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Meeting minutes |
Council Meeting Minutes
Kwataqnuk Resort
Polson, Montana
August 6-8, 2001
1. Presentation by Bonneville Power Administration on Implementation Plan and Implementation Plan EIS
Sarah McNary, Director for Fish and Wildlife; and Molly Moreland, Environmental Protection Specialist, Bonneville
Sarah McNary, director of fish and wildlife (Fish and Wildlife) for Bonneville, presented the federal action agencies’ implementation plan for the 2000 National Marine Fisheries Service (NMFS) Biological Opinion (BiOp). We have shifted from just a hydrosystem focus to looking at “all Hs,” she stated. The plan includes hydrosystem actions plus “off-site” mitigation in the form of habitat measures, hatchery actions, and harvest constraints, McNary explained. Our plan sets out actions for Bonneville, the Corps of Engineers, and the Bureau of Reclamation – it encompasses the obligations for all three agencies that have responsibility for operating and managing the Federal Columbia River Power System (FCRPS), she said.
In the plan, we assume salmon and steelhead improvements will also come from others, McNary continued. Who are the others? Council chair Larry Cassidy asked. We are referring to “others” in two senses, she responded: first, the hydrosystem improvements will come in part from off-site mitigation, and that mitigation will be carried out by other federal agencies, as well as local, state, and tribal entities.
The plan calls for the action agencies to develop one-year and five-year implementation plans, and there are checkpoints at three and five years to determine whether the agencies are taking the necessary actions, McNary said. At five and eight years, there are checkpoints to determine whether these measures alone are reversing the decline of listed stocks, she stated.
Stan Grace questioned whether there would be adequate information at the early checkpoints to make decisions. This year, for example, is an anomaly in terms of the number of returns, he pointed out. Our checkpoint at year three is simply to see if we’re implementing as planned, but in five years, we’ll have some biological information, and in eight years, we’ll have even more, McNary responded. I see a weakness in the plan with stating that you’ll make decisions based on the information you get at these checkpoints, Grace said. You won’t have enough information, and the public will expect you to do more than you intend if you keep this statement in your plan, he indicated.
McNary went over the purpose of the implementation plan, noting that it serves to: assign agency responsibility and accountability for implementing specific actions identified in the BiOp, determine and document timelines and strategies, link measurable performance standards to actions, provide a framework for adapting actions to achieve results, and allow agency and public oversight of implementation and achievements.
Who develops the performance standards? Cassidy asked. Is there a link to NMFS’ Technical Review Team (TRT)? he inquired. “We’ll collaborate to develop the performance standards,” McNary answered, adding that the agencies will look to the TRT and to analytical tools such as the Ecosystem Diagnosis and Treatment (EDT) model. What is your schedule for having the performance standards? Eric Bloch asked. We already have the hydro standards, and the hatchery standards will come from the Artificial Production Review (APR) process, McNary said. “The habitat standards are the stickiest,” she acknowledged, adding that they will be developed over the next two or three years.
The goals of the plan are “very general” and are consistent with the Council’s fish and wildlife program, McNary went on. They include: avoid jeopardy and assist in meeting recovery standards for Columbia River Basin salmon, steelhead, bull trout, sturgeon, and other aquatic species affected by the FCRPS; conserve critical habitats; assure tribal fishing rights and provide non-tribal fishing opportunities; and balance other needs.
You haven’t mentioned crediting, Tom Karier pointed out. How will that be resolved? he asked. We have been discussing crediting with NMFS, and we have a draft crediting paper, which is being reviewed by the agencies, McNary responded. “We have been a pest about crediting,” McNary said.
What value is crediting until you achieve recovery? Grace asked. Crediting would allow Bonneville to say it is implementing measures to the full extent required by the BiOp; without crediting, “we are in an amorphous zone,” McNary explained. If you describe the actions and performance standards well enough, crediting doesn’t seem necessary, Bloch suggested. It seems with crediting, “we are gilding the lily” and it’s all about Bonneville saying, “we are spending money for this or that,” he said. I don’t see what crediting adds, and I don’t want us to stop doing something because of an impasse over crediting, Bloch stated.
We are worried about never being able to say “this is enough” for the FCRPS mitigation, McNary responded. From the Council’s viewpoint, we would be better able to make decisions about projects if we knew what was happening with crediting, Cassidy said. There are arguments for crediting, Karier said. Bonneville will be spending money off site, and without credit that an action is mitigating for the dams, there is no reason for Bonneville to do it, he said. Crediting goes hand in hand with performance standards, Karier added. Recovery is the goal, but that could be 20 to 40 years ahead of us, he said.
To “avoid jeopardy” seems like a minimum; it’s not accomplishing recovery, Cassidy commented. We are talking here about a legal standard, McNary stated. The region wants and intends to recover the stocks, but legally, jeopardy is the standard, she explained.
McNary outlined the specific strategies in the implementation plan for each H. The hydro strategies call for improved project configuration and operations to increase adult and juvenile survival at dams, she said. We’ve spent lots of time and money on this since the 1990s, “with large results,” McNary reported. We do have an aggressive hydro strategy, but we’ve already achieved a lot of survival, she stated. The habitat strategy calls for protecting existing high-quality habitat, enhancing degraded habitat, and re-establishing and increasing habitat complexity, with a focus on anadromous fish, McNary said. These are things we’re doing through the Council’s fish and wildlife program, she observed. In the list of related habitat strategies, McNary noted there is a high reliance on subbasin plans and assessments. “It’s a structure we are all planning to use,” she added.
Have you developed the essential components for subbasin planning? Karier asked. We have been working on it, and NMFS has added to what we’re doing, McNary responded.
For hatchery reform, APR will be our source of guidance, along with the BiOp, she continued. Bloch asked if Bonneville is active in APR, and McNary said yes. Using that process is the right thing to do, Bloch stated, adding that “it has regional buy-in.”
Another hatchery strategy is to use “a safety-net program” on an interim basis to avoid extinction, while other recovery actions take place, McNary said. NMFS identified 12 stocks that need intervention, and Bonneville and the Council “are on the hook” to address the safety-net needs, she explained.
The harvest strategies call for developing selective/terminal fisheries and supporting research to improve harvest management assessments, decisions, and evaluations, McNary said. She added that the agencies intend to do some work with selective fishing gear. “We would intend to have those credited,” McNary pointed out. Related harvest strategies are to link harvest management and the tribal fishing rights that have come out of the U.S. v. Oregon lawsuit, she noted.
“What’s new in this plan?” Cassidy asked. “It seems like the same thing I’ve been looking at since the 1970s – the same story,” he stated. “There’s a little less polyester,” Bloch quipped.
During the consultation, we said we are already doing a lot in these All-H areas, McNary responded. The key to the plan is where we target those activities, along with the level of effort we put in, she continued. The difference here is size of effort and focus, McNary clarified. But “there is nothing earth-shattering that came out,” she acknowledged.
Bonneville has been funding these measures for years, so there’s nothing new here, Bloch agreed. The BiOp has now said that for ESA-listed fish, you have to do these things, but otherwise, there is not anything different, he said. What’s new with the BiOp is that the new structure is geared to achieving performance standards and recovery “with time as the hammer over our heads,” McNary replied. We are focusing on actions that will translate into biological performance, and we are leveraging others’ dollars for biological results, she added.
McNary explained the research, monitoring, and evaluation (RM&E) part of the implementation plan, noting that the RM&E actions provide a way to track trends over time and assess the success of management actions. Karier pointed out that the Council is working on a research plan for the entire basin. This is a subset of a larger research plan, he said.
There are two funding strategies in the plan, using Bonneville ratepayer funds and Congressional appropriations, McNary indicated. As for schedule, she said the agencies expect to release a FY 2002 plan in September, with detailed workplans, milestones, budgets, and tasks. The five-year plan will be revised each year, with annual plans containing more detail on the year’s activities and a focus on high-priority projects, McNary explained.
“This seems like the same old stuff rehashed,” Grace said. Were the requirements of the Northwest Power Act part of this process early on? he asked. This was an education on the Act for some of the federal agencies, McNary acknowledged. But the Federal Caucus was educational for everyone, she said, adding that Bonneville learned a lot about the role of federal land managers.
Judi Danielson asked if the August open houses Bonneville has scheduled on the Draft Environmental Impact Statement (EIS) for the plan will provide an opportunity for “meaningful input.” We are trying to figure out how to talk with interested parties and discern what the issues are, McNary responded, adding that the discussions started last Wednesday. “We will be working to distill out the issues and improve this document,” she added.
This is a rehash, but the question is how are we going to do these things and in what priority, Bloch stated. The funding for three of the four Hs is through the Council program, so a major issue is how we work together to make the federal agencies’ Endangered Species Act (ESA) obligation consistent with the Council’s program, he said. It is vital we work together and not go off in separate directions, Bloch said, adding that he is not aware of any agreement on how to meld the ESA responsibilities with the Council’s program.
Karier asked about the funding proposals. At the meeting last Wednesday, it was clear some states want a separate path for funding the implementation plan, McNary said. Our position on that is consistent with our desire to have a unified regional plan – the most logical approach is to build on what we have, she stated. But we got the message from a couple of states that they are looking at ways to do this outside of the Council’s program, McNary added.
Our position for three years has been that we would implement off-site mitigation through the Council’s program, she continued. In talking with the states, tribes, and others, a couple of states think the current fish and wildlife program funding is not working and could be improved, McNary said. “We are wrestling with that,” and we are concerned about losing some of the synergy if we are working with another fund, she said.
Do you have an obligation to work with the Council on this? John Brogoitti asked. Staffer John Ogan said the legal division has discussed the issue. Our opinion is that to route the off-site mitigation through our fish and wildlife program is not just a policy choice, but a legal obligation, he stated. We don’t know if the federal agencies disagree, but they are trying to resolve this as a policy choice, and our opinion is that it’s more than that, according to Ogan.
Throughout consultation on the BiOp, Bonneville’s position has been that we are already engaged in off-site mitigation activities and that we are implementing them through the Council’s program, McNary said. We have advocated for an integrated regional plan, and that is part of it, she stated.
Staffer Doug Marker said the task at hand is to knit together the federal implementation plan and the Council’s fish and wildlife program. I see the implementation plan as breaking off-site mitigation into short and long-term activities, and we can frame this into the provincial reviews, he suggested. Artificial production is another key area where our goals are very much in line with the implementation plan, Marker added. He advised the Council to feed comments into the federal agencies’ process on specific ways to link the fish and wildlife program with the implementation plan.
Funding is an area where the Council is in a unique position to help, Marker said, explaining that the federal budget process is the prerogative of the Administration, and the agencies “have a tough time” anticipating how their long-term funding needs will be met. They are constrained from lobbying or seeking more funds for their agencies, but the Council does not have those requirements, he noted. Advocating for funds is a key role we can play, Marker suggested.
We have been working “at a distance” with the federal agencies, he continued. “The Federal Caucus has worked behind closed doors,” Marker said. With implementation, the Council needs to decide whether to ask the agencies to stop working that way and bring others into the discussion, he said. We see things in the implementation plan that are a product of that isolation, Marker added.
The federal agencies plan to open the forum, McNary assured the Council. We needed to have “tough discussions” among the agencies, but now the system needs to be open, she said. An invitation for a meeting in September will be going out soon, McNary added.
Ogan stressed the need to synchronize the performance standards. With regard to crediting, our main theme has been for the action agencies and others to go ahead and discuss it, so long as it doesn’t distract from the subbasin work and getting on with recovery, he stated. Cassidy said he wanted to spend more time studying the implementation plan and get back to the federal agencies with comments.
Molly Moreland of Bonneville explained that the Draft Implementation Plan EIS, which Bonneville has now released for comment, is a subset of a much larger effort going on in the basin. It shows how all of the regional processes fit together, she said. “The EIS is our NEPA coverage” for the ESA activities, Moreland noted. The close of comments on the draft is August 31, she said, adding that Bonneville has scheduled four open-house meetings in August to take comments on the document.
2. Briefing by the Columbia River Inter-tribal Fish Commission on Columbia River Energy Vision and Related Recommendations
Don Sampson, Executive Director, CRITFC; Rob Lothrop, Manager, Policy Department, CRITFC; and Tom Foley, Consultant
Rob Lothrop of the Columbia River Inter-Tribal Fish Commission (CRITFC) and consultant Tom Foley summarized an energy vision for the Columbia River, which they said seeks to reduce the pressure of energy demands on the basin’s fish and wildlife resources. CRITFC is asking for comments on the vision, which Lothrop said will be final later this year.
There are three principles behind the paper, he explained: serve loads more cheaply than they are served today; provide better protection against unforeseen events, such as a “Siberian Express”; and create a healthier Columbia River Basin for fish and wildlife resources.
According to Foley, a typical load duration curve tells an interesting story about the way the region serves its electricity load. He laid out the following statistics: the capacity factor of a typical system in the region is 43 percent; T&D costs are between $45 and $100 a kilowatt-year, regardless of how much or how often T&D is used; 35 percent of the total capacity in generation, transmission, and distribution is used to serve loads that occur for only 400 hours per year or 5 percent of the time; the electricity industry is the largest user of capital in the United States; and investment in the electricity sector is 5 to 10 percent of all investment in the country. In other words, if you could remove the load peaks, you could fund a couple of other entire industries, Foley commented. He said that finance experts have speculated that because of the industry’s inefficient use of capital, a company like General Electric could take it over.
Should we come up with a different generation scheme? Leo Giacometto asked. To serve peak loads, you should bring resources closer to the load, Foley responded. It makes sense to build transmission to serve base load, but as you get higher into the peak, it makes less sense, he explained. The cost of shipping electricity to serve base load is cheap, but to serve peak, it’s expensive, Foley said. I recommended that Seattle build a plant downtown to serve the downtown peak, he added.
Lothrop pointed out that the region has a problem with base load and with peak. We need to address this in a way that is friendly to the river, he said. A chart Lothrop presented shows the variation in flows on the Columbia River at Hanford Reach. We are stranding young fish on the Hanford Reach to serve peak by manipulating the river, he said. “So what do we do when this happens? We beat up on Grant PUD and go to FERC,” but it’s not Grant’s fault when office buildings in downtown Seattle are creating the demand, Lothrop pointed out. “We are trying to link these problems,” he said. To address regional reliability this year, we cut off spill, Lothrop said. With this vision, we are trying to deal with peaks in a way that gets out ahead of the problem, he stated.
I’d caution that this year, we didn’t have the water, Grace stated. Our reservoirs wouldn’t be as high as they are if we had had spill, he said. We’d like to find a solution that keeps your reservoirs full and is more fish friendly, Lothrop replied.
The resource portfolio in the vision, Foley said, includes strategically placed gas-fired generation; strategic pricing of retail power; efficiency improvements; load management, “the most effective way to drop peaks”; distributed generation; and wind generators. Strategically placed gas-fired generation makes sense when T&D is constrained, he pointed out. If lower-cost resources can’t get onto the system, higher-cost resources have to be used, Foley said. It is important to have strategically located generation when it is needed to serve load, he stated, adding that FERC has issued orders requiring Regional Transmission Organizations (RTOs) to engage in least-cost planning for new facilities. “It is too expensive to build resources without regard for how they fit into the system,” Foley said. FERC recognizes this “and the Council should recognize it too and use its bully pulpit to get the message out,” he added.
Strategic pricing could deal with peak load, which is much more costly to serve than off-peak load, Foley continued. Pricing could reduce peaks and the strain on the system, he said. Foley pointed out that load buybacks in the Northwest and California have caused prices to drop substantially. “Everything happens at the margin,” he noted.
If you want to run the river better, that’s a good goal, Giacometto said. But making Bonneville responsible for all of this is a federal approach, he said, referring to the list of recommendations in the vision. The only recommendation for Bonneville is to protect fish and wildlife and protect spill, Foley said. But what about building T&D? Giacometto asked. Yes, Bonneville will be building transmission and would take these things into consideration when it does, Foley indicated.
“Spill is fish, energy, and money,” Giacometto stated. It goes back to operating the river, he said. We think we can secure these river operations relatively inexpensively with this approach, Lothrop said. We’d like to play this out for the region and the Council, he stated. We don’t want to go back to the situation that took place this year – we want a solution, Lothrop said.
Lots of companies in Montana are looking at building coal plants to sell power to loads elsewhere, Giacometto said. We want to burn coal and send it over there to keep our reservoirs higher here in Montana, he acknowledged. Coal plant development will face environmental hurdles, Foley observed.
The retail pricing issue is a good one to talk about, Karier stated. Puget Sound Energy has a real-time pricing experiment going on, and “it’s a phenomenal experiment,” he said, adding that if Puget is successful, the Northwest could be a leader in this area. Retail pricing is an issue the Council should be interested in, Karier urged. If you build plants to take load off the river, it’s a question of economics, he added. Grace agreed, noting that if you take the peaking from the river, there has to be an economic replacement. We would like to see a better quantification of what is needed for spill and whether you get returns from spill or not, he stated. Lothrop said CRITFC is going to put out a paper on that topic.
If one of your goals is to provide spill with more certainty, that will engender a response in the market, Bloch said. The form of that response – building distributed generation or buying from coal plants in Montana – “is grist for the mill,” he stated. Bloch suggested the CRITFC vision be referred to the Council’s power committee for study, and Cassidy said that would be done.
3. Briefing on Biological Opinion Litigation
(rescheduled to later meeting)
4. Update on Mainstem Plan Rulemaking
John Shurts, Legal Council; and John Ogan
Staffer John Shurts said rather than tackle all of the topics in the mainstem program amendment recommendations at once, staff had carved off those related to water management, including flows, flow objectives, flow augmentation, and storage reservoir operations. To provide context for the recommendations, he took the Council members through a chart comparing water management requirements in the Council’s 1994-95 fish and wildlife program with those in the 2000 BiOp.
Shurts pointed out major differences between the two, including the BiOp’s shift toward summer rather than spring flow augmentation. In our ’94-95 program, we included protections for the Montana reservoirs, but the BiOp aims to use those reservoirs for summer flow augmentation, he explained. With regard to flow objectives, both the BiOp and our program refer to these as “targets” or “guidelines” and not hard constraints, Shurts said. The tone in some of the recommendations is “if these objectives are legitimate, we should try harder to reach them,” he stated.
Shurts’ chart also compared the fish and wildlife program and the BiOp measures project by project and by river reach. In the Upper Columbia, for example, the BiOp drafts Grand Coulee and the Montana reservoirs to lower levels than the Council’s program, he pointed out. Our program holds the reservoirs higher and calls for keeping them fuller in summer, Shurts said. Both our program and the BiOp try to get more water from Canada, he added.
The following are highlights from Shurts’ overview of the mainstem program amendment recommendations the Council received from nearly a dozen sources:
Oregon’s recommendations, submitted by the Oregon Department of Fish and Wildlife (ODFW), say the flow objectives in the BiOp are too low. In addition, ODFW says if the region is serious about meeting the flow objectives, it has to find more water. ODFW calls for making the flow objectives hard constraints in operating the power system and not compromising them, even in low water years. Oregon calls for a serious review of flood control objectives if it would make more water available. Bloch said he understood ODFW worked with other state agencies to draft its recommendations, and Oregon’s Council members were not involved. We come at this as we should, without any prejudgment, he added.
The Idaho Department of Fish and Game (IDFG) doesn’t agree with the BiOp on summer flow augmentation and makes the case for spring flows. In the long term, IDFG says major hydrosystem reconfiguration is needed. The Montana Department of Fish, Wildlife and Parks (MDFWP) calls for integrated rule curves in operating reservoirs in the state. MDFWP says flows in summer should be minimal, with minimum draft on reservoirs, and calls for implementing the VARQ flood control operation.
CRITFC seeks a mainstem hydrograph that is more like a normative runoff. The tribes recommend setting flow targets and flows to meet that hydrograph, and they outline strategies to get there. There is a heavy emphasis on flood control and bringing more water into the system from the Upper Snake and Canada. The Colville Tribes recommend relaxing flood control and finding more water for the system. The Spokane Tribes give specifics on operations at Lake Roosevelt.
Several associations of irrigators recommend ratcheting back on actions in the mainstem and maximizing hydropower revenues to fund activities to improve habitat and water management in the tributaries. They recommend halting flow augmentation in the spring. The Idaho Water Users call for eliminating flow augmentation from the Upper Snake and suggest the scope of the mainstem plan be confined to the FCRPS, deferring actions in the Upper Snake until a subbasin plan is developed.
Save Our Wild Salmon makes recommendations similar to Oregon’s and defers to FandW biologists on flow augmentation. The organization calls on the region to meet the flow objectives. The Northwest Resource Information Center supports the IDFG and ODFW recommendations.
Shurts said the staff will analyze the impacts of the recommendations on the power system. The Independent Scientific Advisory Board (ISAB) is working on some of the issues raised, particularly the value of flow augmentation, and we are thinking of bringing them in on this, he reported. Shurts also noted that staff no longer has the biological modeling capability to do some of the analysis. Bringing in the ISAB is a good idea, Karier agreed. We need to know if there are measurable benefits for fish, he said. If so, then we should set performance standards, but if not, it’s a different situation and some measures would be deemed experimental, Karier indicated.
How does this cross-pollinate with amending the power plan? Bloch asked. We won’t solve the region’s reliability issue before we get a new power plan, Shurts responded. He explained that the Council would first consider and understand the FandW needs, then look at the effects on the power system. If implementing FandW measures would result in an unreliable power system, you need to set out the steps to resolve that, Shurts explained.
5. Presentation on Ecosystem Diagnosis and Treatment Coarse Scale Analysis
Peter Paquet, Manager, Wildlife and Resident Fish; and Chip McConnaha, Manager, Program Evaluation and Analysis
Staffers Peter Paquet and Chip McConnaha briefed the Council on where things stand with results from the EDT model. McConnaha started with an overview of EDT, emphasizing that it is a habitat-based approach that links an ecosystem with the species that inhabit it. With EDT, you focus on a particular species and assess the habitat in terms of its quality for that species, he said. McConnaha explained how EDT is used to measure habitat in terms of quantity, quality, and connectivity or complexity and then to organize that information to assess whether the habitat is good or bad for the species.
EDT has a long history in the region, and it is the most widely used biological model in the Northwest, he said. It is used extensively by states and tribes, according to McConnaha, adding that the model has been used widely in Washington, to some extent in Oregon and Montana, and the least in Idaho.
The staff is working to make information from EDT available on the Internet, he continued, demonstrating how information can be accessed from the EDT home page. At some point in the next few months, we will have things set up so people can get into the site and interact with the information, McConnaha said.
In subbasin planning, EDT forms a working hypothesis as the basis to begin work on a subbasin plan, he explained. It also provides a scientific basis for evaluating subbasin plans, McConnaha indicated.
Paquet described the data that is now available for subbasin planners, including GIS maps with base-level information, a data disk for each subbasin, and a CD Rom with terrestrial and resident fish data. We are posting things continually on the web site as they become available, he stated. Do you see a county commissioner or other local official using this? Cassidy asked. A commissioner would not likely be running the model, but a technical staff person could use it and it should be helpful, McConnaha stated. When can we have a subbasin ready with the EDT analysis? Cassidy asked. We could do a demo now, McConnaha responded. And we’ll be done when the subbasin plans are done, he added.
6. Council Decision on Subbasin Planning Templates and Guidelines
Bob Lohn
Staff presented two documents, revised since they were first introduced at a July work session, intended to give guidance to the region’s subbasin planners. One document is an overview and the other is a technical outline, Lohn explained. The overview is “a generalist summary,” and the technical outline offers more detailed guidance and serves as a template for preparing a subbasin plan, he said.
Isn’t this confusing? Grace asked. Why do you need both? he inquired. The overview is needed for someone like a county commissioner, who wants to know generally about subbasin planning, but the county planning office will need the kind of detail that is in the technical outline, Lohn responded.
Danielson asked for assurance the information in the overview is consistent with the technical outline and that there is conformance between NMFS’ requirements and the Council’s subbasin program. Ogan said the staff has worked to assure consistency. The question for Council members is how do you use these documents to further subbasin planning, he stated.
Bloch said the documents need to be clear regarding the Council’s desire for fully developed, high-quality subbasin plans. If we put out something that indicates we are willing to accept lesser-quality plans, I don’t see how we can decline to accept them, he added. I don’t have a problem with “the public affairs overview,” but I want to be sure we don’t put it out as something that would lead us to achieve a lesser product, Bloch said. Let’s make it clearer and “hitch our wagon” to higher-quality plans, he urged.
Decision - Approval of Subbasin Planning Documents
The Council agreed both the overview and the technical guidelines served a purpose and on a motion made by Giacometto and seconded by Grace, the members voted unanimously to approve the two documents for use in subbasin planning.
7. Council Decision on Fiscal Year 2001 Funding Reallocation Requests
Doug Marker, Senior Policy Coordinator
Marker explained a proposal to transfer coordination of a number of Regional Assessment Advisory Council (RAAC) activities to the Pacific Northwest National Laboratory (PNNL). Bonneville and the Council staff believe this is appropriate since it would bring in informed technical expertise to manage the project, he indicated. The cost would be $35,000 for project management and $55,000 for overhead and project administration, Marker reported. He said the Council approved a $270,000 budget for RAAC last year, but none of it has been spent.
The alternative to this proposal is to suspend further RAAC funding, Grace stated. If there is value to doing this, there is value to seeing that it gets done, Bloch said, adding that the costs seem reasonable.
The problem is with these continuing demands for EDT, without a product or accounting about where we stand, Karier stated. I’d like staff to give us a report within three weeks on what’s been done and what’s left to do, he said. McConnaha explained “the long history” of the RAAC, noting that it began with CBFWA’s request to develop EDT capability. The Council created RAAC to give oversight and accountability to that process and it has five tasks, none of which are done, he said.
How important is this to the success of our program? Grace asked. If we are going to use EDT in subbasin planning, we need it, McConnaha responded. I’d like justification at this point, and I’d like verification that we need it, Grace said. Brogoitti said he agreed. Karier said he would like to see the proposed costs for the RAAC and what would be accomplished. I’d also like to know the total cost of EDT, he added. McConnaha said it would be difficult to separate out the cost of EDT development from the costs of using it, but he would try to accomplish it by the work session later in August.
My question is whether we need to move ahead with RAAC, Grace stated. “If we have gone for a year without starting, I’m suspicious about whether we need it,” he said.
“The way we make decisions and then unmake them astounds me,” Bloch stated. The FandW managers asked us to do this, and we asked them to work with us on it, so there would be broad-based buy-in that the EDT result was scientifically sound, he said. We asked them to come up with a work plan and a budget, and they’ve done that, Bloch continued. Now we get hung up on the budget and this contract and try to link it with the total funding and need for RAAC, he said. “We risk the credibility of the Council and the willingness of the Council to partner with others” when “we play this game of bring me a rock – oh, wrong rock,” Bloch stated.
I think it’s legitimate to question this, Karier responded. I thought I understood this, but is the Council now switching direction? Danielson asked. I thought there were time constraints on getting this done, she added. My sense is we would add a three-week delay, Cassidy clarified. Does the subbasin planning depend on it? Grace asked. It’s an important piece if we want the subbasin plans to be scientifically based, McConnaha responded. What happens to folks in the Upper Snake if we postpone? Danielson asked. “This won’t kill EDT” – it’s already being widely used, McConnaha responded. It’s a question of how we bring the FandW managers into this as partners, he continued. The biggest factor in the three-week delay is the relationship with managers – “we’ll have to mend some fences,” McConnaha added.
Cassidy said he had indication that PNNL might be willing to negotiate the amount. He said he had spoken recently to a PNNL representative, who mentioned another $300,000 contract in the works. I want to know how much other money is going to Battelle Northwest, Cassidy stated. We have only one contract with Battelle now, but they’ve come to us with another proposal, Lohn explained. It was an early solicitation, and there is no commitment, he added.
Bloch moved the Council recommend Bonneville reallocate $90,000 from the subbasin planning placeholder account to fund a contract with PNNL to manage a series of contracts in support of the subbasin planning process. Giacometto seconded the motion. The motion was defeated, with Bloch, Giacometto, and Danielson voting in favor, and Karier, Cassidy, Brogoitti, Grace, and Kempton voting no.
A third proposal from the FandW committee pertains to the reintroduction of chum salmon into Duncan Creek, Marker said. This has been seen as an area that can handle more coho spawning, he explained, adding that the project has gone through some refinement. The artificial production element of the project is questionable, and staff is not prepared to recommend funding, but Bonneville has indicated it may proceed with the project as part of an ESA requirement, Marker said.
Decision - Funding Deferral for Duncan Creek
Bloch moved that the Council defer the funding reallocation request for Duncan Creek to the Lower Columbia Province review, with Grace seconding the motion. The motion passed on a unanimous vote.
LCREP Funding for Subbasin Planning
Marker explained a proposal to reallocate funds from the subbasin planning placeholder budget for the Lower Columbia River and Estuary Habitat Assessment and Mapping Project. The Columbia Basin Fish and Wildlife Authority (CBFWA) recommended the project, and the fish and wildlife committee supports it, he said.
Decision – Reallocate $150,000
Bloch moved that $150,000 be reallocated, Brogoitti seconded, and the Council voted unanimously in favor.
LCREP Funding for Estuary Survey
At the last meeting, we discussed having a Lower Columbia River Estuary Partnership (LCREP) to coordinate subbasin work for the Lower Columbia provincial review, Marker explained. The fish and wildlife committee recommends funding the partnership at $37,394, he said.
Decision - Recommend Reallocation of Bonneville Funds
Bloch made a motion to recommend Bonneville reallocate funds from the anadromous fish placeholder account to cover the LCREP expenses. Brogoitti seconded the motion, which the Council passed unanimously.
8. Update on Funding Status of Fish and Wildlife High Priority and Action Plan projects
Bonneville Representative
Bob Austin briefed the Council on the funding status of Bonneville’s high-priority and “action plan” projects. Our contracting staff is working with the sponsors of 15 high-priority projects that total $19 million, he reported. Many of the projects are planned for implementation this fall, according to Austin.
For the action plan solicitation, which was put out to address the power emergency, we have a number of proposals for water acquisitions, and we are working with the appropriate entities within each state on those, he said. We want to be sure the water is really there and there is something tangible behind the purchase, Austin indicated. Bonneville is continuing its implementation efforts, but some policy issues have arisen on these projects, he acknowledged.
9. Council Decision on Council Budget for Fiscal Year 2003 and Fiscal Year 2002 Revisions
Steve Crow, Executive Director; and Sharon Ossmann, Business Manager
Staffer Steve Crow said Bonneville had sent a comment on the Council’s budget, which amounted to a “bump in the road,” but won’t delay consideration of the FY 2002 and 2003 budgets. There is a major issue with Bonneville’s changing firm power sales forecast, he explained. We’re talking with Bonneville to work this out, and we’ll have an update later in August, Crow told the Council.
Decision - Adopt Draft 2003 and Revised 2002 Budgets
Bloch presented a motion, which Karier seconded, to adopt the draft FY 2003 and revised 2002 budgets, and to authorize the reprogramming of available FY 2001 funds for unanticipated costs, including subbasin planning and analysis of the region’s energy capacity and reliability. The Council voted six to one in favor of the motion. Bloch voted no, and Brogoitti was not present when the vote was taken.
10. Council Decision on Action Plan Projects Receiving Additional ISRP Review
Doug Marker
The Independent Scientific Review Panel (ISRP) completed its review of responses from project sponsors whose proposals were not recommended for funding in June, Marker told the Council. These projects stem from Bonneville’s action plan solicitation to mitigate for this spring and summer’s power emergency, he explained. The ISRP has recommended that two more projects be funded, a proposal to increase instream flows on the Naches River and one to improve upstream passage in Birch Creek, Marker reported. The ISRP determined that a number of projects, including land acquisitions, did not fit the specific criteria for the solicitation and recommended they be considered in the provincial review process, he indicated.
Danielson asked why the Lemhi Water Users project was not recommended. The ISRP accepted that the Lemhi is short of water, but this proposal would provide only one-third of the amount needed, staffer Bob Lohn explained. There was no documentation about where the remaining water would come from, but we understand that has since been provided, he said. The ISRP also questioned whether this project could be accomplished in one year, Lohn continued. The ISRP says that is unlikely, but the project sponsors disagree, he added.
Karier said he supports the Yakima tributary access and habitat program. The ISRP said it prefers to see the project considered in the provincial review, but Bonneville has said it has $10 million to $20 million for the action plan projects, he pointed out. Only $10 million is being committed so far, and I’d like to recommend we include this project in the funding, Karier stated.
The question is if we switch projects to the provincial reviews, do we miss the opportunity to fund them, Grace observed. Anything we turn down today will compete for the other funds in the fish and wildlife program, he said.
Decision - Approval of Two ISRP Recommended Projects
Giacometto made and Grace seconded a motion to approve the two ISRP-recommended projects. Brogoitti excused himself from the vote. The motion passed unanimously.
Decision - Approve Funding for Yakima Tributary Project
Karier made a motion to include the $1.588 million Yakima tributary project in the funding recommendation to Bonneville, and Cassidy seconded. Grace questioned whether the Council was “getting into a box” with prioritizing the remaining projects, which the ISRP did not recommend for funding. Rather than go from the top of the list down, let’s be objective and prioritize them all, he suggested.
Our original intent was to do additional mitigation for fish stocks affected by the power emergency this spring, and we’d like to see you stick to the criteria set originally, Bob Austin of Bonneville urged. It was our intent to get projects in place quickly, and not all of these fit that criterion, particularly the land acquisition projects, he added.
Bonneville rejected the acquisition projects, saying they don’t fit the criteria, and I agree, Cassidy said. The Yakima tributary project isn’t an acquisition – it’s screening, he indicated. The Council voted unanimously to recommend funding for the project.
Decision - Approve Funding for two Projects
Danielson moved that four remaining projects, including the Lemhi and the monitoring for the South Fork Clearwater, Selway, and Salmon rivers outplant program, be funded. Brogoitti seconded the motion. Karier pointed out that the ISRP judged two of the projects, adult spring/summer chinook and steelhead transport in the Snake River Basin and Taneum Creek water rights, not fundable. Grace explained that the transport project was something Bonneville had asked for and was continuing to work on. Giacometto moved to amend the motion to leave out the two projects judged non-fundable by the ISRP, and Bloch seconded. The motion passed seven to one, with Grace voting no.
We need to verify the sponsors can get the remaining two-thirds of the water needed for the Lehmi project, Karier suggested. Idaho staffer Rayola Jacobsen reported that the Idaho Water Resources Department and the Governor’s office have indicated the water could be supplied from the state’s water bank, which is made up of water from willing lessees.
Karier moved to amend Danielson’s motion to require that Bonneville verify the water is available. Cassidy seconded. Bonneville is already researching the matter, so I am reluctant to add the amendment, Danielson stated. Kempton said he opposed the amendment in part because the criteria for the action plan solicitation was Bonneville’s, not the Council’s. This is Bonneville’s solicitation, and it’s their responsibility to ferret this out, he added. On a voice vote, the amendment failed. The motion to recommend the two projects for funding was unanimously approved.
Decision - Project Approval for Land Acquisition in John Day Basin
Bloch moved to approve a project to acquire Desolation Creek property in the John Day Basin. Brogoitti seconded. What has Bonneville said about land acquisitions? Giacometto asked. They won’t fund them, Cassidy responded. Bloch said the ISRP review gave this project a “glowing” review. All parties recognize this is a unique opportunity, he added. The opportunity has a time limit, and if it is pushed to the Columbia Plateau provincial review, the opportunity may be lost, Bloch argued.
If we approve this, what will Bonneville do? Cassidy asked. We will try to be consistent and refer it to the provincial review, Austin responded.
This is one of the most pristine places in the John Day, and we need to take advantage of this opportunity, Brogoitti stated. The motion passed on a split vote, with five in favor and three against with Cassidy, Karier, Bloch, Brogoitti and Kempton voting yes, and Giacometto, Danielson and Grace voting no.
Decision -Recommend Funding for Chinook & Steelhead Transport in Snake River Basin
Grace moved to recommend funding for the adult spring/summer chinook and steelhead transport in the Snake River Basin, a project previously removed from Danielson’s motion. Danielson seconded. Cassidy asked Grace to clarify whether the motion included a requirement for ISRP support, and Grace said it did. The motion passed unanimously.
Decision - Recommend Funding for three Stream Gauging Projects
Cassidy made a motion to recommend $531,000 in funding for three stream gauging projects on the Entiat, Okanogan, and Wenatchee rivers. These projects were left off today’s list because the project sponsors did not meet the deadline for responding to the ISRP, but they are very important in this low water year, he explained. I would ask for approval contingent on the ISRP being satisfied with the responses the sponsors have now submitted, Cassidy added. Karier seconded the motion, which was unanimously approved.
11. Briefing on Montana Energy Deregulation
John Hines, Economist/Administrator, Montana Council Office
Until 1998, when the restructuring legislation passed by Montana lawmakers took effect, electricity service in Big Sky country was similar to that in the rest of the region, according to Montana staffer John Hines. Customers were served by a monopoly utility, with generation, transmission, distribution, and other services wrapped into the package, he explained. Generation supply accounted for as much as 40 percent of the customers’ bills, and Montana Power’s bundled rate for residential customers was about 6.7 cents per kilowatt-hour (KWh), approximately 2.7 cents of which went for power supply, Hines reported. Industrial customers paid about 3.9 cents per KWh, a little higher than the regional average, he said. “That was the impetus for going to customer choice,” Hines added.
Montana’s in-state generation is 3,200 megawatts (MW), of which about 60 percent is coal and 40 percent is hydro, he continued. The in-state demand for electricity is 1,951 MW, so “we are a net exporter” of power, Hines pointed out. Prior to restructuring, Montana Power generated about 800 average megawatts (aMW) of its total supply, he said. Its supply mix included 50 percent coal, 32 percent hydro, 11 percent purchased power, and 7 percent PURPA qualifying facilities, Hines said. Montana Power Company (MPC) is the largest single electricity provider in Montana, serving 950 aMW of load, he noted. Co-ops serve 530 aMW; large industrial customers use 410 aMW; and Montana-Dakota Utilities (MDU) serves 61 aMW in the state, Hines said.
Transmission constrains electricity sales out of state, he stated. There is no firm availability left on the transmission system, but significant availability for non-firm sales, Hines said. If we want to send power out on a firm basis, we need more transmission, he added.
The Montana legislature passed a restructuring law in May 1997, which put in place a timeline for customers to choose an alternative electricity supplier, Hines explained. Under the law, large customers could choose another supplier beginning in July 1998, and all other customers would have that opportunity by July 1, 2002, he said. The law requires MPC to serve customers that do not choose another supplier until 2002, Hines pointed out. Rates were frozen on the “default supply” from July 1, 1998 through July 2002, he said. The freeze is still in effect, and we have not experienced the rate increases that have occurred in other western states, Hines stated.
The legislation allowed the state’s electric co-ops to opt out of choice, but one co-op has allowed customers to choose, Hines said. So far, “they have had no takers,” he reported. In December 1999, MPC sold its generation to PPL, a Pennsylvania utility, and MPC is currently trying to sell its transmission and distribution facilities to a company called Northwestern Inc., Hines said. If that sale is successful, MPC will be solely a telecommunications and fiber-optics company, he added.
Hines explained the effects restructuring has had on utilities and their customers. Flathead Electric Co-op had to raise rates 29 percent in April, he said. The co-op would have had “financial exposure to catastrophic rate increases” beginning October 1, 2001, when its power costs in a purchase from PacifiCorp would have been indexed to prices at the Mid-Columbia hub, Hines said. Flathead recently renegotiated that power purchase, which eliminates the exposure and will result in a 15 percent increase, he explained. Flathead’s situation, however, was not tied directly to restructuring, Hines pointed out. It was the result of a management decision to diversify supply and move away from Bonneville, he said.
There are 25 other rural co-ops in Montana, plus MDU, which have had stable rates, Hines reported. These co-ops have not exercised choice with their power supply, he said. Nineteen of the co-ops can purchase from Bonneville, and all of them have entered presubscription contracts that exempt them from Bonneville’s cost recovery adjustments for five years, Hines noted. Over two-thirds of MPC’s load remains on its system and is being served under the rate freeze, he said. About 300 aMW of MPC load, primarily industrial customers or cities and towns, chose to go to alternative suppliers, and some of those users are now paying very high market prices, according to Hines.
Some companies have been forced to close or scale back operations because of high power prices, Hines said. The financial viability of customers currently paying high market prices is one of the problems the state is facing in the aftermath of the restructuring legislation, he said, adding, “we’ve been trying to address how to mitigate for those customers.”
In addition, the electricity needs of the MPC default supply customers need to be met beginning July 1, 2002, when the rate freeze expires, Hines explained. The default load is estimated to be between 650 and 950 aMW per year, and there are no contracts currently in place to serve it, he continued. “We need to see that these customers have affordable electricity,” Hines stated. This comes at a time when the wholesale power market is still very high compared to its historical levels and certainly compared to the rate-freeze prices, he added.
PPL Montana, the company that purchased MPC’s resources, does not own enough generation to serve all 950 aMW of the default load, and “even if they did, they are not willing to sell power to just one customer,” Hines said. PPL sold into the California market and received less than full payment for its power, so the company views it as a financial risk to sell all of its power to the default supply customers, he indicated.
The legislature faced these challenges going into the 2001 session, Hines went on. Our overall goal was to facilitate competition in Montana, and one legislative thrust was to expedite and streamline the regulatory process for developing new generation, he explained.
Another effort was aimed at providing tax incentives for new generation development, including renewables, thermal, cogeneration, and conservation, Hines said. The Council’s Montana office cut electricity consumption by 56 percent this year, which was the largest reduction by any state agency, he reported.
The legislature passed bills to allow temporary generation to operate during the resource permitting process and to create a power pool for customers paying market prices, Hines said. In addition, the legislature passed HB 474, a primary energy policy bill, he said.
With HB 474, the legislature tried to accomplish many things, Hines stated. The bill attempts to balance consumer and utility financial risk by giving the default supplier assurances it will be compensated, he explained. The bill also extends the universal systems benefit charge and requires irrigated agriculture to participate, Hines said. HB 474 designates the distribution company as the default supplier so “there is no subjectivity involved” in identifying who has that responsibility, and it allows customers who have made another choice “a one-time opportunity to rejoin the default supplier,” he said. Under the bill, the transition to choice was pushed out through 2007, Hines added.
HB 474 also created the Montana Power Authority, which was granted significant authority to purchase, construct, and operate generation and transmission and distribution (T&D) facilities, Hines continued. The state can be the outright owner or can use its bonding authority to assist other resource developers, he said. The law allows the state to use up to $500 million to acquire generation facilities or to build T&D, Hines told the Council. The power authority has met twice and is wrestling with how to provide affordable power to default supply customers and what actions the state should pursue to assure that supply, including whether the state should get involved in transmission development, and if so, for how long, he explained.
The situation in Montana is changing rapidly, Hines said. The Montana Public Service Commission (PSC) has asserted continued jurisdiction over MPC’s generation rates, including those assets sold to PPL Montana, he reported. The PSC’s action has been met with significant legal challenges, Hines reported. MPC has said it will not enter into contracts for default supply load without PSC approval, he continued. But last week the PSC declined to approve an MPC contract, under which the company could have purchased power at less than 4 cents per KWh, Hines said. The PSC indicated it wants to see MPC’s entire resource portfolio and doesn’t believe it is bound to pre-approve purchase contracts, he explained.
Initiatives are under way to suspend HB 474, and there is a constitutional challenge to the law, Hines stated, which puts “a legal cloud” over any attempt by the state to exercise the bonding authority in the legislation. “There are 326 days to go, the clock is ticking, and we don’t know where this picture is going,” he acknowledged. HB 474 was based on the premise “there aren’t competitive wholesale power markets, so there won’t be competitive retail markets,” Hines concluded.
12. Council Decision on Schedule, Budget, and maximum Project Funding Level for Innovative Project Solicitation
Bob Lohn and Gustavo Bisbal, Senior Science and Policy Analyst
Bisbal presented the Council with an estimated budget for the innovative FandW project solicitation. He reported that the project proposals would be reviewed by the ISRP and that the fish and wildlife committee unanimously recommended approval of the solicitation, with a few changes, which he outlined for the Council.
Decision - Approval of Schedule and Budget for Innovative Project Solicitations
Bloch moved to approve the schedule and budget for the innovative project solicitation, and Brogoitti seconded. The motion passed unanimously.
13. Briefing on Research Plan and Schedule
Bob Lohn and Gustavo Bisbal
Staffer Gustavo Bisbal outlined a proposed research plan, organized into two modules, for fish and wildlife in the Columbia River Basin. Staff will seek final approval of the plan from the ISAB and will also run it past the ISRP, he said. The schedule calls for releasing the research plan for public comment in February 2002 and finalizing it in April, Bisbal explained. We think we can conclude it faster than that, he added. Bisbal indicated that people working on subbasin plans will be a source of information for what issues need to go on the research agenda.
“We are giving staff the head nod” to proceed with the plan on the proposed schedule, Cassidy confirmed. The Council members nodded.
14. Council Business
Council Decision on Idaho Subbasin Planning Facilitator Contract
Decision - Negotiate Contract to Facilitate Subbasin Planning in Idaho
Bloch made a motion and Brogoitti seconded a motion to authorize the Council’s executive director to negotiate a not to exceed $29,375 contract with Consensus Associates to facilitate subbasin planning in Idaho. The Council unanimously approved the contract.
Bloch moved to approve the minutes of the June 26-27 Council meetings in Pendleton, OR. Brogoitti seconded, and the motion passed unanimously.
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Vice-Chairman