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Fish and wildlife recovery in the Pacific Northwest: Breaking the Deadlock
A draft analysis by the Northwest Power Planning Council staff
October 1997
Witt Anderson,
Rick Applegate,
Aldo Benedetti,
Lorri Bodi,
Ken Casavant,
Ralph Cavanagh,
Steve Crow,
Donna Darm,
John Etchart,
Mike Field,
Roy Hemmingway,
Jim Litchfield,
Bob Lohn,
Rob Lothrop,
Alan Stay,
Al Wright
Assisted by: John Fazio, Roy Fox, Luanna Grow,
Andre L’Heureux, Duane Mecham,
Pete Swartz, John Shurts, and John Volkman
See also: Appendix B
- Prologue
- Status of Fish and Wildlife Recovery Efforts
- Institutional Goals for Fish and Wildlife Recovery
- Elements of a Fish and Wildlife Plan: Strategies and Actions
- Goals for Fish and Wildlife Recovery
- Biological Objectives of Fish and Wildlife Recovery
- Scientific Foundation for Fish and Wildlife Recovery
- Governance, Decision Making, and Dispute Resolution
- Implementation of Fish and Energy Decisions
- Timing of Near-Term Decisions on Fish and Energy
- Summary of Economic Analysis
- BPA Cost Recovery
- Operations and Capital Improvements at Mainstem Dams
Appendix A: Energy and Fish Decision Timeline
Appendix B: Potential BPA Economic Impacts from Changing River
Operations
I. Prologue
This report concludes a six-month inquiry into approaches for fish and
wildlife recovery and related financial issues in the Columbia River
Basin. Cyrus Noe initially persuaded a representative core group to meet,
and Ralph Cavanagh and Luanna Grow assisted their discussions. The
co-authors represented only themselves during this process, but their
diverse perspectives capture much of the spectrum of debate over the
future of fish and wildlife recovery efforts in the Basin. Our joint
objective is to help frame the region’s most pressing fish/power debates
and to open new directions for resolving them. Our intended audience
includes all who care about the Columbia, and we hope that our report will
be of particular use to the leadership of the federal administration and
the Pacific Northwest states and tribes.
We address issues surrounding the federal dams of the Columbia River
System, artificial fish production, harvest and habitat. By necessity our
efforts centered on anadromous fish in light of the recent Endangered
Species filings. However, any solution will need to address resident fish
and wildlife issues.
Our report is intended to assist the tribal, state and federal
sovereigns by identifying new ways to balance critical environmental and
economic interests in the future of the Columbia River ecosystem. We have
concluded that it must be the sovereigns working together in consultation
with the various entities that have an interest in the basin that must
craft a lasting framework addressing the fish and wildlife and other
issues in the basin. The region’s failure to execute and integrate
crucial fish and power decisions threatens all these interests today. As
long as approaches to fish and wildlife recovery remain unsettled, BPA’s
financial stability and marketplace prospects will remain in question.
Yet, fish and wildlife recovery are themselves benefited by a financially
healthy BPA, which can fully meet its obligations to fish and wildlife and
the challenges of increasingly competitive electricity markets.
Our report is designed to help publicly accountable decisionmakers find
the solutions that the region so urgently needs. We recognize that any
successful recovery plan must reflect deliberations by the sovereigns, and
we offer joint suggestions for their use in designing and conducting a
successful effort. We recommend a streamlined, deadline-driven and
intensely facilitated effort by state, tribal and federal entities
together to devise a fish and wildlife plan that vests coordination
responsibilities for recovery in a single entity; improved coordination
among the Army Corps of Engineers, the Bonneville Power Administration,
and the Bureau of Reclamation; and creation of a new mechanism for
ensuring that BPA can meet its financial obligations to all Northwest
stakeholders at the lowest feasible cost.
Another work product is a timeline for integrating near-term decisions
on key fish, wildlife and energy issues. The report also draws upon and
summarizes preliminary analyses of BPA’s competitive prospects under
different fish recovery scenarios (Appendix B). We emerge from that
exercise with renewed optimism about BPA’s long-term capacity to prosper
under a wide range of recovery scenarios, although complacency about costs
or inefficiency is unwarranted. We recommend that the Northwest Power
Planning Council convene a regional discussion and peer review of this
preliminary analysis (Appendix B).
II. Status of Fish and Wildlife Recovery Efforts
- Most Columbia River salmon* stocks continue to decline
despite, by some estimates, a $3 billion investment in salmon recovery
measures over the past 15 years. Other fish and wildlife resources
that depend on the Columbia River are or may be adversely affected by
the operation of the Columbia River federal power system.
- There are currently three governmental recovery plans proposed to
address the serious decline of Columbia Basin fish runs. These are the
4-state Northwest Power Planning Council’s Columbia Basin Fish
and Wildlife Program (1994); the National Marine Fisheries Service’s
proposed Recovery Plan for Snake River Salmon (1995); and the
Yakama, Warm Springs, Umatilla, and Nez Perce tribes’ Spirit of
the Salmon (1996).
- To propose serious options for long term fish recovery, this report
draws upon the three salmon recovery plans, as well as the National
Academy of Sciences, National Research Council report Upstream;
the National Marine Fisheries Service’s (NMFS) Snake River Recovery
Team’s Final Recommendations to NMFS; the Independent Scientific
Group report, Return to the River; and the sometimes overlooked
salmon success stories in the Columbia Basin. Although the report is
not specifically directed at protection of resident fish, it
recognizes that salmon measures and resident fish measures must be
integrated so that neither is sacrificed in planning for long term
recovery and maintenance.
- This report recognizes that there are economic benefits to be gained
from a long term plan for fish recovery, including improved
predictability and accountability for fish measures paid for by the
users of the Federal Columbia River Power System.
- Despite all the problems associated with fish recovery,
there have been some success stories, most notably the Hanford Reach
Fall Chinook.
III. Institutional Goals for Fish and Wildlife Recovery
- Equitable and timely allocation of the burden of fish and wildlife
conservation measures among all entities that receive benefit from the
system.
- Preservation of tribal legal rights, secured by treaty, law, and
executive order.
- Recognition of federal, state and tribal water rights.
- Compliance with applicable tribal, state and federal laws and
regulations for protection and restoration of natural resources,
including the Endangered Species Act and the Northwest Power Act,
providing funds for implementation, and resolving differences.
- Compliance with international treaties with Canada for fish and
power.
- Preservation of affordable and reliable power from the Federal
Columbia River Power System (FCRPS).
- Achieving the fundamental purposes (power, flood control,
navigation, recreation, irrigation and fish and wildlife) for which
the FCRPS was authorized by Congress. Addressing economic, social, and
political constraints, including mitigation for economic and social
impacts of fish and wildlife recovery measures on existing river
users.
- Obtaining and providing adequate funds to implement the fish and
wildlife plan developed by the Process (as described in Section V.
below, Governance).
IV. Elements of a Fish and Wildlife Plan: Strategies and Actions
This section presents some options for breaking the current gridlock
over fish recovery. Ultimately, these and other options should be
incorporated into a joint federal/state/tribal recovery plan that provides
predictability for the power system and predictability of fish recovery.
A joint recovery plan should not just be a list of all possible
measures, but should incorporate decisions on priorities, tradeoffs and
integration of measures into a coherent strategy. It should include the
following elements:
Goals and objectives
- A credible scientific rationale
- Specific measures, linked to these goals and objectives
- A logical order for selecting measures, and dispute resolution
- A predictable decision path with a timeline, criteria, and
funding/investment priorities
- We were unable to make progress on substantive fish and wildlife
measures. At the same time, we recognize the urgency of resolving
these issues. The governance process we have suggested in Section V.
below, with the commitment of policy leaders at the highest level, is
the appropriate way to resolve these matters.
- The region lacks agreement on how or whether to implement a number
of specific fish and wildlife measures. The implementation of the
following measures will require further policy deliberations and
timely decision, based on the best available scientific data:
- Strategies to improve mainstem survival, including spill, bypass,
transportation, flows, drawdown, reservoir rule curves and upstream
passage
- Strategies to restore habitat and increase natural production
- Strategies to appropriately implement artificial production
- Strategies to minimize the impacts of hydropower actions on resident
fish and wildlife
- Strategies to integrate fish and wildlife with other uses of the
system
- Strategies that provide for harvest, consistent with Indian rights
- Strategies to address ocean and estuary conditions, including
obtaining information about key aspects of the estuary and near-ocean
environment so that new strategies can be considered that could lead
to enhanced survival
- Monitoring, evaluation and adaptive management
In the following sections, we describe and recommend goals, objectives
and scientific principles for fish and wildlife issues.
A. Goals for Fish and Wildlife Recovery
- Restore biologically diverse naturally spawning fish populations
that support sustainable fisheries and preserve and protect wildlife
populations. Achieve this goal by improving the Columbia River
ecosystem, by protecting core populations and their habitat, and
through other measures that are compatible with natural production and
genetic diversity of fish populations.
- Restore populations to levels sufficient to withstand a reasonable
harvest, the impacts of continuing human activities, and a range of
climatic and ocean conditions.
B. Biological Objectives of Fish and Wildlife Recovery
In order to halt the decline in fish populations and restore healthy,
naturally producing populations of fish, it is essential that the recovery
objectives identified below be defined in as specific a manner as
possible.
- Implement actions sufficient to halt the declining trend in fish
populations above Bonneville dam.
- Restore healthy, naturally reproducing populations of fish in each
subregion accessible to the fish.
- Increase adult fish returns above Bonneville dam.
- Identify and set in place protection and restoration of habitat.
- Establish criteria for determining priority stocks, taking into
account the importance of maintaining metapopulation structure
(includes genetic diversity), meeting treaty fishing obligations,
meeting tribal fishing rights, and providing reasonable non-treaty
fishing opportunities as allowed by law.
- Integrate artificial production methods consistent with the
maintenance of genetic diversity and protection of natural population.
- Consider the impact of fish recovery measures on wildlife resources
and integrate measures that provide benefit and protection for both.
- Identify potential actions to restore stocks.
- Determine the benefits of actions.
- Prioritize potential actions.
C. Scientific Foundation for Fish and Wildlife Recovery
- Restoration of Columbia Basin fish must address all aspects of the
ecosystem and fish lifecycle.
- Restoration of Columbia Basin fish requires a network of diverse,
high quality, and interconnected habitats, which are maintained by
natural processes in freshwater, the estuary, and the ocean.
- Restoration of Columbia Basin fish requires preservation of life
history diversity, genetic diversity, and metapopulation organization,
because these are used by fish populations to cope with environmental
and climatic variation.
- It is important to re-establish the nutrient cycle provided by
decaying fish carcasses, which effectively cycle nutrients from the
ocean to freshwater.
- Restoration of fish and wildlife resources depends on managing human
impacts to achieve suitable ecosystem conditions. Technology and
research should be used in concert with achievement of natural
ecosystem conditions, not to replace natural functions.
- Salmon can be used as an "indicator" species to define
desired environmental conditions in basins accessible to anadromous
fish.
Governance, Decision Making, and Dispute Resolution
Key Principles:
Improved governance is needed to overcome fragmentation and
contradictory decisions on Columbia River fish and wildlife issues and on
fish and wildlife-related power system decisions.
This proposal calls for the integration of existing federal, state and
tribal governance processes and the development of a unified fish and
wildlife recovery plan. We believe the "Three Sovereigns"
process (hereafter the "Process") initiated in June 1997 is the
appropriate place to address these issues.
Existing statutory mandates and treaty and other tribal rights should
remain in full force and effect. No authorities should be increased or
diminished by participation in the Process. It is anticipated that this
governance structure will enhance the ability of the governing entities to
meet existing mandates and obligations and to deal with any conflicts in
mandate that may arise.
The existing Power Council public involvement system should be employed
and Council staffing should be used as appropriate. The three sovereigns
should commit, at the highest levels, to exercise their discretion to
carry out the plan established by the Process. The primary purpose of the
Process is to develop a unified plan that includes mechanisms for dispute
resolution and addresses all river-related activities that affect fish and
wildlife.
By March 1998, the sovereigns should identify a single entity, which might
include an existing institution, to oversee and coordinate implementation
of the plan. They should also develop adequate dispute resolution
mechanisms for planning and implementation disputes. In the interim,
dispute resolution should begin with informal efforts such as mediation,
and proceed as necessary to more formal mechanisms, which could include
arbitration or judicial resolution.
The Process should be open to the public and should provide full
opportunities for all interests to be heard and to participate.
The Process should utilize best available scientific information and
independent scientific and economic analyses. Comprehensive monitoring and
evaluation should be used to ensure that actions are producing desired
results and that appropriate mid-course corrections can be made.
Additional governance reforms can be developed as this effort proceeds.
The Process should integrate fish and fish related power matters. The
Process should appropriately sequence fish wildlife and related power
system decisions so that decisions in one arena will not inappropriately
foreclose decisions in another. The Process should address power system
matters that may have an impact on the fish and wildlife plan and its
implementation and should further address power system matters that may
have the effect of foreclosing actions deemed necessary for fish and
wildlife.
VI. Implementation of Fish and Energy Decisions
A. Timing of Near-Term Decisions on Energy and Fish
Much has been accomplished over the past two years to move the
Northwest towards a competitive, deregulated electric supply system, and
Bonneville Power Administration has been under special scrutiny in that
regard. The effort began as the Comprehensive Review of the Northwest
energy system – a year-long effort initiated by the Governors of the
four Northwest states. The recommendations from that Review are being
dealt with in a linear fashion on single, mostly compartmentalized issues,
such as subscription or transmission separation.
There is an urgent need for the region to come together on both the
structure of a comprehensive package and a coordinated schedule of events.
Appendix A is a graphic attempt to pull the pieces together in a
relatively quick timeline, ending in August of 1998. This graphic
depiction assumes no national legislative initiatives until 1999.
The sequencing of events is critical, since many issues must be resolved
first due to their relationship to resolution of the remaining issues.
Cost Issues
First, the region must achieve resolution of four major Bonneville
issues surrounding costs. In this graph all four are shown to have initial
results by April of 1998.
The Cost Control review team, led by the Council’s Power Four
Committee, is working now to get a preliminary estimate of how low BPA’s
expenses can be by the year 2001. This preliminary estimate is due by
April of 1998. While the review will continue beyond that point to design
of a long-term cost control mechanism, this initial estimate is essential
to generating a Subscription pricing scheme.
The discussions relating to extension of the 1996-2001 Fish Budget
Memorandum of Agreement must be on the same timeline as the cost control
discussions. Again, the Subscription pricing effort may not move forward
without resolution of this issue.
One of the most difficult issues is the determination of the magnitude and
form of BPA’s cost recovery. This too should be on the same schedule to
allow for an understanding of how pricing for subscription and revenue
requirements for transmission will be affected. (See Section VI.C. below
for our proposal).
Also, the rules governing transmission separation and use of transmission
revenues should be clarified to determine whether those revenues would be
available as needed to fund fish and wildlife recovery.
In the mean time, progress can continue on both subscription and
transmission separation, but the major issues cannot be resolved until the
issues identified above are completed. Then a preliminary fixed price
offering for potential subscribers can be determined by Bonneville. This
should be accomplished in a few months. This will in turn lead to some
indication of the contingent level of interest from the customers.
Subsequently, the form and governance of the BPA transmission system can
be determined.
Major System Changes
In a parallel process, the region must move to resolve the issue of
major system configuration changes – such as dam breaching or drawdowns.
While the actions may not take place immediately, the timeline assumes
that the federal government will make such a decision late in 1998.
Without resolution of these major questions, the subscription process
suffers under a large shadow of uncertainty, and no final subscription
contracts will likely be signed. In contrast, the Biological Opinion for
the Columbia Basin dams commits the federal government to a decision on
the method of long term salmon recovery in 1999.
One thing the schedule does not show is the time lag between the
National Marine Fisheries Service’s decision on dam
modification/transportation and actual implementation and funding. If the
decision is made in 1998 or 1999, several years will pass before those
actions will be part of BPA’s costs (under current financing
mechanisms). In the mean- time, the region needs to maximize the current
fish recovery measures with dams in place and assess the results of all
on-going recovery efforts. The region needs to debate: (1) the biological
and economic benefits of dam modifications; (2) the appropriate role of
fish transportation in salmon recovery; (3) the use of flow augmentation
with and without dam modification; and (4) the biological and economic
costs and effects of dam modification on other multi-purpose uses,
including commercial navigation and power.
Possible Legislation
Assuming success on a regional restructuring package by late 1998,
elements of a 1999 legislative initiative may include any or all of the
following:
Congressional authorization and appropriations for altering system
configuration.
Mechanism for paying for altering system configuration.
Allowances for expanded FERC oversight of Bonneville’s transmission
system.
Changes in form and governance of Bonneville’s transmission system.
Changes to allow for some form of transition costs on Bonneville’s
transmission system.
Removal of any barriers to allow Bonneville to join a transmission IGO
or ISO.
Removal of any barriers to allow for completion of a Subscription
process.
Changes to allow for some form of transition cost to be applied to
former Bonneville customers who do not subscribe.
B. Summary of Economic Analysis
To assist with our understanding of how Bonneville Power Administration’s
financial health will be affected by various river operation scenarios, we
asked the Northwest Power Planning Council staff to perform some
comparative analysis. The analysis was performed at the
"reconnaissance" level and provides comparisons in general
terms, not at a definitive level. A summary of this cost analysis in
included as Appendix B.
The studies were designed to look at the effects of a variety of river
operation/drawdown scenarios on Bonneville’s revenue from power sales.
Then each scenario was examined to see (1) how Bonneville’s subscription
rate would compare to a defined "market" rate, and (2)
Bonneville’s exposure to shortfalls.
The base case scenario assumes current fish operations. The comparison
studies demonstrated the effects of various operations and drawdowns on
hydroelectric production, flow targets, and reservoir levels. There is no
attempt to editorialize on the merits of drawdown or any of the options.
Since all the major fish plans call for studying some form of drawdown in
the near future, it became the surrogate for any major impact to
Bonneville’s costs and power production capability. It should be noted
that anything causing a major impact on Bonneville’s financial picture
(large capital cost, major loss of generation) would have the same result.
The exercise is useful on several counts. For example in the
"current operation" scenario, assuming twenty years of
relatively low wholesale power prices (averaging 1.6 cents per kWh in 1996
dollars) and some escalation of fish and wildlife related expenses, BPA
faces potential shortfalls of about $400 million in present value 2001
dollars over the period 2002 - 2012, with large potential benefits flowing
to the region after this time. The annual shortfall under these assumed
conditions would be less than $50 million per year if spread over the
decade beginning in 2002, and thereafter the BPA system has the potential
to generate large economic benefits. The annual impacts range from a loss
of $140 million in the early years to a gain of $115 million in the later
years. The analysis also shows that relatively small movements in
wholesale markets can substantially change the net revenues of the BPA
system, and that under many plausible scenarios no appreciable problem
will emerge.
BPA’s ability to fund major dam modifications is affected by both the
market price of power and its obligation to pay nuclear plant debt. If the
dam modification schedule is adjusted to take nuclear debt schedule into
account, as in Case 8, funding impacts are reduced.
C. BPA Cost Recovery
1. Cost Recovery, Cost Control, and Fish Budgets
Whatever fish recovery plan is chosen, marketplace uncertainties put
BPA at some risk of failing to recover all its costs (which include fish
costs, nuclear plant debt, and interest and amoritization payments
to the U.S. Treasury). Appendix B to this report presents both extreme
and more likely projections of the potential costs that might not be
recoverable from projections of BPA’s likely market revenues. The size
of potential shortfalls appears to be manageable under many recovery
scenarios and market conditions. Additional flexibility might be possible
by meshing part of the schedule for possible dam modifications with the
schedule for nuclear debt retirement.
BPA’s first step should be to control or reduce its costs where
possible. However, there are limits to the savings that can be captured
through cost-cutting, given BPA’s substantial fixed costs and fish and
wildlife obligations.
A cost recovery mechanism should be designed to put significant
pressure on BPA management to control and reduce costs in order to meet
market conditions. To ensure that these pressures do not inappropriately
restrict legitimate fish and wildlife expenditures, and to provide
reasonable levels of certainty for the recovery effort, we propose a
five-year budget for fish and wildlife expenditures, combined with a ten
year capital budget to assure funding of BPA’s present and future fish
and wildlife obligations. The budget process should invite federal, state,
tribal and other public involvement, in order to seek the broadest
possible base of regional support. Every two years, the budget should be
extended for an additional two years, so that a rolling five-year period
of predictable expenditure levels can be maintained. Congress would, of
course, retain the ability to modify the budget if necessary.
Once this process has established a fish and wildlife budget it becomes
a hard constraint on BPA’s operations and would be submitted as part of
the annual federal budget process -- even if this means that BPA budgeted
costs exceed projected revenues. Through the proposed mechanism, if actual
financial performance triggers the need, cost recovery methods would be
implemented.
2. Cost Recovery Recommendations
a. Key Elements
We consider it likely that Congress will act to protect the U.S.
Treasury from BPA costs that exceed its revenues, if the region does not
do so first. An alternative to Congressional action is for BPA and its
customers to negotiate mutually acceptable contractual commitments that
are consistent with fisheries interests. In either case, the following
principles should guide a BPA cost recovery mechanism:
- BPA should be provided incentives to operate efficiently
- BPA’s actual financial performance, with prudent budgeting of
future expenditures, should be used to trigger cost recovery actions
- BPA’s financial obligations, including those associated with the
fish and wildlife budget described above, should be included in
multi-year budgets
- BPA’s power subscribers should be provided a reasonable degree of
predictability for future costs
A negotiated cost recovery approach, as we recommend, must have an
objective and clearly defined trigger, as well as collection and
allocation mechanisms once the trigger events occur.
b. Trigger Mechanism
We suggest that the trigger for cost recovery be based on BPA’s
actual financial conditions that are objectively measurable. There are a
number of mechanisms that could achieve these principles.
Some have proposed that the trigger be based on BPA’s level of
financial reserves (cash on hand). If these reserves dropped to a
specified low level, a charge would trigger on all BPA customers that
would rebuild reserves to an appropriate level.
Another alternative trigger mechanism would focus on BPA repayment of
US Treasury debt. Generally, BPA’s financial obligations to Treasury are
met after all other obligations. For this reason the proposed cost
recovery methodology would focus on BPA’s repayment of its Treasury
obligations. Current statutory authority exists for the Administrator to
reschedule Treasury payments if power marketing conditions (weather,
extra-regional markets, etc.) cause insufficient revenues in the BPA fund
at the end of a fiscal year. The proposed cost recovery methodology would
be triggered by actual shortfalls in BPA’s payment of its Treasury
obligations. The shortfalls could cause the amount that is not paid on
schedule to be refinanced at market based interest rates and to be
scheduled for repayment through the revenues collected from a cost
recovery mechanism.
A third approach combines elements of both of these, but differs by
distinguishing between short term, non-recurring shortfalls between BPA
revenues and costs, and projected chronic, long-term shortfalls of a large
magnitude. Under this approach, BPA’s probability of Treasury repayment
would serve as the basis for the cost recovery trigger. BPA and the region
would set a threshold level of repayment. Cost recovery would be
prospective based on projected revenues and costs and whether these
projections reduced BPA’s repayment probabilities to unacceptable
levels.
So long as the repayment probability exceeds the threshold, no prospective
cost recovery would be authorized. In this case, if BPA actual revenues,
after cost review and management, fell short, a retrospective cost
recovery charge based on either reserves or Treasury rescheduling could be
used.
However, if BPA projects a repayment probability below the threshold,
and especially if shortfalls are projected to be substantial and
recurring, BPA would be authorized to levy a cost recovery charge.
c. Cost Predictability
In order to address customer need for predictability, we also propose
that exposure to cost recovery be capped in each year at a pre-specified
amount. If shortfalls exceeded this amount they could be dealt with by
either smoothing the charges and expenditures or by deferring planned
payments to Treasury.
Cost reviews would be used to ensure BPA’s fiscal prudence. BPA’s
actual or budgeted expenses would be compared with actual or expected
revenues. Where cost recovery was forward looking, any overcharges could
be applied for future credit or rebated to the customers.
The structure and magnitude of the cost recovery charge should be
determined in advance through BPA rate-setting procedures, approved by the
Federal Energy Regulatory Commission, and updated periodically in the same
way. The charge can and should be structured to avoid distorting
competitive generation markets and would be imposed if the triggering
events occur:
d. Collection mechanisms
Should the triggering events occur, the resulting shortfalls could be
recovered using any of the following alternative collection mechanisms. A
combination of these might also be desirable, and these mechanisms should
be further developed and refined before application.
- Limited amount collectible on the transmission system
- Limited amount collectible by direct charges to historic customers
- Limited amount collectible from current customers
- To the extent necessary, statutory authority for retail utilities to
pass on these costs
- Federal taxpayer contributions
D. Operations and Capital Improvements at
Mainstem Dams
At the non-federal hydroelectric dams on the Columbia and its
tributaries, the entity operating a dam depends on the revenues produced
at the dam to pay for its own costs. Thus, there is a strong financial
incentive at the non-federal dams to carry out fish and wildlife
mitigation quickly, innovatively, and effectively and with a minimal
impact on revenues. The same incentive is present for decisions about how
the projects should be operated for energy production, and for maintenance
of and upgrades to the generating systems at those projects.
In contrast, at the federal dams in the Columbia River Basin, the Corps
of Engineers and the Bureau of Reclamation are charged with operating and
improving the dams but have no direct financial stake in the outcome of
their activities. Historically, both agencies have been funded by
Congressional appropriations and do not have their funding linked directly
to their performance.
On the other hand, the Bonneville Power Administration is a
self-funding agency and depends primarily on the revenues produced by the
federal dams to achieve its statutory mission. Although the success of
Bonneville depends, among other things, on achieving prompt, effective,
and least-cost fish and wildlife mitigation at those dams and on
maintaining and improving the generating capabilities at those projects,
it has no authority to carry out such activities directly.
For the long term, legislation would be needed to realign authorities
and incentives at the federal dams. Absent legislation, it appears that
substantial improvements can be made administratively. Those improvements
should be coordinated through the Process and should include:
- Agreements between BPA and the operating agencies for direct funding
by BPA of operations and maintenance of the dams. BPA and the Bureau
have already entered into such an agreement.
- Agreements between BPA and the operating agencies for direct funding
by BPA of capital improvements (including both fish and wildlife
mitigation and generating facilities) within the limits of BPA’s
current borrowing authority.
- Establishment of a joint management authority among the three
agencies to oversee implementation of fish and wildlife mitigation and
power-related operations.
- Creation of multi-year implementation plans for each dam with clear
schedules, benchmarks, cost estimates, and measurable results.
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