURE CONTENT OF
OUR SOIL. IN 1981 WE INSTALLED A 600HP VARIABLE DRIVE PUMP AT OUR RIVER
STATION THAT WAS THE FIRST OF ITS KIND USED ON THE SNAKE OR COLUMBIA
RIVERS. WE ALSO INSTALLED OUR FIRST LOW PRESSURE PIVOT.
WE USE GLOBAL POSITIONING TO FERTILIZE AND TO PLANT AND TILLAGE OUR
GROUND. THIS EQUIPMENT GIVES U.S. SUB-INCH ACCURACY AND SAVES UP TO 35%
ON FUEL COSTS. OUR ENTIRE FIELDS ARE TREATED THIS WAY. WE MONITOR SOIL
MOISTURE, SOIL NUTRIENTS AND PLANT NUTRIENTS ON A BI-WEEKLY AND WEEKLY
BASIS. WE USE COMPUTERS TO CONTROL OUR PUMPING AND ADJUST OUR PRESSURE
AND WATER USE THAT ADJUSTS EVERY 8 MINUTES. WE HAVE USED ETHANOL SINCE
1985. WE HAVE DEVELOPED WILDLIFE PONDS AND PLANTED TREES AND BUSHES TO
ENHANCE HABITAT. WE HAVE DONE THIS TO ENHANCE OUR FARM ENVIRONMENT.
WE HAVE REDUCED OUR ELECTRICAL POWER USAGE 46% PER ACRE SINCE 1979
AND WE HAVE REDUCE OUR WATER USAGE 33% PER ACRE.
FROM 1975 TO 2005 OUR ELECTRICAL POWER RATE HAS INCREASED 280.92%,
81.3% OF THIS INCREASE HAS COME SINCE 2001. BECAUSE OF THIS WE ARE
CONSTANTLY LOOKING AT OUR POWER COSTS AND IN 2006 WE REMOVED A CIRCLE
AND THE MAINLINE THAT PROVIDES WATER TO IT. IN ITS NINE YEARS OF
EXISTENCE IT GENERATED $1,601,700 ON LAND THAT PREVIOUSLY WAS CHEAT
GRASS. FOR TAX PURPOSES THIS LAND UNDER OPEN SPACES WAS ASSESSED AT
$1147.00 AN ACRE. IT HAS NOW REVERTED BACK TO GROUND AT AN ASSESSED
VALUE OF $8.00 AN ACRE. THIS IS MONEY THAT IS LOST TO THE STATE AND
LOCAL ECONOMY
OUR ``OTHER SOURCE OF POWER'', GAS AND DIESEL HAS INCREASED 355.67%
AND 624.54% RESPECTIVELY
ON THE OTHER HAND OUR COMMODITIES SUCH AS WHEAT HAS DECREASED 26%.
POTATOES HAVE INCREASED 4.53% THE FACT THE WE ARE STILL HERE IS AMAZING
TO U.S. NOT TO MENTION OUR BANKER!!! WE HAVE SURVIVED BECAUSE WE HAVE
BECOME MORE EFFICIENT AND HAVE INCREASED OUR CROP YIELDS.
THE SNAKE RIVER IS THE HEART AND BLOOD OF OUR FARM. WE ARE TRULY
FORTUNATE TO HAVE A SOURCE OF ENERGY THAT IS AS EFFICIENT AS HYDRO-
POWER. WHAT OTHER SOURCE OF ENERGY DO WE HAVE THAT HAS NO EMISSIONS, NO
WASTE, NO HAZARDOUS CLEANUP. A RENEWABLE SOURCE THAT CAN BE USED FOR
RECREATION, FOOD PRODUCTION, TRANSPORTATION, FLOOD CONTROL AND
WILDLIFE. IN THIS DAY AND AGE WE NO LONGER CAN AFFORD TO JEOPARDIZE
THIS AMAZING POWER SOURCE BY COURTS AND JUDGES THAT KNOW NOTHING OF
THIS GREAT NATURAL RESOURCE. SPILLING WATER TO FLUSH FISH DOWN THE
RIVER IS SENSELESS AND ENVIRONMENTALLY UNSOUND.
WE NEED TO PUT SOME COMMON SENSE INTO THE ENDANGERED SPECIES ACT.
WE CANNOT CONTINUE TO LEAVE FAMILIES SUCH AS MINE OUT OF THE EQUATION.
I AM JUST AS IMPORTANT AS A FISH AND I CAN DAMN WELL TELL YOU THAT MY
THREE YEAR OLD GRANDDAUGHTER IS MORE IMPORTANT!!!! YOU CAN PATCH A ROOF
USING TWENTY DOLLAR BILLS BUT IT OBVIOUSLY IS TOO COSTLY AND ONLY A
TEMPORARY FIX. WE HAVE TO APPROACH THIS PRACTICALLY NOT JUST TRYING TO
BUY OFF THE PROBLEM.
THE ENDANGERED SPECIES ACT IS A TOOL NO DIFFERENT THEN A SHOVEL PUT
TO COMMON SENSE USE IT CAN PRODUCE BUT IN THE WRONG HANDS IT CAN JUST
AS EASILY DESTROY. LETS PUT OUR DAMS BACK TO USE FOR THE ENVIRONMENT.
______
Miss McMorris. Mr. Espinoza now.
STATEMENT OF RICARDO ESPINOZA, PRESIDENT OF THE BOARD, PASCO
SCHOOL DISTRICT, PASCO, WASHINGTON
Mr. Espinoza. Good morning. I want to begin my testimony by
sincerely thanking the House Water and Power Subcommittee,
Congresswoman McMorris, and Congressman Hastings for the
opportunity to testify this morning on the impacts to public
education as brought on by the salmon recovery efforts in the
Northwest.
The complex issue of salmon recovery in the Northwest is
one in which sides in the debate are holding dear to their
passionate arguments for their particular viewpoint. I'm not an
expert on the management of the infrastructure of the Northwest
electrical power grid, but I do, like so many of my fellow
citizens, know how to flip on a light switch and operate a
couple of power tools.
And I'm not an expert on salmon but I do, again, like so
many others, possess a few photos of me at home of me holding a
couple that didn't get away.
I'm a School Board member. I've served eight years on the
Pasco School District's Board of Directors, and I also serve as
a member of the Board of Directors for the Washington State
School Directors Association. I'm here today to share with you
the impacts on the future of our children's education in light
of the salmon recovery efforts.
In the past five years, the Pasco School District has paid
approximately $5.7 million in electrical costs. Approximately
20 percent of our electric bill goes toward salmon recovery,
$1.1 million in five years.
The point of my testimony could be summed up in one
sentence. The further out the school district's dollars move
away from the classroom, the more difficult the task of
educating our children becomes. $1.1 million could have paid
for four or five teachers each of the past five years. In our
schools we need math coaches, reading coaches, coaches to help
other teachers, newer teachers in these particular areas.
Our new teachers need some seasoned veteran teachers. They
need them to help them to succeed. Our expected result would be
that children would receive a better education and be more
prepared for adulthood.
$1.1 million could have purchased approximately 226
computers for each of the past five years. The cost of
initiating and maintaining a computer technology program in a
school district is high and ever increasing. In this age of
information technology we have to not only provide students
information but the abilities to use it. It was a surprise to
me to see once we did lay out the capital for a technology
program how quickly a lot of the hardware became obsolete and
we had to go out and purchase more. Or in some of our new
higher technologies bulbs will burn out at $300 a pop.
$1.1 million could have purchased approximately 2,600 math
and science textbooks for each of the past five years. The
school districts across the state have and are exploring the
changes of curriculum to better meet the grade level
expectations. Updated research based texts and the proper
instruction are key in helping students learn.
These are three examples from a long list of programs and
activities that many districts are not able to fund, or if they
do reallocate existing resources, they do so at the expense of
other promising interventions for all students. All day
kindergarten, extended days for learning, reducing the academic
Achievement Gap, staff development, reduction of class sizes,
dropout prevention, these are some of the other areas that
school districts would have addressed.
Salmon recovery is an important goal, and not many people
would argue the point. However, it is important to remember
that education dollars that stay close to the classroom are
more effective in our children's education. Like everyone else,
school districts pay for the electricity we consume. We do need
the electricity to operate our schools, but the 20 percent on
the cost used to pay for salmon recovery, the $1.1 million over
five years, those are education dollars that are very far
removed from our classrooms.
Put another way, any increase in the electricity dollars
going to the recovery of schools of fish adversely affects the
schools of our children.
I hope my brief testimony helps you better understand the
impact of the electrical costs and salmon recovery to the
Washington State public school system. The world we're sending
our children into upon graduation is far different from the
world we entered when we received our high school diplomas.
Education reform in Washington State is on the right path.
It takes time and resources to meet the requirements of our
legislature and our Congress and, more importantly, to prepare
our students for their futures. Every dollar counts because,
ultimately, every child counts. I thank you once again.
[The prepared statement of Mr. Espinoza follows:]
Statement of Ricardo Espinoza, President, Pasco School District Board
of Directors, Member, Board of Directors for the Washington State
School Directors Association
I begin my testimony by sincerely thanking the House Water and
Power Subcommittee for the opportunity to testify this morning on the
impacts to public education as brought on by salmon recovery efforts in
the Northwest. The celebration of our national independence, our
nations 230th birthday three days ago serves to remind us all that we
are a nation governed of the people, by the people and for the people;
your presence at Columbia Basin College today validates our democracy
in action. Thank you once again.
The complex issue of salmon recovery in the Northwest is one in
which most sides in the debate are holding dear their passionate
arguments for their particular viewpoint. I am not an expert on the
management of the infrastructure of the northwest electricity power
grid, but I do know how to flip on a light switch and operate a few
power tools. I am not an expert on salmon, but I do possess a few
photos at home of me with one or two that ``didn't get away''. I am a
school board member, serving eight years on the Pasco School District
Board of Directors and I also serve as a member of the Board of
Directors for the Washington State School Directors Association. I am
here today to share with you the impacts on the future of our
children's education in light of the salmon recovery efforts.
Article 9, section 1 of the Washington State Constitution reads as
follows:
It is the paramount duty of the state to make ample provision
for the education of all children residing within its borders,
without distinction or preference on account of race, color,
caste, or sex.
Our state legislature passed the Education Reform Act (HB 1209) in
1993 that set the present course to meet this charge. Since that time
education reform has had a number of successes. The Washington
Assessment of Student Learning (WASL) is our assessment tool that
informs parents, the Office of Superintendent of Public Instruction,
and Congress as to how we, local school districts are performing.
Academic achievement trend lines show that we are getting better at
preparing our students to meet the challenges that life will bring.
Examples of these successes:
In February 2006, Washington State was recognized by the
College Board as one of the top three states in the nation to mark the
strongest increases in proportion of students taking Advanced Placement
exams.\1\
In May 2006 Washington State earned higher scores than
the national average in the National Assessment of Educational Progress
in 4th and 8th grade.\2\
Washington state students scored an all time high in math
and verbal portions in the SAT and also scored above the national
average in 2005.\3\
Locally, Pasco High School was recognized by Newsweek
magazine as the 905th best high school in the United States in May of
2005.\4\
The Kennewick Reading program is a national model for
improving education; its goal of 90% of students in 3rd grade reading
at grade level was achieved this year.\5\
Education reform is working in Washington State; the evidence for this
fact is broad and deep. We should all be proud of the effort of our
students, our teachers and our administrators. Yet challenges remain
before us and it is fair to say that these challenges possess costs
outside of local control that are constantly rising.
In public education our three largest challenges are (1) preparing
the class of 2008 and future graduating classes to successfully pass
their 10th grade WASL; preliminary results indicate that approximately
54% of this year's sophomore class (Class of 2008) passed the math
portion of the WASL.\6\ The WASL passage is a Washington State mandate;
(2) The federal law ``No Child Left Behind'' imposes a large number of
requirements on local school districts with many associated costs
absorbed using existing resources\7\; (3) the federal law ``Individuals
with Disabilities Education Act'' has not been fully funded by congress
and again, school districts must use existing resources to meet the
requirements of this law.\7\ Public education shares expenditures
similar to other public and private entities such as rising fuel costs
(Pasco school busses travel more than a million miles annually), rising
health care costs (The Pasco School District is the largest employer in
Franklin County) and of course, electricity.
In the past five school years the Pasco School District has paid
approximately 5.7 million dollars in electrical costs. Twenty percent
of our electric bill goes towards salmon recovery. 1.1 million dollars
in five years. As I briefly outlined, public education has mandates to
meet and funding issues to resolve. The point of my testimony can be
summed up in one sentence: the further out a school district's dollars
move away from the classroom, the more difficult the task of educating
our children becomes.
1.1 million dollars could have paid for four or five teachers for
the each of the past five years. We need math coaches (teachers) and
reading coaches (teachers). Our new teachers need seasoned mentors
(teachers) to help them succeed. Our expected result: children
receiving a better education and being more prepared for adulthood.
1.1 million dollars could have purchased approximately 226
computers for each of the past five years. The cost of initiating and
maintaining a computer program in a school district is high and ever-
increasing. In this age of technology we have to not only provide
students information, but the abilities to use it.
1.1 million dollars could have purchased approximately 2600 math
and science text books each of the past five years. School districts
across the state have or are exploring the changing of curriculum to
better meet the grade level expectations. Updated researched based
texts and the proper instruction are key in helping students learn.
These are three examples of from a long list of programs and
activities many districts are not able to fund, or if they do
reallocate existing resources, they do so at the expense of other
promising interventions for students. All day kindergarten, extended
days for learning, reducing the Achievement Gap, staff development,
reduction of class sizes, dropout prevention and teacher pay and
benefits are other areas that school districts could address, however
time does not permit me to go into an in depth discussion on the needs
of school districts to meet the mandates from our state legislature and
Congress.
Salmon recovery is an important goal, not many would argue the
point; however it is also important to remember that education dollars
that stay close to the classroom are more effective in our children's
education. Like everyone else, we pay for the electricity we consume.
We do need the electricity to operate our schools but the twenty
percent on that cost used to pay for salmon recovery, the 1.1 million
dollars over five years, those are education dollars that are very far
removed from our classrooms. Put another way, any increase in
electricity dollars going to the recovery of schools of fish adversely
effects the schools of our children.
I hope my brief testimony helps you better understand the impact of
electrical costs and salmon recovery to the Washington State public
school system. The world we are sending our children into upon
graduation is far different than the world we entered when we received
our high school diploma. Education reform in Washington State is on the
right path; it takes time and resources to meet the requirements of our
legislature and Congress and more importantly, to prepare our students
for their future.
I thank you once again for this opportunity to speak to the
subcommittee on this issue today.
Work Cited
1. http://www.k12.wa.us/Communications/pressreleases2006/
APexams.aspx
2. http://www.k12.wa.us/Communications/pressreleases2006/
NAEPScience.aspx
3. http://www.k12.wa.us/Communications/npressreleases2005/
SAT2005.aspx
4. http://www.psd1.org/psd2/attachments/57381--4.pdf
5. http://www.tri-cityherald.com/tch/opinions/story/7917074p-
7810576c.html
6. http://www.k12.wa.us/Communications/pressreleases2006/
StrongGains-
2008Grads.aspx
7. http://www.nsba.org/site/docs/38700/38616.pdf
______
Miss McMorris. Thank you. Mr. Cooper.
STATEMENT OF SCOTT COOPER, DIRECTOR, PARISH SOCIAL MINISTRY,
CATHOLIC CHARITIES, SPOKANE PARISH, SPOKANE, WASHINGTON,
ACCOMPANIED BY BONNIE ROBERTS, REPRESENTATIVE VOICES
Mr. Cooper. Good morning. My name is Scott Cooper, and I
direct Parish Social Ministries to Catholic Charities in
Spokane, which is the largest sectarian social service provider
in Eastern Washington. I want to thank you again for this
opportunity to be here.
Part of my work involves coordinating a network of
emergency assistance providers through churches in some of the
more rural counties in Eastern Washington. And it's in that
capacity that I'm here with you today. The bulk of the
emergency assistance that our network provides to low-income
people and families in crisis is for utility bills. These cases
represent not only the majority of the households we assist,
but also the majority of our assistance budget. In other words,
we're spending more money to help more families with utility
needs than with any other class of needs.
Now I'd like to give you just a snapshot of who it is we're
helping, so this is going to be a composite. We'll call her
Sally. She's a single mother in her late 30s. She's got two
school-age children. She's not on Welfare. She may be
qualifying for food stamps and medical assistance, but she's
not receiving cash grants.
She missed a month of work because of an illness or a
surgery, and she fell behind on her bills. She's back at work.
She's got her income again. But those bills that she missed
have piled up and are bearing down upon her.
She's clearing after deductions about $1,000 a month, not
qualifying for a housing authority voucher, so she's paying
market rate rent of about $550 a month. So $550 every month out
of the $1,000 or so that she's earning. Her heat during the
winter is supplied by electricity, as it is often in lower
income housing, and it averages around $200 a month during the
cold season. So that gives you some sense of what her monthly
budget looks like and what an increase of any kind does to her
family's ability to provide food, clothing, prescription
medication, any kind of necessity, not even counting any sort
of something like a luxury like, oh, say, eating out at
McDonalds for $10.
One thing to note is that there is a network of
governmental, corporate, and private assistance to help people
struggling to pay their bills, and this network is never
sufficient to meet all of the legitimate needs. For a client
who has exhausted all the sources of aid but whose need
continues because of medical crisis, death in the family,
instability in the job market as they move from one job to
another, these are the folks we're calling the working poor.
It's also common to hear from those who do not qualify for
the larger governmental sources of aid because of their
slightly greater income but, nonetheless, face disconnect
notices. Again, my concern is that all sources of aid combined
are not sufficient to meet the needs in the present moment, not
considering any hypothetical increases in rates.
So with that in mind, I ask you to consider the effect on
the poor and the larger community should those rates rise. When
rates rise, incomes for low-income people through entitlement
programs or through minimum wage jobs at the low pay scale do
not typically rise in response. This is to say that increases
in utility rates have the greatest proportional impact on the
budgets of low-income households.
A single digit rate increase for a family receiving TANF,
Temporary Assistance to Needy Families, can easily mean the
difference between winter heat and other necessities. These, in
turn, add stressors on families which have observable results
ranging from increased incidents of domestic violence and
substance abuse to increased visits to medical providers and
emergency rooms, often uninsured.
One small private agency director I spoke to reported that
two of the last three households she had assisted with utility
needs were also dealing with domestic violence at the same
time. These situations are interwoven, perhaps not directly
causing the negative social outcome, but certainly contributing
to it and magnifying it.
The Spokane Neighborhood Action Program, who is the primary
provider of government utility assistance in Spokane County,
reports a 7 percent increase in requests for routine heating
assistance in '06 over '05 and a 25 percent increase in demands
for emergency heating assistance in that same year. They also
report a large number of households seeking help in the past
year who never sought assistance in the past, typically the
working poor who might have been able to manage their own
utility costs in the past years.
Our own network is small, Catholic Charities, by comparison
to some, but our resources are not going to be able to just
automatically increase as the need increases in the community.
That means we're going to be having to turn more people away
with legitimate needs. We will not have the resources
necessary.
I'd like to end with a few comments on your concern of this
committee to seek an equilibrium between the hydropower for a
growing economy and basic human needs on one hand and the
desire for sustainable environmental quality, particularly with
regard to salmon runs on the other hand.
The teaching of my faith tradition is a both/and teaching.
Five years ago Catholic Bishops of the Northwest issued a
pastoral letter, a teaching document, addressing this very
topic. How do we balance the diverse and sometimes competing
needs? It says we've got to learn a balanced analysis. Thank
you very much.
[The prepared statement of Mr. Cooper follows:]
Statement of Scott Cooper, Director,
Parish Social Ministries, Catholic Charities, Spokane
Good morning. My name is Scott Cooper and I direct Parish Social
Ministries for Catholic Charities, Spokane, the largest sectarian
social service provider in Eastern Washington State. It is my privilege
to be here. Thank you for this opportunity.
Part of my work involves coordinating a network of emergency
assistance providers through churches in some of the more rural
counties of Eastern Washington, and it is in that capacity that I speak
to you today. The bulk of the emergency assistance that our network
provides to low-income people and families in crisis is for utility
bills. These cases represent not only the majority of the households we
assist, but also the majority of our assistance budget. Simply put, we
are spending more money to help more families with utility needs than
with any other class of needs--such as housing, transportation, food or
prescriptions.
I have been working directly with low-income households in the
Spokane area for over ten years through three different social service
organizations and I have observed firsthand the challenges confronting
the poor in our communities. The first thing to note is that there is a
large network of governmental, corporate and private assistance to help
people struggling to pay utility bills. The second thing to note is
that this network is never sufficient to meet all of the legitimate
needs. It is very common to hear from clients who have exhausted all
sources of aid but whose need continues, because of a medical crisis,
family turmoil, or instability in the job market. It is also common to
hear from those who do not qualify for the larger, governmental sources
of aid because of their slightly greater income, but who nonetheless
face disconnect notices thanks to unforeseen medical costs, a death in
the family or even rising gas costs. Again, my concern is that all
sources of aid combined are not sufficient to meet the needs in the
present moment, not considering any hypothetical or actual increases in
utility rates.
With that in mind, I then consider the affect on the poor and on
the larger community should utility rates rise and continue to rise.
Just because public utilities find it necessary or desirable to raise
the rates they charge their customers, I can think of no instance when
there has been a corresponding increase in the social security, Welfare
or VA benefits the poor rely upon to meet their needs. Neither has
there been a corresponding increase in the wages paid to the working
poor. This is to say that increases in utility rates have the greatest
proportional impact on the budgets of low-income households, even if
those households have comparatively modest overall bills. A single-
digit rate increase for a family receiving TANF (Temporary Assistance
to Needy Families) can easily mean the difference between winter heat
and other necessities such as routine prescriptions, adequate clothing
for growing children and nutritious food. These added stressors on
families have observable results, ranging from increased incidents of
domestic violence and substance abuse to increased visits to medical
providers and emergency rooms. One private agency director I spoke to
reported that two of the last three households she had assisted with
utility needs were also dealing with domestic violence at the same
time. These situations and needs are interwoven, perhaps not directly
causing the negative social outcome, but certainly contributing to it,
reinforcing and magnifying it, making it that much more difficult to
achieve a positive outcome.
The Spokane Neighborhood Action Programs (SNAP), the primary
provider of governmental utility assistance in Spokane County, reports
a 7% increase in requests for routine heating assistance in 2006 over
2005, and a 25% increase in demands for emergency heating assistance in
the same year. They also report a large number of households seeking
help in the past year who had never sought assistance from SNAP in the
past, typically the working poor who might have been able to manage
their own utility costs in past years. And for all of the resources at
their disposal, SNAP is still able to assist only 30--32% of the 34,000
Spokane County households eligible for this program. To restate, the
current resource is insufficient to the current need. Increases in
utility rates will only have a deleterious effect on low-income
households, which in turn will impact the larger community with greater
social and family instability, increasing crime rates and greater
demands on public services. We know that one utility company in Eastern
Washington will be increasing rates by 12% in coming months, following
several years of no rate increases thanks to a long-term contract with
the Bonneville Power Administration. The gentleman I spoke to at this
utility company indicated that such long-term contracts were likely now
a thing of the past and that this fact opened the door for more regular
and frequent rate increases. He also warned against attempts to shift
the rate structure from a cost basis to a market basis. The market,
taken as a whole, might be able to sustain any rate increases that
would follow from a ``charge what the market can bear'' philosophy, but
low-income households would, without any doubt, be disastrously
affected.
Catholic Charities' own network is small by comparison to some. We
work with a total annual assistance budget of approximately $30,000. In
a few Eastern Washington counties, we benefit from EFSP funds
administered by FEMA to provide emergency utility assistance. We then
add our own private funds to that pot. In all but a few cases, even
this combination of funds is not sufficient and our contacts in rural
communities must turn genuinely needy people away for lack of
resources. I would propose to this committee that any organization
seeking to support families and a stable social structure must consider
both the immediate and indirect effects of utility costs on fixed-
income and working poor households. Those households and society as a
whole will bear the costs, in wider negative consequences.
My final comments concern the balance that this committee seeks in
the title of this hearing, the equilibrium between hydropower for a
growing economy and basic human needs on one hand, and the economic and
social desire for sustainable environmental quality, particularly with
regard to salmon runs, on the other hand. The teaching of my faith
tradition is a both/and teaching. As much as we advocate and work for
the needs of the poor, we also hold up the sanctity of creation, and we
cannot be asked to choose between the two. They are also interwoven.
Five years ago, the Catholic Bishops of the Northwest issued a pastoral
letter, a teaching document, addressing the very topic you are studying
today: how do we balance the diverse--and sometimes competing--needs of
the human community and also the natural systems upon which all life
depends with the limited resources of the Columbia River watershed? I
would point you to that teaching document as one example of a balanced
analysis.
I urge this committee to seek a balance that honors both sets of
concerns, that does not set one above the other, that does not force
one community--either the poor or the environment--to pay for short
term benefits to the other. Our society is enormously creative--surely
we can design solutions that safeguard both our low-income neighbors
and the natural world while continuing to provide energy resources for
economic needs.
______
Miss McMorris. Thank you very much. Mr. Morrison.
STATEMENT OF THE HON. SID MORRISON, CHAIRMAN OF THE EXECUTIVE
BOARD, ENERGY NORTHWEST AND CHAIRMAN OF THE BOARD, YAKIMA BASIN
STORAGE ALLIANCE, ZILLAH, WASHINGTON
Mr. Morrison. Thank you, Madam Chair and Congressman
Hastings. Thank you for using the umbrella of the Water and
Power Subcommittee as a chance to get me out and share some
thoughts.
My thesis for this hearing is based on a long-time
investment involved in water issues. And I'm not here to
complain about the high cost of electricity because of our need
to nurture our cultural icon, the salmon, but to propose a
solution that works for both. What we're doing now doesn't
work. The price of power spirals upward, and we're not making
the best investments in reaching the goal of restoring the
salmon resource. Your legislation promoting transparency will
help public understanding.
My frustration with the status quo is two-fold:
No. 1, The Endangered Species Act was intended by its
authors to be fine-tuned over time. But because of political
pressures it remains inflexible and inaccurate, missing the
target in finding the most workable answers; and, No. 2,
because of past failures of the Executive and Legislative
branches, including me, the management of the river system is
shifting to the judicial branch.
Let me just briefly give you an example of what can be done
as I think an answer that works for both salmon and for our
power and economic resources. By the way, Doc Hastings has been
our champion and, Congresswoman McMorris, we appreciate your
help in supporting Senator Cantwell. The whole Washington team
has been very good in funding the feasibility study for what we
call the Black Rock Reservoir.
As an example, think of what we can do if we think big and
we all work together. Yakima River Basin is just right next
door to us, a wonderful project back when the Bureau of
Reclamation wasn't afraid to dream, a hundred years old. And in
the last 50 years, whether changes have occurred, when I worked
the issue, I inherited one drought year out of ten. Congressman
Hastings now has the pleasure of one drought year out of four.
So we're proposing this concept of using surplus water from
the Columbia when nobody else needs it and power to lift that
water into a reservoir that we call pump storage, and that
water then is used to satisfy irrigation demands, which then
frees up the existing Yakima River system with its five
reservoirs for other interests such as municipal and industrial
water supplies and, most importantly, the restoration the
salmon resource.
The fish story is that we used to have about 500,000 to
800,000 returning salmon each year coming back into the Yakima
River. Scientists have told us that it's the tributary in the
lower 48 states that has the greatest potential for salmon
recovery. Guess what? What's missing is water. We can vest all
kinds of ratepayer and Federal money in bringing back
endangered salmon and improving the expanding habitat, and it
has some benefit, but I repeat, it doesn't work without water.
That's where this interbasin concept of storage--Governor
Gregoire is very enthusiastic about storage as the State is
involved, and the funding you've provided is really the key to
moving on with the feasibility study, which will be completed
in 2008.
By the way, if you build the reservoirs large enough and
perhaps build a series of them along the Columbia, it serves as
a storage vat. It's a logical add on to what we've been doing
for over a hundred years in utilizing the water resource. Store
excess water, release it when you need to rewater such things
as the Hanford Reach, which is very sensitive environmentally,
help with irrigation downstream, generate hydropower, and that
list goes on.
Let me slip on a different hat just for a second. Wouldn't
it be better if we used surplus power to lift surplus water and
hold it until needed? One of my responsibilities with Energy
Northwest, and I now get periodically a phone call from our
friend Steve Wright at BPA saying we can't sell the power, put
the nuclear plant on economic dispatch, which is to try to
throttle it back down. If it doesn't do it very well, they may
be running 100 percent efficiency. We should be pumping water
with that power during those surplus times and using it later
when needed.
Let me close by saying that increased costs of power is
primarily a result of investments we make to meet the
requirements of the Endangered Species Act. The Northwest is
great for this. We are very environmentally conscious. But,
ultimately, people want to know that their investments are
targeted to do the most good.
Like the dreams of a century ago, the Federal process must
be far-sighted and effective instead of sending us an ever
larger bill every year with little to show for the investment.
The options of water storage when there is excess makes
sense both to generate electricity and to support fish recovery
and production. The Federal Government should either lead this
effort or get out of the way.
[The prepared statement of Mr. Morrison follows:]
Statement of The Honorable Sid Morrison on behalf of the
Yakima Basin Storage Alliance and Energy-Northwest
MR. CHAIRMAN, and members of the Water and Power Sub-Committee: I
welcome you here today to the 2/3 of the State of Washington that does
not live up to the title of the Evergreen State. The Cascade Mountain
Range, a chain of volcanic fire, does a thorough job of holding the
moisture-laden clouds from the Pacific Ocean to the west of us, and
Congressman Hastings and your Vice Chair, Congresswoman McMorris, do a
great job of representing our very intense interest in water, and fish,
and the price of power in this dry part of the state.
My thesis for this hearing is based on long-term interest and
involvement in water issues, and this may surprise you, I am here not
to complain about the high cost of electricity because of our need to
nurture our cultural icon, the salmon, but to propose a solution that
works for both. What we are doing now doesn't work; the price of power
spirals upward and we are not making the best investments in reaching
the goal of restoring the salmon resource.
My frustration with the status quo is two-fold: (1) The Endangered
Species Act was intended by it's authors to be fine-tuned over time,
but because of political pressures, it remains inflexible and
inaccurate, missing the target in finding the most workable answers,
and (2) because of past failures by the Executive and Legislative
branches (including me), the management of the River system is shifting
to the Judicial branch.
Let me spend these precious moments with you describing what is
happening here in the Basin of the Columbia River, and what can be done
about it. I will use the tributary just to the northwest of this
hearing as an example of the opportunity that is ours if we will just
think big.
The Yakima Basin Project was undertaken by the federal government
through the Bureau of Reclamation in the late 1800s. It was their dream
to make the desert bloom back in the days when they were bold enough to
have such dreams. They saw high mountains with year-round snow in the
Cascades, and the potential for reservoirs to catch the runoff, feeding
the rivers that fed irrigation canals, producing crops that fed people
around the world.
It worked. The population of the three county area involved grew
from 25,000 to over half a million, and the products produced are world
famous and create a very favorable balance of trade. But the weather
has gradually changed. When I served in Congress, we were beginning to
see the shortage of dark clouds on the horizon, resulting in one
drought year out of ten. We scrambled to find additional reservoir
capacity and put in place conservation measures so water usage could be
more effective, a continuing and successful effort. Minimum flow
requirements and stream management techniques were increased to protect
salmon during critical times in their life cycle.
The volume of precipitation hasn't declined with the climate change
we have incrementally seen over the past 50 years. However, freezing
levels in the Cascades have moved up, and the mountains no longer hold
the snow so it will fill our existing reservoirs the three times per
year that is required for a normal water year. Congressman Hastings now
inherits one drought year out of four, with a multi-billion dollar
economic impact, and all too little water for salmon production on the
Yakima.
Now, let me tell you the fish story. The Yakima River used to host
the return of 500,000 to 800,000 salmon per year late in the 19th
century. Scientists have proclaimed that the Yakima and it's
tributaries have the greatest potential for salmon recovery of any
river system ``in the lower 48.'' The Yakama Indian Nation is
increasingly being recognized for it's expertise in the operation of
supplementation facilities (these used to be called ``hatcheries''--and
the goal is to strengthen and expand wild stocks of salmon). The
recovery stage is set.
What is missing is water. We can invest all kinds of ratepayer and
federal money in bringing back the endangered salmon, improving and
expanding habitat, and it all has some benefit, but, I repeat, it
doesn't work without water.
So, how does all of this weave together to provide an answer to the
high cost of fish? A group of us have formed the Yakima Basin Storage
Alliance to look for water supply answers in our area. Our plan is
called ``Black Rock'', an inter-basin pumped storage reservoir,
utilizing water pumped out of the Columbia River when it is surplus to
all other needs. This reservoir water is released through the summer
season to satisfy the needs of existing irrigated acreage with a least
70 percent of court-proven legal water rights. The existing Yakima
Basin Project, with it's five high mountain reservoirs, then can be
managed for fish production and greatly reduced other needs in the
three-county Basin. The goal is a ``normative'' River as flowed a
hundred years ago, with some modifications to make it even kinder and
gentler for fish than Mother Nature provided.
Is this the way to get the best results for the investment in an
endangered resource? We think so, and Congressman Hastings, backed by
other House members and our two Senators, particularly Senator
Cantwell, have been heroic in finding resources to match the state in
funding a Bureau of Reclamation (BOR) Feasibility Study that is in it's
third year and will be completed in 2008.
During this study, we found an interesting problem in the
Principles and Guidelines the BOR must follow in determining the
economic value of producing salmon. They figure the increased number of
salmon resulting from the Black Rock Reservoir concept, multiply it by
pounds per fish, and calculate what that tonnage does to the retail
price. The problem is that northwest ratepayers paid $695 million last
year in increased power costs and water spilled to help salmon
recovery, and no one I have talked with can recall getting a fish out
of the deal. Next year it could be a billion dollars, and it seems to
me that is the economic value of replacing the salmon, in addition to
the cultural and religious value to the Yakamas and other Columbia
River native Americans.
The Columbia River doesn't suffer as much as the smaller river
systems I have just described. It's roots are in the higher mountains
of the Rockies, and it has capacity to store some water in Lake
Roosevelt behind Grand Coulee Dam. However, when we get rain instead of
snow, and the tributaries of the Columbia swell with water that can't
be managed for fish or power or the economy, everyone suffers.
Let me slip on a different hat for a moment that relates to high
water and the high price of power. The Columbia Generating Station, a
nuclear plant just a few miles up the Columbia River producing 1,150
megawatts for the Bonneville Power Administration (BPA), gets a phone
call when the river system is running high asking that we put the power
plant on ``economic dispatch''. This is an expensive process throttling
back a nuclear plant, built to run most efficiently for years at 100
percent power, because ``we can't sell the power''. What it also says
is that someone can't control the River for a broad base of benefits,
or won't.
The high cost of power that brings this Committee here today is not
because it costs more for energy production in this corner of the
nation. Looking at this historically, the opposite is true. Federal
leadership and planning, augmented by local public power utilities,
have harnessed the water flowing to the Pacific in the Columbia and
Snake Rivers, used that energy to produce the aluminum it took to win
World War II, and to irrigate millions of acres of productive cropland.
Power rates here are the envy of much of the country, even with the
expensive modifications made to turbines, fish ladders, and collection
systems to safely transport salmon both up and down the rivers as they
play out their fascinating life cycle.
The increased cost of power is primarily the result of investments
we make to meet the requirements of the Endangered Species Act. The
northwest is environmentally conscious and more willing than most to
protect our natural resources, but it must be, in the long haul,
efficient, and targeted to do the most good. Like the dreams of a
century ago, the federal process must be far-sighted and effective,
instead of sending us an ever larger bill year after year with little
to show for the investment.
The options of water storage when there is excess makes sense, both
to generate electricity and to support fish recovery and production.
The federal government should either lead this effort or get out of the
way.
* * * * *
Morrison is a former Member of Congress, 1981 through 1992, from
the 4th District of Washington. He chairs the Boards of both the
organizations listed above, and both have a vital interest in the
management of the Columbia River and it's tributaries.
The Yakima Basin Storage Alliance is a broadly based group
interested in assuring a future for the Yakima River Basin, a 100 year-
old Bureau of Reclamation project that is suffering dramatically from
climate changes that inconsistently bring high mountain snow to feed
the reservoirs that supply the water for fish, irrigation, municipal
and industrial use, and recreation.
Energy-Northwest in a Joint Operating Agency under Washington State
law that supplies electrical energy to it's public power member
utilities at cost. It operates a nuclear power plant, wind farms, solar
farm, hydro projects, and other energy activities.
______
Miss McMorris. Very good. Next is Mr. Wright, Administrator
of BPA. We really appreciate you rearranging your schedule to
be here. What we're going to do is have you share your written
testimony and then we're going to each ask you maybe five
minutes of questions and then we'll let you be on your way so
you can get on. Thank you very much.
STATEMENT OF STEVE WRIGHT, ADMINISTRATOR, BONNEVILLE POWER
ADMINISTRATION, PORTLAND, OREGON; ACCOMPANIED BY BILL MASLEN,
MANAGER, FISH AND WILDLIFE, BONNEVILLE POWER ADMINISTRATION
Mr. Wright. Thank you very much. It's an honor to be here
today with the Subcommittee, and it's a great honor to follow
Sid Morrison, who was a great Congressman from this area.
I want to focus on three points today. First, I think that
we have made tremendous progress in this region toward salmon
recovery and I would like to acknowledge that. Second, I want
to summarize the costs that are covered by BPA ratepayers
supporting those efforts that are creating that success. And,
third, describe some of the implications of the ongoing
litigation and where it can lead us as we seek to address that
recovery.
With respect to results, after more than 20 years of
efforts we are producing some real successes in this basin.
Each of the last four years we have seen returning Chinook in
the Columbia that exceeded the historical high year in the 60
previous years, going back to when Bonneville Dam was built and
first able to accurately count the first Chinook.
We've also seen ESA listed fish in the basin, substantial
increases on all of those fish between the years 2000 and 2004.
In river survival of yearling Chinook is higher than it has
ever been, at least in terms of when we've been able to measure
it. Adult salmon and steelhead are estimated to survive through
the hydrosystem at a rate of about 98 percent, which is
equivalent to pre-dam levels.
In 2005 juvenile survival in the Snake and upper Columbia
exceeded the performance standards that were established in the
2004 biological opinion. So we've had some real victories here
over the course of the last years.
But I do need to say that all of these years of effort have
resulted in the low-hanging fruit having been plucked. We are
increasingly facing the problem of survival benefits in the
hydrosystem being harder and harder to come by, with additional
investments producing less results.
Now, with respect to costs, the improvements that we've
made have come at a substantial cost. The Northwest Power and
Conservation Council has concluded that the total costs over
the last 20 years to fish and wildlife covered by the
Bonneville Power Administration ratepayers is about $7.8
billion, the underscore would be $7.8 billion dollars.
Fiscal Year 2007 we estimate the costs at around $350
million for out-of-pocket expenses and over $300 million for
lost hydrosystem costs, changes in the operation of the
hydrosystem. That's for physical year 2007. And we see those
cost extending as far as the eye can see. This currently
represents about 30 percent of Bonneville's wholesale power
rate.
H.R. 4857, sponsored by Congresswoman McMorris, does direct
the power marketing administrations across the country to
include the ESA costs on customers' bills. While the
Administration does not have a position at this time on the
bill, the Administration does support increased accountability,
and we believe this bill would support increased
accountability, and we find many things to like in the bill.
We would recommend the combining of ESA costs and Northwest
power costs, at least with respect to Bonneville, because there
is a tremendous overlap and we find it hard to separate those
costs.
Where do we go from here? Many human activities in the
basin have created the problems that we are seeking to address
today. I think there's general agreement across the region that
we need an ``all H'' approach, one that addresses hydro,
harvest, hatcheries, and habitat.
That District Court that was referenced earlier advised an
``all H'' approach. To simplify, the District Court advised
that to meet the ESA requirements the Federal Columbia River
Power System must take into account all mortality, not just the
mortality caused by operation of the FCRPS. This ruling further
suggests that if a fish is not on the road to recovery, any
proposed action funded, authorized, or carried out by the
Federal Government, even though it may not appreciably reduce
salmon recovery or survival, must, along with all the other
activities, put the fish on the road to that recovery.
The District Court's ruling, if sustained by the Ninth
Circuit, would apply to all proposed actions in the region and
all proposed actions, including harvest and habitat would be
further called upon to share the burden. From where we sit, we
think that this means that in effect we are all in this
together. We are all going to have to find solutions.
The Administration supports and has worked hard to develop
a recovery plan, but we believe that this ruling has gone too
far. Having said that, though, we do believe that the ruling is
appropriate with respect to its focus on a knowledge approach.
The District Court has encouraged a collaborative regional
process to develop an ``all H'' plan. We support this
wholeheartedly and are encouraged by the substantial agreement
that the Pacific Northwest should define its own destiny. And
we have good support and active involvement of the States and
Tribes in that ongoing collaborative process.
Let me make one other point and then come to a conclusion
here. One of the things that has increasingly become clear to
us as a result of the District Court ruling is that we are
going to need to rethink and reorder some of our fish and
wildlife spending priorities. I provide an example of that in
my written testimony with respect to the Northeast Oregon
hatchery.
The bottom line is that particularly with a program of this
magnitude we need clearly articulated goal lines, metrics to
describe our process, and cost effectiveness standards. Again,
we're going to have to work together as a region in order to
accomplish that. At $750 billion a year annually, salmon
recovery needs to be managed like a business.
The largest fish and wildlife restoration program in the
world is happening here in the Northwest, and I think that's
fitting given the citizens of the Northwest feel strongly about
the environment and nature in general.
The recent District Court ruling provides both risk and
opportunity for us as a region. We, Bonneville and the Federal
agency, want to be part of taking advantage of the opportunity
to forge a regional consensus that delivers salmon recovery
cost effectively. Thank you. And we'll do your questions.
[The prepared statement of Mr. Wright follows:]
Statement of Stephen J. Wright, Administrator and Chief Executive
Officer, Bonneville Power Administration, U.S. Department of Energy
Good morning Congresswoman McMorris, Congressman Hastings. Thank
you for the opportunity to testify today. My name is Steve Wright; I am
the Administrator of the Bonneville Power Administration (BPA). I am
pleased to be here today to discuss the impact of the Endangered
Species Act (ESA) requirements on BPA costs and our efforts to ensure
that we are achieving real biological results for endangered salmon and
steelhead.
BPA is committed to our responsibilities to protect, mitigate and
enhance fish and wildlife affected by the Federal Columbia River Power
System (FCRPS), and to provide the citizens of the Northwest with an
economical and reliable power supply. This includes a commitment to
conservation of salmon, steelhead, and other listed fish under the ESA.
We believe the citizens of this region want to protect and recover
these fish, and we share that goal. We also believe that Northwest
citizens understand the tremendous value of the lower-cost, clean
hydropower that the Federal dams on the Columbia River and its
tributaries provide to us. We continue to seek to achieve our twin
goals of supporting a healthy Northwest economy and environment.
Today, I'd like to give you an update on the very ambitious set of
actions the Federal action agencies are taking for listed fish. I'll
also talk about the impact of fish costs on BPA's power rates. Finally,
I will highlight for you the risks and opportunities that we see in the
current direction of ongoing litigation, specifically the remand of the
2004 FCRPS Biological Opinion, now before the Ninth Circuit Court of
Appeals. There are far-reaching implications for that litigation. Costs
are uncertain, but they will be borne not only by BPA customers, but by
a wide range of other businesses, government, and industry in the
region.
This is why we are strongly supporting the collaborative process
among Federal, State, and Tribal sovereigns established under the
remand as a way to develop a solution to this problem. We believe that
a regionally developed 10-year plan of priority actions by all entities
and across all life stages for ESA fish would be the best outcome of
the litigation and the best outcome for the region.
Recent Results
For over a decade, the Federal action agencies (BPA, the U.S. Army
Corps of Engineers, and the Bureau of Reclamation) have been
implementing an extensive program of hydro, habitat, and hatchery
improvements for conservation of ESA listed fish. We have achieved
notable successes and urge more attention on the efforts for recovery.
The results of the last few years are very encouraging. The ultimate
measure of progress, of course, is the number of adult wild and
hatchery salmon and steelhead that return to spawn each year in the
Columbia and Snake Rivers. These numbers, over the last four years,
have shown the highest salmon returns for Chinook salmon in the
Columbia River Basin since we began recordkeeping over 60 years ago.
(See Graph 1.) Moreover, listed fish stocks in the Columbia Basin have
witnessed increased returns in the last few years. (See Graph 2.) This
shows that the fish can respond powerfully. It is also important to
note that while overall salmon numbers may be improving, the situation
for individual species may be less favorable. Because fish populations
can vary widely from year to year, it is important that we sustain
long-term perspective on recovery.
On average, in river survival of yearling chinook salmon is higher
than ever measured. (See Graph 3.) Adult salmon and steelhead survival
is estimated at about 98 percent or higher at each dam--equivalent to
pre-dam survival.
The Federal action agencies recently issued their 2005 Progress
Report, covering actions to protect and recover ESA-listed Columbia
Basin salmon and steelhead (www.salmonrecovery.gov). The report
described the substantial progress we made this past year with actions
that achieved real biological results and improved conditions for the
fish.
Salmon must be able to pass the dams if we are to succeed in
recovering salmon. This is why over $1 billion of capital over a couple
of decades has been invested in measures to improve salmon passage at
Federal hydro facilities in the Columbia Basin resulting in substantial
survival improvements. In 2005 juvenile survival rates were up for both
Snake River and Upper Columbia River spring/summer chinook and
steelhead, exceeding the average performance standard that NOAA
Fisheries set for the action agencies in the 2004 FCRPS BiOp. (See
Graph 4.) In 2004 the Federal action agencies committed to the
deployment of a substantial investment in state-of-the-art juvenile
fish passage systems at all eight Columbia/Snake River Federal mainstem
dams. These systems are proving very effective. Removable spillway
weirs, or ``fish slides,'' at Lower Granite and Ice Harbor dams deliver
an estimated 97-99 percent survival for young spring migrants, while
spilling two to three times less water. Juvenile survival through the
recently-completed Bonneville Dam corner collector is nearly 100
percent.
We have now picked the ``low hanging fruit'' for hydrosystem
operations impacts and we are reaching a point of diminishing returns
for additional hydrosystem operations and improvements. Future
improvements can be found by refining well-known approaches. Spill, for
example, may be adjusted to improve the ``spread the risk'' strategy by
scheduling spills and barge transports for juvenile fish according to
the times of year when each is most effective. The costs and benefits
of targeting spill are very large and important. The additional spill
ordered on June 10, 2005, by the District Court for the period June 20
to August 31, 2005, cost Pacific Northwest ratepayers $75 million.
According to NOAA Fisheries, it is uncertain whether the operation was
beneficial or detrimental to fall chinook, and most of the fish had
passed the dams by late July.
To complement improved hydrosystem operations, the Federal action
agencies also fund a wide range of other hydro, habitat, and hatchery
actions that make a real difference for fish. The 2005 progress report
documents substantial improvements including:
Caspian tern predation on juvenile salmonids in the
Columbia River estuary has been reduced from a range of 7 to 15 million
in 1999 to about 3.6 million in 2005 by moving these birds downstream
nearer the ocean where they feed less heavily on juvenile salmon and
steelhead.
Pikeminnow predation on juvenile salmonids has been
reduced by approximately 25 percent since the program began in 1990,
saving approximately 2 to 4 million juvenile salmon. Intensified effort
since 2004 has yielded an increased pikeminnow catch of over 50
percent.
With our partners, we completed 42 voluntary water
transactions around the region, each addressing a significant
opportunity to restore instream flows in Columbia Basin tributary
streams and rivers. In the third full year of operation, the Columbia
Basin Water Transactions Program delivered 530 cubic feet per second of
water to Columbia Basin streams and improved flows on nearly 900 miles
of streams.
In 2005, we installed screens at 19 barriers to restore
access to over 180 miles of stream for fish. Overall since 2000, fish
passage improvement efforts in the tributaries have resulted in fish
regaining access to over 1,280 miles of stream.
In the lower Columbia River estuary, we have acquired
over 660 acres of fish habitat since 2000. In 2005, over 300 acres were
being actively restored.
Safety-net hatcheries continue to reduce the extinction
risk of Snake River sockeye, spring/summer Chinook, fall Chinook and
steelhead, and mid- and lower Columbia steelhead populations. In one
such program, 348 Snake River sockeye adults returned to Redfish Lake
since 1999--a 20-fold increase over the total of 16 wild fish that
returned from 1990 to 1998.
We intend to build on this success. In 2004, the Corps, Reclamation
and BPA committed to a 10-year plan of extensive actions to improve
hydrosystem survival and improve habitat. We also forego some power
generation in addition to salmon spills for other conservation reasons.
We expect the total of these Federal agency commitments to exceed $6
billion over the next 10 years. Nevertheless, it is not how much money
we spend that is the gauge of our success--it is the biological results
we have to show for the money we have spent.
The Costs
Our success in improving conditions in freshwater and getting these
fish through the hydrosystem comes with a large cost--we must ensure
that it buys us the valuable success we seek. The ESA program for
listed Columbia Basin steelhead and salmon is among the largest fish
and wildlife restoration programs in the world. Just to illustrate how
massive the recovery efforts are, if the water being spilled over dams
to assist in fish passage was used instead to generate power, it would
be enough to meet the City of Seattle's annual electric energy needs.
And spill is just one of the many measures we are taking to assist
salmon recovery. BPA ratepayers pay most of those costs through their
power bills.
A report from the Northwest Power and Conservation Council
(Council) concludes that over the last 20 years BPA ratepayers have
experienced $7.8 billion worth of costs attributed to fish and wildlife
mitigation activities. These costs were paid as a result of different
laws including the Northwest Power Act and Endangered Species Act. In
FY 2007, BPA projects almost $700 million for fish and wildlife costs.
These costs are reflected in our power rates as a cost of doing
business. It is the second largest cost category in our FY 2007-09
power rates--second only to the combined debt service costs for BPA's
one active nuclear plant, two retired nuclear plants, and the Federal
investment in the entire FCRPS. These costs represent more than 30
percent of the rate we charge our 130 public utility customers for
Federal power. It makes sense to publish and monitor the size of a cost
this large.
H.R. 4857, if enacted, would direct the Administrators of the
Federal Power Marketing Administrations (PMA) to include on customers'
monthly bills information about the costs the PMA are incurring to
comply with ESA. We have looked at how we would implement this
legislation were it enacted into law. We would recommend the approach
of reporting our combined ESA-related and Northwest Power Act fish and
wildlife mitigation costs assigned to power as a percentage of total
power bills. While this would be an approximation of the actual amount
of cost recovered from each individual customer, it would be more
readily available and does not require a detailed calculation for each
customer.
The Administration shares the interest in accountability that
prompts this legislation. Power bills result from complicated
calculations and the public debate about what affects power rates often
strays from hard numbers. H.R. 4857 would take a step toward clarifying
the matter. There are many ideas in the legislation that are feasible
and many concepts that are in line with the overall Administration
policy in terms of properly reflecting the costs of regulation to the
ratepayers. The Administration has no position on the legislation at
this time, but there are many concepts in the legislation which the
Administration would not oppose. The Administration is still studying
the legislation as a whole and looks forward to participating in the
broader debate as it unfolds.
Where We Go From Here
Many human activities have contributed over many decades to the
fish runs we have today. In order to be successful, we will need to
work together to address all the human-caused factors that are leading
to salmon declines--the so-called ``four H's'' of harvest, hatcheries
and habitat as well as hydro.
In fact, the current rulings from the District Court on the FCRPS
BiOp advise an ``all H'' approach. Due to the ruling on the 2004 FCRPS
BiOP, we are now, more than ever, all in this together.
To simplify, the District Court advised that, to meet ESA's
requirement, the FCRPS must take into account all mortality--not just
the mortality caused by operation of the FCRPS. This ruling further
suggests that, if a fish is not on the road to recovery, any proposed
action funded, authorized, or carried out by the federal government--
even though it may not appreciably reduce salmon survival or recovery--
must along with all other activities put fish on the road to recovery.
The District Court's ruling implies that, if it is sustained by the
Ninth Circuit, it would apply to all proposed actions in the region and
would be called upon to carry this burden including harvest and
hatcheries operations, federal assistance to port operations, as well
any other distantly-related action requiring Federal approval or
funding or carried out by the Federal Government.
The Administration believes this ruling goes too far. The
Administration supports and has worked hard to develop a recovery plan
for salmon. We believe, however, the ESA requirement to avoid jeopardy
is just what the regulations say it is--to analyze whether the
incremental effects of a particular proposed action will appreciably
reduce the likelihood of both the survival and recovery of the
species--not whether a proposed action could potentially be halted
because the effect of that action in combination with everything else
that affects the species must be determined to create a path to
recovery. We think the District Court's interpretation, if sustained,
could have far-reaching ramifications.
While we have appealed this issue to the Ninth Circuit, we continue
to put significant efforts and hopes into the collaborative process
with States and Tribes to come up with a regional plan consistent with
the District Court's ruling. We are encouraged thus far that there is
substantial agreement among those participating in the collaborative
process that we need to define our own destiny and develop a regional
approach that addresses all the H's and their contribution to recovery.
Setting Priorities
As ESA costs and litigation pressures increase, it is critical that
the region focus on the bottom line--results for the fish. This effort
needs clear objectives and priorities for meeting the objectives. To
accomplish this, we must--as a region--be clearer about our ESA
objectives. How many fish do we need to be satisfied we are moving
toward our goals for each of the fish that are listed under ESA? What
is the mix of hatchery and natural spawning fish that is desirable in
the interim and in the long term? Where are the priority habitat areas
for restoration? What are our hydro survival performance measures?
Ultimately we are working to achieve a 10-year agreement among the
States, Tribes and Federal agencies working on the FCRPS BiOp remand
collaboration on priority actions in the Basin. The actions we agree on
would be guided by our knowledge of which populations of fish need what
types of help, and what's best for the fish.
As we work with the remand collaboration to develop a new FCRPS
BiOp, we continue to emphasize using a biological yardstick for
determining our success. We seek to have clearly defined objectives, or
performance standards, in this new BiOp and actions that the best
science shows will help to achieve them. The performance standards for
juvenile survival through the hydrosystem provide a good example of
establishing clear objectives.
In addition to performance standards, the region must agree on
funding priorities. Prioritization will enable us to achieve our
objectives at the least cost. It is not how much money we spend that is
the gauge of our success--it is the biological results we have to show
for the money we have spent. In the words of the Northwest Power Act
[Section 4(h)(6)(c)] the Power Council's Fish and Wildlife Program
seeks to ``utilize, where equally effective alternative means of
achieving the same sound biological objective exist, the alternative
with the minimum economic cost....'' Under this approach, we use a
biological yardstick, and we also keep our eye on achieving our goals
efficiently.
The implementation of the ESA needs to help set and enforce
priorities. For example, recently we elected to postpone funding the
Northeast Oregon Hatchery (NEOH) because we do not currently have the
means to document the contribution to recovery that we believe the
hatchery will provide. Almost 20 years in the planning, the $16.4
million NEOH construction project was deferred last month until such
time as a specific level of ESA-crediting for application to this
hatchery can be resolved. We are committed to working this out with
regional stakeholders through the remand collaboration, but we would be
open to funding the project now with assurance that it will be
acknowledged properly in the legal documents to follow.
This is disappointing for the Tribes, States and BPA after working
for years on this project. We think NEOH is a good project, and we
believe that the hatchery can help rebuild listed spring chinook stocks
in the Grande Ronde subbasin. But frankly we do not believe we should
spend $16.4 million when it is not clear whether the effects of the
hatchery will be declared to gain or lose ground in our progress toward
achieving ESA goals. BPA currently spends $60 million per year to fund
operations and maintenance at 28 fish hatcheries operated by States,
Tribes and the U.S. Fish and Wildlife Service. Ultimately we must
examine the benefits and risks to ESA listed fish from all of these
fish hatcheries.
NEOH is one of many mitigation efforts that have evolved through
the Council's Fish and Wildlife Program under the Northwest Power Act.
The Council's Program guides BPA's funding decisions. We will soon be
working with the Council to fund about $142 million of projects for the
first year of the Council's FY 2007-09 Fish and Wildlife Program. We
expect the remand process will influence our spending decisions in this
program. We also expect to balance these decisions with efforts that
continue to benefit non-listed species.
Conclusion
One of the largest regional fish and wildlife restoration efforts
in the world is taking place in the Pacific Northwest. The evidence to
date is that substantial progress is being made albeit at a substantial
cost. The progress we have made is encouraging, but our work is by no
means complete. We are committed to taking substantial further actions
to improve the chances for recovery of these inspiring fish.
Our overarching goal should be salmon recovery. And under a
recovery plan approach, hydro operators and others will need to do more
for the fish. We can start by collaborating to develop clear and
specific objectives for endangered fish in the Columbia Basin. Then, to
meet these objectives, we will need to develop a scientifically
credible approach that addresses all the causes of salmon declines in
the Basin. It must be an approach that recognizes that we who live in
this Basin are all in this together and that we must all be part of the
solution.
Thank you for your attention, and I would be happy to answer any
questions.
______
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Miss McMorris. Again, we really appreciate you being here.
I want to start with just asking if you would give an overview
of electricity needs for the region and what percentage BPA is
able to meet. And as we look forward, how do you see that
playing out? How are we going to meet those needs and then the
potential for not only the hydrosystem but also in what we
might be able to do with wind and solar? Just start with an
overview.
Mr. Wright. So the Bonneville system, the Energy Northwest
facility produces about 40 percent of the region's power
supply. 90 percent of our system is produced by hydropower.
About 60 percent of the region's electricity supply comes from
hydropower. That compares somewhere between 10 and 15 percent
at the national level.
This is a region that is heavily reliant on hydro basically
because of the Columbia and Snake River systems, much more so
than other parts of the country and other parts of the world.
That hydrosystem has created an economic advantage for this
region. Hydro is a low-cost resource relative to other
potential resources, coal, natural gas.
The fact of the matter is, though, as we go forward we have
exploited the hydrosystem to its maximum potential. There is
very little left in terms of--and we do expect our economy to
grow. The forecast is we see substantial growth in our region
over the course of the next five to ten years. In fact, we
expect demand to exceed supply around 2010. So we need to
develop some resources of supply.
There are difficulties in terms of development of resources
and supply. The resistance to coal, to nuclear. Natural gas was
the resource of choice, but with the extreme volatility and the
tremendous price increase in the last few years it looks less
attractive than it did just back in 2001, 2002.
There is a tremendous amount of wind being developed in
this region, particularly in this area. We are going to have
close to 1,000 megawatts of wind developed just since probably
about 2002 through the next year or two just in this area. Just
for a second, pause for a moment and think about the size of
John Day Dam. Essentially, we're a developing a resource about
the size of John Day Dam right here in this area of the
country. That's occurring, in part, because it's a windy area.
It's occurring, in part, because of the opportunities for
farmers to be able to capture the benefits of the land. It's
also occurring, in part, because of the ability to--
hydrosystem. Wind is not a dispatchable resource where you can
control the amount, but you can with a hydrosystem.
I would say one of the concerns to begin to address this
question is we're running out of the potential to integrate new
wind with the hydrosystem. There's such a tremendous growth of
wind in this region that we're going to start reaching some
physical limits. To the extent that we limit the capability of
the hydrosystem for other operations for whatever they may be,
then there is an overlap.
Miss McMorris. Would you talk about the difficulty in
estimating ESA costs on the BPA system and what are some of the
challenges and how you see that playing out when you move
forward?
Mr. Wright. Yes. I think a couple things. First, there are
certain costs which are relatively easy to figure. We have
costs associated with ongoing direct program activities,
habitat, hatcheries. We know what the dollars are going out the
door for those. We have other costs of nearly a billion dollars
has been invested in the system, actually more than a billion
dollars at this point, at the dams to try to improve juvenile
and adult survival. And, of course, we know what those are.
We also have a set of costs associated with hydrosystem
operation where we've changed the operation to spill to
increase flow. That increases costs. Although there is debate
about that, about how those costs should be calculated, and
you'll see it in some of the testimony from some of the other
witnesses today. The cost of that varies with the market. If
energy is lost, then when market prices are low, the cost is
relatively low. And when the prices are high, the costs are
much higher. One of the challenges for us is that is based on
what the market would be.
Another challenge for us is that many of these activities
support more than one of our requirements in the law. Northwest
Power addresses a different set of fish and wildlife mitigation
responsibility than the Endangered Species Act. But when you
make a modification for a dam and it improves juvenile
survival, it helps both ESA listed fish and non ESA listed
fish. So you're struggling with the question of how do you
calculate those costs of the ESA with Northwest Power, which is
why we recommend to you the fact we meld those together because
we're not confident that we can separate those costs in a
meaningful way.
Miss McMorris. I have just one last question. Some have
talked about calculating the irrigation costs as a part of the
customer bill. I just wanted to ask you to comment on that if
that is possible.
Mr. Wright. Well, I would say, first of all, that there are
estimates out there. Both Bonneville and Northwest Power have
done estimates of the lost power generation associated with
irrigation. So we have those estimates. And we could come up
with those estimates similar to the way we addressed fish and
wildlife costs. So I would not say that's an impossible task,
that we could if you so desire.
Miss McMorris. Good. Thank you.
Mr. Hastings. Steve, thanks for being here. I just have a
couple of questions. I know that you are looking at long-term
power contracts with your customers. I want to run through that
process. Are there contractual methods going to the process of
capping the overall fish costs to ratepayers or maybe reducing
the likelihood of any increases in fish costs contractually as
you look at that?
Mr. Wright. So I would say, no, that we do not have those.
The long-term contracts implement statutory requirements that
we have, and then there are some requirements for fish and
wildlife both under the Endangered Species Act and Northwest
Power Act. And as we issue these contracts where the customers
would be committed to taking the power and paying for it and
paying for it would be based on whatever our cost is, and that
cost would based on our current statutory requirements.
Mr. Hastings. And those statutory requirements would
mandate you can't put anything in the contract that would
change that; isn't that correct?
Mr. Wright. Certainly that would be my reading.
Mr. Hastings. Any gray area at all.
Mr. Wright. Not that I'm aware of.
Mr. Hastings. The independent scientific review panel
recently looked at the Power Planning Council's fish program
proposals for 2007 through 2009 and found many of them to be
without any scientific method or merit. Do you have--Do we have
adequate protections to ensure that fish and wildlife spending
by the Council is not only cost efficient but complimentary to
our overall efforts as well based on this.
Mr. Wright. So I believe that we do have a reasonable
system for making judgments about what projects we will proceed
with. First of all, the law does require that the Council
approve the program. The law also requires that they take the
advice of the scientific review panel. Where they are in the
process, it's my understanding the ISRP has provided
recommendations but the Council has not reached its conclusions
yet. We expect that they would take into account the data from
that SRP.
Beyond that, the Council provides guidance to us with
respect to what programs we would proceed with. We tend to
get--because we think they represent four states. And certainly
the way the law was set up and for Bonneville to be a part of
the region to show you this. But at the end of the day, we do
have a decision that we need to make because we're Federal and
we can't turn over the decisionmaking authority to a state
body. So we also will be looking at the recommendations that
the Council makes in light of ISRP information coming to a
conclusion.
Mr. Hastings. When you're trying to make long-term
decisions and you have at least an independent review board
that has said, boy, there's something that doesn't have
scientific merit and, yet, decisions are based on that, it
causes one to--especially with past history--it causes one to
at least pause. That's why they have the cross checking, I
guess, of these studies.
One last question that I have, Sid mentioned that you
occasionally call him and ask him to cut back on the power.
Would you just elaborate on that so I can better understand why
that comes about?
Mr. Wright. We do try to operate the system to create
actual value for ratepayers. The best way to do that is to try
to avoid spill. The hydrosystem--Remember that we have a system
that sits on the side of a very steep hill, produces a lot of
water coming down. We can only store 30 percent of the average
annual runoff of the Columbia, whereas, just by way of example,
they can store 300 percent in Missouri.
When water shows up here, we have a limited amount of
ability to store it and use it. So there are times when like
earlier this summer we had that--we had a pretty good snowpack
this year and then incredibly high temperatures in June. And
you get a lot of runoff at that point. And the goal is to try
to maximize energy production because that's the lowest cost
resource, while meeting our fish and wildlife responsibilities.
So at those points it makes sense sometimes to scale back and
use some of your thermal resources, nuclear, coal, whatever it
might be, in order to be able to get the maximum amount out of
the hydrosystem.
Mr. Hastings. As I understood Sid to say, it's kind of hard
to do that, so I just made that observation. Just out of
curiosity, was one of those times during the summer spill last
year.
Mr. Wright. I can't answer that question for the record. I
can't recall.
Mr. Hastings. Just wondering. You know I'm very critical of
the summer spill for what it accomplished. And if that
happened, that could cause some problems with the nuclear plant
and it shows how silly the whole idea of summer spill is.
Anyway, thank you, Steve. My time's up. Thank you very much for
your testimony and for being here. And of course your full
statement will appear in the record.
Mr. Wright. Thank you very much. And I will instruct Bill
Maslen to answer any further questions.
Miss McMorris. OK. We'll continue down the panel. Ms.
Durham-Aguilera.
STATEMENT OF KAREN DURHAM-AGUILERA, DIRECTOR OF PROGRAMS,
NORTHWESTERN DIVISION, U.S. ARMY CORPS OF ENGINEERS
Ms. Durham-Aguilera. Aguilera like the singer. Miss
McMorris, Mr. Hastings, I'm very pleased to be here today. I'm
going to try to define my remarks with what's of concern here
today. And that's the role of the hydropower system, its affect
on power rates, its affect on people and the environment.
The U.S. Army Corps of Engineers has several
responsibilities. We have a responsibility to operate the
system for multipurposes, and that's flood control, irrigation,
navigation, hydropower, recreation, and water supply. So we
operate for the benefits of people. We also are charged to do
that in a cost-effective way.
We also have a responsibility to operate the needs of
salmon for the benefits of the environment. Significant
investments have been made and we're seeing significant
improvements. Adult salmon and steelhead passage and survival
through the system is now about the same rate as the--River.
Juvenile passage in the Snake River is--as when there were just
four dams on the lower Columbia and Snake River. We continue to
ensure that we keep these gains we worked so hard to get.
So our focus on the recent passage and on improved juvenile
passage is using a combination of bypass systems, spills, and
the barge transport. So that also means a responsibility to be
able to adjust, adjust to the needs of fish. Sometimes we cut
back on power to provide spills. Sometimes we release stored
water that we'd rather keep for recreation.
In 2005 we came under a preliminary injunction to provide
additional summer spill. In our 2006 operation we were able to
do a spread the risk approach. There was a combination of about
50 percent in river and about 50 percent in transport for
juveniles.
So what's our focus now? It's surface passage. If you've
been out to Lower Granite, you've seen the spillway. We also
are currently working on the design and construction now to
have another RSW in place in Lower Monumental by next spring.
And we have plans for these along the river. These are good for
fish. They use about a third to one-fifth of the water in a
traditional spill and costs 15 to 20 million apiece. That cost
is quickly recovered by the energy savings.
The Army Corps of Engineers is engaged in other nonhydro
activities. We continue working with NOAA Fisheries, the State,
the Tribes, especially in Oregon and Washington, to address the
sea lions of Bonneville. This year we installed something
called sleds at entrances to fish ladders and they keep the sea
lions out. They work pretty well. One persistent sea lion was
able to get through until it got too fat.
What's our future focus? It's the regional partners working
together in that ``all H'' approach, habitat, hatchery,
harvest, and hydropower. The U.S. Army Corps of Engineers will
continue to do our part and work with you, work with our tribal
state, and other Federal partners, to find the best solutions
for the regions. I'll be happy to take questions when you're
ready.
[The prepared statement of Ms. Durham-Aguilera follows:]
Statement of Karen Durham-Aguilera, Director of Programs, Northwestern
Division, U.S. Army Corps of Engineers, Department of the Army
Members of Congress and distinguished guests, I am pleased to
provide this statement addressing U.S. Army Corps of Engineers (Corps)
activities to protect and restore Columbia River Basin salmon and
steelhead stocks listed under the Endangered Species Act. The Corps
appreciates the support of Congress and the Northwest delegation for
salmon activities. The federal agencies continue to have good news to
report on these ongoing efforts.
The Corps and Bureau of Reclamation operate the Federal Columbia
River Power System (FCRPS) dams in concert with Bonneville Power
Administration (BPA) which markets power produced at the dams. Congress
authorized the dams in the system for multiple purposes; we operate to
provide these purposes along with our operation for protection of fish.
The hydropower system, while a critical part of our efforts, is
just one part of the salmon life-cycle. The federal agencies, tribes,
states, and local interests are also making habitat improvements,
better managing hatcheries and harvest and continuing predator control
efforts. We have made much progress in hydro improvements, and we
realize that further gains at the dams for adult and juvenile fish
survival will be measured in small increments. We continue to look for
hydropower system improvements that make biological and economic sense.
We note that further investing in improvements to the other H's--
habitat, hatchery, and harvest--could bring bigger dividends.
The Corps works in partnership with the other federal agencies in
the region, and with a variety of technical and policy input from
tribes, states, and others; salmon protection and recovery is very much
a regional effort. Currently, in response to a court order, we are also
engaged with Bureau of Reclamation, BPA, National Oceanic and
Atmospheric Administration (NOAA) Fisheries Service, seven tribes and
four states in an intensive collaboration effort. Our goal is to design
a plan for the next ten years or so for a federal approach to salmon
protection and recovery in the Columbia River Basin.
Adult Fish Passage and Survival at the dams
Adult fish ladders at the dams provide good passage survival for
adult fish returning up river to spawning areas. All of the eight Corps
lower Columbia and Snake river dams have at least one adult fish
ladder. Over the years we have made many improvements to the adult
passage facilities, such as providing better ``attraction'' flows and
current efforts to reduce stress to adult fish that are sampled for
research.
Through research we now know that adult survival on a per project
basis is about 98 percent for each ``evolutionarily significant unit,''
or ESU, of listed salmon and steelhead migrating past the dams. In its
2004 biological opinion on FCRPS operations NOAA Fisheries compared
these survival results to a rate of mortality that might occur if the
reservoirs and dams were not present and concluded that ``adult
survival through the FCRPS is similar to survival under unimpounded
conditions in the Snake and Columbia Rivers.''
In recent years, technology for monitoring adult passage has
improved, allowing us to better monitor adult passage patterns, timing
and other fish behavior at the dams. For example, we now have adult
Passive Integrated Transponder, or PIT, monitoring capability at
Bonneville, McNary, Ice Harbor and Lower Granite dams. As a result of
these improvements, we are able to make operational adjustments at
several dams to better optimize conditions for adult migration.
While the news on adult passage is very good, we need to continue
to focus on a few aspects of adult passage and research. Continued
progress means maintaining certain features such as auxiliary water
supply systems for the fishways. Continued funding for operation and
maintenance of fish facilities along with the BPA shared costs will be
essential to further progress of salmon protection and recovery.
One concern we are addressing is ``fallback,'' where adult fish
travel back through the dam after exiting the ladder above the dam. We
know that fish can ``fall back'' over spillways, through juvenile
passage systems, or through turbines at the dams. The rates of fallback
vary among species, individual dams, and with operating conditions.
This is normal behavior for fish moving through the Columbia River,
that is, fish move up and down various reaches before returning to
natal streams or hatchery of origin. However, it is important that we
minimize any adverse effects of downstream adult fish passage at the
dams. For example, fallback at the spillways may cause injury and
delay, resulting in reduced number of adults to spawning areas. The
Corps looks for operational strategies that avoid fallback, such as
prioritizing power production at the Second Powerhouse at Bonneville
Dam before using the First Powerhouse where there is increased fallback
through the spillway.
Pinnipeds
Sea lion predation is another concern for adult fish migrating past
Bonneville Dam in the spring.
Since the early 2000's, the Corps has observed a spring migration
of sea lions to the area below Bonneville Dam, nearly 140 miles from
the Columbia River estuary. Generally arriving in mid- to late-
February, the predominantly male California sea lions feed on adult
salmon, steelhead and other anadromous fish returning upriver to spawn.
The sea lions return to Southern California for mating season in late
May and June. The amount of fish eaten by sea lions (and other
pinnipeds, namely, Stellar sea lions and harbor seals) increased from
0.4 percent (1,010 fish) of the total spring salmon run in 2002 to 3.4
percent in 2005 (2,920 fish). Corps staff observations estimated that
some 50 to 60 fish were eaten per day by the sea lions near the dam in
2005. Preliminary data for 2006 indicate about 2.5 percent of the
spring salmon run, or around 2,700 fish, were consumed by the sea
lions. The estimated number of pinnipeds for 2003, 2004 and 2005 was
111, 105 and 87, respectively. The 2006 estimate is 85. The average
number observed on a given day was 21 in 2005 and 27 in 2006.
In cooperation with NOAA Fisheries and the Oregon and Washington
fish and wildlife departments, we use a variety of harassment
techniques--above-water pyrotechnics, underwater acoustics and others--
to discourage the sea lions.
In 2004, for the first time, a sea lion went into a fish ladder at
Bonneville Dam. In 2005, several sea lions entered the ladders and one
of them, named C404, showed up in the fish counting windows. To address
this problem we installed Sea Lion Exclusion Devices, or SLEDs, in the
ladder entrances. The Corps worked with other regional state and
federal agencies to design, install and test the SLEDs for use in early
2006. The SLEDs consist of individual gates at the entrances to the dam
fishways meant to exclude pinnipeds but allow fish passage. For the
most part the SLEDs have proved effective, although C404 managed to get
past them at the beginning of the season.
Each gate is between 10 and 15 feet wide and 30 to 36 feet tall,
and weighs over 10,000 pounds. They can be installed at the beginning
of the sea lion ``season'' and removed when the sea lions go back to
California.
We will continue to work with our federal and state partners to
address the sea lion issue.
Juvenile Fish Passage
The bulk of investment in fish passage at the eight lower Columbia
and Snake river dams over the past several decades has been for
improved juvenile fish passage, mostly aimed at avoiding passage
through the powerhouse turbines. There are three primary non-turbine
juvenile passage routes at the dams: screened juvenile bypass systems;
spill passage; and transport, where fish are collected at the bypass
systems for transport by barge or truck from one of the four
``collector'' dams (Lower Granite, Little Goose, Lower Monumental and
McNary).
The Corps installed screened juvenile bypass systems at seven of
the eight dams during the 1980s and early 1990s. Following extensive
biological evaluations, many of these facilities have undergone
significant improvements. In the mid-1990s we began to implement spill
to improve juvenile passage through the lower Snake and Columbia river
dams. The combination of screened bypass systems and spill greatly
improved juvenile survival past the dams for most populations.
NOAA Fisheries data (see bar chart) indicates that survival for
spring and summer Chinook traveling in-river has improved to the point
that it is now comparable to that of the 1960s when there were only
four dams in the lower Columbia and Snake rivers. Survival through the
hydro system in recent years ranges from 30 to 60 percent depending on
water conditions and other factors. In-river migrants pass the dams by
means of the juvenile bypass systems, or through the dam spillways or
turbines.
[GRAPHIC] [TIFF OMITTED] T8557.001
At the four collector dams, juvenile salmon and steelhead collected
in the bypass systems can be transferred into specially designed barges
and trucks for transport past the remaining dams, to a release point
downstream of Bonneville Dam. The survival rate for transported fish is
about 98 percent to point of release, although ongoing research is
attempting to determine any delayed effects after the fish are released
downstream from Bonneville Dam and whether these effects can be
minimized. The Corps has operated a juvenile fish transportation
program since the 1970s, to reduce the number of dams and reservoirs
juvenile fish must negotiate in their migration to the ocean.
Surface bypass systems and Removable Spillway Weirs (RSWs)
Recent efforts to further improve in-river survival for juvenile
fish have focused on surface oriented passage. Most juvenile salmon
tend to stay in the upper 10 to 20 feet of the water column as they
migrate downstream to the ocean. When approaching the dams, juvenile
fish need to dive to depths of 50 to 60 feet to find passage routes
such as a spillway opening or a juvenile bypass channel. For several
years, engineers and biologists have been pursuing new technologies
that would provide more surface-oriented, less stressful, passage
routes for juvenile fish.
One of the new surface passage technologies is a removable spillway
weir (RSW), or ``fish slide,'' that fits inside a dam spillway and
allows juvenile fish to pass near the water surface under lower
accelerations and lower pressures. It has the potential to improve
juvenile fish survival, save money (through decreasing spill, allowing
more power generation), and improve water quality (by reducing gas
supersaturation). As water is spilled over the weir, juvenile salmon
and steelhead are carried over a raised spillway crest, similar to a
waterslide. In tests of an RSW installed at Lower Granite Dam on the
Snake River, juvenile fish that used the slide survived at similar or
better rates than through a conventional spillway--about 94 to 98
percent survival depending on test conditions--and had reduced delay
above the dam so that they were less susceptible to predators. While
the slide attracted about the same number of fish, only about one-fifth
as much water was spilled. A fish slide installed at Ice Harbor Dam in
early 2005 delivered good test results that year with 97-99 percent
survival. Lower Monumental Dam will have an RSW by 2007 and Little
Goose Dam is scheduled for RSW installation by 2009. We also expect to
have a prototype weir at McNary dam by 2009.
At Bonneville Dam on the lower Columbia River, a Corner Collector
has been constructed at the Second Powerhouse to provide another type
of surface passage. The ice and trash chute at the powerhouse was
modified for safer passage, and a 2,800-foot long transport channel and
500-foot long outfall channel were constructed. Tests in 2004 and 2005
indicate a survival rate of nearly 100 percent for spring Chinook,
steelhead and fall Chinook through the Corner Collector, and a 94-99
percent survival rate, depending on the species, through all passage
routes combined at this dam. At The Dalles Dam, a spill wall was
completed in 2004, designed to move juvenile fish more quickly and
safely downstream once they passed through the spillway with a two to
four percent survival improvement. Surface passage systems and
improvements are planned for all four of the lower Columbia River dams
within the next several years.
Spill and Transport
Besides making improvements at the dams, we provide operations to
aid juvenile migration, such as spill, transport, flow augmentation
(release of water from upstream storage dams) and cold water releases
(to moderate temperatures in the river). When spill for fish is
provided, water is routed through spillway openings rather than through
turbines to generate power, or rather than being used for other
purposes. Under biological opinions from NOAA Fisheries, the Corps has
provided spill and juvenile fish transportation in a combination
designed and modified to provide an optimum mix for getting the best
return of adult fish.
A complicating factor in operating for improved fish survival is
that studies show various salmon species respond differently to
different strategies. For example, the timing of fish migration and
species of fish may make a difference as to whether the fish would fare
better traveling in-river or in a transport barge. And there is more
information available for some stocks of fish than for others.
Spring Spill
Each year the Corps provides spring spill for fish at all eight
lower Columbia and Snake river dams beginning in early April. In 2006,
as an adaptive management action based on data from transport
operations research, the Corps proposed to maximize transportation of
juvenile fish in late spring to improve adult return numbers. This
would require curtailing spill at the collector projects. However, a
court order for 2006 operations directed full spring spill be provided.
We are continuing research to gather more information on this issue.
Summer Spill
Prior to 2005, the Corps did not spill at the four transport
collector projects in summer, so that we could maximize transport of
juvenile Snake River fall Chinook.
In 2005, in response to a court order, the Corps provided
additional summer spill and less transport of fish. The Corps used the
opportunity to do additional research on fish passage survival
including performance of the removable spillway weirs at Lower Granite
and Ice Harbor dams. Results, as summarized in an ``after action
report,'' indicate that ``juvenile fish left in the river during the
spill operation showed high rates of survival at the dams through the
Snake River and McNary dams with survival ranging from 86 percent to 96
percent based on the results from the radio tracking studies.''
The best available scientific information now indicates summer
transport ``neither helps nor harms'' Snake River fall Chinook. Our
current program for summer operations is to achieve a goal of optimum
adult returns through two objectives: 1) manage spill and powerhouse
operations at all eight dams for optimum juvenile fish survival past
the dams and 2) spill and bypass collection at the collector projects
to achieve a ``spread-the-risk'' distribution of about 50 percent
transported juvenile fish and 50 percent in-river migrants.
Avian Predation: Caspian Terns and Cormorants
Caspian terns and cormorants consume large numbers of juvenile
salmon and are a major cause of mortality of ESA-listed fish. The
program to redistribute Caspian terns from Rice Island in the Columbia
River Estuary to East Sand Island nearer to the ocean has yielded good
results. The intent of the redistribution was to shift the terns' diets
away from mostly salmon and toward a wider variety of fish. Caspian
tern predation on juvenile salmonids in the Columbia River estuary has
been reduced from a range of 7 to15 million in 1999 to about 3.6
million in 2005 by moving these birds downstream nearer the ocean where
they feed less heavily on juvenile salmon and steelhead. A Tern
Management Final Environmental Impact Statement jointly prepared by
several agencies recommends that two-thirds of the Caspian terns be
further redistributed across alternate sites in Oregon and California.
The agencies are now considering management actions to address a
greatly increased population of double-crested cormorants in the
Columbia River estuary. The population increased from around 100 birds
in 1989 to about 12,500 breeding pairs in 2005 nesting on East Sand
Island. Although salmonids make up only about 5 percent of their diet,
the cormorants consumed an estimated 6.4 million of these juvenile fish
in 2005.
Funding of Corps fish programs
The Corps implements a total annual program of about $140 million
for capital improvements for fish passage and operation and maintenance
of fish facilities.
Construction of fish facilities and improvements to these
facilities, and associated analysis and overhead, is funded by
Congressional appropriations in the Columbia River Fish Mitigation
(CRFM) project. BPA reimburses the U.S. Treasury for the ``power
share'' of the expenses using ratepayer funds. For Columbia River Basin
salmon and steelhead capital expenditures, this averages about 80
percent of the total. The power share of operations for fish and
maintenance of fish facilities is direct-funded by BPA; Congressional
appropriations provide the 20 percent matching funds. In 2006, $33
million was direct funded for this purpose. In 2006, the Corps was
appropriated about $11 million for this purpose.
The CRFM project was initiated in 1988 to focus efforts on
improving fish passage systems at the eight lower Columbia and Snake
river dams, as part of the continuing mitigation for construction of
the dams. Many successful improvements to dam fish passage have been
made since, and many more are being studied and implemented. The
estimate to complete this project is approximately $1.6 billion; by the
end of FY05 about $1 billion had been spent.
The Corps has completed numerous individual projects under CRFM.
These include major improvements to the juvenile fish bypass systems at
seven dams such as extended length bypass screens; juvenile fish
monitoring capability at Bonneville, John Day and Ice Harbor dams;
Removable Spillway Weir surface passage at Lower Granite and Ice Harbor
dams; Bonneville Dam Second Powerhouse Corner Collector for juvenile
fish passage; adult Passive Integrated Transponder (PIT) tag detection
facilities at several dams; and spillway flow deflectors at most dams.
Considerable research on fish passage has also been completed, as well
as evaluation of long term configuration and operation options such as
the Lower Snake River Juvenile Salmon Migration Study which looked at
breaching the four lower Snake River dams.
About $40 million annually is expended for operation and
maintenance of juvenile and adult passage systems, and operation of the
Juvenile Fish Transportation Program. Operation and maintenance is
critical for providing reliable adult and juvenile passage.
Summary
Thank you for the opportunity to provide an update on the progress
we have made for fish survival and recovery in recent years. The dams
in the Columbia River Basin provide many benefits to the region,
including flood control, navigation and power, but there are trade-
offs. As the Federal stewards of these benefits, we recognize our
tremendous responsibility to continue to work with the region to find a
way forward that is good for the fish and for people. We believe the
current life-cycle approach to salmon protection and recovery, with a
region-wide effort to address habitat, hatcheries, harvest and
hydropower impacts, is the best approach for bringing these fish back
to sustainability. The Corps will continue to do its part, and work
with you, the relevant Federal agencies and entities, and with the
region to find the best balance and provide the best results.
______
Miss McMorris. Very good. Thank you for being here. Ms.
Hirsh.
STATEMENT OF NANCY HIRSH, POLICY DIRECTOR,
NORTHWEST ENERGY COALITION, SEATTLE, WASHINGTON
Ms. Hirsh. Good morning. Thank you for the opportunity to
testify before you today. The Energy Coalition is an alliance
of more than 100 consumer, environmental, faith-based and low-
income groups, unions, and electric and gas utilities from the
four Northwest states and British Columbia, all working toward
a clean and affordable energy future.
[Discussion held off the record.]
Ms. Hirsh. The Columbia River houses and helps make the
Northwest what it is today, providing low-cost
hydroelectricity, a river highway for transporting goods,
irrigation, and recreational opportunities. This share of
natural resources deserves a better balance between
hydroelectric operations and salmon recovery than we have to
date. More, not less, should be done to balance the scales.
We can achieve salmon recovery without losing our
competitive edge in the electricity industry. We can and should
achieve this balance because we are all stewards of the
Columbia River system. It's important to make clear that
Federal taxpayer and electricity ratepayer investments in
salmon recovery are not made in a vacuum. These dollars are put
to work helping to sustain and rebuild a very important asset
in the Northwest economy.
Sport fishing is a multi-billion dollar industry in the
region and currently supports about 36,000 family wage jobs.
Commercial fishing contributes about $84 million a year to
economically strapped coastal communities. Smart investments in
salmon recovery simply makes economic sense for the entire
region.
Too often balancing salmon and low-cost energy is portrayed
to the public as a tradeoff. The perception is that we cannot
have our cake and eat it too. Yet the Northwest need not make
that difficult choice. The rate increases resulting from the
energy crisis were not in any way due to increased fish and
wildlife investments.
According to the General Accounting Office, BPA's recent
rate hikes were the result of its commitment to provide more
power than it could generate during the West Coast energy
crisis and drought of 2001. BPA should be commended for the
aggressive steps the agency has taken to get us out of the red.
Though the effects of 2001 are still lingering, BPA's rates
have come back down. This is good news and a credit to our
ability to balance salmon and energy that even with increased
salmon recovery measures like spill, BPA has still been able to
keep electricity rates affordable and competitive.
BPA's proposed rates for the Fiscal Year '07 and '09 rate
period will be around $28 a megawatt hour. I should note that
wholesale market prices are about $45 a megawatt hour. And,
clearly, the Northwest still enjoys among the lowest
electricity rates in the country, even with salmon recovery
efforts. Our electricity raises the envy of other parts of the
U.S., and that's something to be proud of.
Would we be able to lower rates if not for salmon recovery
operations? Without a doubt. We could also eliminate the
residential exchange program for customers that invest in our
utilities, or eliminate all sales to the aluminum industry.
Those cost savings would certainly lower rates faster.
But these are not choices within our power to make, nor are
they choices that would aid the Northwest economy as a whole.
As the coalition endures low-income community and consumer
organizations as members, we are very aware of the sensitivity
to rising energy costs and the effects on the general and on
financially constrained low and fixed income families in
particular.
This region has an abundance of resources such as energy
efficiency, wind, and biomass that can help keep rates low,
while at the same time provide more flexibility for salmon
recovery. Energy efficiency and conservation reduces consumers'
bills immediately, and everyone's does over time. Both energy
efficiency and new renewable resources protect consumers
against the volatility of fossil fuels, recurring water
shortages, and any future costs related to carbon dioxide
emissions.
These low-cost resources can meet the low growth we have in
the region, thereby, reducing pressure on the Columbia River
hydrosystem to generate more power.
Finally, I'd like to say a quick word about H.R. 4857. Our
coalition has testified on this bill before, so I'll be
especially brief. In general, the Energy Coalition believes the
transparency of BPA's cost is a laudable goal. More access to
information is always the right goal, but there must be full
and honest accounting to inform the public properly. We do not
believe that 4857 would ensure that fair accounting. The most
open aspect of this legislation is that it would modify the
inclusion of indirect costs.
BPA does not own the river. It shares the river with all
other users like the Tribes and sport and commercial fishermen.
In conclusion, the Northwest has reasonable electricity
rates. Would we like to lower them more? Who wouldn't? But what
we don't have is a healthy sustained wild salmon. We need to do
more to achieve balance. I hope that the region will approach
the question of balance and low-cost energy, the question of
balance between low-cost energy and salmon recovery with a
broader perspective. We can have a win-win solution by
effectively balancing affordable electricity bills and salmon
recovery. Thank you very much.
[The prepared statement of Ms. Hirsh follows:]
Statement of Nancy Hirsh, Policy Director, NW Energy Coalition
Mr. Chairman and distinguished members of the subcommittee, thank
you for the opportunity to testify before you today. My name is Nancy
Hirsh and I am the policy director of the NW Energy Coalition. The NW
Energy Coalition is an alliance of more than one hundred consumer,
environmental, faith-based and low-income groups, unions and
progressive utilities from the four Northwest states and British
Columbia, working toward a clean and affordable energy future. I am
testifying today on an issue that goes to the very identity of the
Pacific Northwest: affordable electricity and wild salmon.
The Pacific Northwest has been blessed with something that no other
region can call its own: the Federal Columbia River Power System. This
system of 31 dams throughout the Columbia River Basin has helped make
the Pacific Northwest what it is today, providing low cost
hydroelectricity, a river highway for transporting goods, irrigation,
recreational opportunities, and more. Since the construction of the
very first federal dam on the Columbia, we as a region have attempted
to balance the benefits of that system. It is a ``multiple use'' system
and inherent in that definition is managing trade-offs on both benefits
and impacts.
But the bounty of the federal system does not come to us for free.
No one would argue that the construction and operation of dams along
the Columbia and Snake rivers hasn't had a profound effect on our
cherished wild salmon and steelhead runs. My testimony today asserts
that we can and should find a better balance between hydroelectric
operations and salmon recovery than we have to date. But unlike many on
today's panel, I believe it is on the salmon side where more, not less,
should be done to balance the scales. I also believe we can achieve
salmon recovery without losing our competitive edge in the electricity
industry. This is our obligation, and our burden, as stewards of the
Federal Columbia River Power System (FCRPS).
Summary
Salmon are a linchpin of the Pacific Northwest economy
Energy vs. salmon is a false and unnecessary choice
Clean energy investments can help us achieve both
Higher-than-normal BPA rates are not the fault of salmon
recovery
The Energy Coalition supports BPA cost transparency, but
H.R. 4857 is the wrong approach
I. The Economic Importance of Salmon Recovery
We all know the economic significance of affordable electricity
rates for everyday consumers, businesses, and others. But a ``working
river,'' as the Columbia is often called, does more than just provide
affordable energy. I'd like to focus briefly on something that is not
as well known and less well understood: the economic significance of
salmon recovery.
According to the Northwest Sportfishing Industry Association,
sportfishing alone is a multi-billion dollar industry and currently
supports about 36,000 family wage jobs in the Pacific Northwest.
1 Stretching far beyond tackle and fishing license sales,
recreational fishing involves both direct spending on rods, reels,
boats, tackle, etc., and significant indirect spending, such as travel
expenses in and around river and coastal communities. This economic
input ripples through local communities, helping to foster jobs,
economic stability and growth.
---------------------------------------------------------------------------
\1\ Testimony of Liz Hamilton, Executive Director, Northwest
Sportfishing Industry Association, before the U.S. House of
Representatives, Subcommittee on Water and Power, Field Hearing,
Clarkston, WA, June 6, 2005.
---------------------------------------------------------------------------
Commercial fishing is another important economic outgrowth of
salmon recovery. According to the independent economic arm of the
Northwest Power and Conservation Council, commercial fishing
contributes about $84 million per year in personal income alone to
economically strapped ocean communities in the Northwest. 2
And all this comes at a time when fishing opportunities are severely
constrained by low salmon returns. These benefits will multiply
exponentially when, and if, salmon are recovered to self-sustaining,
harvestable populations.
---------------------------------------------------------------------------
\2\ Independent Economic Analysis Board, Economic Effect from
Columbia River Basin Anadromous Salmonid Fish Production, January 2005.
(Document IEAB 2005-1)
---------------------------------------------------------------------------
That's why the NW Energy Coalition strongly believes that smart
investments in salmon recovery simply make economic sense for the
Pacific Northwest.
II. The False Choice Between Salmon and Low-Cost Energy
Too often, balancing salmon and low-cost energy is portrayed to the
public as a dichotomy. The perception is that we cannot have our cake
and eat it too. However, the Pacific Northwest need not make that
difficult choice. We can have both salmon and low-cost energy, and we
hope everyone in the room today agrees with that point.
In fact, taking a step back and looking at this issue from a
national perspective, one can make a strong argument that the scales
are currently heavily tipped in favor of low-cost energy. If true
balance is to be achieved, perhaps it's time to do more, not less, for
our imperiled salmon populations.
The fact of the matter is that the Pacific Northwest currently
enjoys among the lowest electricity rates in the country, thanks in
large part to the benefits of the FCRPS. The Bonneville Power
Administration's (BPA) wholesale preference rates are currently 59
percent below the market rates that BPA has assumed for FY 2006 in the
current BPA rate case. On average, Bonneville would be 41 percent below
the lower market rates it projects during the rate period. 3
BPA just established firm wholesale power rates at $27.50 per
megawatthour for FY07-09 rate period. Market based wholesale firm power
contracts are $45-55 per megawatthour.
---------------------------------------------------------------------------
\3\ Declaration of Roger Schiewe of BPA, in National Wildlife
Fed'n, et al, v. NMFS, et al., spreadsheet entitled ``River Ops,
Genesys,'' November, 2005.
---------------------------------------------------------------------------
It is critical to point out that these comparisons include all of
the current fish and wildlife costs and impacts on BPA power
operations. Clearly, our energy rates are higher now than in the past,
and the Coalition supports BPA's efforts to find cost savings that do
not jeopardize the long-term stability of the agency. We hope our rates
will remain under market rates. But even with fish and wildlife costs
included, BPA power is significantly below market rates, and is, in
truth, the envy of other parts of the country. That's something to be
proud of. Business leaders and farmers from California or New York,
where energy prices are through the roof, might wonder what all the
fuss is about.
We have reasonable electricity prices. What we do not have is
healthy, self-sustaining wild salmon, and we have a long way to go
before reaching that goal.
III. Clean Energy Can Help Bridge the Gap
I share the concerns about rising energy costs and their effects on
our region's economy in general and on financially constrained low- and
moderate-income families in particular. Fortunately, I believe that
there is a solution that can help keep rates low while at the same time
providing more flexibility for salmon recovery: investments in cost-
effective energy efficiency and non-hydro renewable power.
Investments in energy conservation programs may increase rates
slightly, but would reduce consumers' actual bills immediately and
everyone's bills over time. The Northwest Power and Conservation
Council's Fifth Power and Conservation Plan identifies 2,500 average
megawatts of energy conservation potential in the region at an average
cost of 2.4 cents per kWh. 4 The Council also says that if
the region does not capture these energy savings, we will lose $2.4
billion in economic benefit over the next 20 years. 5
---------------------------------------------------------------------------
\4\ Northwest Power and Conservation Council, The Fifth Northwest
Electric Power and Conservation Plan, May 2005. (Council Doc. 2005-7)
\5\ Id.
---------------------------------------------------------------------------
Likewise, renewable energy not only protects consumers against the
easily seen volatility of fossil-fuel resources and inevitably
recurring water shortages, but also against the coming penalties/fees
on carbon dioxide emissions. To protect consumers from the financial
impacts of these uncertainties, BPA needs to facilitate and support
renewable energy opportunities.
The NW Energy Coalition thanks BPA for proposing to meet the
Council's energy efficiency targets, but we believe BPA's energy
efficiency goals should be higher and remain concerned about whether
the needed investments will be made. This is an opportunity that the
region cannot afford to pass up.
IV. Higher Than Normal Electricity Rates Aren't Due to Salmon Recovery
Again, looking at this issue from a broad perspective, it becomes
abundantly clear that higher than normal electricity rates in the
Northwest are not in any way due to increased fish and wildlife
investments. Obviously, salmon recovery has an impact on rates, but not
nearly to an extent that is beyond the burden we must bear to maintain
the benefits of the FCPRS in the Pacific Northwest.
In a report to the House Appropriations Subcommittee on Energy and
Water, the U.S. Government Accountability Office (GAO) found that the
major cause of BPA's recent cost increases was the agency's ``open-
ended obligation to be the net provider of wholesale power to the
region'' at a time when the 2001 west coast energy crisis and a serious
drought was about to hit. 6 This obligation, along with
significantly increased customer demand, ``led to BPA's overcommitment
to provide power to its customers in the current rate period--from
Fiscal Years 2002 to 2006--and consequently, to BPA's cost increases as
it purchased large amounts of power at average prices much higher than
the costs of the federal power system.'' 7 As a result, BPA
spent approximately $900 million in Fiscal Year (FY) 2002 and $760
million in FY 2003, necessitating a rate increase of more than 40
percent for the majority of BPA's customers. 8
---------------------------------------------------------------------------
\6\ United States Government Accountability Office, Report to the
Subcommittee on Energy and Water Development, Committee on
Appropriations, House of Representatives, Bonneville Power
Administration: Better Management of BPA's Obligation to Provide Power
Is Needed to Control Future Costs, July 2004. (GAO-04-694)
\7\ Id.
\8\ Id.
---------------------------------------------------------------------------
The effects of 2001 are still lingering, though BPA should be
commended for the steps the agency has taken to get us out of the red.
The agency's mid-year forecast this year shows revenues about $250
million over the start of the year projections, bringing BPA close to
breaking even for the mistakes of the past. 9
---------------------------------------------------------------------------
\9\ Bonneville Power Administration, News Release: BPA mid-year
forecast shows higher revenues; Agency regaining financial strength,
May 1, 2006.
---------------------------------------------------------------------------
Would we be able to make up more ground faster if not for salmon
recovery obligations? Without a doubt. We could also eliminate the
residential exchange program for customers of investor-owned utilities
or eliminate all sales to the aluminum industry. Those cost savings
would certainly lower rates faster. But these are not choices within
our power to make, nor are they choices that would aid the Pacific
Northwest economy as a whole.
The point is that we are moving in the right direction. It is good
news, and a credit to our ability to balance salmon and energy, that
even with increased salmon recovery measures like ``spill,'' BPA has
still been able to keep electricity rates affordable and competitive.
In fact, in 2005, only eight days after the end of the court-ordered
summer spill period, BPA announced that it would be reducing its 2006
wholesale power rates by nearly 2 percent. 10
---------------------------------------------------------------------------
\10\ Bonneville Power Administration, News Release: BPA announces
wholesale power rate decrease, September 8, 2005.
---------------------------------------------------------------------------
Despite all the rhetoric and political jockeying, salmon recovery
obligations are not the most significant driver of BPA's fiscal health.
These obligations, which we are required to meet by federal law,
represent just a small fraction of BPA's overall $3.3 billion budget.
Nevertheless, I take rising electricity costs seriously, and I am
not here today to argue that all is fine and dandy in the world of
Northwest energy. Higher-than-normal electricity and natural gas rates
have a real impact on consumers, particularly on low-income families.
The NW Energy Coalition has long supported increased investments in
low-income weatherization and we thank BPA for increasing its
commitment to this program to $5 million. We urge you to support the
full $5.1 billion annual authorization in the Energy Policy Act of 2005
for the Low Income Home Energy Assistance Program for 2007 and 2008.
V. H.R. 4857 is Not the Answer
Finally, I'd like to say a word about H.R. 4857, the Endangered
Species Compliance and Transparency Act of 2006. Sara Patton, executive
director of the Coalition, appeared before the Committee on Resources
in March of this year to outline our concerns with this legislation.
11 I will briefly restate portions of her testimony here.
---------------------------------------------------------------------------
\11\ Testimony of Sara Patton, Executive Director, NW Energy
Coalition, before the U.S. House of Representatives, Committee on
Resources, Regarding H.R. 4857, the Endangered Species Compliance and
Transparency Act of 2006, March 16, 2006.
---------------------------------------------------------------------------
In general, the Energy Coalition believes that transparency of
BPA's costs is a laudable goal, but there must be a full and honest
accounting to inform the public properly. H.R. 4857 raises a number of
concerns because we do not believe it would ensure that fair accounting
for the following reasons:
The bill is unnecessary: the information is already
readily available from BPA, and utilities are free to inform their
customers if they wish.
BPA's fish and wildlife funding is required by a number
of federal laws and treaties; separating out Endangered Species Act
(ESA) costs would be difficult or impossible.
Proposals to include foregone revenue in these costs
imply that BPA can claim savings for violating federal laws, and that
BPA owns the Columbia and Snake Rivers.
Meaningful economic transparency should address both
costs and benefits. H.R. 4857 only examines perceived costs.
The definition of the firm customers' share of BPA's ESA
costs can be interpreted in different ways, leading to starkly
different conclusions. If not done correctly, such accounting fosters
more confusion than transparency.
I'd like to focus specifically on one aspect of this legislation:
the requirement that BPA and other Power Marketing Agencies include
``foregone generation'' as indirect costs in their Endangered Species
Act-compliance calculation (Section 2'').
``Foregone revenue'' in this context refers to the cost of foregone
generation; that is, the money BPA speculates it could have made if it
did not have to operate the river to assist salmon migration. Requiring
that BPA consider as a ``cost'' the revenues or profits that a business
or agency could have made if it had violated federal laws, regulations,
or court orders is a curious accounting concept, to say the least, and
H.R. 4857 would set a dangerous precedent by codifying it in federal
law.
BPA already readily reports its foregone revenue due to fish and
wildlife obligations. Unfortunately, doing so grossly distorts the
actual monetary contribution BPA expends on salmon recovery, amounting
to over 50 percent of the agency's fish and wildlife investments (if
foregone revenue can properly be deemed an investment). BPA does not,
however, report any of the other various revenues that the agency
foregoes, such as those associated with meeting other legal constraints
on power generation like providing irrigation water, flood control,
maintaining minimum flow depths for river transportation, limiting
rapid variations (``ramping''--which can damage streambeds and banks)
in flow rates, or recreation. All of these other federally mandated
purposes limit the FCRPS's ability to generate electricity and reduce
BPA's potential revenue. Hence, to be consistent, BPA would need to
count them as ``costs'' as well.
In fact, it is difficult to draw a clear line between what does and
does not constitute ``foregone revenue,'' if one looks beyond the uses
of Columbia Basin water. For example, BPA currently makes annual
payments totaling hundreds of millions of dollars for failed nuclear
plants that were never constructed. Using BPA's logic, shouldn't these
payments be considered ``foregone revenue'' because every penny spent
is a penny that cannot be applied to a reduction in rates?
The truth is that BPA does not ``own'' the water used for spilling
salmon past the dams. BPA shares the river with all other uses,
including fish and wildlife. BPA is not entitled to all of the possible
revenue it can squeeze out of the river, only its share. Including
foregone revenue in the calculation would open a Pandora's box that
would be better left closed. The NW Energy Coalition recommends that
Sec. 2(c) be deleted from the bill.
VI. Conclusion
In conclusion, I hope that the Pacific Northwest as a region will
take a step back and start approaching the question of balance between
low-cost energy and salmon recovery from a broader perspective. We are
blessed in this region as the sole beneficiaries of the FCRPS. As the
stewards of this federal system, we have a moral and legal obligation
to keep healthy, wild salmon in our rivers for future generations of
Northwest families, and for the nation as a whole. Salmon recovery is a
part of that responsibility, but it is also a tremendous benefit.
Salmon recovery obligations do not now, and will not in the future,
pose a threat to affordable electricity.
______
Miss McMorris. Thank you. Ms. Flores.
STATEMENT OF TERRY FLORES, DIRECTOR,
NORTHWEST RIVERPARTNERS, PORTLAND, OREGON
Ms. Flores. Good morning. I'm Terry Flores, Executive
Director of Northwest RiverPartners, and I want to thank both
of you for the opportunity to come and comment today. I'm going
to talk a little bit about RiverPartners and our efforts to
work collaboratively on a new biological opinion. And then I do
want to describe for you why we so strongly support the
legislation, H.R. 4857.
So, first, RiverPartners is a nonprofit association. We
represent a broad coalition in the Pacific Northwest that
includes agricultural interests, utilities, both public and
private, industries, and ports.
This hearing today couldn't be more relevant to my members
and our mission. We want to find solutions that will preserve
the multiple uses of the Columbia and Snake Rivers for regional
businesses and families, while also promoting efficient, cost-
effective salmon protection and recovery.
RiverPartners' mission is fourfold. It is about finding
salmon solutions that are, one, achieved via collaboration and
not controversy; two, are based in sound science not advocacy
science; three, are cost effective with demonstrable benefits
for fish and are focused on salmon protection and recovery and
not salmon rhetoric.
To accomplish this mission, we do not need to bankrupt the
region, nor do we need to remove dams as some on the fringes
continue to suggest. We do need, however, to ensure that a
comprehensive approach is taken to salmon recovery, one that
includes all aspects of the salmon's life cycle and addresses
habitat, harvest, hatcheries, and hydro. You've already heard
this morning from a couple of witnesses that the hydrosystem is
reaching its limitations.
To that end, RiverPartners is working very hard to bring
people together to reach reasonable, timely, and workable
solutions. We're currently involved in the effort to develop a
new biological opinion, working through a regional coalition.
That coalition includes the states of Washington, Montana, and
three up-river Tribes, the Spokanes, the Colvilles, and the
Kootenai Tribe in Idaho.
The Coalition's fundamental goal is to remove this enormous
cloud that's hanging over the region right now with continuing
litigation and in essence having a Federal judge opine how to
run the hydrosystem and what's best for fish. Our goal is to
try and see that new biological opinion gets to them and works
with the salmon and the economy.
You've already heard this morning quite a bit on the cost
associated with salmon recovery. I want to tell you that
RiverPartners' prime concern is how those dollars are being
spent and will be spent. Frankly, recognizing that we're going
to be making significant investments in salmon recovery, we
want to make sure that dollars are well spent. We want
accountability, and we want demonstrable results in terms of
fish benefits.
You've also already heard this morning that the majority of
Bonneville's costs are related to river operations,
specifically providing for fisheries down to the migration
period. You've heard that those costs--summer spill is an
example of that. $75 million was spent. And if you read the
Federal agency's after action report, there were not a lot of
fish. So summer spills clearly are bad policy, very expensive,
didn't provide a lot of benefits for the fish.
But I do want to mention that there are some very good
examples of how well dollars are being invested. For example,
the fish line at Lower Granite and Ice Harbor Dam. They're
expensive but they're very effective. They're delivering an
estimated 97 to 99 percent survival for spring migrating and
spilling water two to three times less.
A new corner collector device at Bonneville Dam passed 7.6
million fish at a fraction of the cost of spilling water. The
reality is the region has invested hundreds of billions of
dollars in salmon recovery, and I think we are beginning to see
some very solid results.
You've heard from Steve Wright that adult salmon in
steelhead survival is 98 percent or higher at each one of the
dams. That's a result of having made improvements. And despite
earlier reports that salmon returns would be low this year,
returns are actually looking pretty good.
So, clearly, the costs associated with salmon protection
are great and the stakes for fish and the economy are high. We
think it's important and fair for Northwest businesses and
utility customers to understand the situation. That's why we
strongly support H.R. 4857. Utilities and their customers
should have an opportunity to know and understand the ongoing
investment that they're making recovering salmon and steelhead.
The fact of the matter is that people in the Northwest care
deeply about these resources, and I believe they would
appreciate knowing that they're making a substantial
contribution, they're doing their part to protect these
species.
We also support H.R. 4857 because more information and
knowledge about the ESA will lead to better informed utilities,
their customers, and the general public. And, ultimately, what
we hope is better accountability for costs and how they're
being incurred.
Congresswoman McMorris had already mentioned in her
comments that people are very unaware in the Northwest what
they're spending. That information actually came from a poll
RiverPartners conducted in May of 2005, where we found over 70
percent of the respondents were not aware or thought they spent
5 percent or less on ESA and salmon costs. The reality is,
depending on the serving utility, it's more on the order of 15
or 20 percent.
So, in closing, we support the legislation. We think it's
good public policy. Our hope is that such knowledge will help
spark greater ownership and accountability over the investments
that are being made. We believe in the region that for true
collaboration the region does have the opportunity to invest
dollars more wisely and hopefully develop a new biological
opinion that will work for the fish and the economy.
[The prepared statement of Ms. Flores follows:]
Statement of Terry G. Flores, Executive Director,
Northwest RiverPartners
Congressman Hastings and Congresswoman McMorris, members of the
Committee, my name is Terry Flores, and on behalf of Northwest
RiverPartners I thank you for the opportunity to testify today in favor
of H.R. 4857. Northwest RiverPartners is a non-profit association that
represents a broad coalition of river users in the Pacific Northwest
including agricultural interests, utilities, industries, and ports. Our
100-plus members are dramatically affected by current efforts in the
region to recover listed endangered salmon and steelhead, through power
rates and changes to river operations.
This hearing today couldn't be more relevant to my members and our
mission. We are committed to finding and achieving an appropriate
balance between the region's economy and salmon recovery efforts. We
want to find solutions that will preserve the multiple uses of the
Columbia and Snake Rivers for regional businesses and families, while
also promoting efficient, cost-effective salmon and steelhead
protection and recovery. During the on-going public debate about salmon
recovery, little attention has been paid to the tremendous economic
force of the Columbia and Snake rivers and the quality of life that
they provide, which oftentimes is taken for granted.
Northwest RiverPartners Mission
RiverPartners' mission is fourfold. It is finding salmon solutions
that are: 1) achieved via collaboration not controversy; 2) based in
sound science not advocacy science; 3) cost-effective with demonstrable
benefits for fish; and, 4) focused on salmon protection and recovery,
not salmon rhetoric. To accomplish this mission, we do not need to
bankrupt the region, nor do we need to remove dams as some on the
fringes continue to suggest.
We do need to ensure that a comprehensive approach is taken to
salmon recovery, one that includes all aspects of the salmon's
lifecycle. You can't fix one link in a chain while others are broken
and expect the chain to hold together. Significant efforts also must be
undertaken in the habitat, harvest and hatchery arenas. It will take
sincere collaboration and a willingness to explore these issues
seriously, in addition to making further improvements in hydrosystem
operations, for the salmon to be on a solid path to recovery.
To that end, RiverPartners is working hard to bring people together
to reach reasonable, timely and workable solutions. Currently, we are
very involved in the effort to develop a new Biological Opinion (BiOp)
on federal hydrosystem operations, working closely with a ``Regional
Coalition'' that includes the states of Washington, Montana, and
upriver tribes: the Spokanes, the Colvilles and the Kootenai Tribe of
Idaho.
The Coalition's common goal is to help ensure development of a new
BiOp that is: based in sound science and uses science to resolve issues
of key uncertainty, provides real benefits to listed salmon and
steelhead as quickly as possible, maintains the viability of the
federal hydrosystem, and withstands legal challenge. A very tall order.
However, we believe that through collaboration such as ours, with a
respectful sharing of information and ideas, there is great opportunity
for this new BiOp effort to be successful. It is critical that it be
successful. Otherwise, the huge cloud of uncertainty that hangs over
the region will continue. There will be continued litigation and a
federal Judge deciding how to run the hydrosystem and what's best for
the fish. Such uncertainty is bad for the economy and bad for the fish.
Attorneys and consultants may benefit and it may serve as a valuable
fundraising tool for some organizations, but clearly the salmon will
not be saved in a courtroom.
Fish and Wildlife Costs and Benefits
On the costs associated with salmon recovery, RiverPartners' prime
concern is about how dollars are currently being spent, and will be
spent. For example, over $750 million annually is being invested by
Bonneville Power's customers, about 25 percent of BPA's wholesale power
costs. We want to ensure that what is being spent is well-spent. We are
about accountability. We need demonstrable results in terms of fish
benefits for dollars spent. We are about helping listed fish, not
propping up various economic development projects, paying agencies'
overheads or doing research projects because they make someone feel
good.
If we are to truly solve the problem long-term, we must ensure that
our dollars are being invested in those measures that will provide real
benefits. Currently, the majority of BPA's fish costs are related to
river operations, specifically providing additional flows and spills
for fish during the downstream migration period, resulting in lost
energy to the region.
We have learned that those costs can be huge, with uncertain
benefits for the fish. For example, based on the federal agencies'
October 31, 2005 ``After Action Report'' last year's summer spill
program, ordered by Judge Redden, ran from June 20 to August 31st cost
regional energy customers and businesses nearly $75 million dollars.
Yet, according to the report: ``a considerable portion of the 2005
run...had already passed the Snake River dams by June 20'', and
``nearly all of the Snake River Fall Chinook fish passed (the Snake
River dams) by July 31''.
Summer spill clearly is a good example of a bad policy: it was very
expensive and did little or nothing to help endangered fish. It also
did nothing to advance the region's understanding or the science to
help resolve the debate over the best way to aid fish in their
downstream migration--transportation vs. spill. RiverPartners, together
with the Regional Coalition, supports implementing a comprehensive,
multi-year (and no doubt very expensive study) to determine whether
listed species are better off being transported or spilled, what
species, and when. It is our understanding that such a study will be
pursued.
That said, there are a number of examples where dollars are being
invested to very good effect. For example, ``fish slides'' at Lower
Granite and Ice Harbor dams, while expensive, are proving very
effective, delivering an estimated 97-99 percent survival for spring
migrants while spilling two to three times less water. A new ``corner
collector'' device passed 7.6 million hatchery fish from the Spring
Creek Hatchery this year at a fraction of the cost of spilling water.
The collector, in conjunction with the screened bypass system at the
dam, passed fish with a survival rate of over 99 percent. It is
examples like these that are leading to these good results:
Adult salmon and steelhead survival is 98 percent or
higher at each dam as a result of improvements made to passage
facilities over the last several years;
Despite earlier reports that salmon returns would be low
this year, adult returns for all species were impressive. In fact,
returns were near the 10-year average which includes years of record
and near record high returns from 2000 through 2004.
H.R. 4857--Providing Valuable Information
Clearly, the costs associated with salmon protection are great and
the stakes for fish and the economy are high. RiverPartners believes it
is important and fair for Northwest businesses and utility customers to
understand the situation. That is why we strongly support H.R. 4857.
Utilities and their customers should have the opportunity to know and
understand the ongoing investment they are making in recovering listed
salmon and steelhead. People in the Northwest care deeply about their
natural resources, particularly their fish and wildlife. They would
appreciate knowing that they are making a substantial contribution, are
doing their part to protect and recover these valued resources.
We also support H.R. 4857 because more information and knowledge
about the ESA will lead to better informed utilities, customers and the
general public and, ultimately, we hope, better accountability for
costs and how they are incurred. Knowledge is power--power to make
better decisions and put dollars where they will do the most to benefit
the fish. We need to shine a light on the investment being made in
salmon recovery. Some respond that fish and wildlife costs should not
be singled out. We believe ESA costs warrant special mention because
they are of great magnitude, are subject to great volatility, and,
again, people in the Northwest deserve to know they are making a
significant investment in recovering salmon stocks.
Further, this legislation is needed. Northwest RiverPartners, in a
public opinion survey conducted in May 2005 in Washington, Oregon and
Idaho, learned that nearly 60 percent of respondents were not even
aware that ESA compliance costs were included in their power rates. Of
those who were aware, over 40 percent believed that less than 5 percent
of their bills went to such compliance. The reality is, depending on
the serving utility, 15 to 20 percent or more of consumers' retail
bills go toward ESA compliance, specifically for listed salmon and
steelhead.
Conclusion
Northwest RiverPartners supports H.R. 4857 because it is good
public policy. The costs regional electricity customers are investing
in salmon recovery are significant and they deserve to be aware of
that. Our hope is that such knowledge will help spark greater ownership
and regional discussion over what investments are being made and
whether they are the ones that will provide the greatest benefits to
resources of concern. It is irrelevant whether people believe the
``right'' amount is being spent in the region of fish and wildlife and
ESA compliance. The point of H.R. 4857 is to provide knowledge and
information. Those making the investment deserve no less.
Thank you very much for the opportunity to comment today.
______
Miss McMorris. Thank you. Ms. Miles.
STATEMENT OF HON. REBECCA MILES, COMMISSIONER, COLUMBIA RIVER
INTER-TRIBAL FISH COMMISSION, PORTLAND, OREGON; ACCOMPANIED BY
ED SHEETS
Ms. Miles. Good morning, Congressman Hastings and
Congresswoman McMorris. My name's Rebecca Miles. I'm Chairman
of the Nez Perce Tribe. And I'm here representing the Columbia
River Inter-Tribal Fish Commission, otherwise known as CRITFC.
And the Confederated Tribes of the Warm Springs Reservation is
also here today. We thank you for this opportunity to provide
testimony.
CRITFC consists of the four Tribes of the Treaty Reserved
Fishing Rights on the Columbia River, Yakama Nation,
Confederated Tribes of the Umatilla Indian Reservation,
Confederated Tribes of the Warm Springs Reservation, and the
Nez Perce Tribe.
We have had a seat at the Columbia River table for over
10,000 years. Salmon was so fundamental to our society that
when sovereign tribes would not negotiate a treaty in 1855, our
tribal forefathers explicitly reserved, and the government
agreed to assure, our right to take fish caught on our
ancestral homeland, which stretches across one-third of the
entire Columbia Basin in Washington, Idaho, and Oregon.
We've kept our word by feeding back portions of our
homeland to the United States and have always fully expected
the government to honor their word. We all share a goal for a
healthy environment and access to affordable electricity. It's
important that we develop a fundamental strategy between the
relationship of electricity costs and the Federal obligation to
restore healthy salmon runs under treaties as well as under the
ESA and the Northwest Power Act.
I have tempered optimism. Since I last spoke with this
Subcommittee, our Tribes along with the Northwest States and
Federal agencies have been involved in a collaborative effort
to construct a salmon recovery plan for the Columbia River
Basin. It's our goal to deliver a plan that can win regional
support and be put into practice immediately with hallmarks I
think you would support, certainty and accountability.
In our view, the element most crucial to success or failure
and lacking from the previous salmon plan is sufficient
funding. I appeal to you to work with the collaboration
partners to ensure that all the needed ingredients for a
successful salmon plan are realized.
Anxiety stirred by State and Federal expenditures for
fishery mitigation and protection, including implementation of
ESA, is responsible for power rate increases. Blaming salmon
recovery for the cost of heating our homes is unfair. These
statements are biased by overlooking many factors that
contribute to the cost of electricity.
We feel divisiveness, making us wonder if the region's
relying on biased information will cast out any chance that
salmon will have a place in the culture, economy, and future of
the Basin.
In the past we've had to publicly discredit the millions of
dollars spent to save a single endangered fish. We have fuel to
use by not relying on such misinformation that perpetuates any
anxiety. We need to take care of this. There are other major
causes of BPA rate increases over the past 25 years which have
already been mentioned. For instance, overcommitments to
utilities. Not surprisingly, these factors don't get much
publicity. Based on BPA's own estimate, their 2001 decision to
overcommit to utilities and direct service industries added
$3.9 billion in costs over the current five-year rate period.
In every year BPA paid $828 million in annual costs
associated with nuclear power. $250 million goes to operate the
Columbia generating station. $275 million to pay the debt on
that plant. And $325 million to repay the debt on two nuclear
plants that were never completed and don't produce a spark of
electricity.
Add this to the general hydropower system various subsidies
and power commissions we rate payers can see what constitutes
about 90 percent of our bill. We have reviewed H.R. 4857
Transparency Act of 2006. We support Transparency and agree
that our fellow consumers have a right to know. However, as
written in legislation, it has shortcomings. If we truly
embrace Transparency, this legislation must be--We should be
informed of all the costs contained in our power bill. If we
truly embrace honesty, then we need to be out here finishing
those that are legitimately tied to ESA efforts.
The BPA fish and wildlife is required by a number of
Federal statutes and treaties and not just ESA. The Northwest
Power Act alone requires that we mitigate, protect, and enhance
the fish and wildlife impacted by the Federal hydrosystem. This
includes funding of valuable projects for nonresident fish and
wildlife that provide recreational and commercial opportunities
in all four states. Some projects have multiple benefits so
they share ESA benefits. They comment on ESA related costs
would require more administrative effort, and even these costs
should be shown on our monthly utility bills.
Foregone revenues, as used by BPA, would be fiction. No
entity, public or private, should be able to convert potential
revenue to a cost if they were allowed to violate Federal laws.
Can our farmers and loggers claim foregone revenues every time
they forgot a necessary worker safety or complied with
pesticide laws?
I see my red light is on. I have provided actual written
testimony. But in closing, I ask you to consider salmon
recovery as an investment and not just a cost. If we were to
fully implement a plan recommended by a work group of the
region's fish and wildlife, we'd inject approximately $2
billion in Eastern Washington and Oregon, Idaho, and Western
Montana over the next ten years. This funding supports jobs in
rural communities by implementing on the ground efforts.
In conclusion, Mr. Hastings and Miss McMorris, the Columbia
River is capable of multiple purposes and the natural path of
the water of the river cannot be claimed by a single interest.
Even the Power Act calls for equitable treatment. Today what we
need for salmon and what rural communities need and economies
need in terms of energy costs is the same thing, certainty, the
salmon resource and with it tribal rights reserved under the
treaty with the United States will probably secure a place on
the list of considerations reviewed by the Congress and Federal
agencies in determining the appropriate action and unnecessary
costs to be borne by all of us ratepayers and taxpayers.
We look forward to working with you and your staff to find
the appropriate regional and national support balance,
certainty, and, ultimately, success to our region. Thank you
very much.
[The prepared statement of Ms. Miles follows:]
Statement of The Honorable Rebecca Miles on behalf of the
Columbia River Inter-Tribal Fish Commission
I am Rebecca Miles, Chairman of the Nez Perce Tribal Executive
Committee and a commissioner on the Columbia River Inter-Tribal Fish
Commission. Thank you for allowing me an opportunity to offer testimony
on behalf of the Commission.
The Columbia River Inter-Tribal Fish Commission (CRITFC) was formed
by resolution of the Nez Perce Tribe, the Confederated Tribes of the
Umatilla Indian Reservation, the Confederated Tribes of the Warm
Springs Reservation of Oregon and the Confederated Tribes and Bands of
the Yakama Nation. The Commission's primary mission is to provide
coordination and technical assistance to the member tribes to ensure
that outstanding treaty fishing rights issues are resolved in a way
that guarantees the continuation and restoration of our tribal
fisheries into perpetuity.
The Tribes have had a seat at the Columbia River Basin's table for
over 10,000 years. Salmon was so fundamental to our society that in
1855 when our four sovereign tribes and the United States collaborated
and negotiated treaties 1, our tribal forefathers explicitly
reserved--and the U.S. agreed to assure--our right to fish in
perpetuity within our ancestral homelands as well as to ``take fish at
all usual and accustomed places''. We kept our word by ceding vast
portions of our homelands to the U.S., and we fully expect the U.S. to
honor their word. On the Columbia River and its many tributaries, our
peoples have exercised this right since time immemorial. It was the
expectation of our treaty negotiators then that the tribes would always
have access to abundant runs of salmon; it is our expectation now that
you will honor that commitment and take the steps necessary to protect
our trust resource. This reserved right has not been diminished by time
and its full exercise has been upheld and affirmed in several U.S.
Supreme Court decisions.
---------------------------------------------------------------------------
\1\ Treaty with the Yakama Tribe, June 9, 1855, 12 Stat. 951;
Treaty with the Tribes of Middle Oregon, June 25, 1855, 12 Stat. 963;
Treaty with the Umatilla Tribe, June 9, 1855, 12 Stat. 945; Treaty with
the Nez Perce Tribe, June 11, 1855, 12 Stat. 957.
---------------------------------------------------------------------------
It is important for members of this subcommittee as well as the
region to understand how the four Columbia Basin treaty tribes feel
about the relationship between our shared goal of maintaining access to
affordable electricity and the federal obligation to restore salmon to
healthy sustainable runs under our treaties, as well as under the
Endangered Species Act (ESA) and the Pacific Northwest Electric Power
Planning and Conservation Act--Northwest Power Act for short.
The ancestral homelands of our Commission tribes cover roughly one-
third of the entire Columbia Basin in Washington, Oregon and Idaho.
Along with the northwest states and federal agencies, we have been
involved in an intensive collaborative effort to construct a salmon
recovery plan for the Columbia River basin. It is our goal to deliver a
plan to the region with hallmarks I feel you would support--certainty
and accountability. We feel we have an opportunity to deliver a plan
that can win regional support and be put into practice immediately. In
our view, the element most crucial to success or failure, and lacking
from the previous salmon plan, is sufficient funding. I appeal to you
to work with our tribes and collaboration partners to ensure that all
the needed ingredients for a successful salmon plan are realized.
As a region, we remain concerned over power rates and safeguarding
a healthy environment. Often, salmon and economy are divisive words.
One of the first steps to overcome this divisiveness is to squelch the
fear that Endangered Species Act costs are the primary reason for
electrical rate increases. Claims such as those found in your press
release about the costs per fish are based on a long-discredited
analysis and serves to weaken relations and pit salmon recovery against
the economy.
The causes of Bonneville Power Administration (BPA) rate increases
over the past 25 years are primarily from nuclear costs and over-
commitments to utilities and aluminum smelters. For example:
BPA's 2001 decision to over-commit to utilities and
aluminum smelters added $3.9 billion in costs based on BPA's own
estimate.
BPA's annual payments for nuclear plants average $828
million a year.
By comparison, BPA funds the Northwest Power and Conservation
Council's (NPCC) Fish and Wildlife Program and FCRPS Biological Opinion
on the average of $143 million dollars annually--roughly 5% of its
total expenditures.
The region must consider salmon and ESA costs in another way: an
economic investment in rural communities. Full implementation of
subbasin plans as recommended by a workgroup of the Columbia Basin Fish
and Wildlife Authority (comprised of the basin's state, federal and
tribal fish and wildlife co-managers) would inject approximately $2
billion in Eastern Washington, Eastern Oregon, Idaho, and Western
Montana. If this work is implemented over the next ten years, the
annual funding would support more than 5,000 jobs (assuming $40,000 per
job).
This economic infusion could be realized and BPA rates would still
be 29% to 38% below market rates. Over the past ten years BPA rates
have averaged 27 percent below market, so the region could still
increase investments in salmon recovery and still be further below
market rates than the last ten years.
The pie could get bigger, and sweeter, at the same time. This could
be achieved by the BPA building adequate salmon costs into their next
rate case. Under the current rate case, costs were assumed to be an
average of $186 million. For the next rate case, covering the years of
2007 through 2009, the costs should ramp up to an average of $240
million per year. The effect of including these costs on the
hydroelectric power rates is minimal: for the average household that
gets all of its power from BPA, building these costs in the power rate
would mean an increase of about one dollar per month. BPA only provides
about forty percent of the power in the Pacific Northwest, so most
homes would see smaller monthly increases in power costs.
We also want to make you aware that irrespective of power rate
increases or decreases, Eastern Washington is at risk of losing
existing resources. Last week a different committee of the U.S. House
of Representatives approved a spending bill that would reduce the
Pacific Coastal Salmon Recovery fund by $45 million. Much of that loss
will be felt right here in the mid-Columbia.
As well, a proposal by the NPCC would transfer $7 million per year
for salmon restoration and mitigation OUT of Eastern Washington and
redirect them to Montana and Idaho for resident fish projects (see map
on page 9).
H.R. 4857 the Endangered Species Compliance and Transparency Act of
2006
We have read the text of H.R. 4857, the Endangered Species
Compliance and Transparency Act of 2006. We do not dispute a need for
transparency and reliable consumer information however no one should be
unfairly singled out in this analysis. To aid the consumer on their
overall power bill they must have a better understanding of all costs
that constitutes their bill, including the cost to the consumer of
implementing this legislation.
We cannot support this legislation as written for the following
reasons:
1. BPA's fish and wildlife funding is not exclusively for ESA
compliance. BPA's fish and wildlife obligation is also required by a
number of federal laws and treaties among which ESA is only one. The
Northwest Power Act called for a program to mitigate, protect and
enhance the fish and wildlife resources affected by the federal dams.
There are many non-ESA costs within BPA's fish and wildlife funding
making it difficult and costly to determine costs attributed
exclusively to ESA. All non-ESA costs must be deducted such as
wildlife, resident fish, and administration for example. On-the-ground
projects with multiple benefits would also require that any costs
attributed to ESA be separated.
2. H.R. 4857 relies on the BPA's claiming of so-called ``foregone
revenues''. Calculating costs in this manner implies that BPA can claim
savings for violating federal laws. No other business or government
agency calculates the revenues or profits that it could have made if it
had violated Federal laws, regulations, or court orders as a part of
foregone revenue and costs. The legislation should not put such a
requirement into law. If lost revenues are used to analyze a power
bill, consumers should also be told of lost revenues due to other
public benefits: irrigation, flood control, transportation and
recreation.
3. The economic analysis required by H.R. 4857 does not address
any associated benefits. In order to make a more fair assessment of
costs, any analysis would be strengthened by including economic
opportunities created by a salmon economy plus investments in on-the-
ground salmon restoration work. We must not underestimate the economic
importance of salmon.
4. This legislation is likely to focus national attention on the
fact that BPA's rates are currently about 60 percent below market
rates.
We would support greater ratepayer understanding of all costs that
constitute their utility bills, in effect true and full transparency
which would include, for example, nuclear debt. Every year BPA
customers pay $828 million in annual costs associated with nuclear
power. $250 million goes to operate the Columbia Generating Station,
$275 million to repay the debt on that plant, and $325 million to repay
the debt on two nuclear plants that were never completed. Add to this
amount the debt owed on the hydropower system, various subsidies and
power provisions and a customer will see what constitutes 95% of their
bill.
Also, if foregone revenue was a valid concept, consider the
hydropower revenue losses caused by irrigation. In the NPCC's 4th
Annual Report to the northwest Governors on the Fish and Wildlife
Program, they stated irrigation is the largest non-power user of
Columbia and Snake River water accounting for net water withdrawals of
about 14.4 million acre-feet of water annually. According to their
analysis, this volume of water, were it left in the river and used to
generate hydropower instead of being withdrawn for irrigation, would
yield about 625 average megawatts of electricity (that is, averaged
across all 12 months). At BPA's rates, this additional power would be
worth $170 million per year or $1.7 billion dollars over 10 years. A
recent analysis by the NPPC calculated that at average market rates,
the foregone revenue would be closer to $250 million per year. At the
market prices for the summer of 2005, the lost revenue associated with
irrigation withdrawals was over $380 million. BPA does not count
irrigation as a cost or foregone revenue. It is interesting that we
don't debate irrigation as decreasing revenues or raising electrical
rates or classifying it as foregone revenue. Instead, we accept
agriculture as a mainstay to the region's livelihood and so should we
also accept salmon.
The Northwest Power Act requires equitable treatment between the
purposes for which the dams are operated. The natural capital of water
in the river cannot be claimed by a single interest. The Tribes have
asked for river operations that provide for the natural needs of the
fish. Yet, the legitimate use of spill for smolt survival is met with
disdain and is characterized as lost revenues. In addition, BPA's
purchase of electricity to meet their legal obligation to provide
sufficient flows for salmon migration and habitat is also mislabeled as
a cost in their fish and wildlife budget.
The early settlers took a cue from the Tribes in recognizing the
economic wealth contained in the salmon. Salmon, like timber and
agriculture, provided an economic foothold in this region. We are
accustomed to understanding the timber and farming communities'
contribution to the economy and the imprint their rich family heritage
and culture has given to this region--it is rightly so. And, just as
passionately and determined, we should also defend the historic salmon
economy and its legacy that stretches even deeper in history.
A study done by the Northwest Power Planning Council in the mid-
80's found that the hydropower system is directly responsible for the
loss of between five and eleven million salmon per year from the
historic high of sixteen million. These losses are borne by communities
and cultures in our region and beyond. We must not ignore these costs
to the system. It is unfair when, at the same time, water that is
needed to ensure the safe passage of salmon to the ocean is being
charged as a cost against the ESA.
The Columbia River was built to support multiple purposes. What we
need for salmon, and what rural economies need in terms of energy costs
is the same thing, certainty. The salmon resource, and with it, tribal
rights reserved under treaties with the United States must have a
secure place on the list of considerations reviewed by the Congress and
federal agencies in determining the appropriate costs to be borne by
ratepayers and taxpayers.
We look forward to working with you and your staffs to find the
appropriate sources of regional and national support to bring balance,
certainty and ultimately success to our region. We need a commitment
from the Congressional Delegation to support an aggressive effort to
rebuild salmon runs to sustainable, harvestable levels. The U.S. must
fulfill the commitments entered into by treaties with our tribes.
Tribes have the longest history of collaboration in the region
beginning long before our ancestors negotiated treaties in 1855. Today,
we are working along side our neighbors in the watersheds to restore
salmon habitat, we share in the harvest with non-Indian commercial and
recreational fisherman, and we share in the hope that we can overcome
the divisiveness and strained relations by working through common
understanding. And, we will continue to work with you to secure the
resources necessary to get the job done.
Thank you for this opportunity to offer this testimony. A more
detailed technical analysis is attached.
Technical Recommendations and Concerns of the Columbia River
Inter-Tribal Fish Commission for the Field Hearing on
``Electricity Costs and Salmon: Finding the Balance''
Friday, July 7, 2006
I. A STRONG FEDERAL COMMITMENT TO SALMON RECOVERY IS NEEDED
We need a commitment from the Congressional Delegation
that they will support an aggressive effort to rebuild salmon runs to
sustainable, harvestable levels. The Federal government must fulfill
its commitments in the Treaties signed with our tribes.
Rebuilding salmon runs will provide thousands of jobs in
eastern Washington and Oregon and in Idaho.
Federal agencies should work with the fish and wildlife
managers to develop a science-based plan that will protect and recover
listed salmon species and rebuild salmon runs to sustainable,
harvestable levels.
The federal agencies should work with the fish and
wildlife managers to develop a detailed workplan to implement these
efforts. The plan should include:
An aggressive schedule,
A detailed budget,
An allocation of implementation responsibility, and
Funding commitments.
We want to work with the Congressional delegation to
secure federal appropriations wherever possible.
II. TRIBAL EFFORTS ARE SUCCEEDING IN REBUILDING SALMON, MORE ARE NEEDED
The tribes' vision and their actions have been simple: ``Put the
salmon back in the rivers and protect the watersheds where they live.''
The following are a sample of tribal successes in carrying out this
vision.
In the Clearwater River of Idaho, the Nez Perce Tribe has
resurrected Coho salmon runs that went extinct in the 1970s. The
tribe's efforts returned more than 1,100 Coho to the Clearwater River.
The tribe also has taken the lead in restoring and protecting salmon
habitat. It implemented its plan against great opposition and produced
results in less than eight years. Coho are back in the river.
In the Methow River of Washington, the Yakama Nation, helped save
thousands of spring chinook from destruction by federal and state
agencies. The Yakama Nation led an effort to allow hatchery-reared
spring chinook to spawn in the Methow River rather than be killed due
to mismanagement over genetics. The tribe and others blocked the
hatchery entrance, thereby allowing the nearly 2,000 adult salmon to
spawn in the river. As a result, spring chinook redds (nests) increased
in less than three years--from 15 redds in 1995, to 36 redds in 1999,
to 368 redds in 2000, to 4,400 redds in 2001. Additionally, the tribe
worked with local irrigators to help conserve water critical to spring
chinook spawning and rearing. Spring chinook are back in the river.
In the Hood River of Oregon, the Warm Springs Tribe has led efforts
to restore habitat and supplement wild steelhead and spring chinook
through appropriate hatchery technology. The tribe is operating the
low-tech, yet highly successful Hood River salmon acclimation and
release facilities. The facility is designed to increase survival of
spring chinook and steelhead juveniles and boost the naturally spawning
population. Prior to 2001, the average size of the spring chinook run
was 200 fish. But it jumped to 1,100 fish in 2001 and to 1,600 fish
this year. The winter steelhead run also has increased dramatically on
the Hood River. Last year--2000-2001--it reached about 2,250 fish, up
significantly from the average run size since 1991 of 700 fish, and
this year it climbed to 2,500 fish, making it the highest winter
steelhead run on record since the tribe started counting it during the
1991-'92 season. Steelhead and spring chinook are back in the river.
In the Umatilla River of Oregon, the Umatilla Tribe has spearheaded
one of the most successful models of salmon restoration. Since 1984,
the tribe has worked with irrigators, state agencies, environmental
groups, and local citizens to rebuild salmon runs from an average of
1,500 annually to as many as 30,000 fall and spring chinook, Coho, and
steelhead annually. Working with local communities, water has been
restored to the river, habitat has been improved, and hatchery
technology is supplementing wild salmon populations. Today, once-
extinct spring chinook salmon are returning to spawn. As much as 20
percent of the reintroduced spring chinook are naturally spawning.
Spring and fall chinook, Coho, and steelhead are back in the river.
The Tribes have helped achieve significant accomplishments. Ocean
harvest that intercepts Columbia River chinook has been reduced nearly
50 percent since the 1999 Pacific Salmon Treaty agreement. The tribes
played a pivotal role in reaching this agreement. The tribes have led
the region's efforts to protect fish habitat on federal lands and
restore habitat in cooperation with local landowners on private and
tribal lands. They also have been in the forefront of efforts to
require annual flow and spill over Columbia and Snake River
hydroelectric dams, the most effective way of passing fish in the
river. Today the tribes and other citizens of the Pacific Northwest are
benefiting from the hard work.
A. MORE FISH AND WILDLIFE EFFORTS ARE NEEDED
1. The current funding problem
The NPCC and BPA are currently making decisions on fish and
wildlife projects for 2007-2009. The fish and wildlife managers
developed detailed recommendations for projects that are needed during
this period. BPA's proposed funding level will require significant cuts
in ongoing projects that affect listed species. The proposed funding
levels and cuts are shown in the following table. These cuts will
impact ongoing projects and significantly limit new projects.
[GRAPHIC] [TIFF OMITTED] T8557.007
The map on page 9 shows the reallocation proposed for FY 2007-2009
compared to the average for the Council's recommendation in FY 2004-
2006. All of the areas that will lose funding have listed salmon and/or
steelhead. Based on this reallocation, the funding available to
implement projects under the Council Program and the FCRPS remand will
be cut significantly. The reallocation will transfer $7 million per
year away from projects in eastern Washington and Oregon.
[GRAPHIC] [TIFF OMITTED] T8557.008
2. BPA can fully fund salmon recovery
Fish and wildlife managers have developed several estimates of fish
and wildlife costs. The first was prepared by CBFWA in 1998 as part of
the Multi-Year Implementation Plan. This effort developed costs for
implementing all of the elements of the Council Program and FCRPS
Biological Opinion. The annual costs at the time were $200 to $225
million--this would be approximately $275 million today, adjusted for
inflation.
In 2003, CBFWA and the NPCC conducted the Provincial Review to
determine the costs of implementing projects that had been approved by
the fish and wildlife managers, the Council, and the Independent
Science Review Panel. The Provincial Review identified BPA revenue
requirements (capital, reimbursable costs, and direct program) of $310
million per year for FY 2003 through FY 2006 ($329 million adjusted for
inflation).
CRITFC, the Oregon NPCC office, and the Yakama Nation also
developed estimates of the costs of implementing the 2000 FCRPS
Biological Opinion and NPCC Program in January of 2001. This estimate
was based on more aggressive habitat restoration activities to
implement the ``Aggressive Non-Breach Alternative'' in the Biological
Opinion and had an annual cost of $356 million (approximately $400
million adjusted for inflation to 2005 dollars). This figure assumed
that all of the costs would be expensed; if CRITFC had assumed that
some of the costs would be capitalized, the estimate would be similar
to the recent CBFWA costs.
The following figure has been adjusted for inflation and shows that
BPA has never provided funding at the levels recommended by the fish
and wildlife managers.
[GRAPHIC] [TIFF OMITTED] T8557.009
3. 2007-2009 Biological Opinion and Program cost estimates
The CBFWA formed a workgroup comprised of federal, state, and
tribal fish and wildlife managers to prepare detailed estimates of the
costs of implementing the subbasin plans and other Program measures.
The subbasin plans were the produce of a multi-year, $13 million
effort involving fish and wildlife managers, local stakeholders, and
other interested parties. This effort developed plans for all of the
subbasins in the Columbia River Basin. These plans assessed the current
conditions in each watershed, the desired population levels, and the
key limiting factors. The plans also included specific strategies and
management plans to achieve the biological objectives for each
subbasin. Each plan addressed the requirements of the Council's
program. (See the Columbia River Basin Fish and Wildlife Program, pages
39 to 43.) The NPCC formed technical and policy level groups to oversee
the development of the subbasin plans and the plans were reviewed by
the Independent Science Advisory Board.
The CBFWA workgroup coordinated the efforts of the Columbia Basin
fish and wildlife managers in the development of detailed budgets to
implement the subbasin plans. The CBFWA workgroup effort was based on
the detailed analysis of the fish and wildlife managers of the
production and habitat costs associated with implementing the NPCC Fish
and Wildlife Program and the FCRPS Biological Opinion. The workgroup
compiled the cost estimates for 30 subbasins into province level costs;
where costs were not available for a subbasin, the workgroup
extrapolated costs from similar subbasins based on land area.
The workgroup incorporated the production and habitat costs into
the other costs estimates that had been developed by the NPCC and BPA
to develop an overall budget for the Integrated Fish and Wildlife
Program. The CBFWA workgroup circulated its draft report in beginning
in January of 2005 to the fish and wildlife managers, the Council,
Bonneville, utilities, and others. The workgroup incorporated all of
the comments it received and the review process improved the quality of
the analysis. The workgroup specifically requested comments on whether
there were any better assumptions or costs for the report. We did not
receive any analysis from Bonneville or its utility customers that
provided alternative costs for implementing the subbasin plans and
other elements in the Program and Biological Opinion.
The CBFWA workgroup report is the most detailed estimate of the
costs of implementing the NPCC Fish and Wildlife Program and the FCRPS
Biological Opinions available. In fact, it is the most detailed
estimate ever produced on this issue. The Yakama Nation provided this
report to BPA staff several times, including in our April 29, 2005
comments on the PFR and attached the CBFWA workgroup report.
The CBFWA workgroup found that implementing the habitat and
production activities and other measures in the NPCC's Program had a
total cost of $1.5 billion and the cost of wildlife mitigation was $300
million over the next ten years. Based on this work, CBFWA wrote to BPA
and the NPCC on March 16, 2005 to support adequate funding for fish and
wildlife in the next rate case. The letter states:
While CBFWA Members are continuing to review the detailed
costs, the analysis completed to date provides a strong basis
for increasing the funding for BPA's Integrated Program in the
next rate case period to at least $240 million per year. This
figure assumes that BPA would use its borrowing authority for
new production facilities and the acquisition of land and water
to protect habitat. It also does not include a comprehensive
assessment of costs for mainstem measures beyond those
contemplated in the Updated Proposed Action or the NPCC
Program. Additional mainstem measures are necessary to protect,
recover, and restore anadromous fish impacted by the federal
hydrosystem...
Based on our work to date, it is clear that the current
spending levels are inadequate to protect, mitigate, and
enhance fish and wildlife under the Northwest Power Act. Our
analysis shows that at the current spending levels, it would
take over 100 years to implement all the measures contemplated
in the NPCC Program.
A key issue was the pace of implementation for the habitat and
production activities. The workgroup developed realistic
recommendations for implementation that would increase funding for
implementation over the next four years. This would provide time to
build the necessary staffing, programs, and other infrastructure for
implementing the strategies in the NPCC Program.
The workgroup recommended that FY 2006 funding should be $186
million--this is the level originally assumed in the 2002 Rate Case; we
also understand that it is the approximate planning target being used
by the BPA fish and wildlife division. We further recommended that
funding should ramp up to $200 million in FY 2007, $225 million in FY
2008, and $240 million in FY 2009. The figure below shows this ramp up.
[GRAPHIC] [TIFF OMITTED] T8557.010
This funding level would put the region on a path to implement the
subbasin plans in about ten years. This pace of implementation would
have much lower biological risk to listed species and offers some hope
of progress on restoring the treaty fisheries of the Columbia Basin
Indian tribes.
These recommendations would minimize biological risk to species in
the Columbia River Basin; BPA should implement actions to provide the
habitat conditions that these species need to survive as soon as
possible. Many of the ESUs listed under the ESA have growth rates
(lambdas) that are less than 1.0--that means these populations are not
replacing themselves and will continue to decline toward extinction.
This pace of implementation will also have the lowest long-term costs
because expenses associated with acquiring or leasing land and water to
protect and enhance habitat will increase significantly faster than
inflation, especially the acquisition of land in riparian areas to
protect habitat.
Therefore, we conclude that a ten-year implementation schedule for
the subbasin plans has the lowest biological risk and the lowest long-
term costs. We also note that implementation of the subbasin plans
represents a small portion of the habitat protection and enhancements
needs in the Basin. The CBFWA workgroup did a course grain analysis of
the total habitat work needed to protect and enhance all of the habitat
in the Basin and found that this effort would be significantly larger
than the work identified in the subbasin plans. Completing the subbasin
plans as quickly as possible will provide a good start to the long-term
habitat work that is likely to be needed to meet our goals.
BPA has not incorporated these estimates in setting its budget for
the Integrated Program. At the current pace of implementation, it would
take 40 to 80 years to implement the Council Program and FCRPS
Biological Opinion. BPA's estimate is not based on the costs of
implementing the subbasin plans or meeting the goals and objectives of
the Columbia River Basin Fish and Wildlife Program. The Bonneville
budget uses unrealistic assumptions about inflation, and the funding
needed to implement the Program and Biological Opinion.
4. Costs could be higher
The CBFWA workgroup identified a number of uncertainties that could
increase Bonneville's total system costs.
The remand of the current Biological Opinions will result in
significant changes in required fish and wildlife activities, and will
likely increase costs or affect revenues. We expect that other river
operation, habitat, and monitoring and evaluation activities will be
identified in the remand process.
NOAA Fisheries is developing recovery plans for salmon and
steelhead listed under the Endangered Species Act. The recovery plans
are likely to include more actions than are currently identified in the
subbasin plans and therefore the costs of implementation are likely to
be higher. We base this judgment on the fact that the subbasin plans
were developed by fish and wildlife managers and stakeholders in each
of the watersheds through a consensus process. In some cases, local
landowners objected to some of the habitat and water quality actions
identified by the fishery managers; as a result, measures that will be
needed to recover listed species were not included in the final
subbasin plans.
The CBFWA workgroup cost analysis assumed that other branches of
the Federal government would provide contributions. For example, the
costs for implementing plans in several subbasins (notably those in the
Intermountain Province) assume funding from the federal land management
agencies that may or may not be forthcoming. If additional Federal
appropriations are not available, the region will need to address how
to accomplish this work.
The prospect of shifting the cost of the Mitchell Act hatcheries to
BPA is a substantial uncertainty, considering Congress's previous
interest in this issue and increasing pressures on the federal budget.
Given this analysis, the Tribes are concerned that the BPA proposal
for the Integrated Fish and Wildlife Program is not adequate to
implement the Council Program and the Biological Opinions. Failure to
make adequate progress could increase the risk of extinction for listed
species and makes it unlikely that the region will achieve the fish and
wildlife rebuilding goals in the Council's Program.
All of these uncertainties point to the likelihood of increasing
costs for Bonneville to meet its fish and wildlife responsibilities
during the FY 2007 through FY 2009 rate period. The Initial Proposal
does not adequately address these uncertainties.
III. H.R. 4857 IS UNNECESSARY
A. Substantial Information Is Already Available About BPA Costs
BPA's Power Function Review, 7i Rate Proceedings, and other
publicly available reports document BPA costs and projected revenues.
H.R. 4857 is not needed for this purpose.
In 2006, BPA rates are 59 percent below the market rate for
electricity--based on the assumptions that BPA has used in its current
rate case. Based on BPA's assumptions for future market rates, it will
be 41 percent below market through 2009. The causes of BPA's rate
increase over the past 25 years are primarily from nuclear costs and
over-commitments to utilities and aluminum smelters. These factors
don't get much public attention. For instance, BPA's 2001 decision to
over-commit to utilities added $3.9 billion in costs based on BPA's own
estimate. BPA's annual payments for nuclear plants average $828 million
a year. Of this payment, approximately $450 million per year is for
nuclear power plants that were never completed and never produced
electricity.
In addition, BPA subsidizes (in cash payments) Investor Owned
Utilities of the Pacific Northwest $324 million per year. BPA's subsidy
to customers of investor-owned utilities is $300 million per year.
BPA's subsidy to Direct Service Industries over the next three fiscal
years is projected by BPA to be approximately $59 million per year.
Finally, the ``cost'' to BPA of water withdrawn for irrigation uses in
the Columbia Basin is $250 million per year. Each of BPA's customer
classes has and will strenuously argue that these costs either are or
are not required by one or more federal laws depending on whether the
class is benefited or impacted. See e.g. Dept. of Water and Power of
the City of Los Angeles v. BPA, 759 F.2d 684 (9th Cir. 1985); Aluminum
Co. of Amer. v. BPA, 903 F.2d 585 (9th Cir. 1989); Assoc. of Public
Agency Customers v. BPA, 126 F.3d 1158 (9th Cir. 1997); Central Lincoln
Peoples' Utility District v. Johnson, 735 F.2d 1101 (9th Cir. 1984);
Washington Utilities and Transportation Commission v. FERC, 26 F.3d 935
(9th Cir. 1994).
B. Categorizing BPA's Fish and Wildlife Costs is Unnecessary and
Impractical
BPA's investments in rebuilding fish and wildlife populations is
required by a number of federal laws and treaties, including the
Endangered Species Act, the Northwest Power Act, the Fish and Wildlife
Coordination Act, the Clean Water Act and United States treaties with
Indian Tribes and Canada. It is not possible to categorize which of the
costs are related solely to the ESA since most fish and wildlife
projects are undertaken to implement multiple federal authorities. For
example, the rebuilding goals of the Columbia River Basin Fish and
Wildlife Program are much higher than ESA recovery goals and will
likely require all of the ESA related activities plus additional
efforts to meet the Northwest Power Act related goal.
Moreover, most projects undertaken with BPA fish and wildlife
funding support receive funding support from multiple entities
including other federal agencies' appropriated funds, as well as state,
local, tribal, and private funding sources. These funds are authorized
by a myriad of authorities reflecting local and regional interests for
many projects that provide multiple benefits, such as simultaneously
increasing irrigation efficiency, reducing water consumption, reducing
pumping costs, and increasing streamflows for salmon. These types of
win-win projects enjoy sponsorship of the tribes in the Grande Ronde,
Umatilla, Yakima, Walla Walla, John Day river basins. The art of
assembling local support and funding from diverse sources is already
fraught with delay and bureaucracy. We don't need more red tape
challenges!
C. BPA's Approach to Estimating its Foregone Revenue and Replacement
Power Cost is not consistent with the Northwest Power Act
BPA states that its combined net costs include over $300 million
for hydro system operations for fish and wildlife. BPA counts the
revenue foregone from operating the FCRPS to meet the requirements of
the Endangered Species Act, the Northwest Power Act, the Clean Water
Act, and other laws and regulations as a part of these costs.
Section 16 U.S.C. 839b(h)(6)(E) requires the Northwest Power and
Conservation Council (NPPC) to include measures in the Program that:
(i) provide for improved survival of such fish at hydroelectric
facilities located in the Columbia River system; and
(ii) provide flows of sufficient quality and quantity between such
facilities to improve production, migration, and survival of such fish
as necessary to meet sound biological objectives.
The current NPCC Program includes these measures.
In addition, the FCRPS Biological Opinion requires specific flow
and spill operation to ensure that the operation of the FCRPS does not
jeopardize the continued existence of listed species under the ESA.
It is important to note that the flow targets in the Program and
Biological Opinion are constrained by the current configuration of the
hydroelectric system. Average spring flows in the Columbia before the
dams were 450,000 cubic feet per second. The current target is roughly
200,000 cubic feet per second--less than half the historical average.
Unfortunately, the federal agencies have not been successful in meeting
the Columbia and Snake River flow targets 53 percent of the time
between 1995 and 2005.
No other business or government agency calculates the revenues or
profits that it could have made if it had violated Federal laws,
regulations, or court orders as a part of foregone revenue and
``costs''. The legislation should not put such a requirement into law.
D. BPA's approach is not consistent for other federally authorized
purposes
Given BPA's practice of reporting foregone revenue for fish and
wildlife protection, it is interesting that BPA does not report the
foregone revenue associated with meeting other legal constraints on
power generation such as providing irrigation water, flood control,
transportation, or recreation. All of these other federally-mandated
actions limit the ability to generate electricity and reduce BPA's
potential revenue. Hence, to be consistent, BPA would need to count
them as ``costs'' as well.
For example, the NPCC has calculated that the 14.4 million acre-
feet withdrawn for irrigation could generate an additional 625 average
megawatts if the water remained in the river--aboutfive percent of the
total output of the BPA system. At BPA's rates, this additional power
would be worth $170 million per year or $1.7 billion dollars over 10
years. A recent analysis by the NPPC calculated that at average market
rates, the foregone revenue would be $250 million per year. At the
market prices for the summer of 2005, the lost revenue associated with
irrigation withdrawals was over $380 million. BPA does not count these
``costs.''
Columbia Basin Indian tribes have requested on numerous occasions
that BPA stop its practice of singling out the costs of meeting one of
the purposes of the dams--fish and wildlife--in reporting foregone
revenue. It is not appropriate for BPA to report the costs of operating
the FCRPS to meet Federal laws and regulations. If BPA believes it is
required to report these costs, then it should calculate the costs of
each of the other purposes of the dams and report all of them on a
consistent basis.
E. BPA's calculation of foregone revenue is flawed
In the BPA handouts for its Power Function Review, BPA calculated
that the average ``cost'' of river operations for fish and wildlife was
$357 million per year. This number was calculated using a base case
where BPA eliminated all operations for fish and wildlife. This
assumption is legally flawed. We are also concerned that BPA does not
count the credits that it receives for these operations. Since BPA
started taking these credits in 1994, it has reduced its U.S. Treasury
repayments by more than $1 billion, yet BPA does not offset the
``costs'' with these credits.
Finally, calculation of these costs is complicated and
controversial. BPA did not share its methodology in calculating the
operations ``costs'' cited above. In a Memorandum of Agreement signed
in 1996, BPA committed to working with the tribes to develop a
consensus methodology for reporting river operations and calculating
foregone revenues and power purchases; this work is still incomplete.
F. Foregone Salmon
The NPCC found that 5 to 11 million of the salmon lost each year
(compared to the predevelopment period) were attributable to damage
caused by the hydroelectric system. Based on this estimate, the
Columbia Basin Indian tribes and others have ``foregone'' 340 to 750
million salmon and steelhead since the dams were built.
Salmon and steelhead are invaluable to tribal culture and
religion--the tribes would not put a price on this loss. Non-tribal
economists, on the other hand, would value the annual losses in the
hundreds of millions of dollars and the cumulative losses in the
trillions of dollars.
IV. THE CAUSES OF BPA RATE INCREASES
BPA customers are concerned that BPA's rates have increased over
the years; much of the utility concern has focused on fish and wildlife
costs. This section analyzes the history of BPA rates, the major causes
of rate the increases, and the relative costs of various categories.
A. BPA Rate History
BPA rates declined, adjusted for inflation, between 1937 and 1975
as new federal dams were build in the Columbia basin. In October, 1980,
BPA implemented an 88 percent rate increase, primarily to address the
costs of three nuclear plants being build by what was then called the
Washington Public Power Supply System (WPPSS).
[GRAPHIC] [TIFF OMITTED] T8557.011
The BPA webpage provides yearly rate information beginning in 1996.
The figure below shows that between 1996 and the rates proposed for
2009, BPA rates will have increased by 25 percent in nominal dollars--
about 1.8 percent per year.
[GRAPHIC] [TIFF OMITTED] T8557.012
When BPA's rates are adjusted for inflation, the analysis shows
that they have actually declined by 9 percent over this period.
[GRAPHIC] [TIFF OMITTED] T8557.013
Causes of BPA's Rate Increases
Even adjusting for inflation, the rates show a significant increase
from 2001 to 2003. The primary cause of this increase was the cost of
serving additional load that BPA committed to in 2001. In addition, BPA
used optimistic assumptions about how much revenue it would receive
from selling surplus electricity and underestimated a number of costs
it would face.
The figure below shows the major categories that increased BPA's
rates. In 2001, BPA decided that it would serve the entire load that
its customers wanted to place on the agency. BPA committed to serve
3,400 average megawatts more power than it had available. It assumed
that it could purchase additional power at market rates, which were
then about $30 per megawatt-hour. The manipulation of the California
energy market by Enron and other energy providers increased market
rates. BPA reported that it paid an average of $185 per megawatt-hour
to serve the additional load. The total cost of the over-commitment was
$3.9 billion 2.
---------------------------------------------------------------------------
\2\ What Led to the Current BPA Financial Crisis? A BPA Report to
the Region, April 2003.
---------------------------------------------------------------------------
BPA had also overestimated it revenue from surplus sales of
electricity; a more realistic estimate prepared for BPA's Financial
Choices process reduced BPA revenues by $710 million. BPA entered into
a settlement with investor-owned utilities that set the amount of
subsidy for the residential and small-farm customers of these
utilities; the settlement added $370 million to BPA's costs. BPA had
also used optimistic assumptions about its own administration and
operating costs; in the 2003 Financial Choices process, BPA estimated
that these costs would be approximately $220 million higher than it
originally had assumed. BPA also underestimated the costs of operating
the Columbia Generating Station (the one nuclear plant that is
operating) by $194 million and the Corps of Engineers and Bureau of
Reclamation costs for operating the federal dams by $155 million.
During the Financial Choices process, the integrated fish and wildlife
program was below budget by $18 million.
[GRAPHIC] [TIFF OMITTED] T8557.014
BPA Future Costs
This section summarizes the major categories for BPA proposed costs
for 2007-2007.
[GRAPHIC] [TIFF OMITTED] T8557.015
Nuclear Costs
Of the $828 million in annual costs for 2007-2009, $250 million
goes to operate the Columbia Generating Station, $275 million to repay
the debt on that plant, and $325 million to repay the debt on two
nuclear plants that were never completed.
[GRAPHIC] [TIFF OMITTED] T8557.016
V. BPA CAN AFFORD ADDITIONAL FISH AND WILDLIFE INVESTMENTS
BPA can afford salmon recovery and still provide great benefits to
Northwest ratepayers. Fish and wildlife managers are working with
federal agencies to develop a new FCRPS Biological Opinion that
complies with the Endangered Species Act. That effort should produce a
science-based plan to protect and recover salmon and steelhead and must
include actions that are reasonably likely to occur.
In July, BPA will make final decisions on setting its rates for
2007 through 2009. Its current proposal includes fish and wildlife
funding levels that would force immediate cuts in ongoing fish and
wildlife programs and delay full implementation of the subbasin plans.
The remand process has assumed these ongoing projects are in the
baseline and will likely result in additional habitat, hatchery, hydro,
and harvest actions that will increase implementation costs.
BPA has asserted that it can adjust its rates to accommodate
decisions that come out of the biological opinion remand. The treaty
tribes have provided extensive evidence in the BPA rate case that BPA's
proposal does not allow it to increase its costs and also assure
repayment of its debt to the Treasury. In the past, when BPA has faced
missing a Treasury payment it has deferred salmon recovery actions.
A. BPA's Current rates
Bonneville rates are currently 59 percent below the market rates
that Bonneville has assumed for FY 2006. BPA's current rates are 48
percent below the new resource rate that it has proposed.
[GRAPHIC] [TIFF OMITTED] T8557.017
Averaged over the past ten years, BPA rates have been 27 percent
below market rates and 49 percent below the costs of new resources.
B. BPA Rates 2007-2009
In the current rate case, BPA has assumed that market rates will
decline by approximately 27 percent between 2006 and 2009. BPA's
assumption about a reduction in market costs makes BPA's proposed rates
for 2007 through 2009 slightly closer to market rates. Using BPA's
assumptions, its rates would be 41 percent below market rates on
average over the next rate period.
[GRAPHIC] [TIFF OMITTED] T8557.018
C. The Impact of Salmon Recovery on BPA Rates
This section describes the potential impacts of two alternatives
for salmon recovery on BPA's rates. It is important to note that these
costs will not necessarily cause a rate increase. For example, in 2005,
BPA projected that additional spill at several dams to protect salmon
would increase rates; however, BPA actually decreased its rates by 1.6
percent that year because of other factors.
The assumptions for the additional fish and wildlife costs are
summarized here and detailed later in this paper.
Low Case: This scenario is based on the costs of implementing the
subbasin plans developed for the NPCC and the FCRPS Biological Opinion.
The costs were prepared by a workgroup convened by the CBFWA. This case
also assumes that the river operations ordered by the District Court as
part of the FCRPS Biological Opinion Remand for 2006 would continue
through 2009; this would reduce BPA's revenue from the sale of
electricity. The scenario assumes total added costs would be $93
million in 2007, $114 million in 2008, and $127 million in 2009.
High Case: The high case assumes the integrated fish and wildlife
costs above plus $70 million per year to cover the added costs if BPA
does not use its borrowing authority for land and water acquisitions to
improve habitat. The high case also assumes the river operations
recommended by the plaintiffs in the FCRPS Biological Opinion
litigation. The high scenario assumes total added costs would be $376
million in 2007, $363 million in 2008, and $362 million in 2009.
D. BPA would be significantly below market rates
If these additional fish and wildlife costs are added to BPA's
rates, BPA would be 37 percent below market rates on average over the
next rate period in the low case and 29 percent below market rates in
the high case.
[GRAPHIC] [TIFF OMITTED] T8557.019
The figure below compares the percent that BPA would be below
market prices, on average, under its proposed fish and wildlife funding
level and the low and high fish and wildlife funding scenarios
described above.
[GRAPHIC] [TIFF OMITTED] T8557.020
Given that BPA's rates are significantly below market rates and
lower than most other parts of the country, it appears that BPA can
incorporate the costs to fully implement the NPCC Program and the
Biological Opinion and still benefit the Northwest economy.
E. Rate Impacts would be small
The potential rate impacts for residential customers would range
from zero to $1.90 per month in the low case and zero to $6.22 per
month in the high case.
Under a settlement agreement, customers served by investor-owned
utilities would not pay any of the potential increase. As a result, all
of the additional fish and wildlife cost must be allocated to a smaller
group of customers and the impacts are more significant than the
allocation in the 2002 rate case.
Based on our analysis, we found that the high case described above
would result in a potential rate impact of $0.00622 per kilowatt hour.
3 For an average customer of a utility that purchases all of
its electricity from BPA, this could result in an increase of $6.22 per
month--an increase of approximately 9 percent.
---------------------------------------------------------------------------
\3\ BPA uses a rule of thumb that each $59 million dollars equals
about $0.001 per megawatt-hour.
---------------------------------------------------------------------------
BPA serves approximately 40 percent of the region's power, so the
impact on most ratepayers would be less. We analyzed three other cases:
a utility that purchase 70 percent of its power from BPA, a utility
that purchase 30 percent of its power from BPA )for example, Seattle
City Light, Tacoma City Light) and investor-owned utilities. In the
high case, the average customer of a utility that purchases 70 percent
of its power from BPA could pay an additional $4.35 per month--a 6.5
percent increase. A customer served by a utility that purchases 30
percent of its power from BPA could pay $1.87 per month--a 2.8 percent
increase.
In the low case, we assumed that BPA used its borrowing authority
to finance some of the land and water acquisitions in the habitat
measures under the Integrated Fish and Wildlife Program and that the
Court-ordered river operation for FY 2006 would also be implemented
during the rate period. In the low case, the average consumer that is
served by a utility that purchases all of its power from BPA could pay
an additional $1.90 per month--a 2.9 percent increase. If the utility
purchased 70 percent from Bonneville, the monthly impact could be
$1.33--a 2 percent increase. Consumers served by a utility that
purchases 30 percent of its power from BPA could pay an additional
$0.57 per month--a 0.9 percent increase.
[GRAPHIC] [TIFF OMITTED] T8557.021
______
Miss McMorris. Thank you. Mr. Voigt.
STATEMENT OF CHRIS VOIGT, EXECUTIVE DIRECTOR, WASHINGTON STATE
POTATO COMMISSION AND MEMBER, FAMILY FARM ALLIANCE, MOSES LAKE,
WASHINGTON
Mr. Voigt. Thank you, Congresswoman McMorris and
Congressman Hastings, thank you for the opportunity. I
appreciate it. I've got about 20 minutes of testimony I'm going
to cram into 5 minutes, so please look over the written
testimony I've provided.
I have to start with a personal story. I'm going to flash
back to my 8th grade year sitting in my counselor's office. I
was meeting with Mrs. Stuart. And we had a thing called a
computer. And the idea was you filled out this punch card and
fed it into the computer and the punch card would survey your
likes and dislikes and so forth and it would spit out what
career opportunities might be of interest to you in the future.
First on the list was professional athlete for me. And
because of bad genetics and I rode the bench in 8th grade
basketball, I didn't think that was very realistic. Second on
the list was fish and wildlife biologist, and I thought that
was appropriate that that was on my list because I remember the
previous year before in the fall sitting in a coastal stream in
the Northwest and I saw my first salmon in the wild and it was
a beautiful experience. And actually at some point I stopped
fishing just to watch the salmon go from the deep pool that I
was fishing into the shallow ripples. I thought it was an
incredible experience and I wanted to share it.
Third on my career list was an agriculturist, and that's
the reason today I'm wearing a coat and tie, and I don't
usually have an opportunity to do that. I stumbled across
something from my past, my FFA jacket. When I wore this--This
is from 1982/83 and I don't dare and try to put it on because I
know I won't fit in it anymore. But when I wore that jacket in
my senior year in high school in 1982, there was a sense of
pride.
I was excited about being involved in agricultural. What
was before me? I saw so many opportunities, and I was very
excited about the opportunities of agricultural in the U.S. And
namely to serve not only food to our domestic needs but also
feed those around the world.
Last night I was in my closet and I looked at that jacket,
I don't know, maybe I was naive back then, because now I look
at those initials, FFA, and maybe today there should be a
question mark behind it. Is there a future for agricultural in
America? Are we heading down a food policy that we're going to
be outsourcing all of our food now in this country? How
dangerous is that?
I want to talk specifically about the potato industry and
how the management of the Columbia River has affected that.
Typically now people aren't eating more French Fries,
unfortunately. But we do experience population growth, and
every four to five years there's a need for a new potato
processing plant somewhere in the U.S.
In the last four or five years, if you look back, we have
not received a facility here in Washington State, nor have we
received any of those facilities here in the Northwest.
Actually, quite contrarily, we've actually lost a few
processing facilities that have been taken offline and shut
down and those jobs have been lost.
Plants are opening up in other locations in the world. The
two newest places are in Canada. They shut down plants here in
the U.S. And moved them into Canada. And the reason for that is
because our processors are essentially blacklisted in the
Pacific Northwest for any new development of potato processing
plants here because of unreliable water supplies. We are one
court case away, one litigation away from shutting down
everything. And a processor is not going to invest any
additional infrastructure dollars into new equipment,
expansion, or new plants if there's an unreliable source of
water. So it greatly affects us in the potato industry.
Food processing and potatoes are a big deal to Washington
State. We grow potatoes on about 165,000 acres in both of your
districts. We employ thousands of people here in the Northwest,
about 75,000 people are employed in food processing jobs. The
average pay is $32,000 a year plus benefits.
The economic impact of the potato industry here in the
Columbia Basin is about $3 billion. It's very important. And
these $3 billion are being invested in small communities, much
smaller than even here in the Tri-Cities. We're talking Warden,
Othello, Connell. These are the only economic opportunities for
these rural communities. It's important that we provide that.
I don't want my testimony to focus on jobs for--because,
remember, my career choice was never--also on that list was a
fish and wildlife biologist. And I think that a compromise, a
common ground that can solve all of our problems, meet our
economic needs as well as meet the needs of preserving a
species and additional water storage.
I think The Honorable Sid Morrison was correct. We need to
look at creating more storage so that we can utilize the river,
not only for biological fish, but also for economic activities.
We're also looking at a declining aquifer, the Odessa Subarea.
Surface water is going to be an important aspect. If that area
goes dry, that's a $600 million loss to the Columbia Basin.
So on behalf of the Potato Commission and on behalf of the
Family Farm Alliance we are greatly in support of H.R. 4857. We
feel it creates a tremendous dialog, including opportunities
for us to collaborate with more people, to educate the public,
to get them engaged in the process of finding a true balance.
We actually hope that we can take this one step farther and
apply it another agency, and that's the Bureau of Reclamation.
Because the Bureau of Reclamation also lists ESA costs to their
customers.
But thank you for this time, and I would entertain any
questions.
[The prepared statement of Mr. Voigt follows:]
Statement of Chris Voigt, Executive Director, Washington State Potato
Commission, on behalf of the Family Farm Alliance
Mr. Chairman, Members of the Committee, on behalf of the Family
Farm Alliance and its member organization, the Washington State Potato
Commission (WSPC). I thank you for the opportunity to testify before
the Subcommittee today. I serve on the Advisory Committee of the Family
Farm Alliance (Alliance), and today I am here to convey the message of
agricultural water users from throughout the West. The Alliance
advocates for family farmers, ranchers, irrigation districts, and
allied industries in seventeen Western states. The Alliance is focused
on one mission--To ensure the availability of reliable, affordable
irrigation water supplies to Western farmers and ranchers
We appreciate the effort made by you, Representative McMorris, and
the other members of the subcommittee to hear our concerns today. We
particularly appreciate the effort that you and the committee staff
have made to hear our concerns, here in the Western States. This is an
important and timely hearing on a matter that has a deep concern for
family farmers and other agricultural interests in the Pacific
Northwest--the requirements and costs under the Endangered Species Act
for salmon recovery.
This subcommittee has paid close attention to the Columbia and
Snake River systems, and, in particular, the effect of proposals and
requirements for salmon recovery on irrigated agriculture, navigation
and energy production. We are directly impacted by the salmon recovery
requirements for the Columbia. We appreciate the balanced view taken by
the Committee of the need to consider not only salmon recovery but also
the multiple uses and multiple needs of a working river system.
Our Interests in the Columbia River
The Washington State Potato Commission is a quasi-state agency
dedicated to protecting the interest of potato growers in Washington
State. The WSPC membership includes approximately 350 potato growers
throughout Washington. Potato growers in Washington operate on an
estimated 165,000 acres of farm land, primarily located in three
growing regions: the Skagit Valley, Yakima Valley and the Columbia
Basin. Washington State ranks second in the nation in potato
production, and potatoes alternate with wheat as Washington's second
largest agricultural crop. Thousands of jobs in Washington rely on
potato planting, harvesting, packing, processing and transportation. In
fact, economists estimate the annual economic impact of Washington
potato production, packing and processing at approximately $3 billion,
making potatoes one of the most important value-added agriculture
commodities in the State. Eight percent, or roughly one out of ten jobs
in the region, stems from potato production. As water users in the
Columbia River Basin, WSPC and its members have a direct, substantial
and daily interest in BPA's programs and operation of the Columbia
irrigation and hydro electric power systems. With BPA power rates just
now coming off historic highs, we have little room for rate increases
or inefficient use of salmon recovery funds. Our members compete
globally. A rate difference of 1-2% is important to us, and very often
means whether a business stays in business, goes off-shore, or goes out
of business. The region has, in many ways, lost its electricity price
advantage. We cannot afford rate increases and in fact need a rate
decrease now that the unprecedented rate effects of the West Coast
price spike of 2001 are receding. Because of the nature of our
business, and agriculture in general, we are very concerned about BPA
costs and the efficient use of salmon recovery measures and funds.
Value Added Processing Threatened
Food processing is vital to the economic growth and stability of
the Northwest. A recent study by Advanced Research Technologies found
that food processing annually contributes $20.7 billion to the
Northwest economy. When the multiplier effects are added, processors
add $42.5 billion in economic value to the region's economy. Processors
directly create 75,000 jobs with an average wage of $32,000 per year
plus benefits.
The long, grinding and frustrating saga of implementing the
Endangered Species Act on the Upper Snake and Columbia Rivers is
beginning to seriously impact the desire of key food processors to
maintain operations in this region. Washington, Idaho and Oregon are
three of the most productive and desirable growing regions in the
world. However, in recent years, processors have been relocating plants
and moving operations to other regions to mitigate the potential risk
of being unable to continue to source adequate raw product supplies in
the region due to curtailment in water supplies. This trend is being
exacerbated by the rising cost of power, which was once a huge economic
incentive to Northwest processors but is no longer a competitive
advantage.
Potato processors are building and buying plants in Canada, China,
Europe and Australia. This movement is fueled by a number of issues,
including market location, currency exchange and government incentives.
However, in the past five years, we are now seeing the fear of
inadequate water supplies and the rapidly escalating cost of power,
both of which are being driven artificially by the ESA, beginning to
erode the Northwest's competitive advantages in the world marketplace.
The danger of losing the food processing industry to the world
marketplace is real. It will not happen quickly and the industry does
not want to move out of the region. However, the subtle, grinding
effect of the uncertainty of the ESA will take its toll over the long
run. As processors make decisions about where to spend capital dollars
to upgrade plants and equipment or to add new lines and processes, they
are currently investing outside the region. This trend, if not
reversed, will slowly but surely move the industry to the locations
where the most current, productive and efficient plants are located.
That has always been the Northwest, but now, the trend is changing and
the newest and most productive plants are no longer in our region.
We support the House Resources Committee's efforts to bring
rationality to this process. The bill sponsored by Rep. McMorris is an
incremental step in the right direction. It is good public policy and
sends a message to all parties that there will be transparency and
accountability in the process.
Transparency of ESA Costs and Requirements
The Family Farm Alliance and the Washington State Potato Commission
strongly support H.R. 4857, the Endangered Species Compliance and
Transparency Act of 2006. This much-needed legislation would provide a
basic level of public disclosure of the costs incurred under the
Endangered Species Act by the Bonneville Power Administration to
administer and fund most salmon recovery programs along the Columbia
River and the basin which it drains. We view the requirements contained
in this bill as an appropriate public ``right to know'' provision that
harms no one, yet provides information to the public on the measures
used under the Endangered Species Act to enhance and advance the
recovery of listed species.
In our view, it is common sense to disclose the amount of costs
incurred under the ESA for salmon recovery. We believe that H.R. 4857
would provide valuable information to the public regarding the costs
incurred by the Bonneville Power Administration in compliance with the
Endangered Species Act. Rates paid to Bonneville Power Administration
by our members and other customers of Bonneville are investments of the
public in the federal hydro system. Over the past decade, the public
has invested, through payment of BPA rates, an estimated $8 billion
dollars in salmon recovery efforts, including the costs of lost power
generation. It is important for the public to understand the nature of
those expenditures and the results of the use of those expenditures. It
does not make sense to us to shield disclosure of ESA related costs
from the public which pays those costs through BPA rates.
Endangered Species Act compliance costs are not ordinary
operational costs associated with the operation of the federal
facilities. They arise because of a later listing of species under the
Endangered Species Act, and the requirement that additional measures be
taken to provide for conservation and recovery of listed species. These
are not routine costs. The activities funded by these costs result from
a separate statute and a separate federal obligation to conserve
species listed under the ESA. Further, the costs are extraordinarily
high by any measure. For BPA, it is reported that the costs of salmon
recovery, at over $600 million per year, exceeds all other costs of
operating the agency. No other species recovery effort in the country
matches the costs associated with the recovery of the salmon in the
Pacific Northwest.
We support salmon recovery. Our concern is not with the effort to
restore salmon runs, it is with the efficient and effective use of
salmon recovery funds. For this reason, we believe a disclosure to the
public of the costs associated with ESA compliance and recovery
measures that apply to Bonneville is both fair and appropriate. The
disclosure requirements of this legislation would assist the public in
knowing the amount of repair expenditures going to salmon recovery
efforts, and, we hope, would assist in understanding how efficient are
those measures.
H.R. 4857 applies to power marketing administrations, which
provides a forum to better educate power customers on direct and
indirect costs resulting from compliance with the Endangered Species
Act of 1973. Many of the members of the Family Farm Alliance are also
customers of another agency--the federal Bureau of Reclamation
(Reclamation)--which is the largest water wholesaler in the country.
Reclamation provides municipal and industrial water to more that 31
million people and irrigation water for 10 million acres that produce
60 percent of the nation's vegetables and 25 percent of its fruit and
nuts.
The environmental revolution of the last 30 years imposed new
requirements for environmental assessment, protection, and enhancement
on virtually everything the Bureau of Reclamation does. These new
requirements increase project costs and further constrain the
availability of water for human uses. Over the years, ESA requirements
have significantly altered the operations of federal dams and
reservoirs, which have serious ramifications for agricultural water
users dependent upon those facilities.
As is the case in the power arena, under law, those costs are
passed on by the federal government to water consumers who receive
federal water. For example, water contractors served by California's
Central Valley Project (CVP) pay ESA costs accrued to both water and
power; the power portion of the CVP water contractors costs are
assessed as Project Use Energy (PUE) used to deliver CVP Water. In a
given year, between 20% and 30% of the total power generated by the CVP
are used for PUE.
There are many examples of direct and indirect costs to water users
associated with ESA implementation. Direct costs are defined as
``federal agency obligations related to study-related costs, capital,
operation, maintenance and replacement costs and staffing costs.''
Indirect power costs are defined as ``foregone generation and
replacement power costs, including the net costs of any transmission.''
Water users in California pay some direct environmental costs
through rates that are identified in financial statements as ``water
marketing'' and ``storage operations and maintenance''. It is also
possible that some direct environmental costs are hidden in financial
statements under terms like ``other direct expenses''. The core problem
is that environmental costs are not separately identified as specific
line-items. As a result, water users have no idea of the specific
dollars that they spend on endangered species and other environmental
causes.
It is clear that ESA-related costs are not the only ``environmental
costs''. There are concerns among some water users that additional
costs beyond the ESA may also be included in rates, such as those
associated with the National Environmental Policy Act (NEPA) and, in
California, the Central Valley Project Improvement Act (CVPIA).
Indirect costs associated with ESA and other environmental
regulations--such as lost opportunity costs--are sometimes difficult to
quantify. There may be environmental programs within Reclamation's
Denver Office that are included in the indirect cost allocations that
are added to water rates. Other indirect costs may represent a greater
impact to water users and their communities. As Rep. McMorris has
noted, in the Sacramento, Colorado, Platte and Missouri river basins,
the federal government had to modify its hydropower generation services
and flow requirements to account for ESA mandates. This resulted in
lost federal hydropower generation and has led to an average of $96
million per year in ESA costs that is passed on to consumers. It also
leads to increased uncertainty for family farmers and ranchers, whose
need for a certain water supply can form the foundation for other
financial decisions.
While the Family Farm Alliance and Washington State potato industry
enthusiastically endorsed H.R. 4857, our discussion regarding this bill
suggested that, perhaps, it was not enough. Water users from several
western states have asked that Congress consider expanding the last
part of the bill to require the Secretary of Interior to conduct a
project-by-project breakdown of ESA, NEPA and other environmental costs
for Bureau of Reclamation projects, as well as the power marketing
administrations. This very simple addition would produce very useful
information for Reclamation's customers, many of whom are members of
the Family Farm Alliance.
We offer some initial thoughts on potential solutions to improve
the transparency of environmental costs that water users bear:
1. Investigate the possibility of using a more detailed
description of existing rate components to specifically identify
environmental costs. For some water customers, separately breaking out
and categorizing existing rate components would certainly be useful and
increase the transparency of the environmental costs that are currently
buried in several components of the water user rates. A good first step
might be to identify the specific types of environmental costs
(including ESA, NEPA, etc) that might be buried in water rates. Note
that in many states, State environmental regulations can add still more
environmental costs. CEQA, which is the State of California's
equivalent to the Federal NEPA legislation, is a good example of these
potentially redundant expenditures. Existing Reclamation rate book
schedules could be adjusted to provide specific line-item detail
regarding the specific costs that are incurred due to ESA or other
environmental compliance issues. This would let contractors know what
their environmental compliance bill is without creating a new
environmental rate component. This proposal may not necessarily be
applicable West-wide, and should be considered only after the concept
is reviewed by federal water customers and Reclamation officials at the
regional level.
2. Review Reclamation's Denver Office to investigate ways to make
indirect costs more transparent. Beyond the environmental cost
component indirect costs, it would be helpful to improve visibility on
indirect costs in general. To get an accurate picture of the total
environmental expenditures, it is absolutely necessary to include
Reclamation's indirect expenses at both the Regional Office and Denver
Office level.
3. Establish a ``non-geographic'' division that would be for the
specific purpose of reporting all environmental costs. The current
method for reporting costs in some areas of Reclamation is to segregate
different geographical regions/facilities into divisions on financial
statements. In the interest of full disclosure to the ratepayers, the
environmental costs should be grouped into a single section of the
financial statements, and the cost of each environmental activity
should be segregated into a specific line-item.
The Family Farm Alliance believes that, for both electricity and
water customers to make an informed decision about ESA costs, the first
step is to provide transparency in consumer costs. The Endangered
Species Compliance and Transparency Act of 2006 is a bill that will
take an important first step in this direction. It can be strengthened
and improved even more effectively by expanding the bill to apply to
Bureau of Reclamation water projects.
The Region Should Consider Other Measures To Achieve Balance
The Potato Commission, as well as other constituents of the Family
Farm Alliance, strongly support balanced natural resource policy,
efficient use of federal resources and rate payer funds, and the most
cost-effective environmental policies that may be available. We are
interested in working more directly with both the Bonneville Power
Administration and the Bureau of Reclamation on water conservation as
it would assist in salmon recovery and in the Columbia River Basin
generally. An issue that may soon develop is the recharging of the
Odessa aquifer in Central Washington. We are working on developing a
plan for revamping water management in the Odessa Aquifer area. Part of
this potential solution may well evolve a buy back by the Bonneville
Power Administration of water and power usage and a significant
reduction in aquifer demand. Our hope is that both irrigation and power
use could be significantly reduced through a cooperative program with
Bonneville Power Administration and the Bureau of Reclamation to assist
in the recharging of the Odessa Aquifer.
We are in the early stages of considering these proposals, and are
not yet in the position to seek support either at Bonneville or in this
committee. However, as the committee considers the multiple uses of the
Columbia River system and the ESA obligations, and other obligations as
they apply to the federal Columbia River power system, we would ask
that consideration of an Odessa Aquifer recharging program be put into
consideration at the appropriate time.
Mr. Chairman, we are well aware that Congress has a tough job to
find a balance between conservation, power production, efficient salmon
recovery and the public interest in salmon recovery and cost
disclosure. We stand ready to assist the Committee, and the House, in
seeking to find that balance.
Thank you for the opportunity to testify. I welcome any questions
the Committee may have.
______
Miss McMorris. Thank you. Mr. Chandler.
STATEMENT OF GARY CHANDLER, VICE PRESIDENT OF GOVERNMENTAL
AFFAIRS, ASSOCIATION OF WASHINGTON BUSINESS, OLYMPIA,
WASHINGTON
Mr. Chandler. Thank you, Congresswoman McMorris and
Congressman Hastings, for bringing the Subcommittee to Eastern
Washington. It's a lot more easier to get to than going back to
the other side of the country. I want to thank you also for
giving me the opportunity to talk this morning on the impact of
rising electricity rates that impact our economy.
AWB is the oldest and the largest business organization in
the State. Our 6,000 members provide over 600,000 jobs to
people who live in the State of Washington.
I'd like to first take a personal note, if I may. When
people talk about the subject, we usually talk in statistics.
I'm as guilty as anyone. Because the impact is so significant
and the potential impact is devastating, statistics seem the
best way to make the case. But remember that there is a real
person behind every one of those statistics. Each data point is
a human being with a family and a home and a right to work for
a decent future.
But now the future seems in doubt because of the money
we're spending on the fish. Now let me be clear, we all have a
responsibility to protect the environment, but there must be,
as you said at the beginning of this, Congresswoman McMorris,
about this.
This morning I'd like to talk about the money that's being
spent on salmon programs, why do I see power costs as so
important, and take a look at some of the consequences.
First, the money. The Bonneville Power Administration has
spent $5 billion on fish programs over the last nine years.
That's an impressive number. But to the figures in perspective,
let's look at it as how much is $5 billion?
For $5 billion Habitat for Humanity could build 100,000
homes for poor people. $5 billion is enough to provide health
insurance for 100,000 low-income families in Washington State
for the last nine years. $5 billion is enough to provide 11,000
Washington residents with a $50,000 a year job over the last
nine years.
BPA has spent much of that money on fish programs over the
last nine years. Those costs get factored into what BPA charges
for electricity. Higher costs mean higher prices.
I'd like to talk about why higher energy costs are so
important. Generally speaking, some would say Washington State
is not the greatest place to do business. We have the highest
unemployment insurance cost in the nation. We have the fourth
highest workers comp benefits in the country. Our regulatory
costs are high and our employers pay the lion's share of the
taxes in the state.
But historically our low power rates have made up for that.
We used to have a real advantage over other states because of
our low cost of hydropower. But that advantage is slipping
away. Now for the employers who must deal with all the other
possibilities, rising energy costs can be the straw that breaks
the camel's back.
Salmon programs strike a part of our State's economy
because they target hydropower. For example, in 1999 our
electricity rates for residential and industrial property were
the lowest in the nation. Our commercial rates were the same.
In 2003 that advantage had disappeared. Our industrial rates
are higher than 18 other states, and our commercial rates were
higher than 12 other states.
We have seen our power costs jump by 50 percent over the
last 8 years. We're already seeing the impact on rising
electricity costs in Washington State. Farmers are taking land
out of production because they can't afford to irrigate. Some
are getting out of the business all together, and others are
selling the family farms. Oh, gracious.
Our thriving aluminum industry is now on the end stage of--
In 1998 we had seven aluminum plants operating in the State of
Washington. Now there are only two. We've lost 6,000 aluminum
jobs since 1998, jobs that paid an average of $80,000 a year in
wages and benefits.
Will our wood products and our paper industries be the next
ones to die? Amazingly, things could be worse. U.S. District
Court Judge James Ridden seems intent on removing four Snake
River dams to protect the salmon. He keeps rejecting the
Federal Government's management plans because they don't talk
about breaching the dam.
In fact, Redden once complained that the agencies ``have
failed to demonstrate a willingness to put the needs of salmon
first.'' If Judge Redden gets his wish, our economy will be
devastated. According to the Corps of Engineers, breaching the
dam will cost the State economy $300 million a year for the
next 100 years. Electricity bill for Northwest ratepayers could
jump $300 million. Transportation costs would rise $40 million.
We'd lose 37,000 acres of prime irrigated farmland. 2300 people
would lose their jobs. And personal income would be cut by $278
million a year.
All of us have a responsibility to protect the environment.
Washington employers have and we'll continue to do our part.
Our strategy must be guided by common sense and take into
account the impacts on people as well as animals. The key,
again, is balance. Thank you.
[The prepared statement of Mr. Chandler follows:]
Statement of Gary Chandler, Vice President of Governmental Affairs,
Association of Washington Business, Olympia, Washington
Good morning, my name is Gary Chandler. I'm Vice President of
Governmental Affairs for the Association of Washington Business.
AWB is the oldest and largest business organization in the state.
Our 6,000 members provide jobs for 600,000 people in Washington State.
Thank you for this opportunity to speak about the impact that
rising electricity rates have on our economy.
First, I'd like to make a personal note, if I might. When people
talk about this subject, we usually talk in statistics. I'm as guilty
of this as anyone. Because the impact is so significant and the
potential impact is devastating, statistics seem to be the best way to
make the case:
But we need to remember that there are real people behind each of
those statistics. Each ``data point'' is a human being with a family
and a home and the right to work for a decent future.
But now, that future seems in doubt because of all the money we're
spending on fish.
Now, let me be very clear. We all have a responsibility to protect
the environment--but there must be a balance.
This morning, Id like to talk about the money that's being spent on
salmon programs; why rising power costs are so important; and take a
look at some of the consequences.
First, the money.
The Bonneville Power Administration has spent $5 billion on fish
programs over the last nine years. That's an impressive number. But to
put that figure in perspective, let's look at it another way.
How much is $5 billion?
For $5 billion, Habitat for Humanity could build 100,000
homes for poor people.
$5 billion is enough to have provided health insurance
for 100,000 low-income families in Washington State for the last nine
years.
Or, $5 billion is enough to have provided 11,000
Washington residents with a $50,000 a year job over the last nine
years.
BPA has spent that much money on fish programs over the last nine
years. Those costs get factored into what BPA charges for electricity.
Higher costs mean higher prices.
I'd like to talk about why higher energy costs are so important.
Generally speaking, Washington State is not the greatest place to
do business.
We have the highest unemployment insurance costs in the
nation.
We have the 4th highest workers comp benefits in the
country.
Our regulatory costs are high, and employers pay the
lion's share of the taxes in the state.
But historically, our low power rates have made up for that. We
used to have a real advantage over other states because of our low cost
hydropower. But that advantage is slipping away.
Now, for employers who must deal with all the other costs of doing
business in Washington, rising energy costs can be the straw that
breaks the camel's back.
Salmon programs strike at the very heart of our state's economy
because they target hydropower--the main reason for our competitive
advantage.
For example:
In 1999, our electricity rates for residential and
industrial customers were the lowest in the nation. Our commercial
rates were second lowest.
By 2003, that advantage had disappeared. Our industrial
rates were higher than 18 other states had our commercial rates were
higher than 12 other states.
Here in Eastern Washington, irrigators have seen their power costs
jump by 50 percent over the last few years. That's a bigger increase
than the last 20 years combined.
We're already seeing the impact of rising electricity costs in
Washington State.
Farmers are taking land out of production because they
can't afford to irrigate it. Some are getting out of the business
altogether or selling their family farms to corporations.
Our once-thriving aluminum industry is now on the
endangered species list. In 1998 we had seven aluminum plants operating
in Washington--now there are only two. We've lost 6,000 aluminum jobs
since 1998--jobs that paid an average of $80,000 a year in wages and
benefits.
Will our wood products and paper industries be the next
to die?
Amazingly, things could get even worse.
U.S. District Court Judge James Redden seems intent on removing
four Snake River dams to protect the salmon. He keeps rejecting the
federal government's management plans because they don't talk about
breaching the dams.
In fact, Redden once complained that the agencies--quote--have
failed to demonstrate a willingness to put the needs of salmon first--
unquote.
If Judge Redden gets his wish, our economy will be devastated.
According to the Corps of Engineers, breaching the dams would cost
the state economy $300 million a year for the next one hundred years.
Electricity bills for Northwest ratepayers would jump by
$300 million;
Transportation costs would rise by $40 million;
We'd lose 37,000 acres of prime irrigated farmland;
2,300 people would lose their jobs;
And personal income would be cut by $278 million a year.
All of us have a responsibility to help protect the environment.
Washington's employers stand ready to do their part.
But our strategy must be guided by common sense and take into
account the impacts on people, as well as salmon.
The key is balance.
Thank you.
______
Miss McMorris. Thank you. And once again, thank you,
everyone, for being here today and taking the time to be here.
Each of you has offered excellent testimony, and it all helps
in our efforts to address this issue.
At this time I think we're just going to go back and forth
for a while. I was going to start with a question to the Corps
of Engineers and BPA. If you would just talk about how you
measure the effectiveness of the Corps mandated spills versus
barging the fish for predator control. Which has been more
effective over the past two summers of mandated spills?
Ms. Durham-Aguilera. I'll go first. Thank you.
[Discussion held off the record.]
Ms. Durham-Aguilera. OK. Thank you. I'll take the first
attempt to address and then turn it over to BPA. It's really a
combination of all three. We monitor the passages. We monitor
the transport. But, you know, one of the things that we're
trying to drive for in the region is we still have a consistent
criteria. And what we really try to get to is a criteria that
measures juvenile survival, and this is formed by adult
returns.
So regarding the spill that happened in 2005, the summer
spill we keep talking about, until we get the adult returns,
which won't happen until 2008 and 2009, we won't be able to
tell how effective they are. We know pretty well what the
survival rates are, whether it's transport or spill. We need to
know the adult returns to really know the effectiveness.
As far as the prediction of by the numbers, it has been
effective with the various techniques that we use. Also the
increase had dropped to around 2700. But there's a lot more
that can be done, you know, as far as the sea lion issue. The
States of Oregon and Washington are engaged in trying to get
some relief under the Marine Mammals Protection Act. So they're
looking to streamline that both under the Act. The Corps of
Engineers would support either solution in order to make some
more headway.
Mr. Maslen. I'm Bill Maslen, Bonneville. I'd just like to
add that we're also looking to develop returns around the
effectiveness of transportation. Furthermore, attempting to
design more comprehensive transport studies to take into
account the fact that over half of the returns, the adult
returns from those juvenile fall Chinook are fish that
overwintered in the system and now migrated the following
spring. So if any cases weren't even present, it was just the
lower half of the location when the spill occurred.
Similarly, in the case of predator control, over the last
15 years we found the Northern Pikeminnow Management Program to
be highly effective. That is not just a BPA assessment, that is
in fact research that's performed by Oregon Department of Fish
and Wildlife and USGS.
As a result of our initiatives on modifying summer spill,
we increased the reward associated and have seen a consistent
increase in the rate of removal of those predators by about 50
percent. That will not translate into a 50 percent reduction
degradation mortality for most fish, but it moves us up into an
annual exploitation rate from the low teens to the upper teens,
which is substantial. Currently we're estimating over 25
percent reduction of predation mortality.
Miss McMorris. To the two of you again, when it comes to
measuring the success of saving salmon, how do you believe that
will be defined over the next ten years and what role will
customers and others play in defining success.
Ms. Durham-Aguilera. That's one of the things we're trying
to do as far as collaboration. It takes everything to be able
to figure that out. Success, again, it depends on how you're
going to define it. There's recovery. We all want to hear
numbers with recovery. We're talking in terms of ten years only
because that's about as far as we can predict action. But we
really believe recovery is going to take more than ten years.
So we have to go back again to a competent agreement with a
consistent criteria.
Mr. Maslen. I agree that both collaboration as well as
focus on recovery, necessarily a long-term and sustainable
effort. It's only taken European man about 150 years to create
the situation that we have before us, which includes the
depressed wild populations of salmon and steelhead. It will
take decades of focus, prioritization, comprehensive approach
to costs, all of the human predations, and a sustained effort
or initiative over time that increases the connectivity of
those actions to really enhance and will take that more
holistic approach. That's all.
Miss McMorris. How much money has been spent on litigation
since the first biological opinion was challenged.
Ms. Durham-Aguilera. That's hard to estimate. Again, we do
our best.
Mr. Hastings. First, let me thank all of you for your
testimony. And as I think the people here that are listening
and certainly the two of us up here can see, that there are
different opinions on what the solutions are. And that's, I
guess, what America is all about is to try to figure out the
best way so that everybody can have their way, so to speak.
Let me ask Ms. Durham-Aguilera a question here first
because there's an issue that came to my attention yesterday,
it came to the parties, that would potentially be affected only
a couple of days ago regarding drawing down the McNary Pool. I
understand that you've reached agreement with the local
irrigators regarding the proposed drawdown of McNary Pool. And
it's my understanding that this agreement will keep the
elevation at 336.8 feet; is that correct?
Ms. Durham-Aguilera. Yes. That's correct. We did reach an
agreement. We're trying to get around 337.
Mr. Hastings. Good. I appreciate your working with the
irrigators. I mean, clearly this was one of those issues that
came up very quickly that would have had a devastating impact
in a very hot time of the year. So I appreciate your response
to the Corps.
I want to talk to you about your comments. You mentioned
there's times that you could use that surplus power and use the
example of potentially filling other reservoirs, Black Rock
being one of the most obvious. Do you know if that takes any
legislation at all, or can that be done wholly within the
purview of BPA and with the utilities working with them? I just
wonder if you'd look at that.
Mr. Morrison. I don't really know the answer to that.
There's a myriad of overlapping regulations and requirements. I
have to believe that people of good faith could work through
that. But sometimes, you know, legislation is needed to sort of
clear a path.
For instance, thinking of back in the '60s I chaired a
group that put together a one-stop shopping approach for the
siting of power plants. And we may need to do something like
that with this idea of pump and storage so we've got storage
batteries along the Columbia River system that could be used
for the release of water for fish and certainly for power
generation and for refilling McNary Pool. You can go right down
that list.
I don't know specifically the answer but just say, usually
legislation helps where there is a number of different
bureaucracies.
Mr. Hastings. That would be something to pursue. Since you
brought up Black Rock and since the proposal of the Black Rock
Project is to take water from the Columbia River, I think it's
worth noting that the whole Columbia Basin Project, we're only
irrigating about half of that, only takes 3 percent of the flow
behind Grand Coulee Dam to irrigate that 500,000 acres. And
then.
One percent is returned at various points. So when we hear
a lot of discussion about there's not enough water, that
statistic, in my mind, kind of applies on the face.
The proposal for Blackhawk is strong tension in the water
after you have the full supplement of five rivers downstream.
So I think that's a point worth making, and I appreciate you
bringing up the issue.
Ms. Flores, I want to ask you a question. You talked about
working trying to get a biological opinion and so forth. My
question to you is a hypothetical one. If it appears where
Judge Redden is going with his interpretation of ESA as it
pertains to our area here, what impact do you think that would
have on other biological opinions or similar opinions
throughout the country and if it is subsequently upheld becomes
in fact the law of the land?
Ms. Flores. The simple answer would be morbid because I
assume what you're speaking to is baseline issue and ESA
consultation and how they take into account the baseline issue.
And the fact of the matter is if the Ninth Circuit rules on
that, it could potentially open up a lot of agreements that had
been reached in a region, whether it's licensing, whether it's
the Fish and Timber Agreement for the State of Washington. And
such a ruling could potentially open up those issues and it
could have an enormous impact.
Mr. Hastings. What it probably points out more than
anything else is the need to amend the Endangered Species Act.
And I might add, because it was mentioned several times in the
testimony here, the House has passed a version and I want it to
still be taken up in the Senate.
But the main part of that is it focuses on recovery. And I
don't think there's anybody here that I heard said that we
ought to let the salmon go extinct. In fact, I hear just the
opposite. We find ways we want to make sure that the salmon is
part of our culture here. And it seems to me that we would have
a policy on a national level focusing on recovery that would go
a long way. And the way that's being interpreted now, at least
from your point of view, it would have nationwide devastating
implications. Thank you very much.
Miss McMorris. I want each of you to comment just briefly
on just the uncertainty related to our energy costs. And each
of you have, in your testimony, commented on it. But as we move
forward there's increased concern about energy costs in this
country in general. For those of us in the Pacific Northwest,
we focus a lot on this Columbia Snake River system, electricity
costs, and we're seeing where these costs have a tremendous
impact on our economy. I hear from the farmers, I hear from the
businesses, low income. Everyone is impacted by rising energy
costs.
And one of the challenges before us because of the
continued court battles and the uncertainty that court
decisions have caused for those of us in this region is that
the impact of this uncertainty on our electricity costs in this
region.
And I just wanted each one of you just to comment from your
perspective moving forward what that impact would be on your
particular--from your particular perspective. And I know that
there's efforts underway to work in a collaborative fashion, so
those of us from this region the best way to move forward.
But in the meantime the court decisions and the
uncertainties that these court decisions cause and the impact
that they could have, I just want each one of you just to
comment briefly on what you think the impact will be. And,
Gary, I was going to ask you to start.
Mr. Chandler. I was afraid you were going to start with me
first. There's several things that I think we can give you to
look at. First of all, our association is a big supporter of
looking at alternative sources, and I think some of that
technology is here, some of it is away still being developed.
One of the things we're faced with right now on our energy
costs, as I said in our testimony, I would venture to say that
the majority of our membership is very, very nervous right now
for energy costs going up.
And a lot of our larger businesses are not looking here to
expand or to build new facilities, they're just struggling to
hang on and looking at closing and moving elsewhere because of
the uncertainty of energy costs.
We've got big movement going on in wind power right now.
But I want to remind everybody wind power is great when the
wind blows, but as soon as the wind quits blowing, you just
can't shut the plant down and send everybody home. You have to
have something there when the wind power is not being
generated. But we think we need to move forward with that.
I think there's coal, but everybody has problems around
coal because of the emissions. There is technology looking at
converting coal and liquefying it. And you know my previous
thoughts, Congresswoman McMorris, on water. I still think we're
missing the boat. We have a lot of water, but we utilize it and
we misutilize it and we flush a lot of it down without
containing it in storages.
I still believe one of the things that Congress should be
looking at is reinvigorating the Corps of Engineers and looking
at building more storage so we can have that storage for use
for power. We could have the storage for expansion of
agricultural. We know we have a lot of areas that we have deep
wells and we need to get them off of those deep wells and we
need water for that. So storage to me would be a real key, as
well as storage is good for recreation and for the salmon. So I
think any of those things.
Miss McMorris. Very good. And I'm going to have to ask you
to be brief in your comments.
Mr. Voigt. Thank you, Congresswoman. Regarding potato
industry and costs, our worst thing to do is increase costs. I
know I still missed testimony. I know his about rate increases
has been over close to 280 percent increase. Electricity is
secondary to the actual supply of water. If we don't have
water, we don't get the electricity.
Ms. Miles. On behalf of the CRITFC Tribes, we are a
supporter of alternative energy. We have been a collaborative
partner. We have pushed the Federal agencies to work with us
without going to the last resort. And that has been, I think,
commendable on the Tribes' behalf because we have borne the
conservation burden, and all we're asking is that conservation
burden be applied to all parties so that we can jointly live
the lifestyles that I hear some of the people talking about on
the panel today. Thank you.
Ms. Flores. My answer to that would be, I think, the same
as Chandler's, that pointed out that businesses here in the
Northwest are just hanging on. The fact of the matter is many
of them have gone out of business. Energy has been a
traditional advantage in the Northwest. That's still true
today. We have businesses that have to overcome other higher
costs like transportation, so electricity is key to their
competitiveness.
And I'm going to say we're at a point where there's not a
lot of room for electricity prices to go up without having a
significant and negative impact on the region and its economy.
Ms. Hirsh. There are a number of things that affect
electric rates. And even if rates go up, bills can go down. And
I'd like to see an increased focus on more aggressive energy
efficiency implementation and conservation efforts throughout
the region to help bring bills down.
And there's a number of issues around the country that are
driving electric rates up all over, so the Northwest is not
unique in that problem--facing that problem. But we are blessed
with tremendous opportunity to improve the efficiency and
reduce consumers' bills and keep businesses more competitive.
The Northwest Power and Conservation Council estimates $2.4
billion in lost economic development opportunity, and I don't
think that's an economic impact we can bear.
Ms. Durham-Aguilera. Well, thank you. I'll speak from the
viewpoint as the engineer. We're charged to operate the system
for the purposes of the people and for the environment. That's
why we spent so much time on water control plants because we're
also responsible to let people know what we're doing so they
have a predictable and reliable plan. Without that, people
can't make wise investments. So we have certain operation, we
have a certain plan for the economy to make smart business and
investment decisions. So that leads to cost and efficiencies
and loss of energy.
And then the second point is kind of a broader view. One of
the things I worry about is that we don't have a true long-term
investment plan so we will not in the future continue to see
the value on this.
Mr. Maslen. I'll narrow my comments to fish and wildlife.
We believe that the key to success is an ``all H'' approach. We
have to take that comprehensive and holistic approach. BPA can
only cover costs to some point. So where there's uncertainty,
it makes it difficult to design and sustain programs that can
be implemented over time. So we have all four H's. We have
costs in all four H's. As pressures are brought to bear on one
of those H's, there can be pressures in the alternative
direction on the other. And that makes it hard to implement a
successful program in the long term.
Mr. Morrison. I think the energy future is a timing issue.
We have water. We have wind. In order to supply water for both
power and fish, we have to solve this problem, as Steve Wright
mentioned that we only have storage capacity for 30 percent on
the Lower Columbia River. The other 70 percent we're sending
out to the Pacific Ocean.
So to me when the wind blows, store the water. When you
need the water, let it come out of reservoirs along the
Columbia River system.
Mr. Cooper. I would just say that from the perspective of
my colleagues nationally, you're going to be hearing a lot more
from us in terms of increased demands on a whole range of
indirectly related but still connected needs that will occur in
the lives of low-income people around the country.
As pressure is applied on a utility budget for a low-income
household, they're going to make choices, some good, some bad,
as they seek to pay that bill or to offset that increase. So
you're going to see increased demands for not just energy
assistance but housing, there's going to be an increase in
illness as people are not able to afford health care,
prescription costs are going to see an increase in charity
costs right off to the health care system, you're going to see
an increase in demands for shelters, increase in family
instability, crime rates, all of those kinds of things.
Mr. Espinoza. In Pasco with growing populations, we build
more schools, and we end up with higher electric fees. And,
again, I guess I want to say that there's a lot of pressure to
add accountability into what public education does, not just
here in Washington State but nationally with No Child Left
Behind and the individual DIEA law. But in Washington state,
just to help you understand our intensity and what we're doing
in our classrooms, is the WASL, Washington Academic Student
Learning. Thank you. A little bit of pressure. The Washington
Assessment of Student Learning.
It became a graduation requirement for sophomores this
year, and preliminary results show that only 54 percent of the
students statewide passed. But there's a number of other
subgroups of students that last year 70 percent or more did not
pass the math portion. So the emphasis on keeping educational
dollars in our classrooms is something that I guess I just need
to let you know that. It's a very strong thing.
Mr. Reimann. I wish Steve Wright was still here because
when I was listening to him talk I couldn't help but think of a
quote from Ronald Reagan and it was the most terrifying words
in the English is, I'm here from the government and I'm here to
help.
What's happening to us with the power rates is after the
last round we decided to sell our farming operation. The
problem is mortgage companies, because of the uncertainty of
the power rates, aren't willing to loan on this type of
operation anymore. So it's very difficult to go out there and
market your property.
I have a granddaughter that's half Russian. She speaks
Russian fluently. We just came back last fall from Russia and
went back to the place where my grandfather came in 1880. And
believe it or not, I never thought I would ever say this, is
that the opportunity for farmers like myself and my son and my
granddaughter look greater in Russia than they do here today.
Mr. Hastings. We've come to the end, gone over a little
bit, so this will be the last question. I want to thank all of
you. I apologize if I didn't ask all of you a question today.
But I do have a couple I do want to ask. Ms. Miles, I want to
ask you your position on the use of hatchery fish and if we can
supplement the salmon populations.
Ms. Miles. What was the question?
Mr. Hastings. The question is, what is your position,
CRITFC or individually, what is your position on using
hatcheries to supplement salmon populations?
Ms. Miles. Our view on our hatcheries is that we do need
hatcheries to support an eventually natural sustainable run.
Currently, that cannot happen without hatcheries in our
supplementation programs. I understand the controversy over
supplementation, but at the same time the CRITFC Tribes, who I
believe are the strongest fish managers in the region,
understand that hatchery supplementation programs do have to
support eventually to get a--the goal is to get a harvestable,
sustainable salmon run, which we just can't do at this time.
Mr. Hastings. Can I expand that to say that you support the
four H's then?
Ms. Miles. In the four-H approach, all four H's need to be
addressed equitably and how those gaps are achieved need to be
achieved equitably, which under a confidential process under
the collaboration process we're working toward, but these need
to be addressed. It would be very good if the public understood
how each H affects the actual run and how that affects each
part of the gap and how could you then be responsible and
accountable for filling the gap. And that's kind of where we're
at.
Mr. Hastings. Can I assume that when you come out with your
proposal and your reform, you will address that?
Ms. Miles. In our view the Tribes have--we have always
addressed our H, which is harvest. We have always been asked to
address that. And when I mentioned conservation burden, we have
wholeheartedly had to take on the conservation burden. And in
that ``all H'' approach, we ask that conservation be applied
equitably. I'm not saying we're opposed to the four-H approach,
but it's how you view that four-H approach and how you view
each gap in that approach.
Mr. Hastings. I wanted to ask about hatcheries because I
don't think there's been enough, frankly, work or study on
hatcheries. But I appreciate your answers.
The final question that I have is to Mr. Reimann. There's
been a lot of discussion here today regarding Judge Redden and
the potential that comes out of that, and I know that you've
been very active and are effective as part of the Columbia
Snake River Irrigators Association. I understand there is an
attempt to move this to another court. Would you elaborate on
that?
Mr. Reimann. Well, we've tried a lot of measures with Judge
Redden. One of them was to have him removed from the case, and
so far there's been no luck with that. It's just another
attempt. Whether we get there or not, we can remain hopeful.
But, you know, I think it was Al Gore who brought him out of
retirement to do just this, and he's done a wonderful job of
stuffing us. Maybe he'll go back into retirement.
Mr. Hastings. Well, OK. I see that my time is just about
up. And once again, I want to thank my colleague from Kettle
Falls for pushing to have this meeting out here. I thought the
testimony was very good, and I appreciate all of your coming
and your presence here. And all the people in the audience that
sat through this, we certainly appreciate your presence here
too. Thank you.
Miss McMorris. Very good. We do need to conclude the
hearing today. There will be a number of questions that we will
submit to you in writing. We would ask that you would answer
those so that they could be a part of the official record.
I want to also thank everyone for being here today, for
testifying, for taking time to be here. We all have a goal as
we're here today of protecting salmon as well as our economy.
The question is, how are we going to do that and whether we're
going to do it together? And I think these kind of hearings are
a positive step in pulling people together to make that happen.
I look forward to working with you and my colleagues so
that we can come up with a win-win situation. Thank you very
much.
That's the conclusion.
[Whereupon, at 11:10 a.m., the Subcommittee was adjourned.]
[A statement submitted for the record by Charles L. Dawsey,
General Manager-EVP, Benton Rural Electric Association,
follows:]
Statement submitted for the record by Charles L. Dawsey, General
Manager-EVP, Benton Rural Electric Association
Thank your for the opportunity to share thoughts and comments
regarding dams and Northwest power issues. My name is Charles Dawsey,
and I am the General Manager of the Benton Rural Electric Association--
the consumer owned electric utility serving over 15,000 meters in
Benton and Yakama counties. Currently our utility receives all of its
wholesale power from the Bonneville Power Administration pursuant to
the terms and conditions of a BPA Full Requirements Power Sales
Contract. Wholesale power costs from BPA are still over 60% higher than
they were prior to 2001. In general, this means that end use electrical
consumers have faced increases in retail rates well over 30% during the
past five years. I would suggest that anyone involved in the electric
utility industry, myself included, should be ashamed of these
significant energy cost increases in a region where hydroelectric
energy is so abundantly available.
I applaud and appreciate Congresswoman McMorris' effort to
legislatively secure transparency regarding the costs of fish and
wildlife programs that northwest electric consumers are paying as part
of their power bill. It is critical that consumers know what these
program costs are, as well as the benefits that are being achieved.
In 1984 and 1985, the BPA Federal Base System of generation on the
Columbia River was able to produce 9,750 aMW of energy during a
critical water year. Today, the same Federal Base system can produce
only of 7,079, aMW of energy during a critical water year, a reduction
due in a large part to the implementation of the requirements of
various Biological Opinions and resulting fish and wildlife programs.
In short, the region has lost about 2,671 aMWs of generating capability
during critical water, which is the equivalent of the amount of energy
needed to supply two cities the size of Seattle. In today's energy
market this 2,671 aMWs of energy has a wholesale value of $1.1 Billion.
For the most part, the Northwest has been able to accommodate the
loss of this generation capability through a number of mechanisms,
including the loss of aluminum production, the installation of high
cost combustion turbine generation, and a slowing of northwest economy.
However, as the Northwest economy picks up speed and energy demand
grows, we will be facing some difficult challenges to meet the future
energy needs of this region.
The Benton Rural Electric Association supports the development of
renewable generation both directly through our subscription ownership
in the Coffin Butte Landfill Generation Project which utilizes methane
gas from the landfill to produce electricity, to our indirect support
of member-owned renewable distributed generation projects. We realize
that many of these renewable energy projects provide economic
development opportunities to landowners and equipment vendors, and, if
privately owned, can add to the local tax base of our counties.
However, these renewable energy projects, including wind
generation, rely heavily on financial subsidies, and equally important
rely on existing conventional generation to provide backup, firming,
shaping and other ancillary services to make them a viable energy
alternative. To this end, BPA has used the flexibility of the
federally-owned hydroelectric projects to provide these services at
relatively no cost to the renewable projects. The BPA Administrator has
announced that the Agency is incapable of providing any additional
ancillary services to intermittent generation projects. Any new
renewable projects will need to rely on firming services from a
resource other than the BPA Federal Base System. This will require the
development of new conventional resources to ensure that the shaping
and backup services for new renewable resources are available. In
short, this boils down to more rate increases to the end use electrical
consumer.
In conclusion, while we support renewable resource development, we
recognize that these resources will not replace the need for base load
generation to meet a growing economy. In fact, quite the opposite is
true, since renewable resource development will place additional burden
on conventional base load capacity. We urge all decision makers that
will face tough decisions regarding future energy resources, to at
lease reconsider the opportunity to capture some of the 2,671 aMW of
lost hydroelectric generation on the Federal Base System. This
generation has no additional capital or operating costs associated with
its production. It is without a doubt the most cost-effective renewable
resource that is available to us today.
In closing, I want to thank Congresswoman McMorris and Congressman
Hastings for scheduling this hearing, and for their constant vigil in
protecting and securing the benefits of the Bonneville Power
Administration for ratepayers of the Northwest.
Thank you for your attention.